Ambulife Ambulance, Inc., DAB CR5519 (2020)

DECISION

Noridian Healthcare Solutions (Noridian), an administrative contractor acting on behalf of the Centers for Medicare & Medicaid Services (CMS), revoked the Medicare enrollment and billing privileges of Petitioner, Ambulife Ambulance, Inc. CMS upheld that determination in a reconsidered determination. CMS and Noridian determined that, pursuant to Medicare program regulations, Petitioner had provided false or misleading information in its Medicare enrollment applications. For the reasons stated below, I affirm the revocation of Petitioner’s Medicare enrollment and billing privileges.

I. Background and Procedural History

Petitioner is a supplier of ambulance services that was enrolled in the Medicare Program. CMS Exhibits (Exs.) 6-7.

On or about June 29, 2012, Petitioner submitted additional Medicare enrollment information in response to a development request from Palmetto GBA (Palmetto), a

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Medicare administrative contractor.1 CMS Ex. 6 at 1-10 (portions of enrollment application); 12 (Palmetto’s development request). Palmetto directed Petitioner to, inter alia, complete and submit section 6 of the enrollment application2 for three specific individuals: Oleg Mirmov, Alexander Ashkinazi, and “Ms. A.”3 CMS Ex. 6 at 12. Palmetto also directed that “Section 6 [be] completed for at least one managing employee.” CMS Ex. 6 at 12. In response to this request, Petitioner completed and submitted section 6 of the application for each of those individuals, and with respect to Palmetto’s request that it complete section 6 for at least one managing employee, Petitioner listed Ms. A as a “managing employee.”4 CMS Ex. 6 at 2-4. Petitioner reported that Ms. A was a contracted managing employee, and was also an authorized official5 and a delegated official.6 CMS Ex. 6 at 4. Petitioner reported that Mr. Ashkinazi and Mr. Mirmov both had ownership and partnership interests, and that both were authorized and delegated officials. CMS Ex. 6 at 2-3. Petitioner provided, in

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response to Palmetto’s request that it “report each final adverse action, when it occurred, the Federal/State agency . . . that imposed the action, and the resolution” for the aforementioned individuals, a negative response in section 6B of the enrollment application. CMS Ex. 6 at 5; see CMS Ex. 7 at 13 (listing final adverse legal actions that must be reported, to include an exclusion from a federal health care program). Mr. Mirmov, who identified himself as Petitioner’s vice president, and Ms. A, who identified herself as Petitioner’s chief operating officer, certified that they had “read the contents of this application” and that “the information contained herein is true, correct, and complete.” CMS Ex. 6 at 6; see P. Br. at 3 (acknowledging that Ms. A. had “identif[ied] herself as a management employee, namely, as Chief Operating Officer” in the enrollment application).

Nearly two years later, on or about May 19, 2014, Petitioner submitted another Medicare enrollment application for the purpose of revalidating its enrollment record. CMS Ex. 7 at 6. At that time, Petitioner listed three owners in section 6 of the application: Mr. Ashkinazi, Mr. Mirmov, and a new owner, Vardouhi Sarafian, whom it reported acquired ownership on June 1, 2012.7 CMS Ex. 7 at 26-28. Petitioner again reported that Ms. A was a managing employee, and also reported that she was an authorized official and a delegated official. CMS Ex. 7 at 29. Mr. Mirmov and Ms. A signed the certification statement on behalf of Petitioner, at which time Ms. A identified her title/position as “Manager” and chief operating officer. CMS Ex. 7 at 36. Although Petitioner reported that its Medicare enrollment had previously been revoked on August 31, 2011, it provided a negative response to the question asking whether any of its owners or managers, to include Ms. A, had been the subject of a final adverse legal action. CMS Ex. 7 at 14, 30.

Petitioner terminated Ms. A’s employment on July 7, 2016. See CMS Ex. 8 (letter from Petitioner to the County of Los Angeles Ambulance Licensing Hearing Board); CMS Ex. 9 at 1 (October 2016 letter from the County of Los Angeles Ambulance License Hearing Board approving Petitioner’s license following its termination of Ms. A and hire of a new office manager).

