Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Farrokh Alemzadeh, M.D.
(NPI: 1871529297/PTAN: CB247435),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-442
Decision No. CR4711
Date: September 27, 2016

DECISION DISMISSING CASE

This case is dismissed for lack of jurisdiction. Petitioner, Farrokh Alemzadeh, M.D., has
no right under the Social Security Act (the Act) or the regulations to a hearing before an
administrative law judge (ALJ) related to determinations of the Centers for Medicare &
Medicaid Services (CMS) or its contractors to deactivate or reactivate his Medicare
billing privileges, or related to the determination of the effective date of the reactivation
of his Medicare billing privileges. Act § 1866(h) and (j)(8); 42 C.F.R. §§ 424.540,
424.545, 498.3(b)(15), and 498.5(/).! Accordingly, I have no jurisdiction and this case
must be dismissed.

I. Appeal Rights
The parties may request that an order dismissing a case be vacated within 60 days for

good cause shown pursuant to 42 C.F.R. § 498.72. Pursuant to 42 C.F.R. §§ 498.80 and
498.82(a), either party may request Departmental Appeals Board (Board) review of this

' Citations are to the 2015 revision of the Code of Federal Regulations (C.F.R.), unless
otherwise stated.
dismissal within 60 days of receiving this decision. Detailed appeal procedures are set
out in the guidelines for appellate review of decisions of ALJs at
http://www.hhs.gov/dab/divisions/appellate/guidelines/ index.html.

An appeal may be filed electronically at: https://dab.efile.hhs.gov and following the
e-filing instructions for "Appeals to Appellate Division/Board." Pursuant to regulation,
a request for review must specify the issues, the findings of fact or conclusions of law
with which Petitioner disagrees, and the basis for contending that the findings and
conclusions are incorrect. 42 C.F.R. § 498.82(b). If a request for appeal cannot be filed
electronically, it may be filed by sending the required documents to the Board by mail or
commercial delivery service to:

Carolyn Reines-Graubard

Director, Appellate Division, MS 6127

Department of Health & Human Services

Departmental Appeals Board

330 Independence Ave., S.W. Cohen Building, Room G-644
Washington, DC 20201

Questions regarding filing an appeal should be directed to the Appellate Division
Director, Carolyn Reines-Graubard, at carolyn.reines-graubard@hhs.gov or at (202) 565-
0116.

II. Procedural History and Findings of Fact

Noridian Healthcare Solutions (Noridian) is a Medicare Administrative Contractor
(MAC) for CMS. Noridian sent Petitioner a letter dated August 11, 2015, advising
Petitioner that his Medicare billing privileges related to Provider Transaction Access
Number (PTAN) W17247 and National Provider Identifier (NPI) 1871529297, were
deactivated effective July 30, 2015. Noridian stated that the basis for the deactivation
was Petitioner’s failure to respond to a revalidation request mailed to Petitioner on
February 26, 2015. The letter advised Petitioner that to reactivate his billing privileges he
needed to submit a CMS-855 Medicare enrollment application form, either by mail or
through the Provider Enrollment, Chain, and Ownership System (PECOS). CMS Exhibit
(CMS Ex.) | at 8-10; P. Ex. 1.

Noridian notified Petitioner by letter dated January 7, 2016, that Petitioner’s “initial
Medicare enrollment application” was approved effective December 4, 2015, with the
new PTAN CB247435 associated with NPI 1871529297. CMS Ex. | at 5-6.

Petitioner timely requested reconsideration on January 12, 2016, seeking an effective date
for reactivation of billing privileges of July 31, 2015. CMS Ex. 1 at 7. On February 9,
2016, an unsigned reconsidered determination was issued by an unidentified contractor
hearing officer. CMS Ex. 1 at 1-4. The reconsidered determination denied Petitioner’s
request for an earlier effective date citing 42 C.F.R. § 424.520(d). CMS Ex. 1 at 2.

Petitioner filed a request for hearing before an ALJ on March 22, 2016. On March 31,
2016, the case was assigned to me to hear and decide, and an Acknowledgment and
Prehearing Order (Prehearing Order) was issued at my direction.

On May 2, 2016, CMS filed a combined prehearing brief and motion for summary
judgment with CMS Ex. 1. On May 28, 2016, Petitioner filed a response in opposition to
the CMS motion for summary judgment (P. Br.), accompanied by several documents that
appeared to be offered as evidence, but that were not marked as required by my
Prehearing Order and the Civil Remedies Division Procedures § 14. On May 31, 2016, I
ordered Petitioner to properly mark as exhibits the documents he wanted me to consider
as evidence. On June 9, 2016, CMS filed a reply brief (CMS Reply). On June 13, 2016,
Petitioner filed his corrected exhibit list and his properly marked exhibits (P. Ex.) 1, 2,
and 3 for my consideration. Petitioner also filed his reply brief (P. Reply) on June 13,
2016. On June 30, 2016, CMS objected to Petitioner’s reply but that objection is
rendered moot by this decision. The parties did not object to my consideration of CMS
Ex. | or P. Exs. 1 through 3, and they are admitted as evidence.

III. Discussion
A. Applicable Law

Section 1831 of the Social Security Act (the Act) (42 U.S.C. § 1395j) establishes the
supplementary medical insurance benefits program for the aged and disabled known as
Medicare Part B. Payment under the program for services rendered to
Medicare-eligible beneficiaries may only be made to eligible providers of services and
suppliers.” Administration of the Part B program is through contractors such as
Noridian. Act § 1842(a) (42 U.S.C. § 1395u(a)).

> Petitioner is a “supplier” under the Act and the regulations. A “supplier” furnishes
services under Medicare and the term supplier applies to physicians or other practitioners
and facilities that are not included within the definition of the phrase “provider of
services.” Act § 1861(d) (42 U.S.C. § 1395x(d)). A “provider of services,” commonly
shortened to “provider,” includes hospitals, critical access hospitals, skilled nursing
facilities, comprehensive outpatient rehabilitation facilities, home health agencies,
hospice programs, and a fund as described in sections 1814(g) and 1835(e) of the Act.
Act § 1861(u) (42 U.S.C. § 1395x(u)). The distinction between providers and suppliers is
important because they are treated differently under the Act for some purposes. Act

§§ 1835(a) (42 U.S.C. § 1395n(a)); 1842(h)(1) (42 U.S.C. § 1395(u)(h)(1)).
The Act requires the Secretary of Health and Human Services (the Secretary) to issue
regulations that establish a process for the enrollment of providers and suppliers,
including the right to a hearing and judicial review of certain enrollment determinations.
Act § 1866(j) (42 U.S.C. § 1395ce(j)).

Pursuant to 42 C.F.R. § 424.505, a provider or supplier must be enrolled in the Medicare
program and be issued a billing number to have billing privileges and to be eligible to
receive payment for services rendered to a Medicare-eligible beneficiary. Pursuant to 42
C.F.R. § 424.505, “once enrolled the provider or supplier receives billing privileges and
is issued a valid billing number. .. .” The “effective date of billing privileges,” that is,
enrollment in Medicare of a physician, nonphysician practitioner, and physician and
nonphysician practitioner organizations, is governed by 42 C.F.R. § 424.520(d). The
effective date of enrollment for a physician or nonphysician practitioner may only be the
later of two dates: the date when the physician filed an application for enrollment that
was subsequently approved by a Medicare contractor charged with reviewing the
application on behalf of CMS; or the date when the physician first began providing
services at a new practice location. /d. An enrolled physician or nonphysician
practitioner may retrospectively bill Medicare for services provided to Medicare-eligible
beneficiaries up to 30 days prior to the effective date of enrollment, if circumstances
precluded enrollment before the services were provided. Retrospective billing for up to
90 days prior to the effective date of enrollment is permitted only in case of a
Presidentially-declared disaster pursuant to 42 U.S.C. §§ 5121-5206. 42 C.F.R.

