New Wave Diagnostic Radiology PLLC, DAB CR6416 (2024)

DECISION

I uphold the Centers for Medicare & Medicaid Services’ (CMS) revocation of the Medicare enrollment and billing privileges of Petitioner, New Wave Diagnostic Radiology PLLC, based on 42 C.F.R. § 424.535(a)(8)(ii) (i.e., engaging in a pattern or practice of filing claims that do not meet Medicare requirements).  I also uphold the addition of Petitioner’s name to the CMS Preclusion List.

I.   Background and Procedural History

Petitioner enrolled in the Medicare program in 2013 as a supplier (i.e., clinical/group practice).  CMS Ex. 2 at 1.  In a July 20, 2022 notice of initial determination (revocation notice), National Government Services (NGS), a Medicare contractor, informed Petitioner that its Medicare billing privileges were being revoked effective August 19, 2022, for the following reasons:

[CMS] has determined that [Petitioner] has engaged in a pattern or practice of submitting claims that fail to meet Medicare requirements, in violation of 42 CFR

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424.535(a)(8)(ii).  Despite repeated instances of specific and targeted education, [Petitioner] has failed to meet Medicare requirements by submitting noncompliant claims with documentation that is insufficient to support that the services were reasonable or necessary.

CMS Ex. 12 at 8.

The revocation notice stated that there were three sets of claims that formed the basis for CMS’s determination that Petitioner had a pattern or practice of filing claims that do not meet Medicare requirements.  The first involved the denial of 42 of 60 claims with dates of service from January 8, 2016 through October 17, 2016 (2016 Claims).  The second involved the denial of 28 of 28 claims with dates of service from January 7, 2019 through February 27, 2020 (2019-2020 Claims).  CMS Ex. 12 at 8.  The third involved the denial of 14 of 14 claims with dates of service from April 16, 2021 through November 1, 2021 (2021 Claims).  CMS Ex. 12 at 8-9.  The revocation notice summed up the reasons for revocation as follows:

Despite several instances of specific education, which detailed the correct billing procedures for medical necessity, [Petitioner] has continued to submit claims that fail to meet Medicare requirements.  Evidenced by the continued high percentage of submitted claims that were denied and the specific facts surrounding said non-compliance over which the pattern has continued, [Petitioner’s] . . . billing behavior constitutes a violation of 42 CFR 424.535(a)(8)(ii), and therefore, CMS has determined that the provider, “has a pattern or practice of submitting claims that fail to meet Medicare requirements. . .”

CMS Ex. 12 at 9.  The revocation notice also stated that Petitioner was barred from re‑enrollment in the Medicare program for ten years and that CMS was adding Petitioner’s name to the CMS Preclusion List.¹  CMS Ex. 12 at 9-11.  Finally, the revocation notice advised that Petitioner could request reconsideration of the revocation and CMS’s decision to add Petitioner’s name to the Preclusion List.  CMS Ex. 12 at 10-11.

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Petitioner requested reconsideration and, on December 19, 2022, a CMS hearing officer issued a reconsidered determination upholding the revocation of billing privileges and the addition of Petitioner’s name to the Preclusion List.  Electronic Filing System (E-File) Doc. No. 1a at 1-2; see also CMS Ex. 12 at 3.  The CMS hearing officer discussed the three sets of Petitioner’s claims that had been reviewed by a CMS Unified Program Integrity Contractor (UPIC).  E-File Doc. No. 1a at 3-4.  The CMS hearing officer concluded:

Here, medical reviews were performed for claims submitted for payment by [Petitioner] from 2016 through 2021, spanning more than five years and 10 months.  In all of the reviews, the majority of claims were denied because the documentation submitted was deemed insufficient to support the medical necessity of the services billed.  Therefore, CMS determined that those claims submitted by [Petitioner] failed to meet Medicare requirements.

E-File Doc. No. 1a at 4-5.  The CMS hearing officer also discussed each of the four regulatory factors for determining whether a supplier had engaged in a pattern or practice of abusive billing and concluded that Petitioner had.  E-File Doc. No. 1a at 5-6.  In addition, the CMS hearing officer concluded that the conduct underlying the revocation was detrimental to the best interests of the Medicare program and that Petitioner’s name was properly placed on the CMS Preclusion List.  E-File Doc. No. 1a at 7-8.

On February 17, 2023, Petitioner requested a hearing before an administrative law judge (ALJ) to challenge the revocation and the addition of Petitioner’s name to the CMS Preclusion List.  P. Ex. 3.  On February 24, 2023, the Civil Remedies Division acknowledged receipt of Petitioner’s hearing request and issued my Standing Prehearing Order (SPO), which provided prehearing submission dates for the parties.  CMS filed its prehearing exchange, which included a prehearing brief/motion for summary judgment (CMS Br.) and 12 proposed exhibits.  One of CMS’s proposed exhibits was the written direct testimony for a witness (CMS Ex. 1).  Petitioner then filed its prehearing exchange, which included a prehearing brief/memorandum in opposition to summary judgment (P. Br.) and three proposed exhibits.  Two of Petitioner’s proposed exhibits were the written direct testimony of witnesses (P. Exs. 1-2).  Petitioner also requested to cross-examine CMS’s witness.  Finally, CMS filed a reply brief (CMS Reply), an additional proposed exhibit (CMS Ex. 13), and a document objecting to Petitioner’s request to cross-examine CMS’s witness and a request that CMS cross-examine one of Petitioner’s witnesses (P. Ex. 1) if the case is not decided on summary judgment or based on the written record.

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II.   Issues

1. Whether CMS had a legitimate basis for revoking Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii).
2. Whether CMS had a legitimate basis to place Petitioner on the CMS Preclusion List under 42 C.F.R. §§ 422.2 and 423.100.

III.   Jurisdiction

I have jurisdiction to decide the issues identified in this case.  42 C.F.R. §§ 498.3(b)(17), (20), 498.5(l)(2), (n)(2); see 42 U.S.C. § 1395cc(j)(8); 42 C.F.R. §§ 424.545(a); 498.1(g).

IV.   Summary Judgment

CMS moves for summary judgment and Petitioner opposes that motion.  I grant CMS’s motion because the undisputed material facts are sufficient to show that CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii) and to add Petitioner’s name to the CMS Preclusion List.

Summary judgment is appropriate if a case presents no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law.  Bartley Healthcare Nursing & Rehab., DAB No. 2539 at 3 (2013) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-25 (1986)); Ill. Knights Templar Home, DAB No. 2274 at 3-4 (2009).