On December 13, 2018, Noridian informed Petitioner that its Medicare enrollment had been revoked pursuant to, inter alia, 42 C.F.R. § 424.535(a)(4) because it provided false or misleading information on its enrollment applications.8 CMS Ex. 2 at 1. Specifically,

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Noridian explained that Petitioner had not disclosed that Ms. A, a managing employee, had been excluded by the Department of Health and Human Services Inspector General (IG) from participation in Medicare, Medicaid, and all federal health care programs since August 20, 2000.9 CMS Ex. 2 at 1. Noridian further explained that “[a]n exclusion is listed as an adverse legal action that requires reporting on the 855 application.” CMS Ex. 2 at 1. Noridian informed Petitioner that its revocation was effective July 20, 2010, and that it would be barred from re-enrollment for a period of three years beginning 30 days after the postmark date of the letter. CMS Ex. 2 at 1-2.

Petitioner, through its current counsel, submitted a request for reconsideration dated February 4, 2019. CMS Ex. 1. Petitioner argued that Ms. A was not a managing employee for whom it would have been required to disclose an exclusion, but rather, was merely a clerical employee. See CMS Ex. 1 at 1 (stating “when the 2012 and 2014 Medicare Enrollment applications were submitted [Ms. A.] did not hold a managerial position and performed only clerical functions at Ambulife.”). However, Petitioner conceded that Ms. A continued to serve as “the office manager” after January 2012. CMS Ex. 1 at 2. Petitioner reported that “as of January 2012, [Ms. A’s] role in the application process was limited to inserting information in the application and she was no longer authorized to act as an officer or manager of Ambulife.” CMS Ex. 1 at 3. Petitioner alleged that Ms. A “took it upon herself [to] list herself as an authorized official of Ambulife and claimed to hold the title of ‘COO’ when in fact this was not the case.” CMS Ex. 1 at 3. In an apparent attempt to reconcile the information it provided in its enrollment applications, Petitioner explained:

Because Ms. Sarafian was focused on improving the operations of the company, she relied on the co-owners to ensure the accuracy of the Medicare Enrollment Applications. It is for this reason that [Ms. A] was

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able to submit Medicare Enrollment applications that contained incorrect information. However, notwithstanding the typographical errors contained in the 2012 and 2014 enrollment applications, in actuality [Ms. A] was not an owner, or managing employee.

CMS Ex. 1 at 4 (emphasis in original). Petitioner stated that “Noridian’s decision to revoke Ambulife’s Medicare privileges is based upon the fact that on the 2012 and 2014 Medicare enrollment applications, [Ms. A] misrepresented her role at Ambulife,” that Ms. A “failed to disclose to Ambulife that her name appeared on the OIG’s exclusion list,” and that her “actions are inexcusable.” CMS Ex. 1 at 5.

On April 9, 2019, CMS’s Provider Enrollment & Oversight Group issued a reconsidered determination in which it upheld the revocation of Petitioner’s enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(4) because Petitioner “certified as ‘true’ misleading or false information on the application to be enrolled or maintain enrollment in the Medicare program.” CMS Ex. 10 at 5-6. Based on the evidence that Petitioner had terminated Ms. A on July 7, 2016, CMS determined that she was not a managing employee at the time of the revocation action and withdrew the basis for revocation premised on 42 C.F.R. § 424.535(a)(2).10 CMS Ex. 10 at 5. With respect to Petitioner’s revocation pursuant to 42 C.F.R. § 424.535(a)(4), CMS recognized Petitioner’s claim that Ms. A had been removed from the Board of Directors and as a “General Manager,” but also acknowledged Petitioner’s report that Ms. A had nonetheless been retained as an “office manager” after January 2012. CMS Ex. 10 at 4. CMS further explained that Petitioner’s enrollment applications included false or misleading information, stating:

As previously mentioned above, Ms. [A] was excluded by the OIG on August 20, 2000. On its CMS-855B Medicare applications signed on June 29, 2012 and May 19, 2014, Ambulife indicated that Ms. [A], a managing employee, authorized official, and director on its enrollment record, did not have any final adverse legal actions imposed against her, when in fact she had been excluded by the OIG (see Exhibits 6 and 7).

