James Sadler, MD, et al., CR6329 (2023)

DECISION

Novitas Solutions, Inc. (Novitas), a Medicare administrative contractor for the Centers for Medicare & Medicaid Services (CMS), approved the reassignment applications of James Sadler, MD; Luciana Guerra, MD; Marco Cantini, MD; MaryBeth Elliott, Certified Registered Nurse Anesthetist (CRNA); Sara Emerick, CRNA; Ellen Harr, MD; Jennifer Michelangelo, CRNA; and Charles Tullius, MD (Petitioners) effective December 18, 2021, with retrospective billing privileges effective September 19, 2021.  Novitas approved the reassignment application of Kimberly Matthews Christopher,

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CRNA (Petitioner Christopher),² effective December 29, 2021, with retrospective billing privileges effective September 30, 2021.³  CMS Ex. 20 at 1.

Petitioners requested a hearing before an administrative law judge seeking an earlier retrospective billing date of August 1, 2021.  Because Novitas approved Petitioners’ reassignment applications that it received on December 18, 2021, and December 29, 2021, it correctly determined Petitioners’ reassignment effective dates to be December 18, 2021 (Petitioners Sadler, Guerra, Cantini, Elliott, Emerick, Harr, Michelangelo, and Tullius) and December 29, 2021 (Petitioner Christopher)..⁴  Novitas granted Petitioners the maximum retrospective billing periods contemplated by the regulation, beginning on September 19, 2021 (Petitioners Sadler, Guerra, Cantini, Elliott, Emerick, Harr, Michelangelo, and Tullius) and September 30, 2021 (Petitioner Christopher).  Therefore, I affirm the effective date determinations.

   I. Background

Petitioners are nine anesthesiologists and CRNAs affiliated with Southwestern Gastrointestinal Specialists, PC, located in Uniontown, Pennsylvania.  CMS Ex. 1 at 1, 2.  Novitas received Medicare reassignment of benefits applications submitted through the Provider Enrollment, Chain, and Ownership System (PECOS), on December 18, 2021 (Petitioners Sadler, Guerra, Cantini, Elliott, Emerick, Harr, Michelangelo, and Tullius) and December 29, 2021 (Petitioner Christopher).  Id. at 1; CMS Ex. 9 at 1; CMS Ex. 14 at 1; CMS Ex. 19 at 1; CMS Ex. 24 at 1; CMS Ex. 29 at 1; CMS Ex. 34 at 1; CMS Ex. 39 at 1; CMS Ex. 44 at 1.  By letters dated December 29, 2021 (Petitioners Guerra, Elliott, Emerick, and Harr), December 30, 2021 (Petitioners Sadler, Cantini, Michelangelo, and Tullius), and January 6, 2022 (Petitioner Christopher), Novitas approved the applications.

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CMS Ex. 5 at 1; CMS Ex. 10 at 1; CMS Ex. 15 at 1; CMS Ex. 20 at 1; CMS Ex. 25 at 1; CMS Ex. 30 at 1; CMS Ex. 35 at 1; CMS Ex. 40 at 1; CMS Ex. 45 at 1.

Petitioners requested reconsideration, seeking an earlier retrospective billing date of August 1, 2021.  CMS Ex. 6 at 2; CMS Ex. 11 at 2; CMS Ex. 16 at 2; CMS Ex. 21 at 2; CMS Ex. 26 at 2; CMS Ex. 31 at 2; CMS Ex. 36 at 2; CMS Ex. 41 at 2; CMS Ex. 46 at 2.  Petitioners described circumstances which they claimed delayed them from submitting their applications sooner.  Among other things, Petitioners asserted that they had mailed paper CMS-855R applications which the United States Postal Service (USPS) returned undelivered to Petitioners 30 days later.  See, e.g., CMS Ex. 6 at 2.  Petitioners argued that, because of this mail delay, they should be granted an earlier retrospective billing date.  Id.  In response, Novitas issued unfavorable reconsidered determinations dated June 10, 2022, in which it reaffirmed that Petitioners’ retrospective billing privileges began effective September 19, 2021, and September 30, 2021.  CMS Ex. 8 at 3; CMS Ex. 13 at 3; CMS Ex. 18 at 3; CMS Ex. 23 at 3; CMS Ex. 28 at 3; CMS Ex. 33 at 3; CMS Ex. 38 at 3; CMS Ex. 43 at 3; CMS Ex. 48 at 3.

