Paul D. Orange, M.D., DAB CR5610 (2020)

DECISION

The Centers for Medicare & Medicaid Services (CMS), acting through its administrative contractor, Novitas Solutions, Inc. (Novitas), revoked the Medicare enrollment and billing privileges of Paul D. Orange, M.D. (Petitioner or Dr. Orange), pursuant to 42 C.F.R. § 424.535(a)(1), (a)(9), and (a)(12), because the Commonwealth of Pennsylvania Department of State, State Board of Medicine (Board of Medicine) suspended Petitioner’s medical license, effective November 17, 2017.  Additionally, Petitioner failed to report his license suspension to CMS within 30 days of the November 17, 2017 suspension date.  Dr. Orange acknowledges that his license was suspended, and he did not report his license suspension to CMS within 30 days as was required.  I therefore affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges.

I. Background and Procedural History

Petitioner is a physician licensed to practice medicine in the Commonwealth of Pennsylvania.  CMS Exhibits (Exs.) 1, 8.  On November 17, 2017, the prosecuting attorney for the Commonwealth of Pennsylvania, Bureau of Professional and

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Occupational Affairs, petitioned the Board of Medicine for an immediate temporary suspension of Petitioner’s license to practice as a medical physician and surgeon.  CMS Ex. 4 at 7-12.  The petition alleged that Petitioner’s medical office and exam rooms had dust and visible dirt on the baseboards, carpet, and floors.  CMS Ex. 4 at 9.  Furthermore, investigators determined that Petitioner had unacceptable lapses in infection control, failed to properly sterilize medical instruments, and did not have a written infection control policy.  CMS Ex. 4 at 10-11.  The Board of Medicine found that the prosecuting attorney alleged facts, which, if true, made Petitioner “an immediate and clear danger to the public health and safety.”  CMS Ex. 4 at 1.  On November 17, 2017, the Board of Medicine issued an Order of Temporary Suspension, suspending Petitioner’s license to practice as a medical physician and surgeon for up to 180 days.  Id. at 2.  

In an undated letter, the Pennsylvania Department of Human Services terminated Petitioner’s participation agreement with the Pennsylvania Medical Assistance (MA or Medicaid) Program.  CMS Ex. 5 at 1.  The termination was effective November 17, 2017, and was based on the fact that Petitioner’s license to practice medicine had been suspended.  Id.

In a letter dated April 23, 2018, Novitas issued an initial determination revoking Dr. Orange’s Medicare enrollment and billing privileges, effective November 17, 2017.  CMS Ex. 6 at 1.  Novitas relied upon three grounds in support of the revocation:

42 CFR § 424.535(a)(1) - Noncompliance
The Commonwealth of Pennsylvania State Board of Medicine suspended your license to practice as a medical physician and surgeon effective November 17, 2017.

42 CFR § 424.535(a)(12) - Medicaid Termination
You were informed that you were terminated from the Pennsylvania Medicaid program effective November 17, 2017.  Pennsylvania Medicaid confirmed that your appeal rights have been exhausted with respect to this termination.

42 CFR § 424.535(a)(9) - Failure to Report
The Commonwealth of Pennsylvania State Board of Medicine suspended your license to practice as a medical physician and surgeon effective November 17, 2017.  You did not notify the Centers for Medicare & Medicaid Services of this adverse legal action as required under 42 CFR § 424.516.

Id. (emphasis in original).  The notice further informed Dr. Orange that he could submit a corrective action plan (CAP) with regard to the alleged violation of 42 C.F.R.

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§ 424.535(a)(1) only.1   Id. at 1-2.  In addition, Novitas barred Dr. Orange from re‑enrolling in the Medicare program for two years, effective “30 days after the postmark date of [the] letter.”  Id. at 2. 

