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                              Sunrise Behavioral Health Clinic LLC, DAB CR6052 (2022)
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Sunrise Behavioral Health Clinic LLC, DAB CR6052 (2022)








  
  
    

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





Sunrise Behavioral Health Clinic LLC
(PTAN: S100298152)
(NPI: 1538575295)
Petitioner,

v.

Centers for Medicare & Medicaid Services
Docket No. C-19-657Decision No. CR6052March 25, 2022

        
              
    

      DECISION

Petitioner, Sunrise Behavioral Health Clinic, LLC, is a mental health clinic with outpatient offices in Springfield and Worcester, Massachusetts, in addition to an outreach program that includes in-school and in-home visits.  The Centers for Medicare & Medicaid Services (CMS) revoked Petitioner's billing privileges, effective November 1, 2018, citing abuse of billing privileges under 42 C.F.R. § 424.535(a)(8)(ii).  Specifically, CMS charges that Petitioner has continued to submit claims for services incident‐to the service of a practitioner utilizing unsupervised auxiliary personnel.

Petitioner appeals.  CMS moves for summary judgment and Petitioner opposes.

*I.  Procedural History*

On October 2, 2018, CMS contractor National Government Services (CMS contractor)1
 notified Petitioner that it was revoking Petitioner's Medicare billing privileges, effective

Page 2

November 1, 2018, and establishing a three-year re‐enrollment bar to the Medicare program.  P. Ex 1 at 1.  On October 31, 2018, Petitioner requested reconsideration of the CMS determination to revoke.  On February 1, 2019, a hearing officer in CMS's Provider Enrollment & Oversight Group issued an unfavorable reconsidered determination decision, noting that CMS appropriately revoked Petitioner's Medicare billing privileges for abuse of billing, pursuant to 42 C.F.R. § 424.535(a)(8)(ii).  DAB E‐file No. 1a.  Petitioner filed a Request for Hearing (RFH) on March 19, 2019, for an Administrative Law Judge2
(ALJ) review.  DAB E-file No. 1.

On April 12, 2019, the ALJ issued an Acknowledgment and Pre-Hearing Order (Order), setting forth the pertinent deadlines for the parties to submit written briefs, sworn written testimony, and proposed exhibits.  DAB E-file No. 2.  CMS filed its pre‐hearing brief3
 and submitted 7 proposed exhibits on May 17, 2019, none of which were witness testimony.  On June 6, 2019, Petitioner filed its pre-hearing brief and opposition to CMS's motion for summary judgment.  Petitioner submitted 24 proposed exhibits, which included the sworn testimony of Iris Castro, Petitioner's Clinical Director and Manager, and Jennifer Collins, Petitioner's Chief Executive Officer (CEO).  Petitioner also submitted a motion to include Exhibit 24 as new evidence.  Proposed Exhibit 24 is an additional affidavit of Ms. Castro denying receipt of an October 13, 2017 letter from the CMS contractor, and stating that "[Petitioner] has never employed an individual with the first initial ‘F.' and last name ‘Fernandez.'"  As apparent proof of this, Petitioner attaches a roster of employee names and start dates.  P. Ex. 24 at 2.  While CMS4
 opposes the submission of Petitioner's Exhibit 24, I also note that both Ms. Castro and Ms. Collins deny receipt of the October 13, 2017 letter in their sworn written statements of October 31, 2018.  P. Exs. 3 and 6.  While the roster of employee names did not accompany Ms. Castro's earlier sworn written statement, Petitioner's denial of the October 13, 2017 letter is not new evidence.  More importantly, and for the reasons discussed below, neither Petitioner's receipt of the October 13, 2017 letter, nor Petitioner's failure to receive the October 13, 2017 letter affects my findings.  Accordingly, I receive into evidence CMS Exhibits (CMS Exs.) 1 through 7 and Petitioner Exhibits (P. Exs.) 1-24.

Although CMS did not submit any witness statements, CMS requests in a June 20, 2019 motion, the opportunity to cross-examine Petitioner's witnesses in the event that a

Page 3

hearing is determined to be necessary.  Inasmuch as I find no basis to conduct an in‐person hearing, I decide this case based on the written record.  For the reasons explained below, I find that CMS had a legal basis to revoke Petitioner's enrollment and billing privileges.  Accordingly, I affirm the revocation.

