Ernesto C. Mendoza, M.D., DAB CR6414 (2023)

DECISION

Petitioner, Ernesto C. Mendoza, M.D., challenges the reconsidered determination by the Centers for Medicare & Medicaid Services (CMS) to revoke his Medicare enrollment and billing privileges.  CMS took this action pursuant to 42 C.F.R. § 424.535(a)(10) because Petitioner did not comply with the documentation and access requirements at 42 C.F.R. § 424.516(f).  I find there was a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges for the reasons stated below.

I.    Background and Procedural History

Petitioner was enrolled in the Medicare program as a physician beginning in 2010.  CMS Exhibit (Ex.) 7 at 1.  A physician is considered a “supplier” of services in the Medicare program.  42 U.S.C. § 1395x(d); 42 C.F.R. § 400.202.  On January 21, 2020, a request for the medical records of 20 specified Medicare beneficiaries was sent to Petitioner by Qlarant Integrity Solutions, LLC (Qlarant), a CMS Unified Program Integrity Contractor (UPIC).  CMS Ex. 1.  This request was sent to Petitioner at 393 E. Walnut St., 3rd Fl., Pasadena, CA 91188-0001.  Id.  When no records were received from Petitioner, a follow up request was sent to the same address on July 10, 2020.  CMS Ex. 2.

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On September 1, 2020, Petitioner was notified that his Medicare privileges were being revoked effective October 1, 2020 because of his failure to provide CMS with access to the requested documentation, in violation of 42 C.F.R. § 424.535(a)(10).  A 10-year re-enrollment bar was also imposed, pursuant to 42 C.F.R. § 424.535(c).  CMS Ex. 3. Petitioner filed a request for reconsideration dated October 12, 2020, in which he asserted that he had never been informed of any issues or concerns regarding his Medicare privileges and the requests for information had been sent to Kaiser Permanente, his former employer.  CMS Ex. 4.  Petitioner also asserted that, despite his many attempts to do so, he was unable to obtain a copy of the records held by Telemedex, the company holding the records requested by CMS.  Id. at 1-2.  However, in a reconsidered determination dated October 30, 2020, CMS determined that Petitioner had failed to comply with the documentation and access requirements of 42 C.F.R. § 424.516(f)(2)(i) and, as a result, the revocation of his Medicare enrollment and the 10-year re-enrollment bar were upheld.  CMS Ex. 5.

Petitioner filed a timely request for an administrative law judge (ALJ) hearing (RFH) on December 24, 2020.  On December 31, 2020, Judge Bill Thomas issued a Standing Pre-hearing Order (PH Order), which directed the parties to file their respective prehearing exchanges.¹  CMS filed CMS’s Motion for Summary Judgment and, in the Alternative, Prehearing Brief (CMS PH Br.), along with 13 proposed exhibits (CMS Exs. 1-13).  Petitioner filed Petitioner’s Opposition to CMS’s Motion for Summary Judgment and Prehearing Brief (P. PH Br.) and eight proposed exhibits (P. Exs. 1-8).  Petitioner acknowledges that its proposed exhibit 5 was submitted for the first time at the ALJ level but asserts that as a correspondence document from a CMS contractor, it was within CMS’s access since it was sent.  P. PH Br. at 2 n.1.  Although it does not present the “good cause” argument required by 42 C.F.R. § 498.56(e), I agree with Petitioner that admission of this document would not be prejudicial to CMS.  Moreover, CMS has not filed any objection to the admission of that document.  As a result, I find that good cause exists for its admission since, while marginally relevant, it serves as part of the basis for Petitioner’s appeal.

Neither party objected to the proposed exhibits of the other party.  As a result, CMS Exs. 1-13 and P. Exs. 1-8 are admitted into the record.  Petitioner filed the Declarations of two proposed witnesses (P. Exs. 2 and 6).  However, CMS did not affirmatively request cross-examination of either of these witnesses.  As a result, a hearing for the purpose of cross-examination is not necessary.²  See PH Order at 7-8, ¶ 13.  I consider the record in this case to be closed and the matter is ready for a decision on the merits.

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II.    Issue

Whether CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges, pursuant to 42 C.F.R. § 424.535(a)(10).

