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                              Rural Metro Corporation of Florida, Inc., DAB CR5279 (2019)
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Rural Metro Corporation of Florida, Inc., DAB CR5279 (2019)








  
  
    

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





Rural Metro Corporation of Florida, Inc.
(NPI: 1386690071 / PTANs: A0563, A0563A),
Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-17-200Decision No. CR5279March 29, 2019

        
              
    

      DECISION

The Centers for Medicare & Medicaid Services (CMS) revoked the Medicare enrollment and billing privileges of Rural Metro Corporation of Florida, Inc. (Rural Metro or Petitioner), based on 42 C.F.R. § 424.535(a)(8)(i) (i.e., billing for services that could not have been furnished to a specific individual on the date of service).  Rural Metro requested a hearing to dispute the revocation.  Because the undisputed facts in this case show that Rural Metro filed Medicare claims for reimbursement for ambulance services that could not have been provided to the specified beneficiaries on the dates of service, I affirm CMS’s revocation of Rural Metro.

I.  Background and Procedural History

Rural Metro was enrolled in the Medicare program as an ambulance transporter.  An ambulance transporter is considered a “supplier” in the Medicare program.  42 U.S.C. § 1395x(d); *see also* 42 C.F.R. § 410.40.

In an August 26, 2016 initial determination, CMS revoked Petitioner’s Medicare enrollment and billing privileges, effective September 25, 2016, for the following reason:

**Page 2**

**42 CFR §424.535(a)(8)(i) – Abuse of Billing Privileges**
Data analysis conducted on claims by Rural Metro Corporation of Florida for the dates of services May 12, 2013 to August 02, 2015, revealed that Rural Metro Corporation of Florida billed nine (9) claims for services to seven (7) Medicare beneficiaries, who were deceased on the purported date of service.

CMS Exhibit (Ex.) 3 at 1.  CMS barred Petitioner from re-enrollment in the Medicare program for three years.  CMS Ex. 3 at 2.
 
Petitioner requested reconsideration of the revocation.  CMS Ex. 2.  In her reconsidered determination, a CMS hearing officer upheld the revocation, noting that Rural Metro  billed for nine claims for seven deceased beneficiaries between May 12, 2013, and August 30, 2015, and concluding that these claims for services could not have been furnished to a specific individual on the date of service.  CMS Ex. 1 at 1-3.

Petitioner timely requested administrative law judge (ALJ) review.  Request for Hearing (RFH).  The case was assigned to Judge Carolyn Cozad Hughes for hearing and decision.  Judge Hughes issued an Acknowledgment and Pre-hearing Order (Order).  The parties complied with the requirements of the Order.  On November 20, 2018, I was assigned to hear and decide this case.

In its pre-hearing exchange, CMS moved for summary judgment (CMS Br.) and submitted four exhibits (CMS Exs. 1-4).  On March 8, 2017, Petitioner filed a response to CMS’s motion for summary judgment (P. MSJ Resp.).  On March 17, 2017, Petitioner filed its pre-hearing brief (P. Br.).  Petitioner filed no proposed exhibits with its exchange.

II.  Evidentiary Ruling

Although Petitioner did not object to CMS Exs. 1-3, Petitioner objected to CMS Ex. 4. 
Petitioner’s objection states that CMS Ex. 4 was not previously produced to Petitioner and CMS has not provided any context for the document.  P. Br. at 10 n.2.

CMS’s brief summarized the contents of CMS Ex. 4 as follows:  “[b]ased on data analysis performed by Safeguard Services LLC (a CMS Medicare contractor) in August of 2016, CMS discovered that Rural Metro submitted eight claims for six different deceased beneficiaries between May 12, 2013, and August 30, 2015.”  CMS Br. at 2.  Further, the reconsidered determination references the August 2016 Safeguard Services LLC data analysis documentation.  CMS Ex. 1 at 2.  The document itself indicates that investigators were requesting the revocation of Petitioner based on violations of 42 C.F.R. § 424.535(a)(8).  CMS Ex. 4 at 1-2.  The third page of the exhibit describes the

**Page 3**

factual basis for the revocation, along with a chart of information related to specific claims involved in the investigation.  CMS Ex. 4 at 3.  This information provides sufficient context for this document.