*II.  Issue*

Whether CMS had a legitimate basis to revoke Petitioner's enrollment and billing privileges based on its failure to comply with 42 C.F.R. § 424.535(a)(8)(ii).

*III.  Jurisdiction*

I have jurisdiction to decide this case.  42 C.F.R. §§ 424.545(a), 498.5(a)(e).

*IV.  Findings of Fact, Conclusions of Law, and Analysis5*

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

**A. *Pertinent Regulations:***

42 C.F.R. § 410.26(b) provides that Medicare Part B pays for services and supplies incident to the services of a physician or other practitioner.  These services may be provided by auxiliary personnel acting under the direct supervision of a physician or other practitioner.  42 C.F.R. §§ 410.26(a)(1), (2) and 410.32(b)(3)(ii) provide that direct supervision in the office setting means the supervising practitioner must be present in the office suite and immediately available to furnish assistance and direction.

Under 42 C.F.R. § 424.535(a)(8)(ii), CMS may revoke a currently enrolled provider or supplier's Medicare enrollment for abuse of billing privileges when CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.  In making this determination, CMS considers, as appropriate or applicable, the following:

The percentage of submitted claims that were denied.
	The reason(s) for the claim denials.
	Whether the provider or supplier has any history of final adverse actions (as that term is defined under § 424.502) and the nature of any such actions.Page 4

The length of time over which the pattern has continued.
	How long the provider or supplier has been enrolled in Medicare.
	Any other information regarding the provider or supplier's specific circumstances that CMS deems relevant to its determination as to whether the provider or supplier has or has not engaged in the pattern or practice described in this paragraph.42 C.F.R. § 424.535(a)(8)(ii).

**B. Background:**

Petitioner is the largest out-patient mental health clinic in Western Massachusetts, operating offices in Springfield and Worcester, Massachusetts.  As of October 2018, Petitioner served 9,600 patients.  Petitioner Exhibit (P. Ex.) 3 at 1.  Petitioner also conducts an outreach program which includes in-school and in-home visits.  P. Ex. 3 at 1.  Ms. Castro, a licensed social worker, is Petitioner's Clinical Director and Manager.

Based on Petitioner's enrollment application of March 21, 2016, CMS granted Petitioner a Medicare enrollment effective date May 16, 2016.  DAB E-file No. 1c at 17; CMS Ex. 1 at 1.6
  In the May 26, 2016 letter notifying Petitioner of the enrollment approval, the CMS contractor stated that providers and suppliers enrolled in Medicare are "required to ensure strict compliance with Medicare regulations, including payment policy and coverage guidelines."  P. Ex. 2 at 2.  The letter also directed Petitioner to the online link for the Medicare Learning Network, as well as, to the Medicare website for information.

On June 28, 2016, Petitioner entered into a General Service Agreement with Universal Medical Administrative Services (UMAS) to process and to submit claims to Medicare.  DAB E-file No. 1b at 46.

On September 19, 2017, the CMS contractor advised Petitioner that it would conduct a same‐day on-site inspection and retrieval of records because an analysis of Petitioner's billing indicated that there may be aberrancies in Petitioner's billing.  CMS Ex. 7 at 2; DAB E-file No. 1c at 9.  During the on‐site inspection, Ms. Castro signed a 7-page attestation which was given to the CMS contractor's Investigator Jennifer Coviello.  *See*

Page 5

CMS Ex. 2.  Ms. Castro confirmed in the attestation that Petitioner had over 100 clinicians treating patients.  She acknowledged a report confirming that all Petitioner's billing had been submitted under her name and NPI number as she is Petitioner's Clinical Director.  CMS Ex. 2 at 1.  Ms. Castro further acknowledged that Investigator Coviello, on behalf of the CMS contractor, advised her that clinicians rendering services under her rendering NPI must be directly supervised.  She also confirmed in the attestation that Investigator Coviello explained that direct supervision means being in the facility and available for consultation if needed.  She acknowledged that she does not treat any Medicare patients and that she does not directly supervise clinicians in the field because she is in the office.  She further confirmed that the CMS contractor's representative explained to her that clinicians in the Worcester office are not considered to be directly supervised by her because she is in the Springfield office.