On or about May 23, 2018, Petitioner requested reconsideration.  CMS Ex. 7.  By letter dated September 5, 2018, CMS’s Provider Enrollment & Oversight Group2 issued a reconsidered determination upholding Novitas’s revocation of Petitioner’s Medicare enrollment and billing privileges under subsections 424.535(a)(1) and (a)(9).3  CMS Ex. 9 at 5-6. 

By letter postmarked November 2, 2018, Petitioner requested a hearing before an administrative law judge (Hearing Req.) to challenge CMS’s reconsidered determination, and the request was assigned to me for a hearing and decision.  I issued an Acknowledgement and Pre‑Hearing Order (Pre‑Hearing Order) establishing deadlines for the submission of pre‑hearing exchanges.  Pursuant to the Pre‑Hearing Order, CMS filed its pre-hearing exchange, consisting of a Pre‑Hearing Brief and Motion for Summary Judgment (CMS Br.) and nine proposed exhibits (CMS Exs. 1-9).  Petitioner failed to file a pre-hearing exchange.

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On May 1, 2019, I issued an Order to Show Cause, directing Petitioner to explain his failure to file a pre-hearing exchange.  On May 13, 2019, Petitioner timely filed a response to my order (P. Resp.), noting, “I had failed to file a prehearing exchange timely because I had felt that CMS had already made up their mind in this matter.  The only exhibit that I had was my belief that since Medicaid was notified of my temporary suspension, that Medicare would also be notified.”  P. Resp. at 1.

Petitioner did not object to CMS’s proposed exhibits.  Therefore, in the absence of objection, I admit CMS Exs. 1‑9 into the record.  Petitioner did not file any proposed exhibits.  Additionally, neither CMS, nor Petitioner submitted any witness testimony.  Although CMS moved for summary judgment, my January 15, 2019 Order Discharging Order to Show Cause and Scheduling Further Proceedings (Scheduling Order) noted, “[a]n in person hearing to cross-examine witnesses will be necessary only if a party files admissible, written direct testimony, and the opposing party asks to cross-examine.”  Scheduling Order ¶ 11.  Since neither party submitted witness testimony, an in-person hearing is not necessary.  Accordingly, I deny CMS’s motion for summary judgment, and decide this case based on the written record. 

II. Issue

Whether CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges.

III. Jurisdiction

I have jurisdiction to decide this case.  42 C.F.R. §§ 498.3(b)(17), 498.5(l)(2); see also Social Security Act (Act) § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).

IV. Discussion

A. Statutory and Regulatory Background

The Act authorizes the Secretary of Health and Human Services (Secretary) to promulgate regulations governing the enrollment process for providers and suppliers.  Act § 1866(j) (42 U.S.C. § 1395cc(j)).  A “supplier” is “a physician or other practitioner, a facility, or other entity (other than a provider of services) that furnishes items or services . . .” under the Medicare provisions of the Act.  Act § 1861(d) (42 U.S.C. § 1395x(d)); see also Act § 1861(u) (42 U.S.C. § 1395x(u)).

The Secretary has delegated authority to revoke Medicare enrollment and billing privileges to CMS.  42 C.F.R. § 424.535.  CMS or a Medicare contractor may revoke an enrolled supplier’s Medicare enrollment and billing privileges for any of the reasons

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listed in 42 C.F.R. § 424.535.  Pursuant to 42 C.F.R. § 424.535(a)(1), CMS may revoke a supplier’s enrollment and billing privileges if the supplier is determined not to be in compliance with enrollment requirements found at 42 C.F.R. § 424, subpart P.  Additionally, physician-suppliers have an obligation to report any adverse legal action or a change in their practice location within 30 days.  42 C.F.R. § 424.516(d)(1)(ii)-(iii).  CMS is authorized to revoke a supplier’s enrollment and billing privileges if the supplier fails to make a required report timely.  42 C.F.R. § 424.535(a)(9).