It is also necessary to identify the issues that are not before me for adjudication.  Petitioner asserts that the “length of the re-enrollment bar CMS seeks against Petitioner is reviewable by this Tribunal because it is an issue of law, based on CMS’s misapplication of the applicable statutory and regulatory requirement that the re-enrollment bar not exceed one year for this type of violation.”  P. PH Br. at 12.  Petitioner provides a lengthy discussion of the regulatory history of the re-enrollment bar and the lack of statutory authority explicitly providing for a 10-year re-enrollment bar.  Id. at 12.  While I certainly am sympathetic to the difficult situation faced by Petitioner, I lack jurisdiction to consider any request to reduce the length of the re-enrollment bar or eliminate it entirely.  The only CMS actions subject to appeal under 42 C.F.R. part 498 are the types of initial determinations specified in 42 C.F.R. § 498.3(b).  The Departmental Appeals Board (the DAB) has continued to hold that CMS’s determination of the length of the re-enrollment bar under section 498.535(c) is not subject to review, explaining that:

Although the re-enrollment bar is a direct and legally mandated consequence of an appealable revocation determination, nothing in Part 498 authorizes the [DAB] to review the length of the bar despite that relationship between a revocation and a reenrollment bar. Given section 498.3(b)’s precise and exclusive enumeration of appealable determinations, we cannot find a CMS action to be appealable under Part 498 unless section 498.3(b) describes the subject matter of that action. See North Ridge Care Ctr., DAB No. 1857 at 8 (2002) (stating that “[b]y its very terms, Part 498 provides appeal rights only for these listed actions” (italics added)). On its face, section 498.3(b) does not describe any matter related to a post-revocation re-enrollment bar.

Vijendra Dave, M.D., DAB No. 2672 at 10 (2016).

The DAB reinforced this position in Linda Silva, P.A., stating the arguments regarding the length of the enrollment bar “are also beyond the scope of ALJ and Board review.”  DAB No. 2966 at 11 (2020).  A decision by CMS or its contractor about how long to bar a revoked supplier from re-enrolling in Medicare, unlike the determination to revoke the supplier’s billing privileges, is not an appealable “initial determination” under 42 C.F.R. Part 498.  See Heidi Woody, NP, formerly known as Heidi Richards, DAB No. 3102 at 21 (2023) (“[T]he ALJ ultimately, and correctly, concluded that Petitioner’s challenge to the duration of the re-enrollment bar was not an initial determination subject to ALJ review

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under Part 498 regulations.  For the same reason, we decline to review this agency determination. . . .”).

Given this holding by the DAB, I have no regulatory authority to review the length of the re-enrollment bar.

III.   Jurisdiction

I have jurisdiction to decide this issue.  42 C.F.R. §§ 498.3(b)(17), 488.5(l)(2); see also 42 U.S.C. § 1395cc(j)(8).

IV.   Findings of Fact, Conclusions of Law, and Analysis³

The Social Security Act (Act) authorizes the Secretary of Health and Human Services (the Secretary) to establish regulations for enrolling providers and suppliers in the Medicare program.  42 U.S.C. § 1395cc(j)(1)(A).  Suppliers must enroll in the Medicare program and receive a billing number in order to obtain payment for services rendered to Medicare beneficiaries.  42 C.F.R. § 424.505.

The regulations delegate to CMS the authority to revoke the enrollment and billing privileges of suppliers.  42 C.F.R. § 424.535.  CMS or a Medicare contractor may revoke a supplier’s Medicare enrollment and billing privileges for a number of specified reasons, including, as relevant here, when the supplier does not maintain appropriate documentation or fails to grant CMS the access to records specified in § 424.516(f).  42 C.F.R. § 424.535(a)(10).  After CMS revokes a supplier’s enrollment and billing privileges, CMS bars the supplier from reenrolling in the Medicare program for a minimum of one year but not greater than 10 years.  42 C.F.R. § 424.535(c)(1)(i).

1. Petitioner did not maintain documentation, as described in 42 C.F.R. § 424.516(f)(2)(ii), for seven years from the date of ordering, certifying, referring, or prescribing Part A or B services, items, or drugs, as required by 42 C.F.R § 424.516(f)(2)(i)(A).
2. Petitioner did not, upon request of CMS or a Medicare contractor, provide access to the documentation described in 42 C.F.R. § 424.516(f)(2)(ii), as required by 42 C.F.R. § 424.516(f)(2)(i)(B).
3. The evidence establishes that there is a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges, pursuant to 42 C.F.R. § 424.535(a)(10).

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Under the provisions of 42 C.F.R. § 424.535(a)(10)(i), CMS is authorized to revoke a currently enrolled supplier’s enrollment if “[t]he provider or supplier did not comply with the documentation of CMS access requirements specified in § 424.516(f) of this subpart.” 42 C.F.R. § 424.516(f)(2)(i), governing physicians, provides that:

(i) A physician or, when permitted, an eligible professional who orders, certifies, refers, or prescribes Part A or B services, items or drugs is required to –

(A) Maintain documentation (as described in paragraph (f)(2)(ii) of this section) for 7 years from the date of the service; and
(B) Upon request of CMS or a Medicare contractor, to provide access to that documentation (as described in paragraph (f)(2)(ii) of this section).