The moving party may show the absence of a genuine factual dispute by presenting evidence so one-sided that it must prevail as a matter of law or by showing that the non-moving party has presented no evidence “sufficient to establish the existence of an element essential to [that party’s] case, and on which [that party] will bear the burden of proof at trial.”  Livingston Care Ctr. v. U.S. Dep’t of Health & Human Servs.,388 F.3d 168, 173 (6th Cir. 2004) (quoting Celotex, 477 U.S. at 322).  To avoid summary judgment, the non-moving party must then act affirmatively by tendering evidence of specific facts showing that a dispute exists.  Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,475 U.S. 574, 586 n.11 (1986); see also Vandalia Park, DAB No. 1939 (2004); Lebanon Nursing & Rehab. Ctr., DAB No. 1918 (2004).  The non-moving party may not simply rely on denials but must furnish admissible evidence of a dispute concerning a material fact.  Ill. Knights Templar, DAB No. 2274 at 4; Livingston Care Ctr., DAB No. 1871 at 5 (2003).  In doing so, the non-moving party must show more than “some metaphysical doubt as to the material facts.”  W. Tex. LTC Partners, Inc., DAB No. 2652 at 6 (2015), aff’d sub nom.843 F.3d 1043 (5th Cir. 2016); 1866ICPayday.com, L.L.C., DAB No. 2289 at 3 (2009) (quoting Matsushita, 475 U.S. at 587).

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In examining the evidence for purposes of determining whether summary judgment is appropriate, I must draw all reasonable inferences in the light most favorable to the non-moving party.  Heritage House of Marshall Health & Rehab., DAB No. 3035 at 8 (2021); Brightview Care Ctr., DAB No. 2132 at 2, 9 (2007); Livingston Care Ctr., 388 F.3d at 172; Guardian Health Care Ctr., DAB No. 1943 at 8 (2004); see also Brightview, DAB No. 2132 at 10 (entry of summary judgment upheld where inferences and views of non-moving party are not reasonable).  However, drawing factual inferences in the light most favorable to the non-moving party does not require that I accept the non-moving party’s legal conclusions.  W. Tex. LTC Partners, DAB No. 2652 at 6-7; cf. Guardian, DAB No. 1943 at 11 (“A dispute over the conclusion to be drawn from applying relevant legal criteria to undisputed facts does not preclude summary judgment if the record is sufficiently developed and there is only one reasonable conclusion that can be drawn from those facts.”); see Green Valley Healthcare & Rehab. Ctr., DAB No. 2947 at 8 (2019), quoting Johnson v. Perez, 823 F.3d 701, 705 (D.C. Cir. 2016) (noting that a genuine factual dispute does not exist “when a putatively disputed body of evidentiary material could not, even assuming a sympathetic factfinder, reasonably support a finding crucial to the nonmoving party’s legal position.”).

Specifically, in relation to administrative proceedings involving Medicare, it is well-established that an ALJ is empowered to decide a case on summary judgment, without an evidentiary hearing.  Shah v. Azar, 920 F.3d 987, 996 (5th Cir. 2019) (citing Cedar Lake Nursing Home v. U.S. Dep’t of Health & Human Servs., 619 F.3d 453, 457 (5th Cir. 2010)); see Fal-Meridian, Inc. v. U.S. Dep’t of Health & Human Servs., 604 F.3d 445, 449 (7th Cir. 2010).  “All it means for a decision to be based on a grant of summary judgment is that there are no issues that would benefit from being resolved in an evidentiary hearing.”  Fal-Meridian, 604 F.3d at 449 (emphasis added).

Finally, deciding a case on summary judgment does not mean that it is decided without a hearing.  In reviewing administrative appeals decided on summary judgment, courts describe the case as having been decided without an “oral hearing” or without an “evidentiary hearing.”  They recognize that, by considering the evidence and applying the law, the ALJ has granted the petitioner a hearing.  See CNG Transmission Corp. v. FERC, 40 F.3d 1289, 1293 (D.C. Cir. 1994) (holding that a “paper hearing” satisfies statutory requirements for “notice and opportunity for hearing.”).

The revocation in this case is based on CMS’s determination that Petitioner had a pattern or practice of submitting claims that fail to meet Medicare requirements.  42 C.F.R. § 424.535(a)(8)(ii).  This standard for revocation differs from many others because the underlying basis directly involves Medicare claims that are denied by a CMS contractor.  When claims are denied, CMS has a statutory appeals process, which is explained in detail below.  If a provider or supplier fails to appeal the denial of a claim, it creates legal finality concerning the denied claims.

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The Social Security Act (Act) provides for a multi-tiered process to appeal denied Medicare claims.  42 U.S.C. § 1395ff(a)-(d).  After a claim is filed, a CMS contractor will review the claim and issue an initial determination as to whether the claimed items and services are covered or reimbursable under the Medicare program.  42 U.S.C. § 1395ff(a)(1)-(2); 42 C.F.R. § 405.920.  If the claims are denied, the initial determination must state the basis for the denial and information on the right to seek redetermination of the denial.  42 U.S.C. § 1395ff(a)(4); 42 C.F.R. § 405.921(b).  An initial determination concerning a claim for items or services is binding on all parties to the initial determination unless a redetermination is issued or CMS revises the initial determination.  42 C.F.R. § 405.928; see also 42 U.S.C. § 1395ff(a)(3)(B)(i) (“No initial determination may be reconsidered or appealed . . . unless the [CMS contractor] has made a redetermination of that initial determination. . . .”).

With regard to a revised initial determination, a CMS contractor may reopen an initial determination for remedial action if there is either an overpayment or underpayment of a claim.  42 C.F.R. § 405.980(a)(1).  One reason to reopen the initial determination in a claim is to conduct a post-payment review to determine the validity of the claim.  42 C.F.R. § 405.929(a); see also 42 U.S.C. § 1395ddd(a)-(b) (establishing the Medicare integrity program which includes a review as to whether payments should have been made by the Medicare program).  The post-payment review may either result in no change to the initial determination or the issuance of a revised determination.  42 C.F.R. § 405.929(d).  An adverse revised determination will state the basis for the reopening and revision and provide applicable appeal rights.  42 C.F.R. § 405.982(a).  A revised initial determination is binding on all parties unless a party files a written request for a redetermination.  42 C.F.R. § 405.984(a).