If CMS revokes a supplier’s Medicare enrollment and billing privileges, the revocation generally becomes effective 30 days after CMS or one of its contractors mails the revocation notice to the supplier.  42 C.F.R. § 424.535(g).  However, where revocation is based on a license suspension or revocation, the revocation is effective as of the date of the license suspension or revocation.  Id.  After CMS revokes a supplier’s Medicare enrollment and billing privileges, CMS bars the supplier from reenrolling in the Medicare program for a minimum of one year, but no more than three years.4   42 C.F.R. § 424.535(c). 

B. Findings of Fact, Conclusions of Law, and Analysis.5

1. CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(1) because Petitioner’s license to practice medicine was suspended.

Pursuant to 42 C.F.R. § 424.535(a)(1), CMS or its contractor may revoke a Medicare supplier’s enrollment and billing privileges if the supplier no longer meets the enrollment requirements for a supplier of its type, and the supplier has not submitted a CAP that has been accepted by CMS.  See Akram A. Ismail, M.D., DAB No. 2429 at 5-6 (2011).  To comply with applicable enrollment requirements within the meaning of 42 C.F.R. § 424.535(a)(1), suppliers must also comply with the additional requirements specified in 42 C.F.R. § 424.516.  In relevant part, section 424.516(a)(2) requires that a supplier comply with “Federal and State licensure, certification, and regulatory requirements . . . .”  Id.  A physician who is not “legally authorized to practice medicine” does not meet the regulatory

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requirements in section 424.516(a)(2).  Id. at 6 (cross-referencing the provisions of 42 C.F.R. § 410.20(b)).

The Board of Medicine’s Suspension Order required Dr. Orange to cease practicing medicine immediately upon service of the order.  It further indicated that Petitioner’s temporary suspension “shall remain in effect until vacated by the Board, but in no event longer than 180 days, unless otherwise ordered or agreed to by the participants.”6 CMS. Ex. 4 at 2. 

Petitioner does not dispute that his medical license was suspended.  In fact, his request for hearing states, “[o]n 11/17/2017 my privileges for licensure in Pennsylvania were suspended.”  Hearing Req. at 1.  I find that, as a result of the Suspension Order, Petitioner was not legally authorized to practice medicine in Pennsylvania.  Thus, CMS had a legal basis to revoke Petitioner’s Medicare privileges pursuant to 42 C.F.R. § 424.535(a)(1).

2. CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(9) because he failed to notify CMS or Novitas within 30 days that his medical license had been suspended.

Having concluded that CMS had a legal basis to revoke Petitioner’s Medicare enrollment pursuant to 42 C.F.R. § 424.535(a)(1), based on his medical license suspension, it is not necessary to decide whether there is also a basis to revoke Petitioner’s enrollment under section 424.535(a)(9), for failing to notify CMS or Novitas within 30 days that his

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medical license had been suspended, in accordance with 42 C.F.R. § 424.516(d)(1)(ii).  See, e.g., Daniel Wiltz & Family Healthcare Clinic, APMC, DAB No. 2864 at 12 (2018) (if one legal basis for revocation is established, CMS’s action would be sustained “regardless of the existence of any additional bases for revocation.”).  However, while not required to do so, in this section I explain why I conclude that there is a basis to revoke Petitioner’s Medicare enrollment pursuant to 42 C.F.R. § 424.535(a)(9).

The regulations require that physician-suppliers report, within 30 days, “[a]ny adverse legal action” to their Medicare contractor.  42 C.F.R. § 424.516(d)(1)(ii).  Failure to timely report is a basis to revoke a physician’s Medicare enrollment and billing privileges.  42 C.F.R. § 424.535(a)(9).  A “final adverse action” includes “[s]uspension . . . of a license to provide health care by any State licensing authority.”  42 C.F.R. § 424.502.  As explained above, Petitioner’s medical license suspension on November 17, 2017, satisfies this definition and, as a result, was a reportable adverse legal action.  Thus, Petitioner was obligated to report his license suspension to Novitas, his Medicare contractor, within 30 days of November 17, 2017.

