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                              Zalwango Health & Wellness Concierge, P.C. and Mastura Zalwango, DAB CR6263 (2023)
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Zalwango Health & Wellness Concierge, P.C. and Mastura Zalwango, DAB CR6263 (2023)








  
  
    

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





Zalwango Health & Wellness Concierge, P.C. and Mastura Zalwango
(NPIs: 1962772996 and 1235424565),
(PTANs: IL7657, IL5988 and F400501408),
Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-23-174Decision No. CR6263April 6, 2023

        
              
    

      DECISION

I sustain the determination of the Centers for Medicare & Medicaid Services (CMS), as affirmed on reconsideration, to impose remedies against Petitioners Zalwango Health & Wellness Concierge, P.C., (Petitioner Zalwango, P.C.) and Mastura Zalwango (Petitioner Zalwango) that include:  revoking Petitioners’ Medicare enrollment; imposing a 10-year re-enrollment bar against Petitioners; and placing Petitioners on the CMS Preclusion List.

I. Background

CMS moved for summary judgment and alternatively for a decision based on the written record and without an in-person hearing.  Petitioners opposed CMS’s motion.  With its motion CMS filed exhibits that it identified as CMS Ex. 1-CMS Ex. 13.  Petitioners filed a single exhibit, identified as P. Ex. 1, in opposition.

It is unnecessary that I rule on the motion for summary judgment because this case is ripe for a decision based on the written record without regard to the criteria for imposing summary judgment.  Neither party offered the testimony of a witness.  Consequently,

Page 2

I may resolve any fact disputes based on the documents that the parties offered as exhibits.1

Neither party filed objections to exhibits.  Consequently, I receive into the record CMS Ex. 1-CMS Ex. 13 and P. Ex. 1.

II. Issues, Findings of Fact and Conclusions of Law

**A. Issue**

The issue in this case is whether CMS is authorized to impose remedies against Petitioners, including:  revocation of their Medicare participation; an enrollment bar; and placing Petitioners on the Preclusion List.

**B. Findings of Fact and Conclusions of Law**

**1. Revocation of Petitioners’ Medicare Enrollment**

A supplier of health care services is not entitled to participate in the Medicare program.  The supplier must comply with governing criteria to be eligible to participate or retain eligibility.  42 C.F.R. §§ 424.500, 424.505.  CMS may revoke a supplier’s Medicare participation if it fails to meet governing criteria.  Relevant to this case, CMS may revoke Medicare participation where a supplier of Medicare items or services has a pattern or practice of submitting reimbursement claims that fail to meet Medicare billing requirements.  42 C.F.R. § 424.535(a)(8)(ii).

Determining whether a pattern or practice of improper claims exists lies within CMS’s discretionary authority, subject to guidelines that are stated in the governing regulation.  These include:  (A) the percentage of submitted claims that were denied during the period under consideration; (B) whether a supplier has a history of adverse actions and the nature of such actions; (C) the type of billing noncompliance and the specific facts surrounding that noncompliance; and (D) any other information regarding a supplier’s specific circumstances that CMS deems relevant.  42 C.F.R. § 424.535(a)(8)(ii)(A)-(D).

The regulation instructs CMS to consider the guidelines “as appropriate or applicable.”  42 C.F.R. § 424.535(a)(8)(ii).  It does not mandate that a particular guideline or combination of guidelines be met in an individual case.  The regulation leaves it to CMS to decide what weight to afford evidence relating to any of the guidelines.

Page 3

Revocation based on a pattern or practice of improper claims is an action that falls within CMS’s discretion.  My review of CMS’s exercise of its discretion is limited to deciding whether there is a valid legal basis for CMS to act.  I must sustain a determination if the facts are sufficient to support it.  *William Garner, M.D.,*DAB No. 3026 at 8 (2020); *Sandra E. Johnson, CRNA,*DAB No. 2708 at 15 (2016); *Letantia Bussell, M.D.*, DAB No. 2196 at 13 (2008).  I may not substitute my judgment for that of CMS so long as the evidence establishes a legal basis for a revocation determination.  *Johnson,*DAB No. 2708 at 16.

Petitioner Zalwango enrolled in the Medicare program in 2011 as a supplier of services.  She is the sole owner of Petitioner Zalwango, P.C.  She assigned her benefits to that entity effective July 17, 2012.  CMS Ex. 7 at 3, 7.