§ 424.521.

Pursuant to 42 C.F.R. § 424.502, deactivate “means that the provider or supplier’s billing
privileges were stopped, but can be restored upon the submission of updated
information.” The Secretary has authorized CMS to deactivate a provider’s or supplier’s
Medicare billing privileges if the provider or supplier does not submit any Medicare
claims for 12 consecutive calendar months. 42 C.F.R. § 424.540(a)(1). CMS may also
deactivate a provider’s or supplier’s billing privileges if the provider or supplier does not
report certain changes of information, such as a change in practice location or change of
any managing employee, within 90 calendar days of when the change occurred; does not
report a change in ownership or control within 30 days; or does not provide complete and
accurate information within 90 days of CMS’s request for such information. 42 C.F.R.

§ 424.540(a)(2), (3). A provider or supplier “deactivated for any reason other than
nonsubmission of a claim” is required to “complete and submit a new enrollment
application to reactivate its Medicare billing privileges or, when deemed appropriate, at a
minimum, recertify that the enrollment information currently on file with Medicare is
correct.” 42 C.F.R. § 424.540(b)(1). A provider or supplier who is “deactivated for
nonsubmission of a claim” for 12 months is “required to recertify that the enrollment
information currently on file with Medicare is correct and furnish any missing
information as appropriate. The provider or supplier must meet all current Medicare
requirements in place at the time of reactivation, and be prepared to submit a valid

Medicare claim.” 42 C.F.R. § 424.540(b)(2). Deactivation of Medicare billing privileges
is to protect the provider or supplier from misuse of their billing privileges and the
Medicare Trust Funds. Deactivation does not have any effect upon the provider’s or
supplier’s participation in Medicare. 42 C.F.R. § 424.540(c).

B. Analysis

There is no dispute that prior to July 30, 2015, Petitioner was enrolled in Medicare with
billing privileges. Noridian deactivated Petitioner’s billing privileges effective July 30,
2015, pursuant to 42 C.F.R. § 424.540, based on his failure to timely respond to a
revalidation request. CMS Ex. | at 8. There is no evidence suggesting that Noridian or
CMS revoked Petitioner’s billing privileges and his enrollment at the time or
subsequently.

On January 7, 2016, Noridian notified Petitioner that it approved his “initial Medicare
enrollment application” and issued Petitioner a new PTAN with an effective date of
December 4, 2015. The initial determination did not state that Noridian was reactivating
Petitioner’s billing privileges under 42 C.F.R. § 424.540(b) and it is unclear whether
Noridian was treating Petitioner as a new enrollee or whether Noridian was simply
reactivating Petitioner’s billing privileges. CMS Ex. | at 5. The reconsidered
determination was issued by Noridian on February 9, 2016. The reconsidered
determination clearly shows that the hearing officer concluded that Petitioner failed to
submit revalidation information within 120 days; that “the reactivation process was
correct;” and that the effective date of the reactivated billing privileges would not be
changed. CMS Ex. | at 2.

In his request for hearing, Petitioner blames the situation on Noridian for giving his staff
incorrect information; his heavy workload; difficulty acquiring required documents; and
confusion about the filing process. Petitioner urges me to consider that during the period
is billing privileges were deactivated his practice treated hundreds of patients; spent
thousands of dollars on flu vaccinations; and the practice will face substantial economic
ardship if billing privileges are not reactivated effective August 1, 2015. In his
prehearing brief and response to the CMS motion for summary judgment, Petitioner
requests that I consider whether CMS properly notified him of the deactivation and
whether his billing privileges should be reactivated the same date they were deactivated.
P. Br. at 2. Petitioner argues that when he enrolled in Medicare in 2002, physicians were
allowed to bill for services delivered up to a year prior to their enrollment and that should
bind CMS in this case. Petitioner argues that he never received the revalidation request
from Noridian and he should not be punished for Noridian’s failure. P. Br. at 3.
Petitioner’s complaints and arguments are ineffective because he has no right to review
by an ALJ and I have no authority to grant any relief.

Section 1866(j)(8) of the Act provides,

[a] provider of services or supplier whose application to
enroll (or, if applicable, to renew enrollment) under this title
is denied may have a hearing and judicial review of such
denial under the procedures that apply under subsection
(h)(1)(A) to a provider of services that is dissatisfied with a
determination by the Secretary.

Pursuant to sections 1866(b)(2) and (h)(1) of the Act, “an institution or agency
dissatisfied with a determination by the Secretary that it is not a provider of services” or
whose enrollment in Medicare has been denied or terminated for failure to meet
participation requirements, is entitled to a hearing and judicial review. The Secretary has,
as required by sections 1866(j)(1) and 1871 (42 U.S.C. § 1395hh) of the Act, issued
regulations providing for the enrollment of providers and suppliers and the administration
of the Medicare program.

The Secretary has provided by regulations that some actions by CMS or its contractors
are subject to ALJ, Board, and judicial review, but not all.

The regulations applicable to establishing and maintaining Medicare billing privileges are
at 42 C.F.R. pt. 424, subpt. P. The regulations define enroll or enrollment to mean the
“process that Medicare uses to establish eligibility to submit claims for Medicare-covered
items and services, and the process that Medicare uses to establish eligibility to order or
certify Medicare-covered items and services.” 42 C.F.R. § 424.502. Approval of an
enrollment application means that the provider or supplier has been determined eligible
“to receive a Medicare billing number and be granted Medicare billing privileges.” Id.
Denial of enrollment means that the provider or supplier has been determined ineligible
for Medicare billing privileges and to seek payment from Medicare for services provided
to Medicare-eligible beneficiaries. Jd. Revoke or revocation means that a provider or
supplier’s billing privileges are terminated. Jd. Deactivation of a provider’s or supplier’s
billing privileges means that billing privileges were stopped, not revoked, and the billing
privileges can be restored by the submission of updated information. Jd.

The Secretary has provided that a provider or supplier denied enrollment or whose
enrollment had been revoked may appeal the CMS decision in accordance with 42 C.F.R.
pt. 498. 42 C.F.R. § 424.545(a). A provider or supplier whose billing privileges are
deactivated, i.e., stopped, may file a rebuttal under 42 C.F.R. § 405.374, but no right to
appeal under 42 C.F.R. pt. 498 is accorded. 42 C.F.R. § 424.545(b). Ifa rebuttal is
submitted under 42 C.F.R. § 405.374, the rebuttal statement is considered by the
Medicare contractor, which issues a determination, and that determination is not an initial
determination or subject to appeal. 42 C.F.R. § 405.375(b) and (c).