Ms. Castro does not dispute that the CMS contractor discussed a billing concern during the onsite inspection.  She asserts, however, that she was unaware that UMAS improperly submitted a substantial number of claims on Petitioner's behalf under her rendering NPI number for patients' in-home visits and which was conducted by other clinicians who did not meet Medicare's credentialing requirements.  P. Ex. 3 at 2.  Ms. Castro states that on September 19, 2017, and in the presence of Investigator Coviello, she and Ms. Collins had a phone conference with UMAS.  They told UMAS's owner that there were Medicare billing errors because claims for in‐home visits had been submitted under Ms. Castro's NPI number.  Both Ms. Castro and Ms. Collins told UMAS to stop those billing practices and UMAS agreed to do so.  P. Ex. 3 at 3 ¶¶ 17- 18.

In a December 5, 2017, email to UMAS, Ms. Collins stated, "[a]fter careful research, and speaking with other clinics we would like all the Medicare claims that you were holding, and all Medicare claims moving forward to be billed to secondary insurance."  Ms. Collins added, "I have read over all the specs and we are a non-par with Medicare, and they stated we can only bill qualified claims."  DAB E-file No. 1c at 2.  In a December 11, 2017 letter, Investigator Coviello reminded Petitioner that it had been placed on pre-payment review because an analysis of billing data indicated there may be aberrancies in Petitioner's billing.  Investigator Coviello also reminded Petitioner that the CMS contractor had not received medical record documentation in response to any of the prepayment document requests sent to Petitioner.  She cautioned that without the documentation, the CMS contractor could not confirm that Petitioner's Medicare coverage criteria had been met.  Investigator Coviello's letter included four website addresses that were available for current coverage and other information.  DAB E-file No. 1c at 16.

In an October 2, 2018 letter, the CMS contractor informed Petitioner that Petitioner's billing privileges were revoked as of November 1, 2018.  Specifically, the CMS

Page 6

contractor explained that despite education on proper incident-to billing7
, a review of claims submitted with dates of service from November 22, 2017 to December 27, 2017, reflected that "incident to services continued to be rendered without direct supervision."  P. Ex. 1 at 1.  The notice also established a 3-year enrollment bar.  P. Ex. 1 at 2.

***2) It is no defense to a revocation action for abuse of billing privileges under 42 C.F.R. § 424.535(a)(8)(ii) that the noncompliant claims were due to a third party.***

Petitioner asserts that it was unaware that its third-party billing agent, UMAS, incorrectly submitted claims on its behalf.  RFH at 3.  Furthermore, Petitioner maintains that the claims at issue were accidental and that Petitioner did not intend for them to be submitted by UMAS.  RFH at 7.  The Board has recognized that by enrolling in Medicare, a provider or supplier agrees to be bound by Medicare program instructions.  *Realhab, Inc.*, DAB No. 2542 at 17 (2013).

Petitioner's attempt to blame UMAS for erroneously billing with Ms. Castro's NPI is analogous to other cases in which suppliers have attempted to evade the consequences of improper billing by blaming the company that submitted claims on the supplier's behalf.  In those cases, the Board has stated unequivocally that the supplier is ultimately responsible for the accuracy of its claims submitted.  *See, e.g., Louis J. Gaefke, D.P.M*., DAB No. 2554 at 5-6 (2013).  Citing from its decision in *Howard B. Reife, D.P.M*., DAB No. 2527 (2013), the Board in *Gaefke* reiterated its holding that a petitioner's efforts to assign blame for improper billing to its billing agent does not relieve the petitioner of its responsibility for the improper claims, or bar CMS from revoking the petitioner's billing privileges.  *Louis J. Gaefke, D.P.M*., DAB No. 2554 at 6.  Petitioner, as the enrolled supplier, is responsible to ensure compliance with Medicare requirements.  42 C.F.R. § 424.510(d)(3).  As the drafters of 42 C.F.R. § 424.535(a)(8) noted:

In conclusion, we believe that providers and suppliers are responsible for the claims they submit or the claims submitted on their behalf. 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. at 36,448 (June 27, 2008).

