Arcadia Surgical Medical Center, LLC. DAB CR5952 (2021)

DECISION

The Centers for Medicare & Medicaid Services (CMS), through its Medicare administrative contractor, revoked the Medicare enrollment and billing privileges of Arcadia Surgical Medical Center, LLC (Petitioner) pursuant to 42 C.F.R. § 424.535(a)(4) because Petitioner certified misleading or false information as true on its revalidation application to maintain enrollment in the Medicare program.

I.  Procedural History

On January 11, 2019, CMS contractor, Noridian Healthcare Solutions (Noridian), notified Petitioner that it was revoking Petitioner’s Medicare enrollment and billing privileges, effective February 10, 2019, and establishing a three year re-enrollment bar to the Medicare program.  CMS Ex. 4.  Petitioner requested reconsideration of Noridian’s revocation initial determination on January 22, 2019.  CMS Ex. 5.  CMS issued an unfavorable reconsidered determination on April 5, 2019, and upheld Noridian’s initial determination.  CMS Ex. 6.  Petitioner filed a Request for Hearing (RFH) on May 31, 2019, for an Administrative Law Judge (ALJ) review.

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On June 12, 2019, the ALJ The case was initially assigned to a different ALJ and then transferred to the undersigned. issued a Standing Pre-Hearing Order (Standing Order) setting forth the pertinent deadlines for the parties to submit written briefs, sworn written testimony, and proposed exhibits.  The Standing Order further explained that an 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.  Standing Order at 6.

CMS filed its written brief In conjunction with its brief, CMS filed a motion for summary judgment.  Because this matter may be decided on the record, I need not rule on the motion for summary judgment.  and submitted 6 proposed exhibits on July 11, 2019, none of which were witness testimony.  In a letter dated September 5, 2019, Petitioner confirmed that it had no other information to provide and requested that the case be decided on the written record of all documents previously submitted.  DAB E-file Dkt. C-19-856, Doc. No. 6.  In light of Petitioner’s request, and as neither party submitted written direct testimony, a hearing is unnecessary. The Departmental Appeals Board (The Board) has long held that convening a hearing is unnecessary where no witness testimony is offered or all written testimony is completed in writing and no cross-examination is sought.  George Yaplee Med. Ctr., DAB No. 3003 at 5 (2020)(citing Marcus Singel, D.P.M., DAB No. 2609 at 6 (2014)).   Inasmuch as there is no basis for conducting an in-person hearing, this matter is ready for a decision on the merits.  There being no objection to the proffered exhibits, I receive CMS Exs. 1-6 into the record.

II.  Issue

Whether CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges based on its failure to comply with 42 C.F.R. § 424.535(a)(4).

III.  Jurisdiction

I have jurisdiction to decide this case.  42 C.F.R. §§ 424.545(a), 498.3(b)(17), 498.5(b).

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IV.  Findings of Fact, Conclusions of Law and Analysis My findings of fact and conclusions of law are set forth in italics and bold font.

42 C.F.R. § 424.535(a)(2)(i) and (ii) authorizes CMS to revoke a currently enrolled provider or supplier’s  Petitioner, a surgical medical group practice, 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. Medicare enrollment if any owner, managing employee, authorized or delegated official, medical director, supervising physician, or other health care personnel of the provider or supplier is excluded from the Medicare, Medicaid, and any other federal health care program or is debarred, suspended, or otherwise excluded from participating in accordance with other designated regulations.  Furthermore, under 42 C.F.R. § 424.535(a)(4), CMS may revoke a currently enrolled supplier’s Medicare billing privileges if the supplier certifies misleading or false information as “true” on the application to maintain enrollment in the Medicare program.  Specifically, this includes CMS’s authority to revoke a supplier’s enrollment, where the supplier falsely certifies that it had no final adverse actions against it.  A final adverse action is defined to include an exclusion or debarment from participation in a federal or state health care program.  42 C.F.R. § 424.502(5).

