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                              Richard Klotz, MD, DAB CR5333 (2019)
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Richard Klotz, MD, DAB CR5333 (2019)








  
  
    

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





Richard Klotz, MD
	(NPI: 1750457719; PTAN: G17244),
	Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-18-455Decision No. CR5333May 30, 2019

        
              
    

      DECISION
Petitioner's Medicare billing privileges were deactivated on May 23, 2017, as a result of his failure to timely comply with a request that he revalidate his Medicare enrollment. For the reasons discussed below, I conclude that the effective date of Petitioner's reactivated Medicare billing privileges remains July 13, 2017.
I. Background and Procedural History
On December 15, 2016, Noridian Healthcare Solutions (Noridian), a Medicare administrative contractor, sent a letter to Petitioner, an ophthalmologist, requesting that he revalidate his Medicare enrollment no later than February 28, 2017. *See* Centers for Medicare & Medicaid Services (CMS) Exhibit (Ex.) 1 at 1; *see* CMS Ex. 2. Noridian instructed Petitioner to "update or confirm all the information in [his] record ...." CMS Ex. 1 at 1. Noridian cautioned Petitioner that if "[his] enrollment is deactivated," he "will not be paid for services rendered during the period of deactivation" which "will cause a gap in [his] reimbursement." CMS Ex. 1 at 1.
**Page 2**
On March 24, 2017, Noridian sent Petitioner a letter informing him that it had not received a revalidation application by the February 28, 2017 deadline. CMS Ex. 2 at 1. Noridian again warned Petitioner that his billing privileges could be deactivated, which would cause a gap in his reimbursement. CMS Ex. 2 at 1.
Petitioner submitted a revalidation application, Form CMS-855I, via the internet-based Provider, Enrollment, Chain, and Ownership System (PECOS) that Noridian received on April 3, 2017. CMS Ex. 3 at 1. On April 21, 2017, Noridian sent Petitioner an email message in which it requested "revisions and/or supporting documentation." CMS Ex. 4 at 1. Specifically, Noridian requested that Petitioner submit, via PECOS, a Form CMS-588 electronic funds transfer (EFT) authorization agreement, along with a copy of a voided check or bank verification letter. CMS Ex. 4 at 1.
Petitioner furnished a copy of a voided check on April 24, 2017, in an apparent response to Noridian's April 21, 2017 request for additional information. CMS Ex. 5. However, Petitioner did not submit the requested EFT authorization agreement. CMS Ex. 6 (May 23, 2017 Application Data Report reflecting that Petitioner's revalidation application did not include an EFT authorization agreement); *see* CMS Ex. 4 at 1 (Noridian's April 21, 2017 request that Petitioner submit a Form CMS-588 EFT authorization agreement).
Because Petitioner had not "revalidated [his] enrollment record with [Noridian], or [he] didn't respond to [Noridian's] requests for more information," Noridian informed Petitioner in a letter dated May 23, 2017, that it had deactivated Petitioner's billing privileges that same day. CMS Ex. 7 at 1. Noridian informed Petitioner that it "will not pay any claims after this date." CMS Ex. 7 at 1. Noridian sent this letter to Petitioner at the same address to which it mailed the previous revalidation request, which is also the address that Petitioner has reported on his enrollment applications. CMS Ex. 7 at 1; *see* CMS Exs. 1, 3, 6, 8.
Petitioner submitted a revalidation application via PECOS that Noridian received on July 13, 2017. CMS Ex. 8 at 1. On July 20, 2017, Noridian sent Petitioner a copy of the EFT authorization agreement, and asked him to return the completed form along with a voided check. CMS Ex. 9. Petitioner submitted his response via facsimile.1
 CMS Ex. 9.
In a letter dated August 3, 2017, Noridian informed Petitioner that it had approved his revalidation application and reactivated his billing privileges, but that he had a "lapse in coverage" from May 23, 2017 through July 12, 2017. CMS Ex. 10 at 1-2.
Petitioner submitted a request for reconsideration, dated August 28, 2017, in which he disputed the effective date assigned for his reactivated billing privileges. CMS Ex. 11.
**Page 3**
Noridian issued a reconsidered determination on November 13, 2017, in which it maintained the July 13, 2017 effective date of Petitioner's reactivated billing privileges. CMS Ex. 12 at 2. Noridian explained the following:
[On] April 3, 2017 an 855I web revalidation application was received and was correctly rejected May 23, 2017. A request for additional information was emailed April 21, 2017 and the information received May 5, 2017 did not contain all the information requested. This rejection caused a stop in billing to be applied effective May 23, 2017.
[On] July 13, 2017 an 855I web revalidation/reactivation application was received and was processed. This application released the stop in billing with an end date of July 12, 2017. Under 42 [C.F.R. § ] 424.520(d) the effective date is the date the contractor receives the application that is processed. Reactivations are not eligible for retrospective billing under 42 [C.F.R. § ] 424.521.
The request to remove the gap in billing cannot be honored due to the enrollment not being revalidated by the due date February 28, 2017.
CMS Ex. 12 at 2.
Petitioner submitted a request for an administrative law judge (ALJ) hearing that was received on January 11, 2018. ALJ Carolyn Cozad Hughes issued an Acknowledgment and Pre-Hearing Order (Pre-Hearing Order) on January 23, 2018, at which time she directed the parties to file their respective pre-hearing exchanges.2
 CMS filed a Motion for Summary Judgment and Pre-Hearing Brief (CMS Br.), along with 12 proposed exhibits (CMS Exs. 1-12). Petitioner filed two letters that I collectively construe as a brief and response to CMS's motion for summary judgment (P. Br.).3
 In the absence of any objections, I admit CMS Exs. 1-12 into the evidentiary record.
**Page 4**
A hearing for the purpose of cross-examination is unnecessary because neither party has submitted written direct testimony. Pre-Hearing Order, §§ 8-10. I consider the record in this case to be closed, and the matter is ready for a decision on the merits.4