Ambulife argues that its previous owners failed to disclose Ms. [A’s] background to Ms. Sarafian, and therefore, Ms. Sarafian had no reason to suspect that Ms. [A’s] employment with Ambulife posed a regulatory risk. However, Ambulife’s ignorance is not a defense as Ambulife, along with other health entities, has a responsibility to routinely check the OIG Exclusions database to ensure that its new hires and current employees are not included on it. Ambulife also contends that in 2012, Ms. [A] did not

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have any managing control and that she took it upon herself to list herself as an authorized official. Notwithstanding its contentions, Ambulife twice allowed Ms. [A] to complete and sign Medicare applications on its behalf, along with the signatures of another authorized official. By signing and submitting the June 29, 2012 and May 19, 2014 CMS-855B Medicare applications, Ambulife certified as “true” that Ms. [A] did not have any final adverse legal actions imposed against her, when in fact she was excluded by the OIG prior to her employment with Ambulife. Therefore, CMS finds that Ambulife’s failure to accurately report Ms. [A’s] OIG exclusion on its June 29, 2012 and May 19, 2014 CMS-855B Medicare applications, constitutes certifying as “true” misleading or false information, and as such the revocation of Ambulife’s Medicare billing privileges is appropriate under § 424.535(a)(4).

CMS Ex. 10 at 5-6.

Petitioner, through counsel, filed a timely request for a hearing (P. RFH) on April 30, 2019. Pursuant to the directives in my standing pre-hearing order that was issued on May 3, 2019, CMS submitted a pre-hearing exchange that included a brief and motion for summary judgment, along with 10 proposed exhibits (CMS Exs. 1-10). Petitioner submitted a brief and motion for summary judgment (P. Br.) and 10 proposed exhibits (P. Exs. 1-10). CMS filed a response to Petitioner’s motion for summary judgment (CMS Response), and it also submitted objections to Petitioner’s evidentiary submissions (CMS Objections).

CMS objects to Petitioner’s submission of P. Exs. 1-9 on the various bases that these documents are new evidence and were not accompanied by a showing of good cause, and are irrelevant. CMS Objections at 2-3. I preliminarily note that Noridian, in its December 2018 determination, clearly informed Petitioner that it needed to submit any supporting evidence with its request for reconsideration and warned that it may not have another opportunity to do so, stating:

You may submit additional information with the reconsideration that you believe may have a bearing on the decision. However, if you have additional information that you would like a hearing officer to consider during the reconsideration or, if necessary, an administrative law judge to consider during a hearing, you must submit that information with your request for reconsideration. This is your only opportunity to submit information during the administrative appeals process; you will not have another opportunity to do so unless an administrative law judge specifically allows you to do so under 42 CFR § 498.56(e).

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CMS Ex. 2 at 2. Petitioner, which continues to be represented by the same counsel, did not submit any of the evidence with its request for reconsideration that it later submitted with its pre-hearing exchange. CMS Ex. 10 at 2-3 (listing the evidence considered by CMS when it issued the reconsidered determination).

In support of its belated submission of these exhibits, Petitioner did not address why it did not or was otherwise unable to submit these documents with its request for reconsideration, nor did it otherwise adequately explain why there is good cause for it to submit this evidence for the first time at the hearing level. Therefore, this evidence is inadmissible. 42 C.F.R. § 498.56(e)(2)(ii) (stating that “[i]f the ALJ determines that there was not good cause for submitting the evidence for the first time at the ALJ level, the ALJ must exclude the evidence from the proceeding and may not consider it in reaching a decision”); Care Pro Home Health, Inc., DAB No. 2723 at 11 (2016) (“In enrollment revocation cases, an ALJ must exclude ‘new documentary evidence’ – that is, documentary evidence that a provider did not previously submit to CMS at the reconsideration stage (or earlier) – unless the ALJ determines that ‘the provider or supplier has good cause for submitting the evidence for the first time at the ALJ level.’ 42 C.F.R. § 498.56(e)(1).”).