Appeal rights are established by 42 C.F.R. § 498.5. An enrolled supplier, such as
Petitioner, that is dissatisfied with an initial determination that its services no longer meet
the conditions for coverage under Medicare is entitled to a hearing before an ALJ. 42
C.F.R. § 498.5(e). The right to Board review is accorded by 42 C.F.R. § 498.5(f). The
evidence does not show such a determination was made in this case. Petitioner’s billing
privileges were deactivated; it was not determined by CMS or Noridian that Petitioner’s
services were not subject to coverage.

A practitioner, provider, or supplier who has been suspended or whose services are
excluded from coverage or who has been sanctioned under 42 C.F.R. § 498.3(c)(2) or (3)
is entitled to a hearing before an ALJ and Board review. The imposition of sanctions and
exclusions covered by 42 C.F.R. § 498.3(c) are initial determinations by the Inspector
General and there is no evidence of such an action in this case.

Appeal rights related to provider and supplier enrollment are established by 42 C.F.R.

§ 498.5(/). Initial determinations of CMS and its contractors that are subject to review
are listed in 42 C.F.R. § 498.3(a)(2) and (b). Whether to deny or revoke enrollment and
the effective date of enrollment are specifically listed as initial determinations subject to
review. 42 C.F.R. § 498.3(b)(15), (17). Determinations by CMS or its contractors to
deactivate and reactivate or the effective date of reactivation are not listed in 42 C.F.R.

§ 498.3 as determinations subject to review. Under 42 C.F.R. § 498.5(/), prospective or
existing providers or suppliers dissatisfied with an initial or revised initial determination
related to the denial or revocation of Medicare billing privileges may request
reconsideration. CMS or its contractor or a prospective or existing provider or supplier is
granted the right to request ALJ review of an unfavorable reconsidered or revised
reconsidered determination. Board and judicial review are also granted. 42 C.F.R.

§ 498.5(/). There is no specific language granting a right to ALJ, Board, or judicial
review related to deactivation or reactivation of billing privileges or the effective date of
reactivation in 42 C.F.R. § 498.5(/). In Victor Alvarez, M.D., DAB No. 2325 (2010), the
Board construed 42 C.F.R. § 498.3(b)(15) as according a right to ALJ, Board, and
judicial review to a supplier dissatisfied with a reconsidered determination related to the
effective date of enrollment and billing privileges of the supplier in Medicare. The
situation in Alvarez is distinguishable because in that case there was clear authority to
review the enrollment determination. The Board reasoned that the determination of
effective date was actually a determination to not enroll Alvarez in Medicare on an earlier
date as he requested. A/varez, DAB No. 2325 at 3. Unlike Alvarez, the reconsidered
determination before me is related to a deactivation and reactivation of Medicare billing
privileges for which the Secretary has specifically determined not to accord a right to
ALJ, Board, and judicial review. In this case, there was no initial determination by CMS
or Noridian that is subject to further review under 42 C.F.R. §§ 498.3(b) and 498.5(/).
Because there was no initial determination that was subject to review under the Act or
regulations, Petitioner had no right to request reconsideration and no right to request ALJ

review of the reconsidered determination. I conclude that I have no authority to grant
Petitioner review under § 1866(j)(8) of the Act or 42 C.F.R. §§ 424.545 and 498.5, or by
extension as in Alvarez, under 42 C.F.R. § 498.3(b)(15). Accordingly, Petitioner’s
request for hearing must be dismissed.

Previously I issued decisions remanding and dismissing cases involving deactivation,
reactivation, and the determination of the effective date of reactivation. See e.g., East
Cooper Surgical Assoc., DAB CR3235 (2014), Kamran Hamidi, M.D., DAB CR4577
(2016); Jean-Claude Henry, M.D., DAB CR4627 (2016). The cases were remanded to
permit CMS to ensure action on reconsideration by its contractors was consistent with the
regulations and CMS policies related to deactivation, reactivation, and the effective date
of reactivation. CMS has reissued its policy during the period spanned by the decisions
and an additional remand based on these issues appears pointless. Accordingly, I will not
remand this case but simply dismiss for lack of jurisdiction for the reasons discussed.

I have no authority or jurisdiction to review or invalidate CMS policy in this case or to
grant Petitioner any form of equitable relief. However, CMS may wish to resolve
apparent inconsistencies between its policies related to deactivation, reactivation, and the
determination of the reactivation effective date consistent with the Secretary’s
regulations. CMS policy with respect to reactivations, is set forth in the Medicare
Program Integrity Manual (MPIM) CMS Pub. 100-08, § 15.27. Previous CMS policy
was that if the MAC approved a provider or supplier's reactivation application or
reactivation certification package, the reactivation effective date was the provider or
supplier’s date of deactivation. MPIM § 15.27.1.2 (rev. 474, iss’d July 5, 2013, effective
October 8, 2013). The policy appeared consistent with the Secretary’s regulation that
provided that deactivation had no effect on a provider or supplier’s participation
agreement or conditions of participation. 42 C.F.R. § 424.540(c). But CMS
subsequently changed its policy in December 2014. The policy as changed provided that
if a CMS contractor approves a supplier’s reactivation application, “the reactivation
effective date shall be the date the contractor received the application ... that was
processed to completion.” MPIM § 15.27.1.2 (rev. 561, iss’d Dec. 12, 2014, eff. Mar. 18,
2015). When Petitioner’s application for revalidation was submitted in November 2015,
the CMS policy for reactivation instructed contractors that if a revalidation was received
more than 120 days after deactivation, a new effective date would be issued to the
supplier consistent with the effective date requirements of MPIM § 15.17, which applies
42 C.F.R. § 424.520(d), which regulates the effective date of a new enrollment by a
physician, nonphysician practitioner, or organizations of either. MPIM § 15.29.4.3 (rev.
578, iss’d Feb. 25, 2015, eff. May 15, 2015). CMS has again revised its policy and

re-issued MPIM § 15.29.4.3 (rev. 666, iss’d Aug. 5, 2016, eff. Sep. 6, 2016),° and the

current version states, in relevant part:

MACs shall require the provider/supplier to submit a new full
application to reactivate their enrollment record after they

have been deactivated. The MAC shall process the

application as a reactivation and establish an effective date

based on the receipt date of the application. The

provider/supplier shall maintain their original PTAN but the

MAC shall reflect a gap in coverage (between the

deactivation and reactivation of billing privileges) on the

existing PTAN using Action Reason (A/R) codes in

the

Multi-Carrier Claims System (MCS) based on the receipt date
of the application. The provider will not be reimbursed for
dates of service in which they were not in compliance with
Medicare requirements (deactivated for non-response to
revalidation). This requirement also applies to group
members whose reassignment association was terminated

when the group was deactivated.

In the reconsidered determination, the hearing officer cited 42 C.F.R. § 424.520(d) as the
basis for the decision and stated: “[Petitioner’s application] was not submitted within the
120 day revalidation timeframe so the reactivation process was correct. The requested
earlier effective date will not be honored. The effective date will stay as December 4,

2015.” CMS Ex. | at 1-2. The reconsidered determination shows

that the hearing officer

applied CMS policy from the MPIM related to the determination of the reactivation
effective date, even though the determination includes no citation to the MPIM.