In the present case, there is no dispute that the Board of Medicine suspended Petitioner’s medical license, effective November 17, 2017.  Nor has Dr. Orange argued that the suspension of his license to practice medicine in Pennsylvania was not an “adverse legal action” or that he was under no duty to report the suspension to Novitas.  Instead, he argues, in essence, that his failure to report the suspension should be excused.

Petitioner acknowledges that he failed to report his license suspension to CMS or Novitas within 30 days.  But, he explains that he was under the mistaken belief that “all agencies were notified by the licensure board.”  Hearing Req. at 1.  He therefore assumed that the Board of Medicine notified Novitas or CMS of his suspension.  Id.  Dr. Orange readily agrees, “that CMS was not notified in a timely manner after my temporary suspension from the practice of medicine.”  P. Resp. at 1.  But, he argues that his failure to timely report was an inadvertent error.  Hearing Req. at 1 (“I had no idea that I had to notify Medicare specifically”).  Petitioner states, “[a]t the time of the suspension, I immediately stopped practice and within a few days was getting notices from companies, including Medicaid that they were aware of [the] situation.”  Id.  In summary, Dr. Orange explains that he was unaware of his obligation to notify Medicare of his license suspension within 30 days.  Id.

None of Dr. Orange’s explanations or assumptions is a basis to reverse the revocation of his Medicare billing privileges.  First, Dr. Orange had, at a minimum, constructive notice of the reporting requirement.  On April 9, 2015, Dr. Orange signed the Medicare Certification Statement for Individual Practitioners, which states, “I agree to notify the Medicare contractor of a change in ownership, practice location or final adverse action within 30 days of the reportable event.”  CMS Ex. 2 at 3-4.  Moreover, a July 2, 2015 letter from Novitas to Petitioner reiterated that, “[t]o maintain an active enrollment status

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in the Medicare Program, regulations found at 42 C.F.R. § 424.516 require submittal of any changes or updates to your enrollment information in accordance with the specified timeframes.  [Y]ou are required to report any adverse legal actions, including . . . license suspensions or revocations. . . .”  CMS Ex. 3 at 1; see also Realhab, Inc., DAB CR2763 at 12-13 (2013), aff’d, DAB No. 2542 (2013) (suppliers agree, as a condition of Medicare participation, to abide by all Medicare statutes, regulations, and program instructions).

Second, even if Dr. Orange was subjectively unaware of his duty to report, a party’s misunderstanding or ignorance of the regulation is not a defense.  See Emmanuel Brown, M.D., & Simeon K. Obeng, M.D.,DAB CR2145 at 6 (2010).  In general, those “who deal with the government are expected to know the law . . . .”  John Hartman, D.O., DAB No. 2564 at 3 (2014), citing Heckler v. Cmty. Health Servs. of Crawford Cnty., Inc., 467 U.S. 51, 63 (1984); see also 42 C.F.R. § 424.516(a)(2) (requiring suppliers to certify that they meet all Medicare requirements).

Dr. Orange failed to notify Novitas within 30 days following the suspension of his license to practice medicine in Pennsylvania.  Therefore, I conclude that CMS had a legal basis to revoke Dr. Orange’s enrollment and billing privileges under 42 C.F.R. § 424.535(a)(9).

3. I do not have authority to grant equitable relief.

Finally, to the extent Petitioner argues that revocation of his Medicare enrollment and billing privileges is unfair, too harsh, or injurious to Medicare beneficiaries, because Petitioner “held steadfast and continued to accept” elderly, underserved Medicare patients (Hearing Req. at 1), such general appeals to equity are not a basis to set aside the revocation.  CMS’s discretionary act to revoke a provider or supplier is not subject to review based on equity or mitigating circumstances.  Letantia Bussell, M.D., DAB No. 2196 at 13 (2008). Rather, “the right to review of CMS’s determination by an [administrative law judge] serves to determine whether CMS had the authority to revoke [the provider’s or supplier’s] Medicare billing privileges, not to substitute the ALJ’s discretion about whether to revoke.”  Id. (emphasis in original).  Furthermore, I may not set aside the lawful exercise of discretion by CMS or its contractor based on principles of equity.  See US Ultrasound, DAB No. 2302 at 8 (2010); Cent. Kan. Cancer Inst., DAB No. 2749 at 10 (2016).