Petitioners requested that CMS waive the 90-day retrospective billing provision of 42 C.F.R. § 424.521 as permitted by section 1135 of the Social Security Act (Act).  See RFH at 16.  In response to the section 1135 waiver request, CMS denied Petitioners’ requests for an earlier retrospective billing date.  Id. at 17.

On August 8 and 9, 2022, Petitioners requested hearings before an administrative law judge to challenge Novitas’s unfavorable reconsidered determinations.  I was designated to hear and decide this case.  On August 9, 2022, my office acknowledged receipt of Petitioner Sadler’s hearing request and provided a copy of my Standing Prehearing Order (Prehearing Order).  On August 11, 2022, I acknowledged receipt of the remaining Petitioners’ hearing requests and consolidated Petitioners’ cases under Docket No. C‑22‑707.  See Docket Entry # 3 in DAB E-File.

My Prehearing Order required the parties to file a prehearing exchange consisting of a brief and any supporting documents, including any Motion to Dismiss or Motion for Summary Judgment.  Prehearing Order ¶ 4.  CMS filed a brief, which incorporated a motion for summary judgment (CMS Br.), and 48 proposed exhibits (CMS Exs. 1-48).  Petitioners (P.) filed a brief (P. Br.) and four attachments.  I construe Petitioner’s attachments as proposed exhibits and refer to them as such (P. Exs. 1-4). 

Neither party objected to the exhibits proposed by the opposing party.  Therefore, in the absence of objection, I admit CMS Exs. 1-48 and P. Exs. 1-4.  Neither party offered the written direct testimony of any witnesses.  My Prehearing Order informed the parties that “[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.”

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Prehearing Order ¶ 10.  Therefore, an in-person hearing is not necessary, and I decide this case based on the parties’ written submissions, without regard to whether the standards for summary judgment are satisfied.  I deny CMS’s motion for summary judgment as moot.

II.  Issues

Whether Novitas, acting on behalf of CMS, properly established December 18, 2021 (Petitioners Sadler, Guerra, Cantini, Elliott, Emerick, Harr, Michelangelo, and Tullius) and December 29, 2021 (Petitioner Christopher), as the effective dates of Petitioners’ reassignment of Medicare benefits.

III.  Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R. §§ 498.3(b)(15), 498.5(l)(2); see also Act § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).

III.  Discussion

A.    Applicable Legal Authority

The Act authorizes the Secretary of Health and Human Services (Secretary) to promulgate regulations governing the enrollment process for providers and suppliers.  Act §§ 1102, 1866(j) (42 U.S.C. §§ 1302, 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)).

A supplier must enroll in the Medicare program to receive payment for covered Medicare items or services.  42 C.F.R. § 424.505.  The regulations define “Enroll/Enrollment” as “the process that Medicare uses to establish eligibility to submit claims for Medicare-covered items and services.”  42 C.F.R. § 424.502.  A provider or supplier seeking billing privileges under the Medicare program must “submit enrollment information on the applicable enrollment application.  Once the provider or supplier successfully completes the enrollment process . . . CMS enrolls the provider or supplier into the Medicare program.”  42 C.F.R. § 424.510(a)(1).  CMS then establishes an effective date for billing privileges consistent with 42 C.F.R. § 424.520 and may permit retrospective billing as provided in 42 C.F.R. § 424.521.

CMS sets the effective date of enrollment in accordance with the following:

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The effective date for billing privileges for physicians, non physician practitioners, physician and non-physician practitioner organizations . . . is the later of –

(1)    The date of filing of a Medicare enrollment application that was subsequently approved by a Medicare contractor; or

(2)    The date that the supplier first began furnishing services at a new practice location.