The CMS policy regarding reactivation and the reactivation effective date appears to be

inconsistent with the Secretary’s regulation, which provides that d

leactivation of Medicare

billing privileges is to protect the provider or supplier from misuse of their billing
privileges and the Medicare Trust Funds and does not have any effect upon the provider’s
or supplier’s participation in Medicare. 42 C.F.R. § 424.540(c). If current CMS policy
in the MPIM is given effect, it potentially prevents the filing of claims for covered
services rendered to Medicare-eligible beneficiaries during the period of the deactivation
and before the contractor receives the Medicare application (a CMS-855 or PECOS

application) filed for purposes of reactivation. This effect is clear!

ly contrary to the

> This new policy was effective after the reactivation of Petitioner’s Medicare enrollment

and billing privileges in this case and is included here only to be t

orough.
10

Secretary’s regulation that provides deactivation “does not have any effect upon the
provider’s or supplier’s participation agreement or conditions of participation.” 42
C.F.R. § 424.540(c) (emphasis added).* I note that 42 C.F.R. § 424.555(b) states that
“(n)o payment may be made for otherwise Medicare covered items or services furnished
to a Medicare beneficiary by a provider or supplier if the billing privileges of the provider
or supplier are deactivated, denied, or revoked.” The regulation clearly distinguishes
between a deactivation of billing privileges and a denial or revocation of billing
privileges. The regulation states that payment may not be made, but it does not state that
a provider or suppliers whose billing privileges are deactivated is in the same status as
one whose billing privileges are revoked or denied, i.e., unable to deliver Medicare-
covered care and services and to bill for such services. Indeed, 42 C.F.R. § 424.545(a)(2)
recognizes that even a revoked or denied provider or supplier is not prohibited from
providing Medicare-covered services to a Medicare-eligible beneficiary during the
pendency of an action to deny or revoke enrollment, including the period of appeal. The
regulation specifies that payment for claims is not made during the appeal of the denial or
revocation and payment will only be made if the claims are resubmitted after the provider
or supplier successfully overturns the denial or revocation. The CMS policy related to
providing services and billing during a period of deactivation appears to treat a supplier
more harshly than a supplier subject to a proceeding to deny or revoke billing privileges
without providing a right to ALJ, Board, or judicial review.

CMS policies as set forth in MPIM § 15.27.1.2 and 15.29.4.3 are arguably not
enforceable to the extent the policies are inconsistent with the Secretary’s regulation.
CMS policy statements such as those set forth in the MPIM do not have the force and
effect of law, i.e., the statutes or regulations. Act § 1871; Perex v. Mortgage Bankers
Ass'n, U.S. __, 135 S.Ct. 1199 at 1204 (2015) (Convenience of issuing an
interpretive rule or policy rather than a legislative rule using the Administrative
Procedure Act (APA) notice and comment procedure “comes at a price: Interpretive
rules ‘do not have the force and effect of law and are not accorded that weight in the

* The current CMS policy also creates a conflict among 42 C.F.R. § 424.545(b),

42 CFR. § 498.5(), and 42 C.F.R. § 498.3(b)(15). Under 42 C.F.R. §§ 424.545(b),
498.5(/), a supplier has no right to review of the decision to deactivate billing privileges
or the reactivation of those privileges. However, as the Board has previously concluded,
42 C.F.R. § 498.3(b)(15) recognizes a right to review of a determination by CMS or its
contractors as to the effective date of a Medicare provider agreement or the approval of a
supplier’s participation in Medicare. If the CMS policy related to deactivation and
reactivation is enforced as currently published, a provider or supplier is effectively
deprived of a period of billing privileges without the due process provided by the Act and
Secretary for a denial or revocation of billing privileges.
11

adjudicatory process.’” (citation omitted) (emphasis in original)); Ind. Dep’t. of Pub.
Welfare v. Sullivan, 934 F.2d 853 (7th Cir. 1991) (substantive rules promulgated under
the APA notice and comment rulemaking procedures as regulations are enforceable as
law; agency interpretative rules or policy statements are not subject to notice and
comment rulemaking requirements but are not enforceable as law); Nw. Tissue Ctr. v.
Shalala, | F.3d 522 (7th Cir. 1993). Furthermore, as an ALJ, I am bound to follow the
Constitution, the Act, and the Secretary’s regulations, and I am to give effect to the
policies of the Secretary and CMS to the extent they are not inconsistent with the law,
when I have jurisdiction to do so. 1866/CPayday.com, L.L.C., DAB No. 2289 at 14
(2009) (“[a]n ALJ is bound by applicable laws and regulations and may not invalidate
either a law or regulation on any ground.”).

IV. Conclusion

For the foregoing reasons, this case is dismissed for lack of jurisdiction.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Grady R. Fort, M.D.,
(NPI No. 1982765582,
PTAN No. CA134802)

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-16-643
Decision No. CR4709

Date: September 21, 2016

DECISION

Noridian Government Solutions (Noridian or “the contractor”), an administrative
contractor acting on behalf of the Centers for Medicare & Medicaid Services (CMS),
revoked the Medicare enrollment and billing privileges of Petitioner, Grady R. Fort,
M.D., effective December 31, 2015. The revocation was based on Petitioner’s failure to
report a 30-day license suspension by the Medical Board of California (“state medical
board”). For the reasons stated below, I affirm CMS’s revocation of Petitioner’s
Medicare enrollment and billing privileges.

I. Background and Procedural History

Petitioner, a physician, was enrolled as a supplier in the Medicare program. On
December 1, 2015, pursuant to a settlement agreement entered into by Petitioner, the state
medical board ordered that Petitioner be suspended from the practice of medicine for a
period of 30 days. The effective date listed on the decision was December 31, 2015, but
the period of license suspension was from October 1 through October 31, 2015. See
CMS Exhibit (CMS Ex.) 4 at 5.
On February 8, 2016, Noridian sent Petitioner a letter informing him that his Medicare
privileges were being revoked, effective December 31, 2015, because he did not provide
timely notice of his license suspension. CMS Ex. 3 at 1. Noridian informed Petitioner
that it had established a re-enrollment bar for a period of one year, effective 30 days from
the postmark date of the letter. CMS Ex. 3 at 2. Noridian provided the following
explanation in its letter:

42 CFR §424.535(a)(9) — Failure to Report Changes

Your California Medical License was suspended by the California Medical
Board for 30 days from October 1, 2015 to October 31, 2015. This was not
reported to Medicare.

CMS Ex. 3 at 1 (emphasis in original).

In an undated letter, Petitioner requested reconsideration of the February 8, 2016
determination. CMS Ex. 2. In his request for reconsideration, Petitioner did not deny
that his medical license had been suspended by the state medical board. Rather,
Petitioner explained that he was unaware of the requirement to report his license
suspension. Petitioner conceded that he knew that “ignorance of the law is no excuse”
and stated that “making such a report is a legal requirement, but please know there was
no intent to deceive or do anything fraudulent.” CMS Ex. 2.

In a May 13, 2016 reconsidered determination, Noridian informed Petitioner that his
Medicare enrollment had been revoked pursuant to 42 C.F.R. § 424.535(a)(9) based on
his failure to report his October 1-31, 2015 license suspension within 30 days. CMS Ex.
1 at 1. The letter notified Petitioner that he may request further review by an
administrative law judge. CMS Ex. | at 3.