42 C.F.R. § 424.510 sets out the requirements for enrolling in the Medicare program.  Among other enrollment requirements, § 424.510(d)(3) provides that the application’s certification statement must be signed by an individual who has the authority to bind the provider or supplier, both legally and financially, and that the “signature attests that the information submitted is accurate and that the provider or supplier is aware of, and abides by, all applicable statutes, regulations, and program instructions.”

Petitioner does not dispute that the Office of Inspector General (OIG) for Health and Human Services excluded Maureen Ann Felker from participating in all federal health care programs, effective April 20, 2003.  CMS Ex. 1.

On July 17, 2014, Petitioner submitted a web-based revalidated Medicare enrollment application, or CMS-855B, which certified Maureen Minehart as a managing employee and director/officer effective August 28, 2011, and a delegated official effective July 15, 2014.  CMS Ex. 2 at 3.  Petitioner does not dispute that Maureen Felker and Maureen

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Minehart are the same individual.  The electronically filed application does not disclose that Maureen (Felker) Minehart has any final adverse actions against her.  CMS Ex. 2 at 3.  The electronic application was submitted and electronically signed by Dr. Issac Minehart (Dr. Minehart) as the authorized signer.  CMS Ex. 2 at 4.  Petitioner acknowledges that Dr. Minehart was married to Maureen Minehart from 2011 until 2017.  CMS Ex. 5.

1.  CMS had a legal basis to revoke Petitioner’s Medicare 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 maintain enrollment in the Medicare program.

When Noridian notified Petitioner of the revocation of its Medicare enrollment and billing privileges on January 11, 2019, it included specific guidelines for Petitioner’s response.  CMS Ex. 4.  Noridian explained that if Petitioner believed that the revocation determination was not correct, Petitioner could submit a request for reconsideration before a contractor hearing officer.  CMS Ex. 4.  Noridian also provided the following directive:

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 the only opportunity to submit information during the administrative appeal process; you will not have another opportunity to do so unless an administrative law judge specifically allows you to do so under 42 C.F.R. § 498.56(e).

CMS Ex. 4.  Neither in response to the January 11, 2019 revocation initial determination, nor in later submissions, has Petitioner disputed that the 2014 revalidated Medicare enrollment application does not disclose Maureen Minehart’s final adverse action.  In the request for reconsideration, Dr. Minehart, on behalf of Petitioner, contends that although he was married to Maureen Minehart from 2011 until 2017, she never told him about any illegal history, and he asserts that she hid her final adverse action from him as both an employer and a spouse.  CMS Ex. 5; see also CMS Ex. 6 at 2.  Petitioner submits that the January 11, 2019 revocation initial determination was the first time that Dr. Minehart became aware of Maureen Minehart’s behavior that would affect Petitioner’s Medicare enrollment status.  CMS Ex. 5; see also CMS Ex. 6 at 3.  Dr. Minehart additionally asserts in the request for reconsideration that Petitioner no longer employs Maureen Minehart.  CMS Ex. 5; see also CMS Ex. 6 at 2.

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Assuming that Petitioner did not know that Maureen Minehart was excluded from participating in all federal health care programs, Petitioner’s argument is unpersuasive.  The Board has repeatedly found that the regulations do not require proof that the applicant subjectively intended to provide false information, only proof that the applicant, in fact, provided misleading or false information that the applicant certified as true.  Sandra E. Johnson, CRNA, DAB No. 2708 at 14-15 (2016); Mark Koch, D.O., DAB No. 2610 at 4-5 (2014); see also Howard B. Reife, D.P.M., DAB No. 2527 (2013); Louis G. Gaefke, D.P.M., DAB No. 2554 (2013).  The responsibility for reviewing the content of Petitioner’s application before attesting to its accuracy lays entirely with Petitioner.  See  Sandra E. Johnson, CRNA, DAB No. 2708 at 14-15.  Further, the Board has held that section 424.510(d)(3) of the regulations “requires a supplier to be “aware of, and abide[] by, all applicable statutes, regulations, and program instructions.””  Realhab, Inc., DAB No. 2542 at 17 (2013).  Clearly, there is no provision in the regulations that exempts a supplier’s obligation to provide truthful information on the basis of personal misinformation or ignorance.  Whatever the reason for omitting Maureen Minehart’s final adverse action, it caused the application to be false and misleading, and it established a basis for revocation of Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(4).