Furthermore, the regulations do not require CMS to provide documentation supporting its decision to revoke with the initial determination.  CMS is only required to provide “[t]he reason for the revocation in sufficient detail for the provider or supplier to understand the nature of its deficiencies.”  42 C.F.R. § 405.800(b)(1)(i); *see also* 42 C.F.R. § 498.20(a)(1) (“CMS . . . mails notice of an initial determination to the affected party, setting forth the basis or reasons for the determination . . . .”).  Subsequently, in a reconsidered determination, CMS is only required to “give[] the reasons for the determination” and “specif[y] the conditions or requirements of law or regulations that the affected party fails to meet . . . .”  42 C.F.R. § 498.25(a).  Finally, the rules of evidence do not strictly apply and I am to admit evidence that is relevant and material.  42 C.F.R. §§ 498.60(b), 498.61.

Therefore, I overrule Petitioner’s objection and admit CMS Exs. 1-4 into the record.

III.  Decision on the Record

Judge Hughes directed the parties to include with their pre-hearing exchanges the written direct testimony, in the form of a declaration or affidavit, for all witnesses that the parties intended to present.  Order ¶¶ 4(c)(iv), 8; Civil Remedies Division Procedures (CRDP) §§ 16(b), 19(b).  Further, if a party wanted to cross-examine any of the opposing party’s witnesses, then the party needed to file a request to cross-examine those witnesses.  Order ¶ 9; CRDP § 16(b).  Neither party provided written direct testimony for any witnesses; therefore, I issue this decision based on the written record because an evidentiary hearing in this case is not necessary.  Order ¶¶ 10, 11; CRDP § 19(b), (d); *see Vandalia Park*, DAB No. 1940 (2004); *Pacific Regency Arvin*, DAB No. 1823 at 7-8 (2002) (holding that the use of written direct testimony for witnesses is permissible so long as the opposing party has the opportunity to cross-examine those witnesses).

IV.  Issue

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

V.  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* 42 U.S.C. § 1395cc(j)(8).

**Page 4**

VI.  Findings of Fact

CMS originally revoked Rural Metro based on nine claims involving seven beneficiaries.  CMS Ex. 3 at 1-3.  However, CMS has now decided not to pursue the claim of T.W.  CMS Br. at 1 n.1.  Therefore, this claim is no longer at issue in this decision.  Omitting T.W. as a basis for CMS’s action, CMS’s bases for the revocation are:

1) Petitioner billed eight claims for dates of service from May 12, 2013, to August 2, 2015, for services provided to six Medicare beneficiaries, who were deceased on the purported date of service.  *See* CMS Ex. 3 at 1, 3.

2) Enclosure A with the initial determination provided a list of the eight relevant claims, which CMS identified as improper:

Beneficiary’s Date of Death
			Date of Service
			Beneficiary Initials12/31/2012
			05/12/2013
			A.S.10/17/1999
			07/16/2013
			B.M.11/03/1997
			08/06/2013
			A.A.11/28/2006
			09/20/2013
			S.K.09/15/1999
			09/27/2014
			E.L.09/15/1999
			09/27/2014
			E.L.06/04/2015
			08/02/2015
			J.N.06/04/2015
			08/02/2015
			J.N.CMS Ex. 3 at 3; *see also* CMS Ex. 2 at 3.  I note that, in the above list, I have redacted the beneficiaries’ full names and Medicare Health Insurance Claim Numbers (HICNs) for confidentiality purposes.  I further note that the repeated initials (E.L. and J.N.) denote the same beneficiary for which two claims were filed.  CMS Ex. 3 at 3.

With the exception of an investigative report (CMS Ex. 4) and the documents that Petitioner submitted to CMS with its reconsideration request (CMS Ex. 2 at 15-116), CMS did not submit evidence to support its revocation.  In particular, CMS did not provide evidence that the beneficiaries that it identified as deceased on the relevant dates of service were in fact deceased.