CMS, through its contractor Qlarant, requested beneficiary records from Petitioner for claims associated with durable medical equipment supplies he ordered for 20 specified beneficiaries.  CMS Exs. 1, 2.  These requests were sent to Petitioner at 393 E. Walnut St., 3rd Fl, Pasadena, CA  91188-0001.  CMS Ex. 1 at 1; CMS Ex. 2 at 1.  When the requested records were not received, CMS, through its contractor Noridian Healthcare Solutions (Noridian), revoked Petitioner’s Medicare privileges effective October 1, 2020.  CMS Ex. 3.

Petitioner asserted that he only became aware of the requests for records after receiving an email from Kaiser Permanente, his former employer, where the record requests had been sent.  He stated that he had not worked at Kaiser Permanente since September 2017 and his contact information had not changed since February 2018, when he began work at Sharp Rees Stealy (SRS).  Petitioner also noted that the same contact information was reflected on both the Medical Board of California and the DEA websites, which are public records easily accessible to CMS.  RFH at 3; see CMS Ex. 4.  In the RFH, Petitioner indicated that at the time Qlarant sent letters to him on January 21, 2020 and July 10, 2020, his correspondence address identified in his Medicare enrollment records was 2001 4th Avenue, San Diego, CA 92101-2303 and any suggestion that he failed to update his correspondence mailing address was false.  RFH at 3.  Petitioner also argues that he, via his employer SRS, updated his contact information and this was confirmed by Noridian in 2018 correspondence.  P. PH Br. at 3-4.  Moreover, he disputes that Elaine Taylor was only added as a contact in the reassignment record, as asserted by CMS, because Noridian sent two letters to Elaine Taylor confirming his change of information.  Id. at 5.

CMS asserts that Petitioner did not update his Medicare enrollment record with a correspondence address other than the 393 E. Walnut Street correspondence address and

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incorrectly relies on his February 2018 reassignment application to update his enrollment information as it pertains to his correspondence address.  CMS PH Br. at 14-15.

CMS is correct that the CMS-855I enrollment application is intended to be completed if, as relevant here, the practitioner is currently enrolled in Medicare and needed to make changes to their enrollment information.  CMS Ex. 11 at 2.  The CMS-855R enrollment application is intended to be completed if the practitioner is reassigning their right to bill the Medicare program.  CMS Ex. 12 at 2.  In the enrollment application completed by Petitioner and submitted on February 13, 2018, the correspondence address is listed as PHR Group Provider, Enrollment Unit, 3rd Fl., 393 E. Walnut St., Pasadena, CA 91188-0001.⁴  CMS Ex. 9 at 2.  While Petitioner suggests that CMS should have essentially done more detective work to figure out the correct current address, the record documents that the requests for records dated January 21, 2020 and July 10, 2020 from Qlarant were sent to the correspondence address listed in the enrollment application filed on February 13, 2018.  Thus, it is difficult to see how CMS could be faulted for sending the record requests to the correct correspondence address.

There is little point spending more time on this question, however, since Petitioner did become aware of the request for beneficiary information in conjunction with the notice of the revocation.  CMS Ex. 4 at 1.  The more significant question here is whether, once Petitioner became aware of the requests for records of the 20 specified beneficiaries for whom he had prescribed durable medical equipment, those records were provided.  Petitioner does not allege nor does the record establish that he maintained the specified records or that he provided access to those records when requested.

Instead, he makes several arguments as to why his Medicare enrollment should not be revoked.  In the RFH, it was argued that “Dr. Mendoza did not violate § 424.516(f)’s requirement to provide CMS access to requested documentation because no such request for documentation was ever provided to him.  Therefore, no basis exists for revocation of his Medicare privileges under § 424.535(a).”  RFH at 4.  However, as noted above, Petitioner did eventually become aware of the request for records.  There was nothing to prevent him from submitting those records with the request for reconsideration.  The notice of revocation indicated that a supplier may “[s]ubmit additional information with the reconsideration that may have a bearing on the decision.”  CMS Ex. 3 at 2.  Thus, he had every opportunity to dispute the revocation by providing the requested records, if he, in fact, possessed them.  As Petitioner himself concedes, he did not.

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In the request for reconsideration, Petitioner describes the extensive efforts he made to track down the requested records from Telemedex, LLC, where he worked and subsequently ordered durable medical goods for Medicare beneficiaries from October 2017 through January 2018.  He reported that during his employment at Telemedex, medical records and billing systems were maintained and kept by the company and after he had finished the consult/televisit, he did not have access to the progress notes or billing charges.  CMS Ex. 4 at 1-2.  Petitioner reported attempting to obtain the requested records through many sources but was ultimately unsuccessful.  Id. at 2.

I have no reason to doubt the veracity of these statements from Petitioner and believe he made a sincere effort to obtain the requested records.  However, the governing regulations do not contain any “good faith” exceptions to the documentation rules for Medicare enrolled suppliers.