Addressing the specific documents, I further note that several of the proposed exhibits are patently irrelevant, in that they have been submitted in support of Petitioner’s argument that Ms. A should not have been excluded because 18 years later, in August 2018, Illinois repealed the law that authorized the Department of Professional Regulation to place a license in “refused to renew” status solely based on student loan default. P. Br. at 12-13; see P. Exs. 4 (Illinois license status website printout); 8 (excerpts of amendments to the Department of Professional Regulation Law of the Civil Administrative Code of Illinois); 9 (February 28, 2019 press release by Senator Elizabeth Warren announcing her co-sponsorship of federal legislation addressing student loan defaults). Regardless of any changes in law that occurred nearly two decades after Ms. A’s exclusion and more than two years following Petitioner’s termination of her employment,Petitioner has no right to challenge Ms. A’s exclusion in this forum. In fact, Ms. A was provided with appeal rights at the time of her exclusion, and she was also informed that she could request reinstatement by the IG as soon as she regained her pharmacy technician license. CMS Ex. 3 at 1. The propriety of Ms. A’s exclusion is not a matter within my jurisdiction, and P. Exs. 4, 8, and 9 are irrelevant to the issue before me involving whether Petitioner submitted enrollment applications that contained false or misleading information. Regardless of whether Petitioner disagrees with the underlying basis for Ms. A’s exclusion, the simple fact is that an exclusion was in effect at the time Petitioner submitted its enrollment applications.

Likewise, Petitioner submitted several documents chronicling its ownership changes that culminated with Ms. Sarafian’s sole ownership of Petitioner in August 2017. P. Exs. 1 (January 22, 2012 resolution of its shareholders); 2 (February 28, 2017 special meeting

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minutes of its Board of Directors); 3 (August 4, 2017 special meeting minutes of its Board of Directors). These documents were available to Petitioner when it submitted its reconsideration request, and it has not asserted a basis for good cause for the late submission of these documents. Further, Petitioner has not made any showing that these documents are relevant to the issue of whether it provided false or misleading information on its enrollment applications. Regardless of any errors of its prior owners, Petitioner is subject to revocation pursuant to 42 C.F.R. § 424.535(a)(4).

Finally, Petitioner submitted copies of several blank Medicare enrollment applications. Petitioner submits these applications to argue that the Form CMS-855B application did not actually require its individual owners and managers to report any individual final adverse legal actions. P. Br. at 8. Not only are these enrollment applications available on CMS’s website, but a copy of a complete Form CMS-855B enrollment application is of record. CMS Ex. 7; see Enrollment Applications, https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/EnrollmentApplications (last visited January 22, 2020). These documents are not evidence, and Petitioner concedes as much by stating “[i]n fact, Exhibits 5 thorough [sic] 7, CMS applications, are merely illustrative and not substantive evidence.” I do not admit these blank applications as evidentiary exhibits.

In the absence of any other objections, I admit CMS Exs. 1-10 and P. Ex. 10 (written direct testimony of Vardouhi Sarafian) into the evidentiary record.

In my standing pre-hearing order, I advised the parties that an in-person hearing would only be necessary if the opposing party requested an opportunity to cross-examine a witness. Pre-Hearing Order, §§ 12-14. Because CMS has not requested an opportunity to cross-examine Ms. Sarafian, there are no witnesses for the parties to cross-examine at a hearing. The record is closed, and the case is ready for a decision on the merits.11

II. Issue

The issue is whether CMS had a legitimate basis for revoking Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(4) based on Petitioner’s submission of false or misleading information in its Medicare enrollment applications.

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III. Jurisdiction

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

IV. Findings of Fact, Conclusions of Law, and Analysis12

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).

As relevant here, CMS may revoke a supplier’s enrollment if the supplier certifies as “true” false or misleading information, as set forth in 42 C.F.R. § 424.535(a)(4), which provides:

(4) False or misleading information. The provider or supplier certified as “true” misleading or false information on the enrollment application to be enrolled or maintain enrollment in the Medicare program.

42 C.F.R. § 424.535(a)(4) (emphasis omitted).

1. Petitioner’s June 2012 Form CMS-855B application, which was certified by both Ms. A and one of Petitioner’s owners, listed Ms. A as an individual with an “Ownership Interest and/or Managing Control,” and specified that she was an authorized official, a delegated official, and a contracted managing employee; the application listed that Ms. A had the title/position of chief operating officer.
2. Petitioner’s May 2014 Form CMS-855B application, which was certified by both Ms. A and one of Petitioner’s owners, listed Ms. A as an individual with an “Ownership Interest and/or Managing Control,” and specified that she was an authorized official, a delegated official, and a contracted managing employee; the application listed Ms. A’s title/position as a “Manager” and chief operating officer.