Petitioner provided detailed factual assertions based on the documents it submitted on reconsideration.  P. Br. at 3-7.  After reviewing those assertions, I find that they are consistent with the evidence in the record, with the exception of statements that each of the eight claims involved a “simple billing error” or an accident.  Petitioner did not offer any testimony as to why the claims in this case involved errors, just that there were errors.  Therefore, I adopt Petitioner’s factual assertions, as quoted below, as the findings

**Page 5**

of fact in this case, with the exception of Petitioner’s characterization related to mental state or intent concerning the billing errors.

1) Regarding the claim involving A.S.:

Rural Metro transported [A.S.] on May 12, 2013.  (CMS Ex. 2 at 16.)  [A.S.] was alive on the date of transport, as evidenced by the signature of a facility’s representative on the Patient Care Report acknowledging that she was received by the facility.  (*Id*. at 21.)  [A.S.] did not sign the Patient Care Report because of her altered mental status.  (*Id*.)  Rural Metro billed Medicare for the service with the proper HICN    . . . , but the claim was denied on July 16, 2013, because [A.S.] was on hospice.  (*Id*. at 25.)  Rural Metro reprocessed the claim with proper modifiers indicating that the transport was unrelated to hospice; however, this time billing personnel selected another individual with the *exact*same name but different HICN. . . .  (*Id*. at 26.)  The Florida Medicare Administrative Contractor . . . denied the claim on December 5, 2013, for the stated reason that the beneficiary associated with the second HICN billed had a date of death that preceded the date of service.  (*Id*. at 15.)  Upon receipt of the denial, Rural Metro corrected the claim to reflect the correct beneficiary’s HICN . . . -the HICN originally billed-and the claim was paid.  (*Id*. at 27.)

P. Br. at 3-4.

2) Regarding the claim involving B.M.:

Rural Metro transported [B.M.] on July 16, 2013. (*Id*. at 45.)  [B.M.] was alive on the date of transport, as evidenced by the signature of a facility’s representative on the Patient Care Report acknowledging that she was received by the facility. (*Id*. at 51.)  [B.M.] did not sign the Patient Care Report because of her altered mental status.  (*Id*.)  A simple billing error occurred when a beneficiary with the exact same name . . . was selected when filing the claim.  (*Id*. at 58.)  The Florida MAC denied the claim on August 5, 2013 for the stated reason that the beneficiary’s date of death preceded the date of service.  (*Id*. at 44, 58.)  Upon receipt, Rural Metro corrected the HICN and rebilled the claim, which was paid by Medicare under the correct HICN.  (*Id.* at 59.)

**Page 6**

P. Br. at 4-5.

3) Regarding the claim involving A.A.:

Rural Metro provided transport for [A.A.] on August 6, 2013.  (*Id*. at 62.)  [A.A.] was alive on the date of transport, as evidenced by the signature of a facility’s representative on the Patient Care Report acknowledging he was received by the facility.  (*Id*. at 66.)  [A.A.] did not sign the Patient Care Report because of his altered mental status.  (*Id*.)  A simple billing error occurred when a Medicare beneficiary with the *exact*same name . . . was selected to file the claim.  (*Id*. at 70.)  The Florida MAC denied the claim on August 24, 2013 for the stated reason that the beneficiary’s date of death preceded the date of service.  (*Id*. at 61, 70.)  Upon receipt of the denial, Rural Metro recognized the error and rebilled the claim to Medicaid on August 28, 2013, after determining that the [A.A.] was not a Medicare beneficiary.  (*Id*. at 61.)

P. Br. at 5.

4) Regarding the claim involving S.K.:

Rural Metro provided services to [J.H.] on September 20, 2013.  (*Id*. at 73.)  [J.H.] was alive on the date of transport, as evidenced by his signature on the Patient Care Report.  (*Id*. at 77.)  When billing this claim, billing personnel at Rural Metro performed a Social Security Number (“SSN”) search.  (*Id*. at 72.)  A simple billing error occured [sic] in searching for [J.H.], by accidently [sic] inputting the SSN for another patient, [S.K.], who is a Medicare beneficiary.  (*Id*. at 72, 81.)  The two SSNs only differ in their last two digits.  The Florida MAC denied the claim on October 15, 2013, for the stated reason that the beneficiary’s date of death preceded the date of service.  (*Id*.)  Upon receipt of the denial, Rural Metro determined that the error occurred as a result of a billing personnel’s typographical error, corrected it, and rebilled the claim to Medicaid after determining that [J.H.] was not a Medicare beneficiary.  (*Id*. at 82.)