42 C.F.R. § 424.520(d).  The effective date of enrollment is an initial determination subject to appeal under 42 C.F.R. Part 498.  42 C.F.R. § 498.3(a)(1), (b)(15); Victor Alvarez, M.D., DAB No. 2325 (2010).

Retrospective billing privileges may be granted when –

[T]he physician, non-physician practitioner, physician or non-physician organization . . . has met all program requirements, including State licensure requirements, and services were provided at the enrolled practice location for up to –

(1)    Thirty days prior to their effective date if circumstances precluded enrollment in advance of providing services to Medicare beneficiaries; or

(2)    Ninety days prior to their effective date if a Presidentially-declared disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5206 (Stafford Act) precluded enrollment in advance of providing services to Medicare beneficiaries.

42 C.F.R. § 424.521(a).

In certain circumstances, a supplier who has received an assignment of benefits may reassign those benefits to an employer, or to an individual or entity with which the supplier has a contractual arrangement.  Act § 1842(b)(3) (42 U.S.C. § 1395u(b)(3)); 42 C.F.R. § 424.80(b)(1)-(2).  The provisions governing the effective date of enrollment apply to reassignment.  Gaurav Lakhanpal, MD, DAB No. 2951 (2019); see also Yakup Akyol, M.D., DAB No. 3017 at 5 (2020).

Section 1135 of the Act (42 U.S.C. § 1320b-5) authorizes the Secretary to waive certain requirements for Medicare enrollment and billing during national emergencies:

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(a) Purpose. ‒ The purpose of this section is to enable the Secretary to ensure to the maximum extent feasible, in any emergency area and during an emergency period (as defined in subsection (g)(1)) ‒

*        *        *

(2) that health care providers (as defined in subsection (g)(2)) that furnish such items and services in good faith, but that are unable to comply with one or more requirements described in subsection (b), may be reimbursed for such items and services and exempted from sanctions for such noncompliance, absent any determination of fraud or abuse.

(b) Secretarial Authority. ‒ To the extent necessary to accomplish the purpose specified in subsection (a), the Secretary is authorized, subject to the provisions of this section, to temporarily waive or modify the application of, with respect to health care items and services furnished by a health care provider (or classes of health care providers) in any emergency area (or portion of such an area) during any portion of an emergency period, the requirements of titles XVIII, XIX, or XXI, or any regulation thereunder (and the requirements of this title other than this section, and regulations thereunder, insofar as they relate to such titles), pertaining to ‒

(1)(A) conditions of participation or other certification requirements for an individual health care provider or types of providers[]

*        *        *

(c) Authority for Retroactive Waiver. ‒ A waiver or modification of requirements pursuant to this section may, at the Secretary’s discretion, be made retroactive to the beginning of the emergency period or any subsequent date in such period specified by the Secretary.

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B.    Findings of Fact, Conclusions of Law, and Analysis⁵

1. On December 18 and 29, 2021, Novitas received Petitioners’ applications for reassignment of Medicare benefits, and subsequently approved those applications.
2. Petitioners’ effective dates of reassignment of Medicare benefits are December 18, 2021 (Petitioners Sadler, Guerra, Cantini, Elliott, Emerick, Harr, Michelangelo, and Tullius) and December 29, 2021 (Petitioner Christopher).
3. Novitas granted Petitioners retrospective billing privileges effective September 19, 2021 (Petitioners Sadler, Guerra, Cantini, Elliott, Emerick, Harr, Michelangelo, and Tullius) and September 30, 2021 (Petitioner Christopher).