II. Issue
Whether CMS had a legitimate basis to assign Petitioner a July 13, 2017 effective date for his reactivated Medicare billing privileges.
III. Jurisdiction
I have jurisdiction to decide this case. 42 C.F.R. §§ 498.3(b)(15), 498.5(*l*)(2).
IV. Findings of Fact, Conclusions of Law, and Analysis5
***1. On December 15, 2016, Noridian requested that Petitioner revalidate his Medicare enrollment no later than February 28, 2017.***
***2. On April 3, 2017, Petitioner submitted an incomplete revalidation application that did not include an EFT authorization agreement.***
***3. On April 21, 2017, Noridian asked Petitioner to submit, inter alia, an EFT authorization agreement.***
***4. On May 23, 2017, after Petitioner did not timely submit a complete revalidation application, Noridian sent a letter to Petitioner notifying him that it had deactivated his billing privileges that same day.***
***5. On July 13, 2017, Petitioner submitted another incomplete enrollment application for purposes of revalidation.***
***6. On August 3, 2017, after Petitioner submitted an EFT authorization agreement and bank account information, Noridian approved the revalidation application and assigned a July 13, 2017 effective date for reactivated Medicare billing privileges.***
**Page 5**
***7. An effective date earlier than July 13, 2017, is not warranted for the reactivation of Petitioner's Medicare enrollment and billing privileges.***
As a physician, Petitioner is a "supplier" for purposes of the Medicare program. *See* CMS Ex. 3 at 1-2; *see also* 42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202 (definition of supplier); 498.2. A "supplier" furnishes items or services under Medicare and the term applies to physicians or other practitioners that are not included within the definition of the phrase "provider of services." 42 U.S.C. § 1395x(d). A supplier must enroll in the Medicare program to receive payment for covered Medicare items or services. 42 C.F.R. § 424.505. The regulations at 42 C.F.R. Part 424, subpart P, establish the requirements for a supplier to enroll in the Medicare program. 42 C.F.R. §§ 424.510-424.516; *see also* 42 U.S.C. § 1395cc(j)(1)(A) (authorizing the Secretary of the U.S. Department of Health and Human Services to establish regulations addressing the enrollment of providers and suppliers in the Medicare program). A supplier who seeks billing privileges under Medicare "must submit enrollment information on the applicable enrollment application." 42 C.F.R. § 424.510(a)(1). "Once the provider or supplier successfully completes the enrollment process ... CMS enrolls the provider or supplier into the Medicare program." 42 C.F.R. § 424.510(a)(1); *see also* 42 C.F.R. § 424.510(d) (listing enrollment requirements). Thereafter, "[t]o maintain Medicare billing privileges, a ... supplier ... must resubmit and recertify the accuracy of its enrollment information every 5 years." 42 C.F.R. § 424.515. Further, a supplier "may be required to revalidate their enrollment outside the routine 5-year revalidation cycle." 42 C.F.R. § 424.515(e).
CMS is authorized to deactivate an enrolled supplier's Medicare billing privileges if the enrollee does not provide complete and accurate information within 90 days of a request for such information. 42 C.F.R. § 424.540(a)(3). If CMS deactivates a supplier's Medicare billing privileges, "[n]o payment may be made for otherwise Medicare covered items or services furnished to a Medicare beneficiary ...." 42 C.F.R. § 424.555(b); *Urology Grp. of NJ, LLC*, DAB No. 2860 at 10 (2018) ("The regulations, taken together, clearly establish that a deactivated provider or supplier was not intended to be entitled to Medicare reimbursement for services rendered during the period of deactivation."). Further, and quite significantly, the Departmental Appeals Board (DAB) has unambiguously stated that "[i]t is certainly true that [the petitioner] may not receive payment for claims for services during any period when his billing privileges were deactivated." *Willie Goffney, Jr., M.D.*, DAB No. 2763 at 6 (2017); *see Urology Grp.*, DAB No. 2860 at 11 ("Taking [the] unique effects of revocation into consideration, it is reasonable to conclude that CMS intended for revocations and deactivations to share the feature of precluding a provider or supplier from collecting reimbursement for services rendered during the period of inactive Medicare billing privileges, while simultaneously intending for revocations to have more severe consequences on a provider's or supplier's ability to participate."); *Frederick Brodeur, M*.*D.*, DAB No. 2857 at 16 (2018) ("Allowing a deactivated supplier to bill for services furnished during a period of
**Page 6**
deactivation would conflict with section 424.555(b) of the regulations ...."). The regulation authorizing deactivation explains that "[d]eactivation of Medicare billing privileges is considered an action to protect the provider or supplier from misuse of its billing number and to protect the Medicare Trust Funds from unnecessary overpayments." 42 C.F.R. § 424.540(c).
On December 15, 2016, Noridian mailed a letter to Petitioner directing him to revalidate his Medicare enrollment record no later than February 28, 2017, and Noridian warned that Petitioner's failure to revalidate could result in deactivation of his Medicare billing privileges, with a resulting gap in reimbursement. CMS Ex. 1 at 1. After Petitioner did not submit a complete enrollment application, despite being given additional time to do so, Noridian deactivated Petitioner's billing privileges on May 23, 2017.