P. Br. at 5.

**Page 7**

5) Regarding the first claim involving E.L.:

Rural Metro provided transport for [E.L.] on September 27, 2014.  (*Id*. at 85.)  [E.L.] was alive on the date of transport, as evidenced by her signature on the Patient Care Report.  (*Id*. at 89.)  Orlando Regional Medical Center provided Rural Metro with [a] HICN . . .  to use and Rural Metro billed Medicare for this service using that HICN.  (*Id*. at 84, 98.)  The claim was denied on July 1, 2015 for “Claim Lacks Medical Necessity/Non Covered Service.”  (*Id*.)  Rural Metro attempted to fix the deficiency by billing the claim with a modifier (*see* [next paragraph] below), but the Florida MAC denied that claim for the same reason.  (*Id*. at 99.)  At no point in time did the Florida MAC deny the claims with codes asserting that the date of death preceded the date of service (which assuming *arguendo*was the issue).  (*Id*. at 98-100.)  Rural Metro was unable to determine a solution for the billing deficiency and, ultimately, it wrote off the entire claim.  (*Id*. at 84.)

P. Br. at 5-6.

6) Regarding the second claim involving E.L.:

[This claim] is for the same service provided as in claim six, given that Rural Metro only transported [E.L.] once on September 27, 2014.  The only difference between the two claims is that Rural Metro modified claim seven in an attempt to re-bill the claim after receiving a denial from the Florida MAC for “Claim Lacks Medical Necessity/Non Covered Service.”  (*Id*. at 99.)  Thus, claims six (6) and seven (7) are not claims for two separate incidences of services.

P. Br. at 6.

7) Regarding the first claim involving J.N.:

Rural Metro provided transport for [J.N.] on January 31, 2015.  (*Id*. at 103.)  Rural Metro confirmed that [J.N.] was alive on the date of transport, as evidenced by her signature on her patient records of the service and the fact that she passed away on June 4, 2015.  (*Id*. at 109.)  A simple billing

**Page 8**

error occurred when Rural Metro inserted the claim filing date of August 2, 2015, which followed [J.N.’s] date of death, as the date of service.  (*Id*. at 115.)  The Florida MAC denied the claim for the stated reason that the date of death preceded the date of service.  (*Id*. at 102, 115.)  Rural Metro attempted to bill the claim again (*see*[next paragraph]), but again failed to update the date of service to the proper date of January 31, 2015.  (*Id*. at 114.)  This mistake was not captured by Rural Metro before the claim reached its timely filing limits; therefore, Rural Metro wrote off the entire claim amount.  (*Id*. at 102.)

P. Br. at 6-7.

8) Regarding the second claim involving J.N.:

[This claim] is for the same service provided as in claim eight (8), given that Rural Metro only transported [J.N.] once on January 31, 2015.  There is no difference between the two claims besides claim nine (9) being an attempt to re-bill for the service denied in claim eight.  (*Id*. at 114-15.)  Thus, claims eight and nine are not claims for two separate incidences of services.

P. Br. at 7.

VII. Conclusions of Law and Analysis

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.

The regulations delegate to CMS the authority to revoke the enrollment and billing privileges of suppliers.  42 C.F.R. § 424.535.  CMS or a Medicare contractor may revoke a supplier’s Medicare enrollment and billing privileges for any of the reasons listed in 42 C.F.R. § 424.535(a).  42 C.F.R. §§ 405.800(b)(1), 424.535(a).  If CMS revokes a supplier’s Medicare enrollment and billing privileges, the revocation becomes effective 30 days after CMS or one of its contractors mails the revocation notice to the supplier, subject to some exceptions not applicable in this case.  42 C.F.R. §§ 405.800(b)(2), 424.535(g).  After CMS revokes a supplier’s enrollment and billing privileges, CMS bars

**Page 9**

the supplier from re-enrolling in the Medicare program for a minimum of one year, but no more than three years.  42 C.F.R. § 424.535(c).