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V. Conclusion

For the foregoing reasons, I affirm that CMS had authority to revoke Petitioner’s Medicare enrollment and billing privileges, effective November 17, 2017.  I deny CMS’s motion for summary judgment as moot.

1. Although the initial determination did not bar Petitioner from requesting reconsideration on all three grounds, the initial determination stated, “Pennsylvania Medicaid confirmed that your appeal rights have been exhausted with respect to this termination.” (emphasis removed). I understand that this sentence was meant to convey that Petitioner had exhausted his right to appeal his Medicaid termination. However, a person unfamiliar with the regulations might have mistakenly believed that there were no further appeal rights for the revocation pursuant to 42 CFR § 424.535(a)(12).
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2. The Provider Enrollment & Oversight Group is a component of CMS itself, not an administrative contractor.
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3. The reconsidered determination stated, “Dr. Orange’s May 23, 2018, reconsideration request did not contest the revocation of his Medicare billing privileges under 42 C.F.R. § 424.535(a)(12).  Therefore, the April 23, 2018, initial determination became final and binding as it relates to revocation basis § 424.535(a)(12).  Thus, Dr. Orange’s appeal rights regarding revocation reason § 424.535(a)(12) have been exhausted.”  CMS Ex. 9 at 5.  Based on the language in the initial determination (see n.1, above) it is unclear whether Petitioner intended to voluntarily abandon his appeal rights under 42 C.F.R. § 424.535(a)(12).  However, because the reconsidered determination does not address revocation pursuant to section 424.535(a)(12), that ground is not before me.  See Neb Group of Ariz., LLC, DAB No. 2573 at 7 (2014).  In any event, even were I to find that CMS lacked a basis to revoke Petitioner’s Medicare enrollment pursuant to subsection 424.535(a)(12), the revocation would still stand based on subsections (a)(1) and (a)(9), as I discuss below.
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4. Effective November 4, 2019, the regulations governing revocations were revised.  84 Fed. Reg. 47,794 (Sept. 10, 2019).  The revisions authorize CMS to establish a reenrollment bar for a period ranging from one to ten years for a first-time revocation, and up to twenty years for a second revocation.  Id. at 47,794, 47,855 (amending 42 C.F.R. § 424.535(c)).  These revisions took effect well after the initial determination to revoke issued in this case.  I apply the regulations in effect at the time of the initial determination.  Linda Silva, P.A., DAB No. 2966 at 1 n.1 (2019).
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5. My findings of fact and conclusions of law are set forth in italics and bold font.
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6. Although Petitioner did not explicitly argue that his Medicare billing privileges should not be revoked because his license was temporarily suspended, and not permanently revoked, I note that appellate panels of the DAB have held that a temporary suspension is a basis for revocation under 42 C.F.R. § 424.535(a)(1): CMS may determine a supplier is out of compliance with the Medicare enrollment requirements at any time.  See 71 Fed. Reg. at 20,761(“[A] provider or supplier's enrollment and billing privileges may be revoked if at any time, it is determined to be out of compliance with the Medicare enrollment requirements outlined in subpart P . . . .” (emphasis added)).  Thus, the [appropriate inquiry was] the immediate effect of [the supplier’s] suspension rather than the possibility that the suspension may be lifted at some point. Ismail, DAB No. 2429at 8; see also Angela R. Styles, M.D., DAB No. 2882 at 6 (2018) (explaining that the Ismail decision “concluded that the revocation was lawful because the suspension left [the supplier] without legal authority to practice medicine, regardless of whether the suspension was temporary or permanent.”).
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