Petitioner filed a request for hearing dated June 6, 2016, that the Civil Remedies Division
received on June 15, 2016. On June 30, 2016, I issued an Acknowledgment and Pre-
Hearing Order (Order) directing the parties to file pre-hearing exchanges, consisting of a
brief by CMS and a response brief by Petitioner, along with supporting evidence, in
accordance with specific requirements and deadlines.

CMS filed a pre-hearing brief and motion for summary judgment (CMS Brief), along
with five exhibits (CMS Exs. 1-5). Petitioner submitted a pre-hearing brief (P. Brief) and
three exhibits.' (P. Exs. 1-3). I admit the parties’ briefs, along with CMS Exs. 1-5 and P.
Exs. 1-3 into the record.

' Petitioner’s exhibits are not compliant with the identification, marking, and pagination
requirements set forth in the Order. I have admitted Petitioner’s exhibits as follows:
Exhibit 1 - blank Form CMS-460 (Medicare Participating Physician or Supplier
Neither party has submitted written direct testimony, and it is therefore unnecessary to
convene a hearing for the purpose of cross-examination of any witnesses. See Order §§
8-10. The record is closed, and the case is ready for a decision on the merits.”

II. Issue

Whether CMS has a legal basis to revoke Petitioner’s Medicare enrollment pursuant to 42
C.F.R. § 424.535 (a)(9) based on his failure to comply with reporting requirements.

Ill. Jurisdiction

I have jurisdiction to decide this case. 42 C.F.R. §§ 498.3(b)(17), 498.5())(2); see also
42 U.S.C. § 1395cc(j)(8).

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

As a physician, Petitioner is a “supplier” for purposes of the Medicare program. See

42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202 (definition of supplier), 410.20(b)(1). In
order to participate in the Medicare program, a supplier must meet certain criteria to
enroll and receive billing privileges. 42 C.F.R. §§ 424.505, 424.510. CMS may revoke a
supplier’s enrollment and billing privileges for any reason stated in 42 C.F.R.

§ 424.535(a).

CMS may revoke a supplier’s enrollment based on the supplier’s failure to timely report a
final adverse action, as is set forth in 42 C.F.R. § 424.535(a)(9):

(9) Failure to report. The provider or supplier did not comply with the
reporting requirements specified in §424.516(d)(1)(ii) and (iii) of this
subpart.

Pursuant to 42 C.F.R. § 424.516(d)(1)(ii), physicians must report “[a]ny adverse
legal action” within 30 days of the reportable event, and 42 C.F.R. § 424.502
(Definitions) defines a final adverse action to include “[s]uspension or revocation
of a license to provide health care by any State licensing authority.”

Agreement); Exhibit 2 - CMS fact sheet for physicians regarding open payments; and
Exhibit 3 - blank sample Medicare private contract.

“ As an in-person hearing to cross-examine witnesses is not necessary, it is unnecessary
to further address CMS’s motion for summary disposition.

> My numbered findings of fact and conclusions of law are set forth in italics and bold
font.
I. Ina December 1, 2015 decision that became effective December 31, 2015,
the Medical Board of California imposed on Petitioner a 30-day suspension
from the practice of medicine.

Petitioner, with the assistance of counsel, entered into a stipulated settlement and
disciplinary order with the state medical board in July 2015. CMS Ex. 4 at 14-15. The
state medical board adopted the stipulated settlement and disciplinary order on December
1, 2015, and the decision and order became effective on December 31, 2015. CMS Ex. 4
at 1. Petitioner acknowledged that the charges and allegations against him, if proven at a
hearing, would constitute cause for imposing discipline. CMS Ex. 4 at 3-4. The state
medical board’s accusation document, filed on May 13, 2013, charged that Petitioner
committed gross negligence, repeatedly committed negligent acts, prescribed prescription
drugs or controlled substances to addicts, and repeatedly prescribed excessive amounts of
controlled substances to patients. CMS Ex. 4 at 17-38.

The disciplinary order directed the following, in pertinent part:

IT IS HEREBY ORDERED that [the] Physician’s and Surgeon’s
Certificate . . . is revoked.* However, the revocation is stayed and
[Petitioner] is placed on probation for seven (7) years on the following
terms and conditions.

1. SUSPENSION. As part of probation, Petitioner is suspended from the
practice of medicine for 30 days beginning the sixteenth (16") day after the
effective date of this decision, but no sooner than October 1, 2015.

CMS Ex. 4 at 5. In his brief, Petitioner admits that he was suspended from the practice of
medicine for 30 days. P. Brief. Petitioner further explained that his suspension “was for
a one month period and was served in October 2015 but the final Medical Board of
California decision was not rendered until December of last year.” P. Brief.

2. Petitioner was required to report his license suspension to CMS, through its
contractor, within 30 days.

Pursuant to 42 C.F.R. § 424.502, a suspension or revocation of a license to provide health
care by a state licensing authority is a final adverse action. A physician must report any
adverse legal action within 30 days. 42 C.F.R. § 424.516(d)(1)(ii).

* The reconsidered determination does not address whether it was necessary for
Petitioner to report that his medical license was revoked (with the revocation stayed
while he continued practicing medicine in a probationary status).
3. Petitioner did not provide notice to CMS or its contractor within 30 days of
the adverse legal action.

As previously explained, the regulations at 42 C.F.R. § 424.516(d)(1)(ii) require that a
physician report, within 30 days, any adverse legal action to his or her Medicare
contractor and that the failure to timely report an adverse legal action subjects a physician
to revocation of his or her Medicare billing privileges. 42 C.F.R. § 424.535(a)(9).
Petitioner does not contend that he informed Noridian of his license suspension within
the required reporting period of 30 days.*

The evidence indicates that Noridian issued a determination revoking Petitioner’s
Medicare enrollment and billing privileges prior to receiving any notice from Petitioner
of his license suspension. Petitioner contends in his brief and supporting exhibits that he
was “completely unaware of the requirement to report any license suspension or it would
have been done promptly.” P. Brief. Petitioner further argues that his attorney had no
knowledge of the Medicare reporting requirement and that the state medical board did not
address this requirement in its order. Petitioner further contends that it is an “unfair
practice to deny privileges to providers for violating a rule that is not common
knowledge,” and that the documents he submitted as exhibits demonstrate that he was not
on notice of the reporting requirement. P. Brief.

While I need not assess the sincerity of Petitioner’s explanation that he was unaware of
the reporting requirement, Petitioner nonetheless was obligated to report his license
suspension, and he cannot escape responsibility for his failure to report the suspension
within the 30-day period.® Petitioner is responsible for knowing the rules pertaining to
Medicare suppliers, and the state medical board had no obligation to inform him that he
would be required to report the license suspension. The regulation places the burden
upon the Medicare participant to report “[a]ny adverse legal action,” and there are no
exceptions to this requirement provided in 42 C.F.R. § 424.516(d) based on a supplier’s
ignorance of his or her obligations. Further, section 424.516(d)(1)(ii) requires a supplier
to report any adverse legal action, even if it is not a final adverse action. Akram A.
Ismail, DAB No. 2429 at 10-11 (2011). Therefore, I conclude that Petitioner failed to
notify Noridian of an adverse legal action within 30 days as required, and that this failure
serves as a legitimate basis for Noridian to revoke his Medicare enrollment and billing
privileges.

> Petitioner also failed to report the 30-day license suspension within 30 days of the
December 31, 2015 effective date of the December 1, 2015 order and decision.