**There is a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(i), because Petitioner filed eight Medicare claims for ambulance services for which Petitioner either did not provide such services to the individuals specified on the claims or did not provide such services  on the dates of service indicated on the claims.******CMS revoked Petitioner’s enrollment and billing privileges based on 42 C.F.R. § 424.535(a)(8)(i), which permits revocation when:

(i) The provider or supplier submits a claim or claims for services that could not have been furnished to a specific individual on the date of service.  These instances include but are not limited to the following situations:

(A)  Where the beneficiary is deceased.
(B)  The directing physician or beneficiary is not in the state or country when services were furnished.
(C)  When the equipment necessary for testing is not present where the testing is said to have occurred.

It is important to note for the discussion that follows that § 424.535(a)(8)(i) was originally promulgated as the sole provision in § 424.535(a)(8).  *See*73 Fed. Reg. 36,448, 36,461 (June 27, 2008).  However, when § 424.535(a)(8)(ii) was added, the original text of § 424.535(a)(8) became § 424.535(a)(8)(i).  79 Fed. Reg. 72,500, 72,520 (Dec. 5, 2014).  Therefore, all references to § 424.535(a)(8) in the 2008 preamble to the final rule relate to the text that is now located at § 424.535(a)(8)(i).

Petitioner is correct that the record in this case is relatively simple, and consists primarily of two charts, one attached to the initial determination and the other as part of Safeguard Services’ data analysis document indicating the alleged dates of death for the beneficiaries in question.  P. Br. at 10, 12; CMS Ex. 3 at 3; CMS Ex. 4 at 3; *see also* CMS Ex. 2 at 3.  As Petitioner points out, Safeguard Services’ report makes reference to supporting exhibits, but CMS did not submit them and they are not in the record in this case.  P. Br. at 3, 9-11; CMS Ex. 4 at 3-5.

Due to the lack of documentation submitted by CMS showing that the beneficiaries listed on Petitioner’s claims were deceased, I have no factual basis for finding that those beneficiaries were deceased.  Petitioner asserts that, without such evidence, CMS did not have a legitimate basis to revoke.  P. Br. at 8-13.

**Page 10**

However, Petitioner admits to filing all of the claims that CMS identified, and admits that in each claim Petitioner either failed to properly identify the correct individuals to whom it provided services or the correct dates on which it provided services.  As succinctly stated in Petitioner’s hearing request:  “In reality, [Petitioner] billed for services properly supplied to living beneficiaries; however, due to unfortunate human error, clerical mistakes led to initial bills containing information for beneficiaries for whom [Petitioner] did not supply any services being submitted for reimbursement.”  RFH at 1.  But, Petitioner asserts that such a circumstance is not sufficient for revocation because services were provided to a Medicare beneficiary, just not the one specified on the claim.  P. Br at 10.

Petitioner’s admissions are sufficient to satisfy the requirements of 42 C.F.R. § 424.535(a)(8)(i).  Although CMS stated that Petitioner billed for services provided to deceased beneficiaries, the regulations do not require the beneficiaries to be dead.  The regulatory provision referring to deceased beneficiaries is only part of a list of non-exhaustive examples of situations where § 424.535(a)(8)(i) is implicated.  *See* 42 C.F.R. § 424.535(a)(8)(i)(A).  For CMS to properly revoke under § 424.535(a)(8)(i), Petitioner need only to have filed a claim or claims for services that could not have been furnished to the individual specified on the claim on the date of service.  The Departmental Appeals Board (DAB) interpreted the regulation this way:

We conclude that the plain language of the regulation sufficed to notify Petitioners that the submission of a claim for services **that could not have been provided to the specific individual identified in the claim on the date of services** was an abuse of billing privileges that could lead to revocation, and the preamble provided notice that the submission of at least three such claims would not be viewed as merely accidental.

*John P. McDonough III, Ph.D*., DAB No. 2728 at 8 (2016) (emphasis added); *see also* *Patrick Brueggeman, D.P.M*., DAB No. 2725 at 11 (2016); *Louis J. Gaefke*, *D.P.M*., DAB No. 2554 at 8 n.7 (2013) (agreeing with the ALJ’s interpretation that the phrase “a specific individual” means the individual identified in the claim.).