Page 7

Petitioner acknowledges that while "multiple ‘incorrect' claims were submitted by UMAS[,]" those claims were "accidental" and Petitioner did not intend for them to be submitted by UMAS.  RFH at 7; Petitioner's Brief (P. Br.) at 13.  CMS is not required to show that a provider or supplier intended to defraud Medicare before it revokes their billing privileges, nor is CMS required to show that the improper claims were not accidental.  *See Patrick Brueggeman, D.P.M.*, DAB No. 2725 at 8 (2016); *John P. McDonough III, Ph.D.*, DAB No. 2728 at 8 (2016).

Thus, it is Petitioner's ultimate responsibility to ensure compliance with Medicare requirements and that responsibility cannot be absolved by directing the blame to its billing contractor

***3) The number of claims reviewed or the designated time period for CMS's review is not a defense to a revocation action for abuse of billing privileges under 42 C.F.R. § 424.535(a)(8)(ii).***

In its letter dated October 2, 2018, the CMS contractor informed Petitioner that its Medicare billing privileges were revoked effective November 1, 2018, because Petitioner had engaged in a pattern or practice of submitting claims that failed to meet Medicare requirements, in violation of 42 C.F.R. § 424.535(a)(8)(ii).  Specifically, the CMS contractor noted that Petitioner "continued to submit claims for services incident to the service of a practitioner utilizing unsupervised auxiliary personnel."  P. Ex. 1 at 1.  The CMS contractor attached a sample of 10 claims, submitted for services during this time period to document that Petitioner continued to render incident‐to services without direct supervision.  P. Ex. 1 at 5.

Petitioner notes that of the 89 claims made within the period of November 22, 2017 through December 27, 2017, CMS approved 44, reduced 4, and denied 41 claims.  *See* RFH at 10; P. Ex. 21.  Petitioner argues that in an analysis of total claims versus claims denied, the correct number from the sample of 89 claims is 65 approved, 20 denials, and 4 reductions/recoded.  RFH at 10.  Petitioner argues that because CMS improperly denied a portion of the claims, Petitioner actually had a lower percentage of denied claims than CMS determined.  Petitioner maintains that 21 additional claims should have been approved because Ms. Castro "is credentialed to and did directly supervise the clinicians in the office suite, as opposed to in the patients' homes and reviewed and approved the patients' Comprehensive Assessments and Individual Action Plans."  RFH at 8.

Petitioner acknowledges that Ms. Castro does not see any Medicare patients and that she does not directly supervise clinicians in the field because she is in the Springfield office.  CMS Ex. 2 at 2.  While Petitioner admits that clinicians other than Ms. Castro conduct the initial evaluations and create the patients' Comprehensive Assessments and Individual Action Plans, Petitioner argues that Ms. Castro reviews and approves these with the clinicians.  RFH at 8.  Thus, Petitioner appears to make the argument that

Page 8

Ms. Castro provides direct supervision to other clinicians because she reviews and administratively approves the clinicians' treatment plans.  While Ms. Castro may ultimately review or approve other clinicians' treatment plans and assessments as the clinical director, such actions do not constitute direct supervision as required by the regulations.  42 C.F.R. § 410.26(b)(5) provides that Medicare Part B pays for services and supplies incident to the service of a physician or other practitioner.  The services, however, must be furnished under the direct supervision of the physician or practitioner.  42 C.F.R. § 410.26(a)(1) and (2) further clarify that direct supervision is defined as the level of supervision by the practitioner of auxiliary personnel as defined in section 410.32(b)(3)(ii).  Direct supervision as defined in section 410.32(b)(3)(ii) in the office setting means the practitioner must be present in the office suite and immediately available to furnish assistance and direction to the auxiliary personnel performing the service.  Petitioner cites no authority to support its assertion that Ms. Castro's review and ultimate approval of a patient's treatment plan is equivalent to direct supervision as defined in 42 C.F.R. § 410.32(b)(3)(ii).

In a follow-up letter of October 5, 2018, the CMS contractor notified Petitioner of its final determination for a prepayment review of claims submitted through March 8, 2018.  The CMS contractor reviewed a total of 223 claims representing 224 services.  Of the 224 services, 135 were allowed, 11 were reduced/recoded, and 78 were denied.  The CMS contractor explained that all the psychiatric evaluations and psychotherapy services were billed under rendering provider Castro and all those services were denied.  DAB E-file No. 1c at 43-44.