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3. Ms. A was the subject of a final adverse action, as defined by 42 C.F.R. § 424.502, based on her inclusion on the IG’s exclusion list effective August 20, 2000.
4. Although Petitioner reported that it removed Ms. A as a Director and General Manager in January 2012, she continued to serve as “the office manager” for Petitioner until her termination in July 2016.
5. Both Palmetto and the instructions in the enrollment applications directed Petitioner to report any final adverse legal actions involving its owners and managing officials, and Petitioner did not report that Ms. A had been the subject of a final adverse legal action.
6. Because Petitioner did not report the final adverse action against Ms. A, it provided false or misleading information on its enrollment applications.
7. To the extent that Petitioner contends that its office manager was not a managing employee, Petitioner reported false or misleading information on its enrollment applications when it reported that Ms. A was a managing employee, manager, and chief operating officer.
8. CMS was authorized to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(4).

1. The IG placed Ms. A on the exclusion list, effective August 20, 2000.

Pursuant to the definitions provided in 42 C.F.R. § 424.502, a final adverse action includes a “[a]n exclusion or debarment from participation in a Federal or State health care program.” The IG excluded Ms. A from Medicare, Medicaid, and all federal healthcare programs pursuant to 42 U.S.C. § 1320a-7(b)(4) based on action taken against her pharmacy technician license by the State of Illinois (CMS Ex. 3 at 1), and Petitioner does not dispute that the IG had imposed this exclusion effective August 20, 2000. P. Br. at 5 (“Ambulife management became aware that [Ms. A] had been restricted from renewing her pharmacy technician license because 18 years earlier, in 2000, she had defaulted on a student loan” and that “[s]he was consequently excluded by Medicare.”).

Petitioner does not submit any evidence disputing that Ms. A continued to be listed on the exclusion list during her employment with Petitioner. As I explained in Section I of this decision, even if the State of Illinois no longer refuses to renew a pharmacy technician license based on a default on student loan debt, such a change in law nearly two decades after the imposition of Ms. A’s exclusion has no bearing on the fact that Ms. A was the

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subject of an IG exclusion pursuant to 42 U.S.C. § 1320a-7(b)(4) at the time Petitioner submitted the 2012 and 2014 enrollment applications.

2. Petitioner correctly listed its “office manager” as a “managing employee” on its enrollment applications.

Despite the fact that Ms. Sarafian testified that Ms. A had been “removed from the Ambulife Board of Directors and . . . her Officer position as General Manager” effective April 19, 2011, and that she “did not have the authority to exercise operational or managerial control over the company and did not hold any officer positions,” effective January 22, 2012 (P. Ex. 10 at 1-2), Ms. A continued to serve as “the office manager” at the time she submitted the 2012 and 2014 enrollment applications. CMS Ex. 1 at 2 (“Upon assuming management of the operations of Ambulife, in January of 2012, Ms. Sarafian removed [Ms. A] from the Board of Directors and relieved her of her responsibilities as General Manager. At that time [Ms. A] was retained as the office manager, which was a part time clerical position.”).

The Form CMS-855B enrollment application indicates that “[a]ll managing employees” must be reported in section 6 of the Form CMS-855B enrollment application. It further explains that a managing employee is defined as a “general manager, business manager, administrator, director, or other individual who exercises operational or managerial control over, or who directly or indirectly conducts, the day-to-day operations of the supplier, either under contract or through some other arrangement, regardless of whether the individual is a W-2 employee of the supplier” (CMS Ex. 7 at 25), which mirrors the regulatory definition of managing employee set forth in 42 C.F.R. § 424.502. It is expected that “the office manager” for a supplier “exercises managerial control over,” or “directly or indirectly conducts the day-to-day operations” of that supplier.13 See 42 C.F.R. § 424.502. And CMS, in providing guidance to its administrative contractors, specifically explained that an “office manager” isa managing employee. See CMS Pub. 100-8, Medicare Program Integrity Manual, § 15.5.6 (A managing employee “is any individual, including a general manager, business manager, office manager or administrator, who exercises operational or managerial control over the provider's business, or who conducts the day-to-day operations of the business.”). In fact, Congress, in section 1124A of the Social Security Act, broadly required that an enrolled supplier must provide “full and complete information” for “any managing employee.” 42 U.S.C. § 1320a-3a(a)(2) (emphasis added). Ms. A, as the office manager for Petitioner, would undoubtedly be considered “any managing employee” as contemplated by both the Social Security Act and the regulatory definition of a managing employee.