Petitioner does not dispute that it filed the claims in question in this case and Petitioner has admitted that four of the claims were ones in which Petitioner billed for services that were not provided to the beneficiary identified in those claims.  These claims are sufficient to uphold CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges.

However, the other claims identified by CMS further support its action.  In the claims

**Page 11**

related to E.L., Petitioner admits to misidentifying the HICN of the individual to whom services were provided.  Therefore, the specific individual in those claims was misidentified.

Further, in the claims related to J.N., administrative error resulted in submitting a claim for service provided on a date on which no service was provided.  In these claims, the inaccuracy of the date of service makes the claim similarly problematic.  As the DAB stated:

The improper claims to which [§ 424.535(a)(8)] applies are not all erroneous claims but claims for services that could not have been provided as claimed, that is to say that are “impossible” in that the identified beneficiary could not have been treated by the identified provider/supplier **on the specific dates given.**

*John M. Shimko, D.P.M*., DAB No. 2689 at 7 (2016) (emphasis added).  Therefore, the services must have been provided on the dates of service stated in the claim.

Petitioner admits the services for J.N. were not provided on the date specified in both of the two claims, meaning that the claims were for services that could not have been furnished to a specific individual on the date of service.  P. Br. at 3-7, 10.

**It is no defense, to a revocation action for abuse of billing privileges under 42 C.F.R. § 424.535(a)(8)(i), that the noncompliant claims were due to clerical errors.**Petitioner also argues that it merely committed errors without a motive to defraud Medicare, and that it, therefore, did not engage in abusive billing practices.  RFH at 1; P. MSJ Resp. at 13-16.  Petitioner disputes that “clerical errors constitute an abuse of billing privileges” under 42 C.F.R. § 424.535(a)(8)(i).  RFH at 1; *see also* P. Br. at 16-19.  Petitioner also argues that it received no payment for claims for any deceased individual.  RFH at 1.

However, the elements of § 424.535(a)(8) do not include any form of intent requirement.  The fact that the claims were billed improperly due to clerical errors is not a defense under § 424.535(a)(8).  *See generally*, *Gaefke*,  DAB No. 2554 at 6-10 ; *Brueggeman*, DAB No. 2725 at 8.  The regulation does not require CMS to demonstrate that Petitioner intended to defraud Medicare before it may revoke Petitioner’s billing privileges.  Rather, the regulation authorizes CMS to revoke the billing privileges of a supplier when that supplier submits “a claim or claims for services that could not have been furnished to a specific individual on the date of service.”  *Howard B. Reife, D.P.M.*, DAB No. 2527 at 5

**Page 12**

(2013); s*ee also id.*at 6, 8.  Petitioner is responsible under the regulations for ensuring that its submitted claims comply with Medicare requirements.

Petitioner also argued that the eight claims identified by CMS in this case represent an insufficient number of claims on which to base a revocation.  P. Br. at 7, 14.  Petitioner argued that the situation in this case does not warrant revocation because it is against the intention of the regulations, violates language from the preamble to the final rule, and disregards Congressional intent involving an unrelated statutory provision concerning claims.  RFH; P. Br. at 13-16, 19-20; P. MSJ Resp. at 7-8, 10, 11-12.  Petitioner further argued that the mistakes in these claims were of a minor or inadvertent nature, and that therefore, revocation is inappropriate.  RFH; P. Br. at 7, 14, 19-20.

In response to Petitioner’s arguments, I note first that Petitioner’s billing privileges were revoked pursuant to 42 C.F.R. § 424.535(a)(8)(i), a provision that permits revocation when a supplier submits a claim or claims for services that could not have been furnished to a specific individual on the date of service, and not under 42 C.F.R. § 424.535(a)(8)(ii), which authorizes revocation when a supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.