If a party is dissatisfied with an initial determination or revised initial determination, that party may seek redetermination within 120 days of receiving the initial determination or revised initial determination.  42 U.S.C. § 1395ff(a)(3); 42 C.F.R. §§ 405.940, 405.984(a).  A redetermination is made by an individual who was not involved in the initial determination.  42 U.S.C. § 1395ff(a)(3)(B)(ii).  The redetermination must provide the specific reasons for the outcome of the redetermination, including a summary of the clinical and scientific evidence used in making the redetermination, and will provide notice of the right to appeal the redetermination.  42 U.S.C. § 1395ff(a)(5)(A).  Unless a party requests reconsideration of the redetermination, the redetermination is binding on the parties.  42 C.F.R. § 405.958.

If a party is not satisfied with the outcome of the redetermination, the party may request reconsideration by a qualified independent contractor (QIC).  42 U.S.C. § 1395ff(b)(1)(A), (c)(3)(B)(i); 42 C.F.R. § 405.960.  A party must file a reconsideration request within 180 days of receiving the redetermination.  42 U.S.C. § 1395ff(b)(1)(D)(i).  The QIC will issue a reconsideration determination that includes a summary of the facts, an explanation of pertinent law, a rationale for the determination, and instructions for

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appealing the determination.  42 U.S.C. § 1395ff(c)(3)(E); 42 C.F.R. § 405.976.  Unless a party appeals, the reconsideration determination is binding on the parties.  42 C.F.R. § 405.978.

A party may appeal an unfavorable reconsideration determination by requesting a hearing before an ALJ.  42 U.S.C. § 1395ff(b)(1); 42 C.F.R. § 405.1000.  After a hearing, an ALJ will issue a decision that provides the specific reasons for the decision and notice on how to appeal the decision.  42 U.S.C. § 1395ff(d)(1)(A), (4).  If a party does not appeal the ALJ’s decision, then that decision is binding on the parties.  42 C.F.R. § 405.1048.

A party may appeal an ALJ decision to the Medicare Appeals Council (Council) of the Departmental Appeals Board (DAB).  42 C.F.R. § 405.1102.  The Council will conduct a de novo review of the ALJ decision and either render a decision or remand the case to the ALJ.  42 U.S.C. § 1395ff(d)(2); 42 C.F.R. §§ 405.1126(a), 405.1128.  The decision of the Council is final and binding unless a federal court modifies it.  42 C.F.R. § 405.1130.  Providers and suppliers may seek judicial review of the Council’s decision in a United States District Court.  42 U.S.C. §§ 405(g), 1395ff(b)(1).

Because providers and suppliers have extensive appeal rights when a claim is denied, it is possible that previously denied claims may be allowed on appeal.  During the promulgation of 42 C.F.R. § 424.535(a)(8)(ii), comments received from the public asked the Secretary of Health and Human Services (Secretary) not to allow a revocation for abusive billing practices to be based on claims that were originally denied but allowed on appeal.  The Secretary agreed that “[a] provider or supplier’s claim denial that has been both – (1) fully (rather than partially) overturned on appeal; and (2) finally and fully adjudicated will be excluded from our consideration in determining whether the provider or supplier’s Medicare billing privileges should be revoked under § 424.535(a)(8)(ii).”  79 Fed. Reg. 72,500, 72,513 (Dec. 5, 2014).  The Secretary stated that “the term ‘finally and fully adjudicated’ means that – (1) the appeals process has been exhausted; or (2) the deadline for filing an appeal has passed.”  79 Fed. Reg. at 72,513.

Although this comment and response primarily involve the exclusion from consideration of denied claims that were later allowed on appeal, I conclude the response supports the use of denied claims that are administratively final as a basis for revocation under 42 C.F.R. § 424.535(a)(8)(ii).  Indeed, the Secretary indicated that, when considering whether to revoke under 42 C.F.R. § 424.535(a)(8)(ii), CMS could base the revocation on denied claims that were being appealed.  79 Fed. Reg. at 72,513 (“First, excluding claims that are currently being appealed could encourage providers and suppliers to file meritless appeals simply to circumvent the application of § 424.535(a)(8)(ii).  Second, merely because a claim is under appeal does not necessarily mean it will be overturned.”).

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As indicated above, CMS’s initial and reconsidered determinations to revoke in this case were based on three audits of claims Petitioner filed.  The first involved the denied 2016 Claims, the second the denied 2019-2020 Claims, and the third the denied 2021 Claims.  Petitioner did not request redetermination for the revised initial determinations that denied the 2016 Claims or the 2019-2020 Claims.  However, Petitioner is actively appealing the revised initial determination denying the 2021 Claims.  See CMS Ex. 13.  As discussed below, the denied claims based on the first two audits are sufficient to uphold the legitimacy of the revocation and the addition of Petitioner’s name to the CMS Preclusion List.  Importantly, these claims denials are legally binding on the parties.  Further, given the extensive statutory appeal process that was afforded to Petitioner, I consider Petitioner’s decision not to seek any review of the denied 2016 Claims and 2019-2020 Claims to manifest Petitioner’s clear acceptance of those denials.  Therefore, there can be no dispute of material facts as to the denial of those claims or the basis for the denial of those claims in this case.  In addition, these claims constitute most of the denied claims on which CMS based its revocation.  Finally, Petitioner’s arguments concerning these denied claims are of a legal nature.  As a result, summary judgment is appropriate in this case.

For purposes of summary judgment, I do not consider the denied 2021 Claims to be uncontested because they are presently on appeal.  See CMS Ex. 13.  While CMS could rely on those claims denials to revoke Petitioner, it may not be appropriate to render summary judgment on the basis of those claims denials because those denials and/or the basis for those denials involve material facts in dispute.  See P. Br. at 8-9.

V.   Evidence

For purposes of summary judgment, I admit the parties’ proposed exhibits into the record because neither party objected to them.  See SPO ¶ 10.

As noted above, the denied 2021 Claims will not be considered in this decision because it is rendered on summary judgment.  Therefore, the parties’ exhibits that solely relate to the denied 2021 Claims will play no substantive part in this decision.  These exhibits include CMS Exhibits 5, 8, 11, and 13, and Petitioner Exhibit 1, which is the written direct testimony of Warren B. Bilker, Ph.D. (testimony limited to challenging the statistical extrapolation of denied 2021 Claims that resulted in a significant overpayment determination).  Further, the portions of other exhibits that relate to the denied 2021 Claims will also play no substantive role in this decision.