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3. Because Ms. A. was a managing employee, Petitioner was required to report her exclusion on its enrollment applications.

Even if Ms. A did not inform Petitioner of her exclusion, as Petitioner alleges, Petitioner was not relieved of its obligation to report this final adverse legal action on its enrollment applications. A supplier is bound by any false or misleading information that it provides on an enrollment application, and false or misleading information may ultimately be submitted to the Medicare administrative contractor if the supplier does not carefully review all sections of an enrollment application. See 42 C.F.R. § 424.535(a)(4). Ms. A is listed on the IG’s public database of excluded individuals (CMS Ex. 4), and notice of her exclusion was readily available to Petitioner via the IG’s website, regardless of whether she disclosed her exclusion to Petitioner. See 76 Fed. Reg. 5862, 5866 (Feb. 2, 2011) (Federal Register notice pre-dating Petitioner’s submission of its 2012 and 2014 applications that references the website for the then-existing public database of excluded individuals, http://oig.hhs.gov/fraud/exclusions/exclusions_list.asp). Petitioner argues that Ms. A “was an inherited employee, who had been affiliated with Ambulife since its inception,” and that its new owner, Ms. Sarafian, “had no reason to suspect that [Ms. A’s] employment at Ambulife posed a regulatory risk.” P. RFH at 3. However, Petitioner certified false or misleading information when it signed a certification statement attesting to the accuracy of the content of an application, which reported that Ms. A had not been the subject of any final adverse legal actions. Although Petitioner “relied on co-owners to ensure the accuracy of the CMS Medicare applications” (P. RFH at 3), Petitioner identifies no legal authority that allows it to disassociate itself from the actions of an owner who certified the 2012 and 2014 enrollment applications.

A supplier that “certifie[s] as ‘true’ misleading or false information” may be subject to revocation of its Medicare enrollment and billing privileges. 42 C.F.R. § 424.535(a)(4). “[S]ection 424.535(a)(4) does not require proof that [a supplier] subjectively intended to provide false information, only proof that [it] in fact provided misleading or false information that [it] certified as true.” Mark Koch, D.O., DAB No. 2610 at 4 (2014) (emphasis in original). Further, and based on a situation similar to the one presented here involving the revocation of billing privileges pursuant to section 424.535(a)(4), the Departmental Appeals Board (DAB) explained that “even if [a suppler] did not subjectively intend to mislead the Medicare program on the [enrollment] application, he was not without fault.” Id. at 4-5. The DAB continued by stating: “Petitioner admits that, contrary to his signed certification, he did not read the complete application before signing and submitting it to Medicare. That omission was certainly negligent and exhibited indifference to Medicare requirements.” Id. at 5 (citation omitted). In expanding on its analysis in the Koch decision, the DAB later explained, in a nearly identical situation involving a revocation pursuant to section 424.535(a)(4), the following:

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Petitioner, like Dr. Koch, in fact provided misleading or false information that she certified as true. Moreover, even accepting that Petitioner did not intend to mislead the Medicare program, Petitioner admitted that she did not read at least one of the applications inasmuch as she asserted that she was not given an opportunity to review the application form itself. By signing the certification statements in both application forms (and she does not dispute that the signatures are hers), she attested to the truth, accuracy and completeness of their content, as is.

As the ALJ correctly noted, once CMS determined that Petitioner submitted Medicare enrollment applications that contained false or misleading statements that Petitioner certified as “true,” CMS had a legal basis for revocation.

Sandra E. Johnson, CRNA, DAB No. 2708 at 15 (2016). Petitioner reported false information, and CMS had a legitimate basis to revoke its Medicare enrollment pursuant to section 424.535(a)(4).