CMS determined that both Petitioners had engaged in a pattern or practice of improper claims submissions, justifying revocation of their Medicare participation and the additional remedies of an enrollment bar and placing Petitioners on the Preclusion List.  The evidence establishes that CMS considered the guidelines for revocation contained in 42 C.F.R. § 424.535(a)(8)(ii) and found sufficient support to justify a determination to revoke Petitioners’ Medicare enrollment.

A Medicare contractor, acting on behalf of CMS, reviewed Petitioners’ billing on three separate occasions:  during the latter half of 2017; in late 2020 and early 2021; and in the first half of 2022.  The reviews found that nearly all the reviewed claims were improper, either because the services for which they billed were not reasonable or necessary or because the claims did not support the level of services for which Petitioners claimed reimbursement.  CMS Ex. 4 at 4-10; CMS Ex. 5 at 8, 9-13; CMS Ex. 6 at 10.

The 2017 review examined a total of 30 reimbursement claims.  The contractor denied any payment for 14 of these claims because they did not document services that were reasonable and necessary.  It recoded 16 claims, resulting in less reimbursement than Petitioners claimed, because they did not support the level of management and evaluation that Petitioners asserted.  CMS Ex. 4 at 4-10.

The contractor evaluated 30 additional claims during the 2021 review.  It found that 28 of those claims were improper.  CMS Ex. 5 at 1, 17; CMS Ex. 8; CMS Ex. 9.  Findings of impropriety were that some of the claims were not for services that were reasonable and necessary, others alleged services that were not rendered as billed, some used improper coding to claim reimbursement, and others did not document required elements for billing.  CMS Ex. 5 at 9.  The contractor found also that Petitioners failed to notify beneficiaries in advance that some services were not covered by Medicare.  *Id.*  The contractor found overpayments of more than $2500 for the claims that it had reviewed.  *Id.*at 12.

Page 4

The 2022 review involved 30 more claims.  After evaluating these claims the contractor denied reimbursement for each of them because Petitioners had billed for services that were not reasonable and necessary and that were not provided as claimed.  CMS Ex. 6 at 10.  The contractor determined that CMS had overpaid Petitioners over $3400 for these improper claims.  *Id.*at 14.

There is an appeals process via which a supplier that is dissatisfied with a claims review may challenge findings of improper claims.  42 C.F.R. §§ 405.900-405.1140.  Petitioners disputed some of the findings of improper claims resulting from the 2017 review.  Their appeal was favorable in only one instance.  CMS Ex. 4 at 10.  Likewise, Petitioners appealed some of the adverse findings resulting from the 2021 review.  Petitioners prevailed in two instances, with the remaining findings being sustained.  CMS Ex. 5 at 17; CMS Ex. 8; CMS Ex. 9.  Petitioners did not successfully challenge any of the findings of improper claims made at the 2022 review.  Consequently, 96 percent of the 2017 review findings were sustained, as were 93 percent of the findings made at the 2021 review, and 100 percent of the findings made at the 2022 review.  The findings of improper claims that were made at the three reviews and that were sustained on appeal are administratively final and may not now be challenged by Petitioners.

Regulations do not require CMS or its contractors to offer remedial assistance to a supplier who is found to have filed improper claims.  Nevertheless, CMS’s contractor offered such assistance to Petitioners.  After the 2017 review the contractor supplied Petitioners with the name of a representative who Petitioners could contact with questions about billing issues, directed Petitioners to its website, and offered Petitioners a telephone number that Petitioners could call for outreach and education.  CMS Ex. 4 at 5.  In its letter summarizing the findings of the 2021 review the contractor provided detailed explanations of its findings.  CMS Ex. 5 at 12.  In its summary of the 2022 review the contractor provided Petitioners with a summary of their persistent billing trends.  CMS Ex. 6 at 10-14.

The percentage of claims that the contractor found to be improper at each of the reviews – 93 percent in 2017, 96 percent in 2021, and 100 percent in 2022 – is strong evidence of a pattern or practice of improper claims.  *See* 42 C.F.R. § 424.535(a)(8)(ii)(A).  That this pattern persisted despite the contractor’s efforts to offer Petitioners remedial assistance is especially telling.  It is equally noteworthy that a pattern of improper claims submissions persisted over a period of more than four years.  That is certainly sufficient basis for CMS to conclude that Petitioners persistently filed improper claims.

The nature of Petitioners’ improper claims also unequivocally supports a finding of a pattern or practice of improper claims by Petitioners.  *See* 42 C.F.R. § 424.535(a)(8)(ii)(C).  CMS and its contractor justifiably concluded from Petitioners’ persistent submission of claims that were not supported by documentation that Petitioners

Page 5

had a “habit” of submitting claims that continued to be denied for the same or similar reasons.  CMS Ex. 7 at 6.