Petitioner argues that the CMS contractor's October 2, 2018 revocation notice provided a sample of only 10 claims for services to support its determination that Petitioner had engaged in abusive billing practices or patterns.  Petitioner objects to the fact that the CMS contractor did not mention the entire set of 223 claims for 224 services provided through March 8, 2018.  RFH at 7.  Petitioner submits that CMS should have considered claims for service dates through March 8, 2018, and thus, with a larger sample, there would have been fewer denied claims.

At the time that 42 C.F.R. § 424.535(a)(8) was promulgated, the regulation's drafters stated that CMS would regard as few as three instances of improper billing as grounds for revocation.  73 Fed. Reg. 36,455 (June 27, 2008).  In subsequent cases involving revocation under 42 C.F.R. § 424.535(a)(8), a petitioner's argument that it filed a low percentage of erroneous claims has been rejected by the DAB multiple times*.  See Patrick Brueggeman, D.P.M.*, DAB No. 2725 at 11-12; *John M. Shimko*, *D.P.M.*, DAB No. 2689 at 9-10 (2016); *Howard B. Reife, D.P.M*., DAB No. 2527 at 7.  Citing its earlier decision in *Brueggeman*, the Board made clear that section 424.535(a)(8) does not require CMS to establish an error rate or percentage of improper claims.  *See also John P. McDonough III, Ph.D.*, DAB No. 2728 at 8.

Page 9

While the preamble language for 42 C.F.R. § 424.535(a)(8) cited above now applies only to the revocation basis now codified as 42 C.F.R. § 424.535(a)(8)(i), it is nevertheless illustrative of the point that a relatively small number of improper claims may demonstrate a pattern of abusive billing.  Furthermore, the preamble to the final rulemaking for 42 C.F.R. § 424.535(a)(8)(ii) explicitly declines to set a numerical threshold or minimum percentage that would constitute a "pattern or practice."  79 Fed. Reg. at 72,514.  In declining to set a numerical threshold amount, the drafters explained that each case must be judged on its own specific facts.  *Id.*

***4) Petitioner's alleged lack of education is not a defense to a revocation action for abuse of billing privileges under 42 C.F.R. § 424.535(a)(8)(ii).***

In its February 1, 2019 reconsideration decision, a Hearing Officer for CMS's Provider Enrollment & Oversight Group found that the CMS contractor,

[P]rovided no less than three written, formal, documented pieces of education of [Petitioner] regarding varying billing violations committed by [Petitioner] and the correct method for [Petitioner] to bill and submit claims to the Medicare program. CMS considers these facts to be relevant regarding [Petitioner's] specific circumstances.

DAB E-file No. 1a at 10.  The decision further states that Petitioner received education on numerous occasions; however, Petitioner continued to submit claims to Medicare for payment that failed to meet Medicare requirements*.  Id.*  Specifically, CMS asserts that Petitioner's education began with the CMS contractor's letter and onsite visit on September 19, 2017, followed by additional letters dated October 13, 2017 and December 11, 2017.  DAB E-file No. 1a at 9-10.

Petitioner vehemently denies that CMS provided education.  RFH at 5-6.  Petitioner acknowledges, however, that its first education event was September 19, 2017, the day of the CMS contractor's onsite visit.  Petitioner does not dispute that on September 19, 2017, the CMS contractor explained that clinicians under Ms. Castro's rendering NPI number must be directly supervised by her.  CMS Ex. 2 at 2-3.  Instead, Ms. Castro testified that during the CMS contractor's visit, she inquired as to "whether [Petitioner] could instead submit claims to Medicare/Medicaid under the treating clinicians' provider numbers for the sole purpose of receiving denials, which would then be submitted to Medicaid, which is a payer of last resort."  P. Ex. 3 at 3.  Ms. Castro testified that Investigator Coviello did not provide any education to her regarding her alternative billing suggestion.  Ms. Castro also testified that between September 19, 2017 and November 30, 2017, she and Ms. Collins placed numerous telephone calls to Investigator Coviello seeking to determine how to submit the Medicare/Medicaid claims and what

Page 10

documentation was required.  Ms. Castro asserts that Investigator Coviello did not provide any assistance.  P. Ex. 3 at 3-4.