® The record contains a Form CMS-855I, submitted by Petitioner in June 2014, that
documents he “agreed to notify the Medicare contractor of a change of ownership,
practice location, and/or Final Adverse Action within 30 days of the reportable event.”
CMS Ex. 5 at 26.

Petitioner otherwise does not challenge the effective date of the revocation or the
duration of the re-enrollment bar, and therefore, I need not address those issues.

V. Conclusion

For the reasons explained above, I affirm CMS’s determination revoking Petitioner’s
Medicare enrollment and billing privileges.

/s/

Leslie C. Rogall
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

James T. Murphy, M.D.,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-15-4208
Decision No. CR4707

Date: September 20, 2016

DECISION

National Government Services (NGS), an administrative contractor acting on behalf of
the Centers for Medicare & Medicaid Services (CMS), revoked the Medicare enrollment
and billing privileges of Petitioner, James T. Murphy, M.D. (Petitioner or Dr. Murphy).
NGS relied on two grounds in revoking Dr. Murphy’s Medicare billing privileges: 1) the
State of California had revoked his license to practice medicine and 2) the State of
California had terminated his enrollment in Medi-Cal, California’s Medicaid program.
Petitioner requested a hearing to contest the revocation. CMS later informed Dr. Murphy
that it was relying on the Medi-Cal termination as the sole basis for revoking his
Medicare billing privileges. Because Petitioner does not dispute that his participation in
Medi-Cal was terminated, I affirm CMS’s revocation of Dr. Murphy’s Medicare billing
privileges.

I. Background and Procedural History

Dr. Murphy is an emergency medicine physician who at various times has been licensed
to practice medicine in Alabama, Arizona, California, Connecticut, Indiana, Michigan,
Missouri, New York, North Carolina, Texas, Wisconsin, and Wyoming. See Petitioner’s
Brief (P. Br.) at 2. On or about January 9, 2014, the New York State Board for

Professional Medical Conduct (New York Board) charged Dr. Murphy with five
specifications of professional misconduct. CMS Exhibit (Ex.) 2 at 16-19. The first
specification charged that Dr. Murphy “practic[ed] the profession of medicine with
negligence on more than one occasion.” CMS Ex. 2 at 18. The other four specifications
charged that Dr. Murphy “fail[ed] to maintain a record for each patient which accurately
reflect[ed] the evaluation and treatment of the patient.” Jd. On or about January 10,
2014, Dr. Murphy and the New York Board entered into a consent agreement. CMS Ex.
2 at 11-15. In the consent agreement, Dr. Murphy agreed not to contest the charge that he
failed to maintain adequate patient records. CMS Ex. 2 at 11. Under the terms of the
consent agreement, Dr. Murphy agreed, among other conditions, that he would never
reactivate his New York medical license (# 259046) and would never again practice
medicine in New York State. CMS Ex. 2 at 12. The New York Board adopted the terms
of the consent agreement by order dated January 10, 2014. CMS Ex. 2 at 10.

On or about May 23, 2014, the Medical Board of California (California Board) issued an
Accusation against Dr. Murphy’s California medical license (#G89033), charging that the
conduct that formed the basis for the New York consent order constituted unprofessional
conduct under California law. CMS Ex. 2 at 6-9. Dr. Murphy requested a hearing and
the California Board scheduled a hearing for January 8, 2015. CMS Ex. 2 at 1-2. Dr.
Murphy did not appear for the scheduled hearing and was declared in default. CMS Ex. 2
at 2. On January 27, 2015, the California Board issued a default order revoking Dr.
Murphy’s California medical license, effective February 26, 2015. CMS Ex. 2 at 4.

In a letter dated April 13, 2015, the California Department of Health Care Services
(DHCS) notified Dr. Murphy of the following:

[Y]ou are prohibited from being able to receive payment from the Medi-Cal
program for an indefinite period of time, effective March 16, 2015. Your
name will be posted on the “Medi-Cal Suspended and Ineligible Provider
List,” available on the Internet. During the period of your suspension, no
person or entity, including an employer, may submit any claims to the
Medi-Cal program for items or services rendered by you.

CMS Ex. 4 at 1. DHCS further stated that it was required to suspend from Medi-Cal any
provider of health care services who has a license to provide health care revoked or
suspended or has surrendered that license while a disciplinary hearing on that license was
pending.! Id.

' Although the California Board revoked Dr. Murphy’s medical license, the DHCS letter
mistakenly stated that Dr. Murphy had surrendered his license while a disciplinary
hearing was pending. CMS Ex. 4 at 1.
In an e-mail dated June 19, 2015, DHCS informed CMS that Dr. Murphy’s Medi-Cal
privileges were suspended or “terminated,” that the reason for termination was “[l]icense
loss,” and that Dr. Murphy had exhausted all appeal rights. CMS Ex. 5 at 1-2. In an e-
mail dated June 25, 2015, CMS directed NGS to revoke Dr. Murphy’s Medicare
enrollment and billing privileges. CMS Ex. 6.

By letter dated July 2, 2015, NGS issued an initial determination revoking Dr. Murphy’s
Medicare enrollment and billing privileges, effective February 26, 2015. CMS Ex. 7 at 1.
NGS relied on two grounds in support of the revocation:

42 CFR §424.535(a)(1) — Not in Compliance with Medicare
Requirements

James Murphy’s license to practice medicine in the State of California was
revoked effective February 26, 2015, as a result of disciplinary action
rendered by the Medical Board of California.

42 CFR §424.535(a)(12) — Medicaid Termination

By letter dated April 13, 2015, James Murphy was informed that he was
terminated from the California Medicaid (Medi-Cal) program. California
Medi-Cal confirmed that James Murphy’s appeal rights have been
exhausted with respect to this termination.

Id. The initial determination further informed Dr. Murphy that he could submit a corrective
action plan (CAP) with regard to the alleged violation of 42 C.F.R. § 424.535(a)(1) only, and
that he could request reconsideration of either or both grounds. CMS Ex. 7 at 1-2.

Dr. Murphy timely requested reconsideration by letter dated August 15, 2015. CMS Ex.
9. In his reconsideration request, Dr. Murphy argued that the California Board had
illegally revoked his medical license and denied him due process. He explained that the
conduct charged in the New York disciplinary proceeding occurred at a facility that was
understaffed and was implementing a new electronic medical records system that did not
function properly. He characterized the disciplinary action of the New York Board as
“{d]raconian” and stated that he lacked the time or resources to fight the New York
charges. He pointed out that several of the other jurisdictions in which he was licensed
had not taken action against his licenses, and that Wisconsin had permitted him to retain
his license with the proviso that he complete “remedial education for medical record
taking.” Dr. Murphy’s reconsideration request did not address whether or not his
California Medicaid privileges had been terminated. CMS Ex. 9.

In an August 17, 2015 reconsidered determination, an NGS hearing officer upheld the
initial determination. CMS Ex. 10. The reconsideration determination stated the
following:
EVALUATION OF SUBMITTED DOCUMENTATION: There was no
letter of reconsideration, stating the facts in which [Dr. Murphy] is
disagreeing with the decision in which [sic] was made to revoke[.]

DECISION: James T Murphy MD Has not provided evidence to show full
compliance with the standards for which you were revoked. Therefore, we
cannot grant you access to the Medicare Trust Fund (by way or issuance)
of a Medicare number.