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VI.   Undisputed Facts, Conclusions of Law, and Analysis

1. Petitioner is a medical testing facility that specializes in cardiac, vascular, and general ultrasound exams, which include neurological testing.  Treating physicians determine which tests are needed for their patients, and Petitioner’s staff perform the tests that are ordered by the treating physicians.  Petitioner’s owner is a physician/radiologist who interprets the results from the tests performed.  Petitioner was enrolled in the Medicare program to provide and bill for services for Medicare beneficiaries.

Petitioner “is a testing facility. . . . [Petitioner] provides on-site cardiac, vascular, general and ultrasound exams, including neurological testing.”  P. Ex. 2 ¶ 11.  Petitioner enrolled in the Medicare program in 2013 as a “Clinic/Group Practice.”  CMS Ex. 2 at 1.  Petitioner is located in New York State.  CMS Ex. 2 at 3.

Anuraag Sahai, M.D., is the sole owner and managing employee for Petitioner.  P. Ex. 2 ¶ 3; CMS Ex. 2 at 4-5.  Dr. Sahai is a board-certified radiologist.  P. Ex. 2 ¶¶ 10, 15.

Dr. Sahai’s written direct testimony provided the general scope of services Petitioner provides.  Dr. Sahai stated that Petitioner receives “orders from referring physicians for various diagnostic tests, including vascular, ultrasound, MRIs, and other types of scans to be performed on their patients.”  P. Ex. 2 ¶ 12.  Dr. Sahai further stated that “before I receive any order for a diagnostic test, the referring physician has already examined the patient.  I have no interaction with the patient and do not examine them.”  P. Ex. 2 ¶ 13.  Finally, Dr. Sahai reviews the physician order with the technician who will conduct the test on the patient and then interprets the results of the test that become part of the patient’s chart.  P. Ex. 2 ¶ 14.

Dr. Sahai’s role is to thoroughly and accurately interpret each image resulting from tests ordered by other physicians.  He testified that:  “[i]t is not my role to question a treating physician as to what is medically necessary for his or her patient.  The treating physician has the adequate education, experience, and training to make that determination.”  P. Ex. 2 ¶ 15.  As a result, Dr. Sahai testified that only the treating physician can determine the medical necessity for the tests ordered and not Petitioner.  P. Ex. 2 ¶ 16.

2. A UPIC is a CMS contractor that conducts investigations, data analysis, and pre-payment and post-payment reviews of claims submitted to the Medicare program.  The UPIC’s purpose is to prevent and deter fraud, waste, and abuse in the Medicare program.  SafeGuard Services, LLC (SafeGuard) is the UPIC responsible for investigation and audits in New York State.  When a UPIC conducts a post-payment review that identifies Medicare claims that were allowed, but should have been denied, a revised determination may be issued denying those claims that had previously been approved without review.

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SafeGuard is the UPIC that was contracted by CMS for the purpose of “preventing, detecting, and deterring fraud, waste, and abuse in the Medicare program” in the northeast region of the country, which includes New York State.  CMS Ex. 1 ¶¶ 2, 4.  SafeGuard accomplishes this goal by “investigating fraud and abuse matters, performing data analysis/data mining to identify potentially fraudulent billing, recommending recovery of federal funds through administrative actions, and implementing payment suspensions.”  Further, SafeGuard “conducts pre and post-payment review of certain claims submitted to the Medicare program.”  CMS Ex. 1 ¶ 4.

A post-payment review means the following:

[A] review that occurs after payment is made on the selected claim to determine whether the initial determination for payment was appropriate.  Post-payment reviews may result in either no change to the initial determination or a “revised determination,” indicating an underpayment or overpayment.

CMS Ex. 1 ¶ 7.

3. SafeGuard conducted a review of Medicare claims submitted by Petitioner for Duplex scans/Doppler studies and ultrasound procedures allegedly performed in 2016 (i.e., the 2016 Claims).  SafeGuard determined that, out of 97 services that Petitioner claimed to have provided to 40 Medicare beneficiaries, 61 should be denied because there was insufficient evidence that Petitioner provided the claimed services.  In June and July 2017, CMS contractor NGS issued overpayment notices (i.e., revised initial determinations) seeking the return of approximately $2,300.  Despite being notified of the right to appeal the overpayment determinations, Petitioner did not do so.  NGS recouped the overpayment from Petitioner.

In a June 8, 2017 letter, SafeGuard informed Petitioner that it had been overpaid by $2,373.84.  CMS Ex. 3 at 2, 8; see also CMS Ex. 1 ¶ 16.  SafeGuard explained that it had analyzed the Medicare billing history for 40 beneficiaries for dates of services from January 8, 2016 to October 17, 2016, in which Petitioner was paid $3,991.85 from January 27, 2016 to November 2, 2016.  CMS Ex. 3 at 2.  SafeGuard conducted an onsite visit at Petitioner’s practice location and obtained copies of Petitioner’s medical records for 40 beneficiaries.  CMS Ex. 3 at 3.

SafeGuard’s letter stated that a review of the medical records for the 40 beneficiaries revealed that 61 out of 97 services claimed (i.e., 62.9%) were being denied and 36 services claimed (i.e., 37.1%) were being allowed.  CMS Ex. 3 at 3.  SafeGuard found that Petitioner’s documentation did not support the claimed services and/or the medical

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records lacked required documentation per Medicare requirements.  CMS Ex. 3 at 3.  Further, the “Current Procedural Terminology (CPT) procedure codes from the treating physician order were different than what was reported on the claim.”  CMS Ex. 3 at 3.  SafeGuard’s letter also specified that there were a total of 77 services for Duplex scan and Doppler study procedure codes in the sample of claims reviewed and 41 of those services were denied.  CMS Ex. 3 at 4.  The letter also stated that the medical review sample included billing for 20 services for ultrasound procedure codes but that all 20 services were being denied.  CMS Ex. 3 at 7.

For the denial of both the 41 services for the Duplex scan and Doppler study procedure codes in the sample and the 20 services for ultrasound procedure codes, SafeGuard’s letter specified that a review of the medical records related to the reviewed claims showed that those claims “lack the treating physician’s order, related diagnosis to support the need for the procedure, required images/results, the interpretation of results signed by [Dr. Sahai], and/or the ordered procedure does not match the billed CPT code.”  CMS Ex. 3 at 5, 7.