The contractor found that most of the claims that it reviewed were not reliably supported by verifiable documentation.  In reviewing the claims, the contractor found a persistent pattern of claims that were purportedly supported by vague documentation, documentation that did not support the level of services that were claimed, and instances of incomplete or invalid documentation.  CMS Ex. 5 at 9-12; CMS Ex. 7 at 6.  Furthermore, there were numerous instances in which Petitioners “upcoded” their claims – meaning that Petitioners persistently asserted a level of complexity or difficulty for the services for which they claimed reimbursement that was not supported by the circumstances of the claims or by documentation.  CMS Ex. 4 at 5, 7-9.

The most damning aspect of this evidence is that Petitioners’ behavior persisted over a period of more than four years and despite the contractor’s attempts to educate Petitioners about their responsibilities.  That evidence points only to the conclusion that Petitioners were incorrigible and that they persisted with improper claims filing despite the contractor’s efforts to address the problem.

The circumstances surrounding Petitioners’ submission of improper claims also supports the determination to revoke their Medicare enrollment.  *See*42 C.F.R. § 424.535(a)(8)(ii)(D).  This case does not involve random error or even systemic billing errors that Petitioners corrected once they were informed about them.  Rather, it discloses a persistent pattern of improper claims by Petitioners, a pattern that was extraordinarily resilient given the efforts by the contractor to reveal it and to encourage Petitioners to correct their improper practices.

I find Petitioners’ arguments against revocation of their Medicare enrollment to be unpersuasive.

Petitioners argue that the percentage of claims that the contractor denied after review is actually considerably lower than that which the contractor and CMS contend to be the case.  *See*42 C.F.R. § 424.535(a)(8)(ii)(A); Petitioners’ Prehearing Brief and Response to Respondent’s Motion for Summary Judgment (Petitioners’ Brief) at 14-15.  Petitioners base their argument on their contention that the percentage of claims that the contractor fully denied (that is to say, for which it concluded that no reimbursement was permissible) was 46 percent in the 2017 review and 36 percent in the 2020-2021 review.  Petitioners concede that the contractor found 100 percent of the claims to be non-reimbursable in the 2022 review.  From these assertions, Petitioners contend that CMS cannot infer a pattern or practice of improper claims, especially considering the asserted improvement in Petitioners’ performance at the second review.  Petitioners’ Brief at 14.

Page 6

I find this argument to be without merit for several reasons.  First, 42 C.F.R. § 424.535(a)(8)(ii) does not address only claims that are fully denied.  It explicitly addresses all claims that fail to meet Medicare billing requirements.  The regulation encompasses equally claims that are defective because they are upcoded or badly documented as it encompasses claims that are for non-reimbursable items or services.  Petitioners’ improper claims thus counted as part of a pattern or practice of such claims whether the contractor denied them in full or allowed only partial payment for them.

Second, the guidelines at subparts (A)-(D) of the regulation are just that, guidelines.  They are not rigid restrictions of what CMS may consider as improper billing practices by a supplier.  Indeed, subpart (D) makes it plain that CMS may consider any information that is relevant to a supplier’s billing practices.

Third, the language of subpart (A) should not be read restrictively to encompass only claims that are fully denied by a contractor or CMS.  I interpret that language to sweep in claims that are denied either fully or in part.  That is evident in light of the broader language of 42 C.F.R. § 424.535(a)(8)(ii), which addresses all claims that fail to meet Medicare billing requirements.

Finally, even employing Petitioners’ definition of denied claims to mean only claims that are fully denied, the denial rate emerging from the three reviews remains very substantial, ranging up to 100 percent at the 2022 review.  That denial rate suffices to establish a pattern or practice of improper claims by Petitioners.

Petitioners contend that the number of claims reviewed by the contractor – 90 claims over a period of more than four years – is too small a sample from which to draw any reliable conclusions about Petitioners’ billing practices.  Petitioners’ Brief at 15.

Neither party offered evidence as to the predictive value of the samples that the contractor reviewed.  For that reason, I reach no conclusion as to the precise statistical significance of these samples.  However, these samples establish a pattern or practice of improper claims by Petitioners without regard to their statistical significance.  They establish dozens of improper claims with repeated defects over a period of more than four years, resulting in overpayments of thousands of dollars to Petitioners.  That is more than sufficient to establish grounds for revocation of Petitioners’ Medicare enrollment.