The effective date of Medicare enrollment and billing privileges for physicians, non-physician practitioners, and physician or non-physician practitioner organizations is the later of the “date of filing” or the date the supplier first began furnishing services at a new practice location.  42 C.F.R. § 424.520(d).  The “date of filing” is the date the Medicare contractor “receives” a signed enrollment application that the Medicare contractor is able to process to approval.  73 Fed. Reg. 69,726, 69,769 (Nov. 19, 2008).  The date of mailing a paper application is immaterial to the effective date determination.  Donald Dolce, M.D., DAB No. 2685 at 8 (2016) (“receipt, rather than mailing, of an application determines the effective date of enrollment”); Alexander C. Gatzimos, MD, JD, LLC, DAB No. 2730 at 5 (2016) (“date of mailing continues to be irrelevant to the effective date determination”).  A reassignment application is an “enrollment application” within the meaning of the regulation.  Lakhanpal, DAB No. 2951 at 5 n.5. 

When a contractor approves an enrollment application, it may allow retrospective billing for up to 30 days prior to the effective date established under 42 C.F.R. § 424.520 for a supplier that meets all program requirements and is providing Medicare-covered services.  42 C.F.R. § 424.521(a)(1).  The regulations also authorize CMS or its contractor to permit retrospective billing for up to 90 days prior to the effective date “if a Presidentially-declared disaster under the Robert T. Stafford Act . . . precluded enrollment in advance of providing services to Medicare beneficiaries.”  42 C.F.R. § 424.521(a)(2).

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Here, the date of filing is controlling because it occurred after Petitioners began providing services for the medical practice.  RFH at 23-31.  Novitas never received Petitioners’ mailed paper CMS-855R applications.  Id. at 19-21.  Thus, Novitas was never able to process the paper applications to approval.  Consequently, the paper applications cannot serve as the basis for an effective date determination.  The only applications Novitas received from Petitioners that it was able to process to approval were the web CMS-855R applications via PECOS, which Novitas received on December 18, 2021, and December 29, 2021.  CMS Ex. 1 at 1; CMS Ex. 9 at 1; CMS Ex. 14 at 1; CMS Ex. 19 at 1; CMS Ex. 24 at 1; CMS Ex. 29 at 1; CMS Ex. 34 at 1; CMS Ex. 39 at 1; CMS Ex. 44 at 1.

Therefore, Novitas correctly determined Petitioners’ effective dates of reassignment of benefits are December 18, 2021 (Petitioners Sadler, Guerra, Cantini, Elliott, Emerick, Harr, Michelangelo, and Tullius) and December 29, 2021 (Petitioner Christopher).  See, e.g., CMS Ex. 8 at 3; see also CMS Ex. 23 at 3.  Consistent with 42 C.F.R. § 424.521(a), Novitas granted Petitioners 90 days of retrospective billing.  See, e.g., CMS Ex. 8 at 3.  Based on the dates Novitas received Petitioners’ applications, it correctly determined that all Petitioners, except for Petitioner Christopher, have a retrospective billing date of September 19, 2021.  Id.  Novitas correctly determined that Petitioner Christopher has a retrospective billing date of September 30, 2021.  CMS Ex. 23 at 3.

4. Section 1135 waivers and retrospective billing periods are matters within CMS’s discretion and are not subject to administrative review.

Petitioners argue that CMS should have granted them a waiver under section 1135 of the Act or that CMS should not have applied the 90-day retrospective billing provision of 42 C.F.R. § 424.521(a)(2).  See, e.g., P. Br. at 3, 6.  The regulations governing enrollment appeals, 42 C.F.R. Part 498, do not authorize DAB administrative law judges to review CMS’s denial of a waiver request or the date from which CMS permits retrospective billing.  The only initial determination I have authority to review is the effective date of enrollment.  42 C.F.R. § 498.3(b)(15).  Thus, Petitioners’ arguments are not ones I have authority to hear and decide.

In general, where the regulations consign a determination to CMS’s discretion, the exercise of that discretion is not subject to administrative review.  See Decatur Health Imaging, LLC, DAB No. 2805 at 8-9 (2017) (citing Brian K. Ellefsen, DO, DAB No. 2626 at 7 (2015); Douglas Bradley, M.D., DAB No. 2663 at 13 n.13 (2015)).  Both waivers under section 1135 of the Act and determinations regarding a supplier’s retrospective billing date are matters over which the Secretary or CMS has discretion.