The SafeGuard letter advised Petitioner of the absolute need for appropriate medical documents in order to obtain payment for services billed to the Medicare program.  The letter stated that the Social Security Act “places the burden upon the provider to furnish such information as necessary to determine if payment is (or was) due and the amount of the payment. . . . The documentation should be of such content and clarity as to make it abundantly clear to any third party reviewer, the patients’ symptoms, history, physical findings, and plan of treatment.”  CMS Ex. 3 at 8-9.

The letter concluded that:  it was intended to be educational for Petitioner concerning the appropriate submission of Medicare claims; Petitioner may be subject to future follow-up reviews to ensure compliance with the information in the letter; and that “per 42 CFR § 424.535(a)(8)(ii), CMS has the authority to revoke a currently enrolled provider’s or supplier’s Medicare billing privileges if CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.”  CMS Ex. 3 at 10.

The letter provided a spreadsheet with the specific claims denial information.  CMS Ex. 3 at 10; CMS Ex. 6; see also CMS Ex. 1 ¶¶ 17-18.  The spreadsheet provided for each of the 61 denied services that the “[c]laim/service lacks information which is needed for adjudication.  The record lacks Medicare required documentation to support that diagnostic services were provided as billed.”  CMS Ex. 6.

In notices dated June 19, 2017 (two separate notices on that date), June 20, 2017, and July 6, 2017, CMS contractor NGS informed Petitioner that it had outstanding overpayments owed to the Medicare program in the amounts of $1,904.65, $88.16, $231.50, and $77.94, respectively.  CMS Ex. 9 at 1, 18, 24, 30; see also CMS Ex. 1 ¶ 20.

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The notices advised that Petitioner could appeal the overpayment determination by requesting a redetermination within 120 days of the date on the notice.  CMS Ex. 9 at 4, 21, 27, 33.  The notices also stated that Petitioner could stop recoupment of the overpayment, pending appeal, if Petitioner filed the request for redetermination within 30 days from the date on the notice.  CMS Ex. 9 at 3, 20, 26, 33.  Finally, the notices indicated that Petitioner could stop recoupment again, should the redetermination be unfavorable, by filing a request for reconsideration.  CMS Ex. 9 at 3, 20, 26, 33.

Petitioner did not appeal the overpayment determination and NGS recouped the overpayment.  CMS Ex. 1 ¶ 21; see also P. Ex. 3 at 2 (Petitioner only claiming that appeal rights have not been exhausted for the 2021 Claims).

4. SafeGuard conducted a review of Medicare claims submitted by Petitioner for multiple cerebrovascular ultrasound procedures allegedly performed in 2019 and 2020 (i.e., the 2019-2020 Claims).  SafeGuard determined that, out of 86 services that Petitioner claimed to have provided to 28 Medicare beneficiaries, all 86 should be denied because there was insufficient evidence of medical necessity under the relevant local coverage determination (LCD).  In February 2021, NGS issued an overpayment notice seeking the return of approximately $4,500.  Despite being notified of the right to appeal the overpayment determinations, Petitioner did not do so.  NGS recouped the overpayment from Petitioner.

In a January 28, 2021 letter, SafeGuard informed Petitioner that Petitioner had been overpaid by $4,504.74.  CMS Ex. 4 at 2, 5; see also CMS Ex. 1 ¶ 25.  SafeGuard stated that, based on data analysis that revealed a treatment pattern for cerebrovascular ultrasounds, it analyzed the Medicare billing history for 28 beneficiaries for dates of services from January 7, 2019 to February 27, 2020, in which Medicare paid Petitioner $4,504.74 from March 27, 2019 to April 9, 2020.  Specifically, beneficiaries were receiving three separate cerebrovascular ultrasounds (CPT codes 93886, 93890, and 93892) on the same dates of service.  CMS Ex. 4 at 2.  SafeGuard requested and received from Petitioner the medical records for the 28 Medicare beneficiaries.  CMS Ex. 4 at 3.

SafeGuard’s letter stated that a review of the medical records revealed that all 28 beneficiaries’ Medicare claims involving 86 services were being denied.  CMS Ex. 4 at 3.  SafeGuard stated that the “[d]ocumentation submitted was insufficient to support medical necessity of services billed.”  CMS Ex. 4 at 3.  As further explained in the letter:

The documentation does not support the medical necessity for the services billed per local coverage determination (LCD) guidelines.  Per the LCD L33627, non-invasive vascular studies done preventatively (i.e., without signs or symptoms of disease) are considered not reasonable and

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necessary and are therefore non-covered by Medicare.  The indication for these diagnostic procedures was not included in the medical record.  Since the diagnostic studies themselves were not considered medically necessary, the professional component of interpretation of the studies is also not considered medically necessary.

CMS Ex. 4 at 3 (emphasis added); see also CMS Ex. 7.

The letter advised Petitioner of the absolute need for appropriate medical documents in order to obtain payment for services billed to the Medicare program.  The letter stated that the Social Security Act “places the burden upon the provider to furnish such information as necessary to determine if payment is (or was) due and the amount of the payment. . . . The documentation should be of such content and clarity as to make it abundantly clear to any third party reviewer, the patients’ symptoms, history, physical findings, and plan of treatment.”  CMS Ex. 3 at 5.

The letter concluded that:  it was intended to be educational for Petitioner concerning the appropriate submission of Medicare claims; Petitioner may be subject to future follow-up reviews to ensure compliance with the information in the letter; and that “per 42 C.F.R. § 424.535(a)(8)(ii), CMS has the authority to revoke a currently enrolled provider’s or supplier’s Medicare billing privileges if CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.”  CMS Ex. 4 at 7.

SafeGuard’s letter provided a spreadsheet with the specific claims denial information.  CMS Ex. 4 at 7; CMS Ex. 7; see also CMS Ex. 1 ¶¶ 26-27.

In a notice dated February 17, 2021, NGS informed Petitioner that it had outstanding overpayments owed to the Medicare program in the amount of $4,504.74.  CMS Ex. 10 at 1; see also CMS Ex. 1 ¶ 29.  The notice advised that Petitioner could appeal the determination by requesting a redetermination within 120 days of the date on the notice.  CMS Ex. 10 at 3.  The notice also stated that Petitioner could stop recoupment of the overpayment pending appeal if Petitioner filed the request for redetermination within 30 days from the date on the notice.  CMS Ex. 10 at 3-4.  Finally, the notice indicated that Petitioner could stop recoupment again should the redetermination be unfavorable, by filing a request for reconsideration.  CMS Ex. 10 at 4.