Furthermore, although it may not be possible to predict exactly what percentage of Petitioners’ total claims were improper in the absence of evidence of the statistical significance of the samples that the contractor reviewed, it is certainly reasonable to infer that Petitioners filed many more improper claims than just the 90 claims in the samples.  That is because the percentage of those claims that were improper exceeded 90 percent in every instance.

Page 7

Petitioners argue next that CMS failed to consider that Petitioners have no history of final adverse actions regarding their claims.  *See*42 C.F.R. § 424.535(a)(8)(ii)(B); Petitioners’ Brief at 15-16.  However, nothing in the governing regulation requires CMS to weigh a supplier’s billing history in deciding whether a pattern or practice of improper claims exists.  Billing history is one of the factors that CMS may consider, but evaluating it is not mandatory.

However, although CMS did not explicitly consider Petitioners’ compliance history as it relates to factor (B) of 42 C.F.R. § 424.535(a)(8)(ii), it plainly considered it as another factor to be considered pursuant to subpart (D) of the regulation in deciding whether a pattern or practice of improper billing is present.  It was only after three reviews covering a span of more than four years, which unearthed numerous improper claims that CMS concluded that Petitioners should not be allowed to continue to participate in Medicare.

Petitioners argue that the reasons that the contractor gave for denying Petitioners’ claims either entirely or in part varied from claim to claim and from survey to survey.  Petitioners’ Brief at 16-17.  It suggests CMS cannot rely on the myriad reasons that the contractor gave for its denials to establish a pattern or practice of improper claims within the guidance of 42 C.F.R. § 424.535(a)(8)(ii)(C).

But, and as CMS has established, the deficiencies in Petitioners’ claims plainly fell into clearly defined broad categories.  There were numerous claims that were for services that were not reimbursable, others that lacked sufficient justifying documentation, still others that were upcoded to claim reimbursement for more complex or demanding services than Petitioners had provided.  It is true that the specifics varied from claim to claim but that doesn’t derogate from the fact that all the improper claims were deficient for certain generally described reasons.

Furthermore, it doesn’t matter that not all the improper claims were exactly alike or that the specific reasons for denying them varied from claim to claim.  42 C.F.R. § 424.535(a)(8)(ii) doesn’t apply only to identical or very similar improper claims.  A pattern or practice of improper claims exists under this regulation if enough claims are defective for any reason.

Petitioners also complain that the contractor failed to provide it with sufficient assistance to correct its practice of filing improper claims.  Petitioners’ Brief at 17-18.  There is nothing in the regulation that requires a contractor or CMS to assist a supplier in remediating a pattern or practice of filing improper claims.  However, in this case, the evidence that I describe above establishes that the contractor did offer to assist Petitioners, to no avail.

Finally, Petitioners contend that CMS failed to take into consideration that Petitioner Zalwango made changes to her practice’s billing system after the 2017 review that

Page 8

produced an alleged improvement that was evident at the 2020-21 review.  Petitioners’ Brief at 18.  Petitioners offered no affirmative proof that established that they changed their billing system in any meaningful way.  In fact, the evidence proves that Petitioners showed no meaningful reduction in the number of improper claims that they filed over a period of more than four years.

**2. Re-enrollment Bar**

I sustain CMS’s determination to impose a re-enrollment bar of 10 years against Petitioners.

A bar against re-enrollment is a mandatory remedy where a supplier engages in a pattern or practice of filing improper claims.  42 C.F.R. § 424.535(c)(1)(i).  In this case CMS imposed a re-enrollment bar against Petitioners of 10 years, the maximum that the regulation permits, except in circumstances not applicable here.  *Id.*

The determination of the length of the re-enrollment bar falls within CMS’s discretion.  I have no authority to review that determination.  *William Garner, M.D.*, DAB No. 3026 at 8, 16 (2020); *Angela R. Styles, M.D.*, DAB No. 2882 at 10 (2018).

Petitioners argue that no re-enrollment bar should be imposed because they did not engage in a pattern or practice of improper claims.  Petitioners’ Brief at 18-19.  This argument fails because, as I have explained, there is overwhelming evidence to support CMS’s determination of a pattern or practice of improper claims filing.

Petitioners’ attempt to distinguish the *Garner* and *Styles* decisions by arguing that in those cases the re-enrollment bars were for periods of three years as opposed to the 10-year bar that the contractor imposed here.  They assert that the petitioners’ improper claims practices in those cases were more egregious than is the case here.  Petitioners’ Brief at 19.  That is not a meaningful legal distinction.  The length of a re-enrollment bar falls within CMS’s or its contractor’s discretion so long as it is within the period allowed by regulation, which is the case here.  I may not decide that a bar is unjustified based on comparing the underlying conduct that authorizes the bar in one case with the conduct in another case.