Petitioner acknowledges that it received letters from the CMS contractor dated September 19, 2017 and December 11, 2017, but denies that it received letters dated October 13, 2017, or September 21, 2017.  P. Ex. 3 at 4.  While the CMS contractor's December 11, 2017 letter did not specifically address Medicare regulations for "incident‐to" services, the letter reminded Petitioner of its March 21, 2016 agreement to abide by the Medicare laws, regulations, and program instructions.  The letter also included a listing of four websites "available for current coverage and other information."  DAB E-file No. 1c at 16-17.  Petitioner contends that the CMS contractor's first and only education letter concerning the "incident‐to" guidelines was dated March 23, 2018.  P. Ex. 6 at 4; P. Ex. 16.

Assuming that Petitioner did not receive the CMS contractor's letters of September 21, 2017, and October 13, 2017, Petitioner's argument of inadequate education is not a sufficient defense to the revocation of Petitioner's billing privileges.  Even if Petitioner did not receive the letters of September 21, 2017, and October 13, 2017, the record reflects that the information was available to Petitioner.  In the May 26, 2016 letter notifying Petitioner of its enrollment approval, the CMS contractor stated that Petitioner was required to strictly comply with the Medicare regulations, including payment policies and coverage guidelines.  The letter directed Petitioner to the online link for the Medicare Learning Network as well as the Medicare website.  P. Ex. 2 at 2.

Ms. Castro admits that during the September 19, 2017 onsite visit, Investigator Coviello told her that all of Petitioner's billing had been submitted under her name and NPI number as Clinical Director.  CMS Ex. 2 at 3.  Ms. Castro further admits that on September 19, 2017, the CMS contractor told her that clinicians rendering services under her rendering NPI must be directly supervised, and that direct supervision requires being in the facility and available for consultation if needed.  CMS Ex. 2 at 5.

Petitioner asserts that Ms. Castro and Ms. Collins telephoned the CMS contractor numerous times for guidance and education concerning billing and none was given.  P. Ex. 3 at 4.  The record reflects, however, that Investigator Coviello explained the billing problem to Ms. Castro and Ms. Collins during the September 19, 2017 visit.  Admittedly, Investigator Coviello explained that Petitioner could not submit claims for services under Ms. Castro's NPI number unless Ms. Castro directly supervised the clinician providing the service.  Ms. Castro admits that direct supervision required her to be in the same facility as the clinician and available to the clinician for consultation.  CMS Ex. 2 at 2-5.

There was no apparent confusion about the billing requirements during the September 19, 2017 visit.  This is evidenced by Ms. Castro's inquiry if Petitioner could "instead submit claims to Medicare/Medicaid under the treating clinicians' provider numbers for the sole

Page 11

purpose of receiving denials which would then be submitted to Medicaid, which is a payer of last resort."  P. Ex. 3 at 3.  While Petitioner may have posed a question related to alternative claim submissions, the record reflects that the CMS contractor discussed the billing issues with Petitioner as early as September 19, 2017.  Although Petitioner asserts a lack of education about billing, Ms. Castro and Ms. Collins understood the billing issues sufficiently to telephone UMAS and direct UMAS's owner to correct the submitted billing.  Inasmuch as they did so in Investigator Coviello's presence, their understanding was arguably consistent with Investigator Coviello's instruction.  Accordingly, I am not persuaded that Petitioner's submission of erroneous claims for the period in question was caused by a lack of education.

***5) Other considerations are not a defense for the revocation of billing privileges.***

42 C.F.R. § 424.535(a)(8)(ii) includes six criteria for determining whether a provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements, and thus, an abuse of billing privileges.  The percentage of submitted claims that were denied and the reason for the claim denials have been discussed above.  42 C.F.R. § 424.535(a)(8)(ii)(A) and (B).

Additional factors for consideration are whether the supplier or provider has any history of final adverse actions and the length of time the provider or supplier has been enrolled in Medicare.  42 C.F.R. § 424.535(a)(8)(ii)(C) and (E).  The record does not reflect that Petitioner has any history of adverse actions, and Petitioner was initially approved for enrollment in the Medicare program on May 26, 2016.  P. Ex. 2 at 1-3.  It was not until September 19, 2017, that the CMS contractor informed Petitioner of its billing irregularities.  The CMS contractor began its review by selecting claims for services provided on August 3, 2017.  DAB E-file No. 1c at 13.  Assuming that Petitioner began submitting claims shortly after its enrollment approval on May 26, 2016, there was a 14-month period of submitting claims before CMS's initial analysis period.