Petitioner did not appeal the overpayment determination and NGS recouped the overpayment.  CMS Ex. 1 ¶ 30; see also P. Ex. 3 at 2 (Petitioner only arguing that appeal rights have not been exhausted with regard to the 2021 Claims).

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5. CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii) because CMS reasonably concluded, based on a consideration of relevant regulatory factors, that Petitioner had a pattern or practice of filing claims that did not meet Medicare requirements.

The Act authorizes the Secretary to establish regulations for enrolling providers and suppliers in the Medicare program.  42 U.S.C. § 1395cc(j)(1)(A).  Providers 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.

Under the Medicare program, diagnostic procedures may be performed by a physician, a group practice, or an independent diagnostic testing facility (IDTF).  42 C.F.R. § 410.33(a).  Physicians and entities that are not specifically identified by the Act as a “provider of services” are considered to be “suppliers.”  42 U.S.C. § 1395x(d), (u); 42 C.F.R. § 498.2 (definition of Supplier).  Outpatient diagnostic services are considered “medical and other health services” for Medicare program purposes.  42 U.S.C. § 1395x(s)(2)(C).  The regulations specify a variety of requirements for suppliers that provide diagnostic testing services.  42 C.F.R. § 410.33.

The regulations delegate to CMS the authority to revoke the enrollment and billing privileges of providers and suppliers.  42 C.F.R. § 424.535.  CMS or a Medicare contractor may revoke a provider’s or supplier’s Medicare enrollment and billing privileges for any of the reasons listed in 42 C.F.R. § 424.535(a).  42 C.F.R. §§ 405.800(b)(1), 424.535(a).  If CMS revokes a provider’s or supplier’s Medicare enrollment and billing privileges, the revocation becomes effective 30 days after CMS or one of its contractors mails the revocation notice to the provider or supplier, subject to some exceptions not applicable in this case.  42 C.F.R. §§ 405.800(b)(2), 424.535(g).  After CMS revokes a provider’s or supplier’s enrollment and billing privileges, CMS bars the provider or supplier from re-enrolling in the Medicare program for a minimum of one year, but no more than ten years.  42 C.F.R. § 424.535(c).

CMS may revoke the enrollment of a provider or supplier who engages in abuse of billing privileges.  42 C.F.R. § 424.535(a)(8).  CMS may determine that there has been an abuse of billing privileges if a provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.  42 C.F.R. § 424.535(a)(8)(ii).  To determine if there has been a pattern or practice, CMS considers, as applicable, the following four factors:

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(A) The percentage of submitted claims that were denied during the period under consideration.

(B) Whether the provider or supplier has any history of final adverse actions and the nature of any such actions.

(C) The type of billing non-compliance and the specific facts surrounding said non-compliance (to the extent this can be determined).

(D) Any other information regarding the provider or supplier’s specific circumstances that CMS deems relevant to its determination.

42 C.F.R. § 424.535(a)(8)(ii)(A)-(D).²

Based on the undisputed facts discussed above, I conclude that the binding revised initial determinations involving the 2016 Claims and the 2019-2020 Claims establish that Petitioner submitted claims that failed to meet Medicare requirements.  Petitioner had the opportunity to participate in a multi-tiered appeal process to challenge the revised initial determinations but did not.  Had Petitioner believed that it could prevail on appeal, Petitioner would have had an incentive to appeal because collection of the overpayments identified in those revised initial determinations would have been stayed pending the redetermination and reconsideration levels of appeal.  Petitioner did not appeal, and the findings of the revised initial determinations cannot be challenged in this proceeding.

Petitioner argues that “CMS has not demonstrated that there is any legitimate basis for revoking [Petitioner’s] billing privileges and thus summary judgment is not warranted.”  P. Br. at 5.  However, the binding revised initial determinations show that Petitioner filed claims that did not meet Medicare requirements, thus establishing one of the elements for revocation under 42 C.F.R. § 424.535(a)(8)(ii).

Petitioner’s other arguments relate to the factors used to determine if there is a pattern or practice of filing claims that do not meet Medicare requirements.  As discussed below, I reject Petitioner’s arguments and conclude that CMS was able to reasonably conclude, based on the regulatory factors, that Petitioner engaged in a pattern or practice of

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submitting claims that did not meet Medicare requirements.³  Therefore, CMS was authorized to revoke Petitioner’s Medicare enrollment and billing privileges.  Below, I discuss each factor individually and address Petitioner’s arguments.⁴

1. The percentage of the claims denied during the period under consideration was high and supports the finding of a pattern or practice of filing claims that do not meet Medicare requirements.

In the hearing request, Petitioner took issue with the CMS hearing officer’s reconsidered determination, asserting that Petitioner’s denied claims were sporadic and not a pattern or practice.  P. Ex. 3 at 2.  Petitioner points out that the first of the three audits occurred in 2017 (i.e., the 2016 Claims) and it resulted in a finding that 18 of the claims were medically necessary.  P. Ex. 3 at 2.  Petitioner also argues that, despite another audit showing more claims denials (i.e., the 2019-2020 Claims), claims filed years apart cannot be used to show a pattern or practice.  P. Ex. 3 at 4.  Petitioner also questions whether the limited number of claims denied in the audits is sufficient to show a pattern or practice, especially when the denied claims represent less than 0.01% of Petitioner’s total claims.  P. Ex. 3 at 4.

As explained above in detail, SafeGuard conducted an audit of 40 beneficiaries, involving billing for 97 services, allegedly provided from January to October 2016.  CMS Ex. 3 at 2.  The medical review of these claims resulted in “[s]ixty-one (61) of the ninety-seven (97) services or 62.9 percent being denied, and thirty-six (36) services or 37.1 percent being allowed.”  CMS Ex. 3 at 3.

In addition, SafeGuard later conducted an audit of 28 beneficiaries, involving billing for 86 services, allegedly provided from January 2019 to February 2020.  CMS Ex. 4 at 2.  The medical review of these claims resulted in “[a]ll twenty-eight (28) claims and eighty-six (86) services being 100 percent denied.”  CMS Ex. 4 at 3.

Although Petitioner considers these claims denials to be too few when compared with the total claims Petitioner has submitted to Medicare and too far apart in time from each other, the regulation only seeks the percentage of denied claims “during the period under consideration,” and not the total claims submitted to CMS.  42 C.F.R.