First, pursuant to section 1135(b) of the Act, “[t]o the extent necessary . . . the Secretary is authorized, subject to the provisions of this section, to temporarily waive or modify [certain enrollment requirements].”  42 U.S.C. § 1320b–5(b) (emphasis added).  Pursuant to section 1135(c) of the Act, “[a] waiver or modification of requirements pursuant to this

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section may, at the Secretary’s discretion, be made retroactive to the beginning of the emergency period or any subsequent date in such period specified by the Secretary.”  Id. (emphasis added).  The regulations do not require the Secretary to waive or modify Medicare enrollment requirements, but merely authorize the Secretary to do so.  Similarly, retrospective billing date determinations are not subject to administrative review because, under the regulations, CMS or its contractor has discretion to grant or deny retrospective billing.  See Sandeep Gupta, M.D., et al., DAB CR5617 at 4 (2020), aff’d, DAB No. 3088 (2023).  But, even if I were authorized to review the retrospective billing dates Novitas assigned Petitioners, I would find no error in the determinations.

5. Even if I were authorized to review Petitioners’ retrospective billing dates, I would conclude that CMS acted appropriately in applying the 90-day retrospective billing provision of 42 C.F.R. § 424.521.

Petitioners argue I should compel CMS to comply with the decision in Justin McCarthy, M.D., DAB CR5749 (2020).  P. Br. at 2, 6.  According to Petitioners, the McCarthy decision holds that “the 90-day rule in 42 C.F.R. § 424.521 was waived by section 1135 of the Social Security Act.”  P. Br. at 6.  Petitioners misread McCarthy.  Moreover, even if Petitioners’ reading of the decision were correct, many decisions of the DAB hold that administrative law judge decisions are not precedential and do not bind other DAB decision makers.  See, e.g., Littlefield Hospitality, DAB No. 2756 at 13 (2016) (and cases cited therein)).  Therefore, I am not bound by McCarthy.

Even if I were to look to McCarthy as persuasive authority, the decision is inapplicable to the facts presented here.  McCarthy is distinguishable because the supplier in McCarthy obtained temporary Medicare billing privileges based on an application submitted by telephone.  DAB CR5749 at 3 (Findings 7, 9).  During the COVID-19 public health emergency, the Secretary used his section 1135 waiver authority to permit suppliers to enroll by telephone and obtain temporary Medicare billing privileges.  Id. at 4-5; see also https://www.cms.gov/files/document/physicians-and-other-clinicians-cms-flexibilities-fight-covid-19.pdf (last visited July 24, 2023) (the relevant information appears at page 15 of the PDF file).  In McCarthy, the administrative law judge held that the supplier had received the full benefit of the applicable waiver, so no further relief was available.  The present case does not involve telephone applications or temporary billing privileges; therefore, the waiver basis addressed in McCarthy does not apply. 

Petitioners additionally contend the McCarthy decision interpreted the section 1135 waiver permitting telephone applications for temporary Medicare billing privileges during the public health emergency as broadly overriding the 90‑day rule in section 424.521.  P. Br. at 6.  Petitioners’ contention is incorrect.  Nothing in McCarthy supports such a broad reading and I am aware of no other authority supporting Petitioners’ position.  To the contrary, it appears the Secretary determined that the 90-day emergency

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retrospective billing period described in 42 C.F.R. § 424.521(a)(2) sufficed during the COVID‑19 public health emergency.

I infer that the Secretary made such a determination because, during the public health emergency, CMS issued a Technical Direction Letter to administrative contractors, including Novitas.  The Technical Direction Letter provided, in pertinent part:

For enrollment applications received on or after April 1, 2020, [Medicare administrative contractors] shall grant retrospective billing privileges of up to 90 days prior to the effective date or March 1, 2020, whichever is later.