42 C.F.R. § 424.535(a)(8)(ii)(D) looks to the length of time over which the pattern has continued.  Petitioner contends that the time period between November 22, 2017 and December 27, 2017, as discussed in the October 2, 2018 revocation of billing privileges letter is a "very short 36 days."  P. Br. at 12; P. Ex. 1 at 5.  At the time of the September 19, 2017, onsite visit, Ms. Castro acknowledged that all Petitioner's billing was submitted under her name and NPI number.  Additionally, Ms. Castro acknowledged that she did not directly supervise clinicians in the field.  The CMS contractor's letter of October 5, 2018 confirmed that a prepayment review of Petitioner's claims through March 8, 2018, revealed that all psychiatric evaluations and psychotherapy services were billed under rendering provider Castro and all services were denied.  DAB E-file No. 1c at 43-44.  Thus, the CMS contractor determined that Petitioner continued to bill for all psychiatric and psychotherapy services under Ms. Castro's NPI number, despite Investigator

Page 12

Coviello's explanation on September 19, 2017.  While the time period addressed in the CMS contractor's October 2, 2018 letter is a relatively short time period, the billing practice during that time is representative of Petitioner's overall billing practice.  Accordingly, the length of time over which the pattern has continued supports a revocation of billing privileges.

42 C.F.R. § 424.535(a)(8)(ii)(F) also provides that CMS may consider any other information regarding the supplier's specific circumstances that CMS deems relevant to its determination as to whether the supplier has or has not engaged in a pattern or practice of abusive billing.  Petitioner argues that CMS failed to give weight to numerous relevant factors in its decision to revoke its billing privileges.  P. Br. at 1-2.

Petitioner argues that it is the largest out-patient mental health clinic in Western Massachusetts.  P. Ex. 3 at 2; P. Br. at 13.  Petitioner submits that the revocation,

[I]s likely to negatively impact the Petitioner's ability to continue to treat its thousands of Medicare/Medicaid patients who have severe mental health and who are severely affected by the opioid crisis and substance abuse issues in the greater Springfield and Worcester areas.

P. Br. at 13.  I cannot, however, consider the effects of the revocation on the community or the diagnoses of the Medicare patients served by Petitioner.  I am bound by the regulations, and I cannot choose to overturn the agency's lawful use of its regulatory authority based on principles of equity*.  US Ultrasound*, DAB No. 2302 at 8 (2010); *Cent. Kan. Cancer Inst*., DAB No. 2749 at 10 (2016); *James Shepard, M.D.*, DAB No. 2793 at 9 (2017).

In its defense that it did not intentionally submit improper claims or engage in an abusive pattern or practice of billing, Petitioner submits that it instructed UMAS to "immediately cease and desist from such billing practices" and to hold Medicare claims for submission.  P. Br. at 13; P. Ex. 7 at 1.  Ms. Collins testified,

Unsure about what to do with all of the Medicare/Medicaid claims, from September 19, 2017 through early December 2017, I instructed UMAS to hold and not submit any Medicare claims.  By December 1, 2017, [Petitioner] had amassed a total of 919 unsubmitted claims for treatment of Medicare/Medicaid patients.

P. Ex. 6 at 2.  Despite Petitioner's instructions to UMAS, Petitioner, as a Medicare supplier, is ultimately responsible for the accuracy of its claims for Medicare reimbursement.  A petitioner's efforts to assign blame for improper billing to its billing

Page 13

agent does not relieve it of its responsibility for the improper claims, or bar CMS from revoking its billing privileges.  *Louis J. Gaefke, D.P.M.*, DAB No. 2554 at 6.