The regulations requiring document retention and disclosure by physicians were published in a final rule on April 27, 2012.  77 Fed. Reg. 25284 (Apr. 27, 2012).  In the summary of the final rules, it is clearly stated that the rule “mandates document retention and provision requirements on providers and supplier [sic] that order and certify items and services for Medicare beneficiaries.”  Id.  The final rules implemented the Patient Protection and Affordable Care Act (Pub. L. 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152) (collectively known as the Affordable Care Act), with the purpose of promoting “the furnishing of quality care, while protecting the integrity of the program.”  Id.  To establish accountability measures to ensure compliance with the ordering and referring provisions, section 6406 of the Affordable Care Act amended § 1842(h) of the Act (42 U.S.C. § 1395u(h)) by adding a new paragraph, which states:

The Secretary may revoke enrollment, for a period of not more than one year for each act, for a physician or supplier under section 1866(j) if such physician or supplier fails to maintain and, upon request of the Secretary, provide access to documentation relating to written orders or requests for payment for durable medical equipment, certifications for home health services, or referrals for other items or services written or ordered by such physician or supplier under this title, as specified by the Secretary.

42 U.S.C. § 1395u(h)(9).

The statutory language gives no support to the argument that the regulation implemented to effectuate the statute only applied to a custodian of a record.  It is clear that the purpose of the revision was to ensure that physicians ordering durable medical equipment or making referrals for services covered by Medicare could provide supportive

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documentation for those actions after the fact.  The preamble to the final regulation refers to the revised regulations as the “Medicare Requirement for Physicians, Other Suppliers, and Providers to Maintain and Provide Access to Documentation on Referrals to Programs at High Risk of Waste and Abuse.”  77 Fed. Reg. 25284, 25309.  To limit those provisions to only those who “possess” the records would circumvent the purpose of the statute, which was to maintain the integrity of the Medicare program by requiring physicians to document and support their actions when Medicare funds are expended. Thus, the fact that the employer is no longer in existence or no longer possess the records does not excuse the physician from the obligation to retain and provide them upon request.  To find otherwise would not be in keeping with the statutory mandate to “establish accountability measures to ensure compliance with the ordering and referring provisions.”  Id.

Accordingly, after considering the evidence of record, I must find that Petitioner failed to comply with the documentation and access requirements specified in 42 C.F.R. § 424.516(f).

Finally, in the request for reconsideration, Petitioner points out that many of his patients are Medicare and Medicare Advantage patients who speak only Spanish or Tagalog and he is the only primary care physician in his medical group who speaks those languages.  He notes that being unable to care for them would put many of those individuals at risk due to their multiple medical co-morbidities and age.  CMS Ex. 4 at 2-3.  Petitioner also indicates that having his Medicare privileges revoked has been detrimental to both patient care and his medical group.  Id.

I acknowledge that the revocation has likely resulted in harsh consequences for Petitioner, his medical group, and the Medicare patients he serves.  However, to the extent that his request for relief is based on principles of equity, I have no authority to grant such relief.  US Ultrasound, DAB No. 2302 at 8 (2010) (“Neither the ALJ nor the [DAB] is authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements.”).  The DAB has consistently held that neither it nor the ALJ has authority to reverse an authorized revocation for reasons of equity.  See, e.g., Patrick Brueggeman, D.P.M., DAB No. 2725 at 15 (2016) (the ALJ and the DAB may not “restore a supplier’s billing privileges on equitable grounds”); Horace Bledsoe, M.D., and Bledsoe Family Medicine, DAB No. 2753 at 11 (2016) (declining to rule on petitioners’ estoppel claim and stating that the DAB may not overturn CMS’s lawful revocation of petitioners’ billing privileges on equitable grounds). As such, I cannot grant Petitioner’s request for relief on the basis of equity.

In this case, the stated basis for revocation, that of Petitioner’s failure to maintain records and grant access to those records, is grounded in law and fact.  Accordingly, I find that CMS had a legitimate basis for revoking Petitioner’s Medicare enrollment and billing privileges, pursuant to the provisions of 42 C.F.R. § 424.535(a)(10).

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V.   Conclusion

For the reasons explained above, I affirm the revocation of Petitioner’s Medicare enrollment and billing privileges, pursuant to 42 C.F.R. § 424.535(a)(10).

Endnotes

¹ This case was transferred to me on December 7, 2023.  

² Because a hearing is not necessary, I need not decide whether summary judgment is appropriate.

³ My findings of fact and conclusions of law are set forth in italics and bold font.

⁴ That application also added Elaine Taylor as a contact person at 2001 4th Ave., San Diego, CA 92101-2303.  However, the fact remains that the correspondence address continued to be listed as the 393 E. Walnut Street address.