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§ 424.535(a)(8)(ii)(A).  In the preamble to a final rule, the Secretary explained as follows the reason for this:

• In paragraph (a)(8)(ii)(A), we proposed revisions to focus on the percentage of denials within subsets of the provider’s or supplier’s claim submissions rather than across the entire universe of their claim submissions.  Specifically, we would consider the percentage of submitted claims that were denied during the timeframe under consideration.  We believe existing paragraph (a)(8)(ii)(A) inhibits our capacity to target brief periods involving a significant percentage of denied claims; this is because this factor has been interpreted to require said percentage to be weighed against claim denials over the entire period of the provider’s or supplier’s enrollment.  Proposed revised paragraph (a)(8)(ii)(A) would better enable CMS to address these non-compliant periods by restricting the scope of denial percentages to a shorter duration.
• For reasons similar to our revision of § 424.535(a)(8)(ii)(A), we proposed to remove § 424.535(a)(8)(ii)(D) altogether.  As already indicated, short but very intense periods of improper billing can endanger the Medicare program no less than a longer pattern of non-compliant yet merely moderate-volume billing.  Yet the ‘‘length of time’’ standard in paragraph (a)(8)(ii)(D) often deters us from taking action under paragraph (a)(8)(ii) to address these shorter timeframes.  Given this, we believed that eliminating paragraph (a)(8)(ii)(D) would strengthen our program integrity efforts.

86 Fed. Reg. 64,996, 65,334 (Nov. 19, 2021).

CMS’s use of this factor to support its conclusion that Petitioner engaged in a pattern or practice of submitting Medicare claims that did not meet Medicare requirements was appropriate.  The length of time between audits is not material to the consideration of this factor.  In fact, CMS gave Petitioner the opportunity to change its ways to ensure that it filed compliant claims.

The first audit yielded a rate of denial that was well above 50 percent.  Despite the warnings and information provided to Petitioner (CMS Ex. 3 at 8-10), the next audit conducted years later resulted in a 100 percent denial rate.  These rates of denial for the periods under audit are not in dispute.  Therefore, this factor provides significant support

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for CMS’s determination that a pattern or practice of filing claims that do not meet Medicare requirements existed.  

2. Petitioner does not have a history of final adverse actions.  Therefore, this factor does not support the finding of a pattern or practice of filing claims that do not meet Medicare requirements.

Another factor that may be considered when determining if there is a pattern or practice of filing claims that do not meet Medicare requirements is the provider’s or supplier’s history of final adverse actions.  42 C.F.R. § 424.535(a)(8)(ii)(B).

Final adverse actions include:

(1) A Medicare-imposed revocation of any Medicare billing privileges;

(2) Suspension or revocation of a license to provide health care by any State licensing authority;

(3) Revocation or suspension by an accreditation organization;

(4) A conviction of a Federal or State felony offense (as defined in § 424.535(a)(3)(i)) within the last 10 years preceding enrollment, revalidation, or re-enrollment; or

(5) An exclusion or debarment from participation in a Federal or State health care program.

42 C.F.R. § 424.502 (definition of “Final adverse action”).

There is no dispute that Petitioner has not been subject to a final adverse action.  Therefore, this factor does not support a finding of a pattern or practice.

3. The billing non-compliance in this case generally involves Petitioner’s failure to provide accurate information and/or to have necessary documentation to support the claims.  Because providers and suppliers have the duty to submit accurate and supported claims, this billing non‑compliance supports the finding of a pattern or practice of filing claims that do not meet Medicare requirements.

Another factor involves the type of billing non-compliance.  42 C.F.R. § 424.535(a)(8)(ii)(C).  Petitioner raises two arguments concerning this factor.

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Petitioner’s first argument involves the denial of claims based on a lack of medical necessity for the testing that was billed to the Medicare program (i.e., 2019-2020 Claims).  Petitioner asserts that CMS incorrectly placed the burden on Petitioner to determine medical necessity for the tests it performed and interpreted despite the fact that this is the responsibility of the beneficiaries’ physicians.  P. Br. at 2, 6.  Petitioner argues that it is in no position to question the medical and professional judgment of the treating physicians who examined the beneficiaries.  P. Br. at 2.  Petitioner points out that 42 C.F.R. §§ 410.32(a) and 410.33(d) require diagnostic tests to be ordered by the physician who treats the beneficiary for a specific medical problem and that tests ordered by individuals other than a treating physician are not reasonable and necessary.  Petitioner states that a radiologist performing a diagnostic intervention or procedure is not a treating physician.  P. Br. at 6.  As a result, a testing facility must rely on the treating physician’s order as documentary support for performing the test, and the testing facility does not have the ability to unilaterally establish the medical necessity of the test.  P. Br. at 6-7.  “Here, [Petitioner] merely followed and complied with the orders of the treating physician in performing diagnostic testing services.  [Petitioner] was not directly responsible for the content of the orders. . . . Here, again, the issue is that [Petitioner] properly relied on the medical and clinical judgment of the beneficiary’s treating physician in determining the medical necessity of the underlying diagnostic test.”  P. Br. at 7-8.  Petitioner’s owner testified in support of this argument, as summarized above, and that testimony has not been disputed.  Therefore, I accept as undisputed that the physicians ordering the tests are responsible for determining the need for the test and not Petitioner.

CMS responds to Petitioner’s argument concerning medical necessity by explaining that a supplier that files Medicare claims has a legal obligation to produce the documentation necessary to support payment of the claimed services.  CMS Reply at 2.

CMS’s argument is correct.  Petitioner does not have the obligation to determine whether tests that have been ordered are medically necessary.  However, Petitioner has the obligation to make certain that it has documentation from the physician ordering the test that shows that a Medicare claim is properly supported with evidence of medical necessity.

When providers or suppliers seek reimbursement from the Medicare program for items or services provided to Medicare beneficiaries, CMS may not make payment unless the items or services are “reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”  42 U.S.C. § 1395y(a)(1)(A).  CMS contractors may issue local coverage determinations “respecting whether or not a particular item or service is covered” under 42 U.S.C. § 1395y(a)(1)(A).  42 U.S.C. §§ 1395y(l)(5)(D), 1395ff(f)(2)(B).

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The regulations require that the IDTF receive an order for testing from each beneficiary’s physician.  The physician must be either treating the beneficiary or providing a consultation to a beneficiary concerning a specific medical problem and will use the test results to manage the specific medical problem.  42 C.F.R. § 410.33(d).  Further, the treating physician’s “order must specify the diagnosis or other basis for the testing.”  42 C.F.R. § 410.33(d).