Petitioner for the first time argues that it was not required to report Ms. A’s exclusion because the instructions on the Form CMS-855B indicate that a supplier must report any of the types of final adverse action that are listed on page 13 of the application, whereas in actuality page 13 is a continuation of Section 3 (pertaining to “FINAL ADVERSE ACTIONS/CONVICTIONS”) that begins on page 12 and lists the final adverse legal actions on that page. P. Br. at 7-10; see, e.g., CMS Ex. 7 at 13-14; 30 (Form CMS-855B application). Regardless of whether the list of reportable final adverse legal actions appears on page 12 or 13 of section 3 of the application, Petitioner was clearly aware of the types of adverse actions that it must report on its enrollment application; in fact, Petitioner reported its previous revocation on its 2014 application. CMS Ex. 7 at 14. Additionally, Palmetto, in June 2012, specifically instructed Petitioner to report whether any individuals had any final adverse legal actions, directing that Petitioner “report each final adverse action, when it occurred, the Federal or State agency or the court/administrative body that imposed the action, and the resolution, if any.” CMS Ex. 6 at 12. Petitioner has previously conceded that Ms. A “failed to disclose to Ambulife that her name appeared on OIG’s exclusion list” and that her “actions are inexcusable.” CMS Ex. 1 at 5. Likewise, in its request for hearing, Petitioner acknowledged that Ms. A’s exclusion “was not based upon fraud or any health care related activities but rather was based on her failure to pay a student loan” and that her “problematic history was not revealed to the current owner or management team of Ambulife until June of 2016, at which time Ambulife immediately terminated her.” P. RFH at 4. It is clear that Petitioner was aware that it needed to report final adverse legal actions, such as exclusions and revocations, and it has not demonstrated that the construction of the Form CMS-855B relieved it of this obligation.

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4. Even if Ms. A, as “the office manager,” was not a managing employee, revocation based on 42 C.F.R. § 424.535(a)(4) is warranted because Petitioner provided false or misleading information that Ms. A was a “managing employee” on its enrollment applications.

In its defense, Petitioner argues that it provided incorrect information in its enrollment applications and that it should not have reported that Ms. A was a managing employee. P. Br. at 10-12. Thus, Petitioner’s defense to the charge that it submitted false information is that it, in fact, submitted false information. Petitioner certified that the information it provided in its 2012 and 2014 enrollment applications was “true, correct, and complete,” and if Ms. A was not a managing employee, then this information was obviously not “true, correct, and complete.” CMS Ex. 6 at 4, 6 (listing Ms. A as an authorized official, delegated official, and contracting managing employee who held the title/position of chief operating officer); CMS Ex. 7 at 29, 36 (listing Ms. A as an authorized official, delegated official, and contracted managing employee who held the title/position of “Manager” and chief operating officer”). Petitioner’s 2012 and 2014 applications were certified by not only Ms. A, but also by one of Petitioner’s owners, Mr. Mirmov, who was also Petitioner’s vice president. CMS Exs. 6 at 6; 7 at 36. If Ms. A was not a managing employee, then Petitioner, to include one of its owners, certified enrollment applications containing false or misleading information. Sunsites Pearce Fire District, DAB No. 2926 at 10 (2019) (“the issue in relation to section 424.535(a)(4) is simply whether the information [the petitioner] provided in its . . . application was misleading or false.”). Therefore, revocation based on 42 C.F.R. § 424.535(a)(4), the regulatory basis relied upon by CMS, is warranted. See CMS Ex. 10 at 5-6; CMS Response at 3.

The crux of Petitioner’s argument is that the “circumstances surrounding the submission by Ambulife of the 2012 and 2014 . . . applications reveals that Ambulife did not closely review the CMS 855B applications submitted by [Ms. A] but Ambulife had absolutely no knowledge of or intent to mislead or provide false information to CMS.” P. RFH at 4. However, the DAB has repeatedly held that CMS need not establish that a supplier had an “intent” to furnish false or misleading information. See Mark Koch, D.O., DAB No. 2610 at 4; Sandra E. Johnson, CRNA, DAB No. 2708 at 15. Therefore, revocation is appropriate pursuant to section 424.535(a)(4).14

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V. Conclusion

For the reasons explained above, I affirm the revocation of Petitioner’s Medicare enrollment and billing privileges.