CMS Ex. 10 at 2 (italics original).

Petitioner timely requested a hearing. The case was initially assigned to Administrative
Law Judge Carolyn Cozad Hughes, who issued an Acknowledgment and Pre-Hearing
Order (Order) establishing deadlines for the submission of prehearing exchanges.
Effective August 26, 2016, the case was reassigned to me. In accordance with Judge
Hughes’ Order, CMS filed its prehearing exchange, consisting of a brief (CMS Br.) in
support of summary disposition and ten exhibits (CMS Exs. 1-10). CMS did not submit
the written direct testimony of any witness. In its prehearing brief, CMS stated that it
was no longer pursuing revocation of Dr. Murphy’s Medicare enrollment and billing
privileges based on 42 C.F.R. § 424.535(a)(1) and, instead asserted that revocation was
authorized based solely on 42 C.F.R. § 424.535(a)(12).? CMS Br. at3 n.1.

Petitioner also filed a prehearing exchange consisting of a brief (P. Br.) responding to
CMS’s submission and cross-moving for summary disposition. Petitioner also offered 3
exhibits (P. Exs. 1-3). Petitioner did not offer the written direct testimony of any witness.
Petitioner requested to cross-examine Kyra Blair, an NGS representative identified by
CMS in its brief. See P. Br. at 7 n.1; see also CMS Br. at 3 n.4.

Neither party objected to the exhibits offered by the opposing party. Therefore, in the
absence of objection, I admit CMS Exs. 1-10 and P. Exs. 1-3 into the record. As
explained in more detail below, I conclude that it is unnecessary to hold a hearing for the
purpose of receiving the testimony of the NGS representative, Ms. Blair, because her
testimony would not be relevant to any issue necessary to my decision in this case.

> Because CMS determined not to pursue revocation of Dr. Murphy’s Medicare
enrollment and billing privileges based on the loss of his California medical license, CMS
amended the effective date of revocation of his Medicare billing privileges to August 2,
2015, which was 30 days after Dr. Murphy was notified that his Medicare billing
privileges were being revoked. See CMS Br. at 3 n.2; see also P. Ex. 3.
IL. Issue

Whether CMS had a legitimate basis for revoking Petitioner’s Medicare billing privileges
under 42 C.F.R. § 424.535(a)(12).

Il. Jurisdiction

I have jurisdiction to decide this issue. 42 C.F.R. §§ 498.3(b)(17), 498.5(1)(2); see also
42 U.S.C. § 1395cc(j)(8).

IV. Findings of Fact, Conclusions of Law, and Analysis*
1. Summary disposition is appropriate in this case.

CMS argues that it is entitled to summary judgment in its favor. CMS Br. at 12. The
Departmental Appeals Board (Board) has stated the standard for summary judgment:

Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to
judgment as a matter of law. ... The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
material fact for trial and that it is entitled to judgment as a matter of law... .
To defeat an adequately supported summary judgment motion, the non-
moving party may not rely on the denials in its pleadings or briefs, but must
furnish evidence of a dispute concerning a material fact — a fact that, if
proven, would affect the outcome of the case under governing law. ... In
determining whether there are genuine issues of material fact for trial, the
reviewer must view the evidence in the light most favorable to the non-
moving party, drawing all reasonable inferences in that party’s favor.

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010) (citations omitted).

In the present case, CMS produced evidence to establish that the Medi-Cal program
terminated Dr. Murphy’s participation and that he had exhausted all appeals. See CMS
Ex. 5. These are the only two elements required to establish a basis for revocation
pursuant to 42 C.F.R. § 424.535(a)(12). Thus, CMS met its initial burden in support of
its motion for summary disposition. By contrast, Petitioner has not meaningfully
disputed any fact material to my resolution of the case. On the contrary, Petitioner
admits that “Medi-Cal terminated Dr. Murphy’s participation in the program because of a

> My findings of fact and conclusions of law are set forth in italics and bold font.
default order by the California Medical Board....” P. Br. at 10. As I explain in the
following sections, Petitioner’s remaining arguments concern matters that are either
irrelevant or are beyond my authority to consider. Accordingly, I conclude that summary
judgment in favor of CMS is appropriate.

2. Petitioner does not dispute that his Medicaid privileges were
terminated or that he had exhausted all possible appeals; therefore,
CMS had a legitimate basis for revoking Petitioner’s Medicare billing
privileges under 42 C.F.R. § 424.535(a)(12).

Petitioner is a physician and, therefore, a supplier for purposes of the Medicare program.
See 42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202 (definition of Supplier), 410.20(b)(1).
CMS may revoke the Medicare billing privileges of a supplier for any of the reasons
stated in 42 C.F.R. § 424.535. Pursuant to 42 C.F.R. § 424.535(a)(12), CMS or its
contractor is authorized to revoke a supplier’s Medicare enrollment and billing privileges
under the following circumstances:

(i) Medicaid billing privileges are terminated or revoked by a State
Medicaid Agency.

(ii) | Medicare may not terminate unless and until a provider or supplier
has exhausted all applicable appeal rights.

As noted above, the California DHCS notified Dr. Murphy that, because his
license to practice medicine in California had been lost, he could no longer be
reimbursed for treating Medi-Cal beneficiaries. CMS Ex. 4. DHCS then notified
CMS that Dr. Murphy’s Medi-Cal privileges had been terminated and that he had
exhausted all appeal rights. CMS Ex. 5.

Petitioner admits that DHCS terminated Dr. Murphy’s Medi-Cal privileges. P. Br.
at 3-4, 10-11. Petitioner does not dispute that DHCS is a State Medicaid Agency
or that Medi-Cal is a State Medicaid program within the meaning of the
regulations. Nor does Petitioner contend that Dr. Murphy’s appeal rights (if any)
regarding the Medi-Cal termination were not exhausted. Accordingly, CMS had a
legal basis to revoke Dr. Murphy’s Medicare enrollment and billing privileges
pursuant to 42 C.F.R. § 424.535(a)(12).

3. Estoppel does not provide a basis to overturn the revocation of
Petitioner’s Medicare enrollment and billing privileges.

Petitioner argues that CMS should be estopped from enforcing the revocation of Dr.
Murphy’s Medicare enrollment and billing privileges based on what Petitioner
characterizes as misconduct by NGS. P. Br. at 6-8. According to Petitioner, NGS
committed misconduct by issuing its reconsidered determination without having
reviewed the substance of Dr. Murphy’s reconsideration request.

By arguing that NGS or its employee committed misconduct in reviewing Dr. Murphy’s
reconsideration request, Petitioner apparently acknowledges that courts and
administrative tribunals generally disfavor claims of estoppel against government actors.
The Supreme Court has expressed doubt as to whether the government can ever be
estopped from enforcing valid regulations based on statements or actions of government
employees or their agents. See Heckler v. Cmty. Health Servs. of Crawford Cnty., 467
U.S. 51, 63 (1984); Schweiker v. Hansen, 450 U.S. 785 (1981). However, while
expressing doubt that estoppel is ever available against the federal government, the Court
left open the possibility that estoppel might lie upon a showing of “affirmative
misconduct,” such as fraud, by the federal government. See, e.g., Office of Personnel
Management v. Richmond, 496 U.S. 414, at 421 (1990). However, as I explain below, I
need not decide whether NGS’s actions constitute “affirmative misconduct” that would
support a claim of estoppel.