Petitioner also asserts that CMS did not follow its Medicare Program Integrity Manual or provide the requisite education prior to revocation.  P. Br. at 15-17.  Petitioner submits that between September 19, 2017 and November 30, 2017, Ms. Castro and Ms. Collins made "numerous telephone calls to Ms. Coviello seeking to determine how to correctly submit the Medicare/Medicaid claims and what documentation was required . . . ."  P. Br. at 15; P. Ex. 3 at 3-4.  I have no reason to doubt that Petitioner instructed UMAS to submit proper billing for its Medicare patients or that Petitioner engaged in numerous conversations with both UMAS and the CMS contractor concerning proper billing.  The Board, however, has found that, "Medicare suppliers are presumed to have constructive notice of the statutes and regulations that govern their participation as a matter of law."  *Pepper Hill Nursing & Rehab. Ctr., LLC*, DAB No. 2395 at 8 (2011).

Furthermore, when Ms. Castro first met with Investigator Coviello on September 19, 2017, she acknowledged that although she does not see Medicare patients, all Petitioner's billing was submitted under her name and NPI number.  CMS Ex. 2 at 1-2.  In her attestation on September 19, 2017, and her sworn testimony on October 31, 2018, Ms. Castro acknowledged that she did not directly supervise clinicians in the field or in the Worcester office, and that Petitioner could not bill under her NPI number for outreach visits.  CMS Ex. 2 at 2-3; P. Ex. 3 at 3.  Based on Ms. Castro's testimony, there was no apparent ambiguity about whether Petitioner could use Ms. Castro's NPI for clinicians who were not in the Springfield office.  Petitioner, however, explored the option of submitting claims that would not qualify for Medicare but would qualify for Medicaid.  P. Ex. 3 at 3.  Ms. Castro testified that while she first posed this option to Investigator Coviello on September 19, 2017, Investigator Coviello did not provide any education to her regarding her alternate billing suggestion.  Petitioner has not cited any authority to establish that the Medicare contractor had a duty to educate a supplier about alternate billing options or to endorse a supplier's submission of invalid Medicare claims for the purpose of payment through Medicaid.

In summary, Petitioner's overall arguments suggest that CMS did not properly weigh various information before deciding to revoke.  CMS's discretionary decision to revoke a supplier's billing privileges, however, is not reviewable by an ALJ.  *Letantia Bussell, M.D*., DAB No. 2196 at 13 (2008).  Thus, despite Petitioner's arguments, CMS's discretionary act to revoke a provider or supplier is not subject to review based on equity or mitigating circumstances.  CMS "may have discretion to consider unique or mitigating circumstances in deciding whether, or how, to exercise its revocation authority."  *Care Pro Home Health, Inc.*, DAB No. 2723 at 9 n.8 (2016).  An ALJ or the Board, however, "may not substitute [their] discretion for that of CMS in determining whether revocation is appropriate under all the circumstances."  *Abdul Razzaque Ahmed, M.D.*, DAB No. 2261 at 19 (2009), *aff'd, Ahmed v. Sebelius*, 710 F. Supp. 2d 167 (D. Mass. 2010).

Page 14

*V.  Conclusion*

For the foregoing reasons, I affirm CMS's revocation of Petitioner's Medicare billing privileges under 42 C.F.R. § 424.535(a)(8)(ii), effective November 1, 2018.


          /s/
        Margaret G. Brakebusch

                      Administrative Law Judge
      1. The Medicare contractor is also identified in the record as (1) National Government Services or NGS, (2) Northeastern Unified Program Integrity Contractor or NE UPIC, and (3) SafeGuard Services LLC. back to note 1
                      2. The case was initially assigned to a different ALJ and then transferred to the undersigned. back to note 2
                      3. In conjunction with the brief, CMS filed a motion for summary judgment.  Because this matter may be decided on the record, I need not rule on the motion for summary judgment. back to note 3
                      4. As there are significant facts not in dispute, this case could also be resolved by summary judgment. back to note 4
                      5. My findings of fact and conclusions of law are set forth in italics and bold font. back to note 5
                      6. CMS also approved and granted Ms. Castro's Medicare enrollment with a May 16, 2016 effective date.  She was assigned an NPI of 1497880785 and a Group Member PTAN of S400298200.  CMS Ex. 1 at 5; P. Ex. 2 at 2. back to note 6
                      7. While the CMS contractor also referred to an October 13, 2017 education letter, I have not found Petitioner's receipt of the October 13, 2017 letter to be critical, as the record reflects that Petitioner received other information concerning proper billing. back to note 7 Back to top
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