Following receipt of the April 5, 2019 reconsidered determination from CMS, Petitioner requested a hearing for a final ALJ review.  Dr. Minehart, on behalf of Petitioner, presents an entirely new defense in this request; a defense that had not been raised in Petitioner’s request for reconsideration filed on January 22, 2019.  Dr. Minehart contends:  “I have no recollection of signing or being asked to sign an enrollment form to make Ms. Minehart an Officer/Director or a Managing Employee of the organization, let alone have the effective date be the actual date of our marriage-08-28-2011.”  Dr. Minehart denies that Maureen Minehart was ever an officer or director or that she was ever named or considered a managing employee.  Dr. Minehart contends that the application was fraudulently filed and was submitted without his knowledge and not under his legal signature.  RFH.

Petitioner submitted this new defense despite Noridian’s January 11, 2019 revocation initial determination in which it clearly set out the deadline for Petitioner to submit all its evidence.  More importantly, Noridian’s revocation initial determination put Petitioner on notice that its request for reconsideration would be the only opportunity to submit additional information during the administrative appeal process, unless an ALJ specifically allowed Petitioner to do so under 42 C.F.R. § 498.56(e).  CMS Ex. 4.  Despite Noridian’s directive, Petitioner’s only defense in its request for reconsideration was Dr. Minehart’s claim that he did not know about Maureen Minehart’s final adverse action.  Petitioner submitted no defense of a fraudulently filed application.  CMS Ex. 5.

Petitioner’s late-filed defense that the revalidated Medicare enrollment application was fraudulently submitted without Dr. Minehart’s knowledge is not compelling.  Petitioner

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neither offers evidence in support of this assertion nor an explanation of how someone could fraudulently submit this application without Dr. Minehart’s knowledge.  As CMS argues, the defense is “elusive and unreliable in that Dr. Minehart speaks to his lapse of memory, rather than affirmatively stating that he never signed the application.”  CMS Br. at 7.  Further, it is noteworthy that the revalidated Medicare enrollment application was filed in 2014, and fully within the timeframe of Dr. Minehart’s marriage to Maureen Minehart.  Although CMS did not expand on this point in its brief, it is reasonable that despite Petitioner’s assertions of a fraudulently filed application, Petitioner continued to bill and receive payment from Medicare.  Arguably, Dr. Minehart had reason to know that Petitioner was receiving Medicare payments due to an enrollment application.  CMS Ex. 2 at 4.  If Dr. Minehart had not signed the application as he argues and, if Maureen Minehart was not an officer, managing employee, or director as Dr. Minehart asserts, who would have allegedly filed the application upon which Medicare payments would have been made?  While Dr. Minehart asserts that he does not recall having signed the application, Petitioner offers no evidence as to how this application could have otherwise been filed.

CMS submits a persuasive argument that if the application was filed without a legitimate signature as Petitioner contends, there is an additional basis to revoke Petitioner’s Medicare enrollment and billing privileges.  Citing an ALJ’s decision in Arizona Medical Boutique, LLC, DAB CR2674 at 7 (2012), CMS argues that “without a legitimately signed application, Petitioner clearly was not eligible for enrollment.”  In the Arizona case, a third party billing consultant forged a supervising physician’s signature on the enrollment application.  The ALJ accepted as true the petitioner’s assertions that the signature was forged and noted that the contractor approved the Medicare enrollment for the petitioner based on the application without the required authorized signatures.  The ALJ determined, however, that without a legitimately signed application, the petitioner clearly was not eligible for enrollment.  Id. at 7.  While the Arizona decision is a non-precedential decision and it has no binding effect on the instant case, the analysis therein is applicable to the present arguments and circumstances.