1. Petitioner had previously submitted an incomplete enrollment application to re-enroll in the Medicare program following the revocation of its enrollment and billing privileges in August 2011. CMS Ex. 7 at 14, 55; see CMS Ex. 6 at 12.
• back to note 1
2. Section 6 of the Form CMS-855B requires a supplier to list individuals with “Ownership Interest and/or Managing Control.” See CMS Ex. 6 at 2
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3. I do not use Ms. A’s actual name because she is not a party to these proceedings and has not had an opportunity to respond to the discussion about her herein.
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4. A managing employee “means a general manager, business manager, administrator, director, or other individual that exercises operational or managerial control over, or who directly or indirectly conducts, the day-to-day operations of the provider or supplier, either under contract or through some other arrangement, whether or not the individual is a W-2 employee of the provider or supplier.” 42 C.F.R. § 424.502; see CMS Ex. 7 at 25 (definition of “managing employee” provided on the Form CMS-855B enrollment application).
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5. An authorized official “means an appointed official (for example, chief executive officer, chief financial officer, general partner, chairman of the board, or direct owner) to whom the organization has granted the legal authority to enroll it in the Medicare program, to make changes or updates to the organization's status in the Medicare program, and to commit the organization to fully abide by the statutes, regulations, and program instructions of the Medicare program.” 42 C.F.R. § 424.502.
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6. A delegated official “means an individual who is delegated by the ‘Authorized Official,’ the authority to report changes and updates to the enrollment record. The delegated official must be an individual with ownership or control interest in, or be a W-2 managing employee of the provider or supplier.” 42 C.F.R. § 424.502.
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7. However, Petitioner reported that Ms. Sarafian has had a 60 percent ownership interest since January 2012. CMS Ex. 1 at 2.
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8. The notice also informed Petitioner that its enrollment had been revoked pursuant to 42 C.F.R. § 424.535(a)(2) based on the fact that Petitioner had listed an excluded individual “as a contracted managing employee, authorized official, and director” on the enrollment applications. CMS Ex. 2 at 1.
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9. Pursuant to 42 U.S.C. § 1320a-7(b)(4), the IG may exclude an individual from participation in Medicare, Medicaid, and all other federal healthcare programs if that individual’s license to practice medicine or provide health care was revoked, suspended, otherwise lost or was surrendered while a formal disciplinary proceeding was pending before a state licensing authority for reasons bearing on professional competence, professional performance, or financial integrity. Effective August 20, 2000, the IG excluded Ms. A based on an action taken against her pharmacy technician license by the State of Illinois. CMS Exs. 3 at 1; 4 at 2; see CMS Ex. 5 at 2 (January 2000 Department of Professional Regulation disciplinary report stating that Ms. A’s “pharmacy technician license [was] placed in refuse to renew status for defaulting on Illinois Student Assistance loans.”). At the time the IG excluded Ms. A, the IG informed her that she could apply for reinstatement “[o]nce [her] license has been returned to active status by the licensing board or agency taking the disciplinary action in the State of Illinois.” CMS Ex. 3 at 1.
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10. As a result, CMS revised the effective date of Petitioner’s revocation from July 20, 2010, to January 12, 2019 (30 days following the date of Noridian’s initial determination). CMS Ex. 10 at 6.
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11. As an in-person hearing to cross-examine witnesses is not necessary, it is unnecessary to further address the parties’ motions for summary judgment.
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12. My findings of fact and conclusions of law are set forth in italics and bold font.
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13. Petitioner reported to the County of Los Angeles Ambulance Licensing Board that it had hired another “Office Manager” after Ms. A’s “LiveScan denial.” CMS Ex. 9 at 1.
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14. Petitioner does not raise any dispute regarding the effective date of its revocation or the three-year length of the re-enrollment bar, and it is unnecessary to further address these issues. See Vijendra Dave, M.D., DAB No. 2672 at 11 (2016) (holding that CMS’s determination regarding the duration of the re enrollment bar is not reviewable). However, I observe that CMS’s withdrawal of the basis for revocation premised on 42 C.F.R. § 424.535(a)(2) (which was justifiable based on Ms. A’s continued services as “the office manager”) resulted in a favorable effective date of revocation of January 12, 2019, rather than July 20, 2010. CMS Ex. 10 at 6.
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