The pertinent regulation with respect to the effective date of reactivation is 42 C.F.R. § 424.520(d). *Urology Grp.*, DAB No. 2860 at 7 ("The governing authority to determine the effective date for reactivation of Petitioner's Medicare billing privileges is 42 C.F.R. § 424.520(d)" (italics omitted).). Section 424.520(d) states that "[t]he effective date for billing privileges for physicians, non-physician practitioners, physician and non-physician practitioner organizations ... is the later of – (1) [t]he date of filing of a Medicare enrollment application that was subsequently approved by a Medicare contractor; or (2) [t]he date that the supplier first began furnishing services at a new practice location." The DAB has explained that the "date of filing" is the date "that an application, however sent to a contractor, is actually received." *Alexander C. Gatzimos, MD, JD, LLC*, DAB No. 2730 at 5 (2016) (emphasis omitted). Noridian deactivated Petitioner's billing privileges because he did not submit a complete revalidation application in response to the revalidation request and did not provide the necessary revisions within the time period given for those revisions, and on July 13, 2017, Petitioner electronically filed an application for purposes of revalidation and reactivation that was processed to approval. CMS Exs. 4, 6, 7, 8, 10. Based on the July 13, 2017 receipt date of the enrollment application that was processed to approval, Noridian did not err in assigning a July 13, 2017 effective date for reactivated billing privileges. 42 C.F.R. § 424.520(d); *see Urology Grp.*, DAB No. 2860 at 9 ("Moreover, the fact that a supplier must file a new enrollment application in order to reactivate its billing privileges is consistent with the language of section 424.520(d) and compelling evidence that the provision should apply to reactivations."); *Willie Goffney*, DAB No. 2763 at 6 ("It is certainly true that [the petitioner] may not receive payment for claims for services during any period when [its] billing privileges were deactivated."); *Frederick Brodeur*, DAB No. 2857 at 16 ("Petitioner remained enrolled in Medicare, but his deactivated status made [him] ineligible for payment for any covered services he furnished to otherwise eligible Medicare beneficiaries, pursuant to section 424.555(b), until he provided the information necessary to reactivate his billing privileges.").
**Page 7**
Petitioner is challenging the assignment of a July 13, 2017 effective date of his reactivated billing privileges, which resulted in a nearly two-month gap in his Medicare billing privileges. The deactivation of Petitioner's billing privileges on May 23, 2017, based on his failure to comply with a revalidation request, is not reviewable. *Willie Goffney*, DAB No. 2763 at 5 (stating no regulation provides appeal rights with respect to the contractor's deactivation determination); *Frederick Brodeur*, DAB No. 2857 at 12 ("A contractor's deactivation decision is not an initial determination subject to ALJ or [DAB] review."). I can only review the effective date assigned for Petitioner's reactivated billing privileges, and Petitioner has not presented evidence that the July 13, 2017 effective date of reactivation was inappropriate. Pursuant to 42 C.F.R. § 424.520(d), Noridian had a legitimate basis to assign an effective date of July 13, 2017, for Petitioner's reactivated billing privileges.
Petitioner argues in his request for hearing that he had a number of telephone conversations with Noridian in which he was "given a run-around," and he also argues that Noridian unfairly denied his request for reconsideration. Again, I point out that I do not have the authority to review the deactivation of Petitioner's billing privileges, and the scope of my review is limited to whether Noridian assigned the correct effective date for Petitioner's reactivated billing privileges. *See Frederick Brodeur,* DAB No. 2857 at 12. Nonetheless, I note that Petitioner has not claimed that he submitted a *complete* revalidation application with an EFT authorization agreement prior to July 13, 2017, despite the fact Noridian warned him that he must "update or confirm all the information in [his] record" in order to avoid a gap in his Medicare reimbursements and had specifically asked Petitioner for an EFT authorization agreement to complete his application. CMS Exs. 1 at 1; 4 at 1. Even if Petitioner was confused based on his telephone conversations with Noridian personnel, Noridian clearly informed him in writing that he needed to revalidate his enrollment record and that the failure to do so would adversely affect his billing privileges. CMS Ex. 1 (December 15, 2016 letter requiring timely revalidation to avoid deactivation and a gap in reimbursement); CMS Ex. 2 (March 24, 2017 follow-up letter, after Petitioner did not timely revalidate, warning that his failure to revalidate would cause deactivation and a gap in reimbursement); CMS Ex. 4 (April 21, 2017 email instructing Petitioner to submit additional information to complete his revalidation application and warning that his revalidation application would be rejected if he did not do so by May 21, 2017); CMS Ex. 7 (May 23, 2017 letter informing Petitioner that his billing privileges had been stopped because he did not timely revalidate his enrollment record). Despite repeated warnings, Petitioner did not submit a revalidation application that could be processed to approval until July 13, 2017. CMS Ex. 8. Even if I had authority to review the deactivation of Petitioner's billing privileges, Petitioner has not shown that Noridian erred when it deactivated his billing privileges.
Noridian had a legitimate basis to deactivate Petitioner's billing privileges when he failed to respond to the revalidation request, and it had a legitimate basis to assign a July 13,
**Page 8**
2017 effective date for his reactivated billing privileges based on the date he submitted the enrollment application that was ultimately processed to approval. 42 C.F.R. § 424.520(d).
To the extent that Petitioner's request for relief is based on principles of equitable relief, I cannot grant such relief. *US Ultrasound*, DAB No. 2302 at 8 (2010) ("Neither the ALJ nor the [DAB] is authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements."). Petitioner points to no authority by which I may grant him relief from the applicable regulatory requirements, and I have no authority to declare statutes or regulations invalid or ultra vires. *1866ICPayday.com, L.L.C*., DAB No. 2289 at 14 (2009) ("An ALJ is bound by applicable laws and regulations and may not invalidate either a law or regulation on any ground ....").
V. Conclusion
For the foregoing reasons, I uphold the July 13, 2017 effective date of Petitioner's reactivated Medicare billing privileges.