Petitioners argue additionally that a 10-year re-enrollment bar will likely put them out of business.  It asserts that this remedy is unfair because their improper claims were not egregious but rather, were found to be improper based on “nuanced” medical issues.  Petitioners’ Brief at 19; *see*CMS Ex. 7 at 7.

That is an equitable argument that I have no authority to consider.  As I have explained, my authority is limited to deciding whether CMS has established a legal basis for imposing remedies, including a re-enrollment bar.  I may not look behind the

Page 9

determination to decide whether it is or is not unfair.  *Patrick Bruggeman, D.P.M.*, DAB No. 2725 at 15 (2016).

**3. Preclusion List**

The CMS Preclusion List operates to prohibit Medicare Advantage organizations from making payments for health care items or services to suppliers whose names appear on the list.2  It also operates to prohibit a Medicare Part D sponsor from accepting a pharmacy claim for payment for any medication prescribed by suppliers whose names appear on the list.3  42 C.F.R. §§ 422.2, 422.222, 423.100, 423.120(c)(6).

CMS may place a supplier on the Preclusion List if that supplier’s Medicare enrollment is revoked for reasons that include engaging in a pattern or practice of filing improper claims pursuant to 42 C.F.R. § 424.535(a)(8)(ii), is currently subject to a re-enrollment bar, and if CMS determines that the conduct that led to the revocation is detrimental to the best interests of the Medicare program.  42 C.F.R. §§ 422.2; 423.100.  In deciding whether the third criterion for placing a supplier on the preclusion list is met, CMS considers:  (A) the seriousness of the conduct that underlies the revocation; (B) the degree to which that conduct could affect the integrity of the Medicare program; and (C) any other relevant evidence.  *Id.*

I find above that the first two criteria for placing Petitioners on the Preclusion List are met and I need not restate my analysis.  As to the third criterion, the evidence overwhelmingly supports the determination that Petitioners’ improper billing practices were detrimental to the Medicare program’s best interests.

I take notice that each year CMS or its contractors must process millions of suppliers’ claims for Medicare reimbursement.  The huge volume of claims precludes evaluation of each individual claim for correctness and propriety.  Rather, CMS and its contractors must rely on the honesty and accuracy of the suppliers whose claims it processes.  The immense volume of claims that are filed each year leaves the Medicare program highly vulnerable to waste, fraud, and abuse caused by suppliers who do not faithfully comply with claims requirements.

Petitioners’ pattern or practice of improper claims was extremely serious, and it clearly affected the integrity of the Medicare program.  When a supplier of services such as

Page 10

Petitioners engage in a pattern or practice of improper claims that behavior attacks the Medicare program at its most vulnerable point.  The program may be defenseless against improper – even false – claims until those claims are discovered via a review process.  Even then, the review may uncover only the tip of the iceberg.  Here, a pattern of improper claims extending over a period of more than four years during which well over 90 percent of the sampled claims were improper suggests that Petitioners likely reaped very substantial undeserved payments from Medicare, in amounts that greatly exceeded the several thousand dollars of overpayments that the contractor found.

Petitioners argue that no authority exists to place them on the preclusion list.  Petitioners’ Brief at 19-21.  They assert first, that there was no basis to revoke their enrollment in Medicare.  I have addressed that issue and need not revisit it.

Petitioners argue that their claims were similar because the beneficiaries to whom they provided care had similar medical issues.  Petitioners’ Brief at 21.  From this assertion they seem to contend that no conclusions may be drawn about the repetitive nature of Petitioners’ improper claims and certainly, that no inferences may be made about potential damage to the Medicare program from these claims’ similar appearance and defects.  I disagree.  A supplier is obligated to certify the accuracy of each reimbursement claim that it submits.  It may not excuse systemic errors and misstatements in its claims by asserting that the services billed for in multiple claims are similar.

Endnotes

1 That said, there appear to be few, if any, disputed material facts.

2 I take notice that a Medicare Advantage organization is a third-party health insurer that is qualified to insure services that fall within Medicare’s Part B coverage of non-hospital services.

3 Medicare Part D is that part of the Medicare program which insures some of the costs of medications.
  
          /s/
        Steven T. Kessel

                      Administrative Law Judge Back to top
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