Petitioner contends that by alleging NGS committed misconduct, he raises an issue of
material fact that would prevent my granting CMS’s motion for summary disposition. I
disagree. This is because, even if NGS did not consider the arguments in Dr. Murphy’s
reconsideration request, the omission would be harmless error. The error, if any, is
harmless because the arguments Dr. Murphy put forward in his reconsideration request
have no bearing on any issue necessary to support the revocation determination in this
case.

As noted above, in the present proceeding, CMS relies on only a single ground in support
of its decision to revoke Dr. Murphy’s billing privileges: namely, that revocation is
authorized by 42 C.F.R. § 424.535(a)(12) based on the termination of his Medi-Cal
privileges. “[I]n reviewing the legality of a revocation under section 424.535(a)(12), an
administrative law judge is authorized to decide only whether (1) a supplier’s Medicaid
billing privileges have been terminated or revoked by a State Medicaid Agency and (2)
that action has become unappealable, or otherwise final, under state law.” Douglas
Bradley, M.D., DAB No. 2663 at 16 (2015). Dr. Murphy’s request for reconsideration
included no contention that his Medi-Cal privileges were not terminated, or that the
termination was not final. CMS Ex. 9. Instead, the sole focus of the reconsideration
request was Dr. Murphy’s contention that the New York and California Medical Boards
acted unfairly in revoking his medical licenses in those States. Jd.

Petitioner’s logic appears to be that, had the California Board not unfairly revoked Dr.
Murphy’s license based on the unfair action by the New York Board, his Medi-Cal
privileges would not have been terminated. However I have no authority to declare the
Medi-Cal termination invalid based on Dr. Murphy’s perception of unfairness.* A
revocation under section 424.535(a)(12) is derivative of the action of a state Medicaid
agency. The regulations do not authorize me to review the merits or procedures involved
in the state Medicaid agency’s decision to terminate a provider or supplier. See Douglas
Bradley, M.D., DAB No. 2663 at 16 (“[n]othing in [the appeal] regulations, or in the
Medicare statute, even remotely suggests that they were intended [to] provide a forum to
collaterally challenge adverse decisions by federal or state courts or non-federal
regulatory bodies”). If Dr. Murphy wished to assert that the Medi-Cal termination or the
New York or California license revocation proceedings were unfair, he should have taken
direct appeals challenging those actions. Having apparently made a strategic decision to
abandon his New York and California medical licenses and thus avoid the expense of
mounting legal defenses in those states (see CMS Ex. 9), Dr. Murphy cannot now
collaterally attack the New York and California proceedings in which he lost his medical
licenses and which led to the termination of his Medi-Cal privileges.

Therefore, because Dr. Murphy’s reconsideration request did not raise any issue material
to the grounds on which CMS determined to revoke his Medicare billing privileges,
NGS’s alleged “misconduct” in failing to review the reconsideration request was, at most,
harmless error. For this reason, it is unnecessary to convene a hearing to elicit testimony
or cross-examination of the NGS employee identified in CMS’s brief. See CMS Br. at 3
n.4; see also P. Br. at 7 n.1.

4. Ido not have authority to review the length of the re-enrollment bar
imposed by CMS.

Because Petitioner does not dispute that DHCS terminated Dr. Murphy’s Medi-Cal
privileges, Petitioner implicitly acknowledges that CMS had a basis to revoke Dr.
Murphy’s Medicare enrollment and billing privileges. Petitioner nevertheless argues
that I should grant summary disposition in Dr. Murphy’s favor, reducing the two-year

* Though not necessary to my decision, I observe that Petitioner has not demonstrated
that the processes through which Dr. Murphy’s New York and California licenses were
revoked were tainted by any unfairness. In each instance, Dr. Murphy had the
opportunity to contest the revocation, but voluntarily waived or abandoned that
opportunity. Dr. Murphy chose to enter into the consent agreement pursuant to which the
New York Board revoked his license. In so doing, he relinquished his right to appeal the
license revocation. In the case of his California license, the California Board offered Dr.
Murphy the opportunity to appear at a hearing at which he could have explained the
circumstances under which he lost his New York license. But, instead of appearing at the
hearing, Dr. Murphy chose not to appear. It was his failure to appear at the California
hearing that led the California Board to declare him in default and revoke his California
license.

re-enrollment bar imposed by CMS to one year. P. Br. at 11. Petitioner contends that I
must reduce the two-year re-enrollment bar because CMS failed to articulate why it
imposed a two-year re-enrollment bar instead of a one-year re-enrollment bar. P. Br. at
8-13. Petitioner’s arguments are without merit.

Petitioner argues that CMS is bound by precedent in setting the length of a re-enrollment
bar. P. Br. at 9-11. In support of this proposition, Petitioner cites the decision of the U.S.
Court of Appeals for District of Columbia Circuit in Friedman v. Sebelius, 686 F.3d 813
(D.C. Circuit 2012). The case is inapposite because it interprets the authority of the
Inspector General of the Department of Health and Human Services to exclude
individuals from participation in the Medicare program pursuant to section 1128 of the
Social Security Act (Act) (42 U.S.C § 1320a-7). As an appellate panel of the
Departmental Appeals Board has stated:

[R]evocation under section 424.535 and exclusion under section 1128 are
distinct remedial tools, each with its own set of prerequisites and
consequences for the provider or supplier.

Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 13 (2009), aff'd sub nom. Ahmed v.
Sebelius, 710 F. Supp. 2d 167 (D. Mass. 2010). Thus, the rationale articulated by the
court in Friedman is inapplicable to the present case because Dr. Murphy has not been
excluded from Medicare pursuant to section 1128 of the Act, but rather has had his
Medicare enrollment and billing privileges revoked pursuant to 42 C.F.R.

§ 424.535(a)(12).

Moreover, even if CMS could be bound to precedent under the reasoning articulated in
Friedman, it is well settled that decisions of Civil Remedies Division administrative law
judges have no precedential weight. See, e.g., John M. Shimko, D.P.M., DAB No. 2689
at 5 (2016). Finally, CMS’s decision as to the length of a re-enrollment bar is a matter of
discretion which I do not have authority to review. See Vijendra Dave, M.D., DAB No.
2672 at 8-12 (2016).

5. Petitioner’s other arguments request equitable relief, which I lack
authority to grant.

Petitioner points out that the State of Wisconsin, where Dr. Murphy currently practices,
did not revoke his medical license, although it was aware of the circumstances
surrounding the disciplinary proceedings in New York and California. P. Br. at 4.
Petitioner further points to a letter of support from Dr. Murphy’s employer, attesting to
Dr. Murphy’s competence as an emergency physician. P. Br. at 10, citing P. Ex. 2.
These assertions seem to imply that I should overturn CMS’s exercise of its discretion to
revoke Dr. Murphy’s Medicare billing privileges because the revocation does not serve a
remedial purpose. However, CMS’s discretionary act to revoke a provider or supplier is
10

not subject to review based on equity or mitigating circumstances. 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’’).

III. Conclusion

For the reasons explained above, I affirm CMS’s determination to revoke Petitioner’s
Medicare billing privileges.

/s/
Leslie A. Weyn
Administrative Law Judge