          /s/
        Leslie C. Rogall

                      Administrative Law Judge
      1. It is unclear when Petitioner sent Noridian this information, as an April 25, 2012 date-stamp appears on the header of Petitioner's outgoing facsimile message. CMS Ex. 9. back to note 1
                      2. This case was reassigned to me on March 8, 2019. back to note 2
                      3. Petitioner also submitted several documents via DAB E-File that are not marked as exhibits, and CMS objects to the admission of these exhibits. See Pre-Hearing Order, § 5. These documents are either irrelevant (postcard reminding Petitioner of the Medicare open enrollment period; Internal Revenue Service letter assigning Petitioner a taxpayer identification number; Petitioner’s list of patients who received services during his period of deactivation) or are otherwise duplicative (August 28, 2017 reconsideration request, which CMS submitted as CMS Ex. 11 at 2-3; voided check # 12250, which CMS submitted as CMS Ex. 9 at 6). I do not admit these irrelevant or duplicative documents that are not compliant with the Pre-Hearing Order. See also Civil Remedies Division Procedures § 14 (requiring that exhibits be marked, paginated, and included in an exhibit list). back to note 3
                      4. Because a hearing is unnecessary, I need not address whether summary judgment is appropriate. back to note 4
                      5. Findings of fact and conclusions of law are in italics and bold font. back to note 5 Back to top
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