It is certainly reasonable that without a valid signature, no authorized official has certified to the accuracy of the information in Petitioner’s application, and more importantly, no authorized official has agreed to be bound by all applicable statutes, regulations, and program instructions.  42 C.F.R. § 424.510(d)(3).  Thus, if I accept Petitioner’s argument that Maureen Minehart or someone else forged Dr. Minehart’s signature on Petitioner’s 2014 revalidated Medicare enrollment application, the forged signature alone supports revocation of Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(4).

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2.  Petitioner has not shown good cause for submitting its new defense and there is no basis for considering this defense.

Finally, I look to whether there is any other basis to accept Petitioner’s late-filed defense of a fraudulently signed revalidated Medicare enrollment application.  The June 12, 2019 Standing Order explained that except as preclusion, Petitioner may not offer new documentary evidence in this case without a showing of good cause.  Standing Order ¶6; see also 42 C.F.R. § 498.56(e).  The Standing Order further provided that:  “[i]f Petitioner offers such evidence, the evidence must be specifically identified as new, and Petitioner’s brief must explain why good cause exists for me to receive it.”  Standing Order ¶6.  Moreover, under 42 C.F.R. § 498.56(e)(2)(ii), if an 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.

42 C.F.R. § 498 does not define “good cause,” and the Board has not set out an “authoritative or complete definition” of the term.  Meridian Nursing & Rehab at Shrewsbury, DAB No. 2504 at 8 (2013)(quoting Hillcrest Healthcare, L.L.C., DAB No. 1879 at 5 (2003)), aff’d, Meridian Nursing & Rehab at Shrewsbury v. CMS, 555 F. App’x 177, 2014 WL 350698 (3rd Cir. 2014).  A determination of whether good cause has been established under 42 C.F.R. § 498.56(e) is a matter that the Board has left to the ALJ’s discretion and to which the Board will defer in the absence of a compelling reason to do otherwise.  HeartFlow, Inc., DAB No. 2781 at 19 (2017).

In the instant case, Petitioner did not raise this defense in its request for reconsideration, despite Noridian’s clear directives in its January 11, 2019 revocation initial determination.  While Petitioner raises this defense for the first time in its request for hearing before an ALJ, Petitioner submitted no evidence in support of this new defense.  Thus, Petitioner disregarded the ALJ’s Standing Order and federal regulations, as well as Noridian’s clear directives, and raised a new defense which was conceivably in existence at the time Petitioner submitted a request for reconsideration on January 22, 2019.  More importantly at this stage of review, Petitioner neither acknowledged that this was a new defense nor explained at any time why there is good cause for me to consider it.  See Meadowmere Emergency Physicians, PLLC, DAB No. 2881 at 10 (2018).  Accordingly, there is no basis for me to find good cause for Petitioner’s failure to raise this defense at the earlier stage of review,The Board has sustained an ALJ’s failure to find good cause when a petitioner failed to submit any evidence, such as a declaration or affidavit, to support its assertions.  Maximum Hospice and Palliative Care, DAB No. 2898 (2018). and I cannot consider it now in reaching a decision.  Care Pro Home Health, Inc., DAB No. 2723 at 11 (2016).

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In summary, under 42 C.F.R. § 424.535(a)(4), CMS may revoke a currently enrolled supplier’s Medicare billing privileges if the supplier certified as “true” misleading or false information on the application to maintain enrollment in the Medicare program.  On April 20, 2003, the OIG excluded Maureen Felker (Minehart) from participating in all federal health care programs.  CMS Ex. 1.  Petitioner’s July 17, 2014 revalidated Medicare enrollment application lists Maureen Minehart as both a managing employee as well as a director/officer.  CMS Ex. 2.  By signing and submitting this application, Petitioner certified as “true” that Maureen Minehart had no final adverse actions imposed against her.  Because the revalidated Medicare enrollment application contained false and misleading information, the revocation of Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(4) is appropriate.

V.  Conclusion

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