The intended application of 42 C.F.R. § 424.535(a)(8)(i) is well-established, and envisions scenarios in which a small number of claims can form the basis for revocation.  The preamble to the final rule provides the following guidance regarding its intended uses:

CMS, not a Medicare contractor, will make the determination for revocation under the authority at § 424.535(a)(8). We will direct contractors to use this basis of revocation after identifying providers or suppliers that have these billing issues . . . . This revocation authority is not intended to be used for isolated occurrences or accidental billing errors.  Rather, this basis for revocation is directed at providers and suppliers who are engaging in a pattern of improper billing . . . . We believe that it is both appropriate and necessary that we have the ability to revoke billing privileges when services could not have been furnished by a provider or supplier.  We recognize the impact that this revocation has, and a revocation will not be issued unless sufficient evidence demonstrates abusive billing patterns.  Accordingly, 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 . . . . In conclusion, we believe that providers and suppliers are responsible for the claims they submit or the claims submitted on their behalf.

**Page 13**

We believe that it is essential that providers and suppliers take the necessary steps to ensure they are billing appropriately for services furnished to Medicare beneficiaries.

73 Fed. Reg. 36,448, 36,455 (June 27, 2008).  As indicated above, the preamble states that this revocation authority is not intended to be used for isolated occurrences or accidental billing errors, but indicates that CMS can revoke when there are as little as *three* instances.  I note that Petitioner has submitted *eight* instances of erroneous claims in this case.  The preamble also emphasizes the necessity of providing CMS “the ability to revoke billing privileges when services could not have been furnished by a . . . supplier” and concludes that providers and suppliers are ultimately responsible for the claims they submit.  *Id.*  Therefore, even assuming that a minimum of three instances is required for revocation, despite the regulatory text that only requires a single claim, there is a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(i).

Petitioner argues that an ALJ, who is holding a de novo hearing, may review the discretionary act of CMS to revoke Petitioner’s billing privileges.  P. MSJ Resp. at 5-6.  However, CMS’s discretionary decision to revoke a supplier’s billing privileges is not reviewable by the ALJ.  *Letantia Bussell*, *M.D*., DAB No. 2196 at 13 (2008) (“the right to review of CMS’s determination by an ALJ serves to determine whether CMS had the authority to revoke . . . not to substitute the ALJ’s discretion about whether to revoke.”).  Rather, “[t]he ALJ’s review of CMS’s revocation . . . is thus limited to whether CMS had established a legal basis for its actions.”  *Id*.  The DAB addressed this issue in the context of a case involving a § 424.535(a)(8) revocation:

Neither the preamble to the Final Rule nor the plain language of the regulation establishes a strict liability standard for improper billing or creates an exception for accidental billing. To the contrary, the Final Rule establishes that CMS and its contractors will exercise discretion in determining whether revocation for improper billing is appropriate.

****

[R]evocation is not a mandatory consequence but a measure which CMS may take after exercising discretion.  Here, it was not improper for CMS to determine that Petitioners’ multiple improper billings were abusive, and the ALJ did not err when he affirmed CMS’s determination based upon the exercise of its discretion pursuant to the policy set forth and published in the Preamble to the Final Rule.

**Page 14**

*Access Footcare, Inc., & Robert Metnick, D.P.M*., DAB No. 2752 at 9-10 (2016).

Further, to the extent that Petitioner’s arguments rely on equitable considerations,
I do not have authority to provide equitable relief based on principles of fairness and thus cannot reverse the revocation for that reason.  *US Ultrasound*, DAB No. 2302 at 8 (2010) (“[n]either the ALJ nor the Board is authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements.”).

**I cannot review the length of the re-enrollment bar CMS imposed.**Petitioner also argues that I can and should reduce the re-enrollment bar in this case, due to various factors such as the dearth of evidence brought by CMS, what Petitioner perceives as a lack of culpability, a perceived lack of harm to the Medicare trust fund, the fact that the claims at issue were submitted by Rural Metro prior to its acquisition by American Medical Response, and that revocation will cause harm to the Medicare beneficiaries in several Florida counties.  P. Br. at 16-19, 20-23; CMS Ex. 2 at 1.  However, the re-enrollment bar itself is not reviewable by an ALJ.  *Vijendra Dave, M.D*., DAB No. 2672 at 8-12 (2016).

VIII.  Conclusion

For the foregoing reasons, I affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(i), effective September 25, 2016.
  
          /s/
        Scott Anderson

                      Administrative Law Judge Back to top
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