RFH at 17 (emphasis added).  A decision to make the 90-day retrospective billing period described in 42 C.F.R. § 424.521 the maximum period for retrospective billing during the public health emergency is fully consistent with the waiver statute.  I reach this conclusion because, while section 1135 grants the Secretary discretion to approve a waiver “retroactive to the beginning of the emergency period,” the statute further provides that the Secretary may choose “any subsequent date in such period specified by the Secretary.”  Act § 1135(c) (emphasis added).  Thus, section 1135 permits, but does not require, the Secretary to grant waivers retroactive to the beginning of the emergency period.

6. I do not have authority to grant equitable relief

Petitioners argue that an additional 30 days, beyond the allotted 90 days, should be added to the retrospective billing period to account for the fact that the USPS failed to deliver their paper reassignment applications.  RFH at 2.  Petitioners explain that they also experienced other disruptions unrelated to the mail delay which contributed to the delay in submitting their Medicare reassignment of benefits applications.  Petitioners cite COVID-19 as an aggravating factor which made tracking down files “very difficult.”  RFH at 2.  Further, Petitioners argue that they deserve “additional time” beyond the 90‑day retrospective billing period described in section 424.521 “given that [Petitioners] are anesthesiologists and CRNAs who work at multiple facilities and multiple locations.”  RFH at 2.  Petitioners state that not being reimbursed is a “significant hit to the cash flow for [their] practice.”  CMS Ex. 6 at 2.  Petitioners’ alternative arguments amount to a request for equitable relief.  However, an administrative law judge is not authorized to provide equitable relief by reimbursing a supplier or altering an effective date.  US Ultrasound, DAB No. 2302 at 8 (2010) (citing Regency on the Lake, DAB No. 2205 (2008)).  Put another way, I may not set aside CMS’s lawful exercise of its discretion based on principles of equity or fairness.  See, e.g., Cent. Kan. Cancer Inst., DAB No. 2749 at 10 (2016); see also Tosan Fregene, M.D. and Oncology Clinics, Inc., DAB No. 3018 at 8 (2020); Chaplin Liu, M.D., DAB No. 2976 at 10 (2019); James Shepard, M.D., DAB No. 2793 at 9 (2017).

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V.  Conclusion

For the reasons explained above, I affirm Novitas’s determination that Petitioners’ effective dates of reassignment are December 18, 2021 (Petitioners Sadler, Guerra, Cantini, Elliott, Emerick, Harr, Michelangelo, and Tullius) and December 29, 2021 (Petitioner Christopher), with retrospective billing privileges effective September 19, 2021 (Petitioners Sadler, Guerra, Cantini, Elliott, Emerick, Harr, Michelangelo, and Tullius) and September 30, 2021 (Petitioner Christopher).

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Endnotes

¹  The names, NPIs, and PTANs of the individual Petitioners are listed in the attached table.  See Attachment A.

²  Petitioners’ hearing request refers to Petitioner Christopher as “Kimberly Christopher Matthews.” See Request for Hearing (RFH) at 22 (Docket Entry # 1 in the Departmental Appeals Board (DAB) Electronic Filing System (E-File)).  However, it appears Petitioner’s correct name is Kimberly Matthews Christopher.  See id. at 49; see also Docket Entry # 1b in DAB E-File for Docket No. C-22-714.

³  Novitas received Petitioner Christopher’s web CMS-855R reassignment of benefits application on December 29, 2021.  CMS Exhibit (Ex.) 19 at 1.  Therefore, the reassignment has a different effective date.

⁴  In its initial determinations, Novitas identified September 19, 2021, and September 30, 2021, as the effective dates of Petitioners’ reassignments.  See, e.g., CMS Ex. 5 at 1; CMS Ex. 20 at 1.  Because these dates are 90 days prior to the dates Novitas received Petitioners’ reassignment applications, it appears Novitas inaccurately used “effective date” to refer to the dates from which Petitioners were authorized to retrospectively bill for Medicare services.

⁵  My findings of fact and conclusions of law appear as numbered headings in bold italic type.