There is no doubt that the treating physician, and not the IDTF, is responsible for determining when a beneficiary needs to be tested; however, this does not absolve the IDTF from securing sufficient medical records to ensure the medical necessity for the test is documented.  Such an effort is necessary because, in order to receive payment from Medicare, “[t]he . . . supplier . . . must furnish to the [Medicare contractor] sufficient information to determine whether payment is due and the amount of payment.”  42 C.F.R. § 424.5(a)(6); see 42 U.S.C. § 1395l(e).  This places a duty on an IDTF to be able to produce documentation showing medical necessity for the tests that it bills the Medicare program for providing.  As the Medical Appeals Council stated:

Hence, as [42 U.S.C. § 1395l(e)] and the implementing regulation at 42 C.F.R. § 424.5(a)(6) make clear, no payment can be made to the IDTF in this case, and similar cases, unless the necessary information and documentation has been furnished.  Either the IDTF or the ordering physician can provide it, but if it is not provided, Medicare coverage will be denied.  Thus, in these cases, the appellant did not meet its burden of proof.

Neuromed Electrodiagnostic, No. M-12-1279, 2012 WL 3805743, at *5 (MAC July 19, 2012). ⁵  The Council also has made clear that IDTFs need to obtain the documentation showing medical necessity for the test before conducting the test.

Moreover, the IDTF representative testified at hearing that there was “no real way” to obtain this type of information. ALJ Hearing at 2:09, 2:18 p.m.  In fact, the information should have been obtained from . . . each beneficiary’s treating physician prior to testing.

Neuromed Electrodiagnostic, Inc., No. M-13-2620, 2013 WL 9541326, at *4 (MAC Oct. 3, 2013) (emphasis added).

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Although the regulations only specify that the IDTF needs a physician’s order for the test with a diagnosis or the reason for the test, the Council concluded that such a requirement does not absolve the IDTF from obtaining documentation showing medical necessity to support its Medicare claim.  In doing so, the Council analogized the physician order requirement to the durable medical equipment (DME) requirement for a physician certification for the equipment.  The Council then cited court opinions holding that, despite the physician certification, DME suppliers still needed to produce evidence of the medical necessity for the DME equipment in order to be reimbursed by Medicare.  KGV Easy Leasing Corp., 2010 WL 11842374, at *6 (MAC Feb. 24, 2010) (“Thus, the appellant had the burden to provide sufficient documentation, evidence and testimony that indicates the services provided are covered by Medicare.”);⁶ see also Maximum Comfort Inc. v. Leavitt, 512 F.3d 1081, 1088 (9th Cir. 2007) (“[T]he Secretary may require, as a condition of reimbursement to an equipment supplier, information in addition to that provided by the certificate of medical necessity.”).

Consistent with the Council’s view, when promulgating 42 C.F.R. § 424.535(a)(8)(ii), the duty to have supporting documentation was explicitly stated in the preamble to the final rule.  79 Fed. Reg. at 72,516 (“We believe it is the responsibility of the provider submitting the claim to ensure that all requirements—including, as necessary, proper and compliant supporting documentation—have been met prior to the claim’s submission.”).  Therefore, I reject Petitioner’s argument that CMS improperly placed a burden on Petitioner to prove medical necessity for the tests.

As its second argument concerning this factor, Petitioner asserts that there can be no showing of a pattern or practice of filing claims that do not meet Medicare requirements because CMS wrongly stated that all of the claims denials were for the same reason.  P. Br. at 2-4; P. Ex. 3 at 3.  Because the specific bases for the denials are not the same, Petitioner believes that the denials do not support a pattern or practice of filing claims that do not meet Medicare requirements.  P. Br. at 5.  Petitioner states that the denials of the 2016 Claims were due to the CPT codes in the claims failing to match the CPT codes on the treating physician’s orders, whereas the denials of the 2019-2020 Claims were related to a lack of documentation to show medical necessity.  P. Br. at 9.

CMS responds to this argument by asserting that 42 C.F.R. § 424.535(a)(8)(ii) does not require that all of the claims fail to meet the same or a similar Medicare requirement.  CMS Reply at 4.

I agree with CMS.  The Secretary has made it clear that “providers and suppliers have a responsibility to always submit correct claims.”  86 Fed. Reg. at 65,335.  A goal of

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42 C.F.R. § 424.535(a)(8)(ii) is to incentivize the filing of claims that meet Medicare requirements, rather than stop any one type of claims error.

[T]he overall purpose of paragraph (a)(8)(ii) has always been to deter non-compliant billing, regardless of the reason for it.  Even if a period of erroneous claim submissions reflected no nefarious intent by the provider, the latter still failed to comply with Medicare billing requirements and thus presented a risk to the Medicare program.  For this reason, we do not view the claim denial reason as particularly germane to the question of whether paragraph (a)(8)(ii) should apply in a particular case.

86 Fed. Reg. at 65,335.

As explained in detail above, the audits for the 2016 Claims and 2019-2020 Claims found a lack of documentation to show that billed tests were performed, that correct CPT codes were provided on the billing, and that claimed services failed to have documentation showing medical necessity in conformance with an applicable local coverage determination.  While Petitioner is correct that the specific reasons for the claims denials vary between the 2016 Claims and 2019-2020 Claims, the non-compliance is essentially the same or similar.  Petitioner filed many claims that failed to provide correct information or were unsupported by sufficient documentation.

One of the requirements for IDTFs is to “[h]ave proper medical record storage and be able to retrieve medical records upon request from CMS or its fee-for-service contractor within 2 business days.”  42 C.F.R. § 410.33(g)(13).  While this requirement is not a basis for the revocation in this case, it shows the need for IDTFs to obtain and maintain proper documentation to support claims filed with the Medicare program.  Filing many claims with insufficient or incorrect information and documentation supports CMS’s finding that a pattern or practice existed of filing claims that do not meet Medicare requirements.

4. CMS also considered that Petitioner continued to file non-compliant Medicare claims after receiving notice and information related to the denial of the 2016 Claims.  This additional factor supports CMS’s determination that Petitioner engaged in a pattern or practice of filing claims that do not meet Medicare requirements.

The CMS hearing officer’s reconsidered determination found that Petitioner’s failure to submit claims compliant with Medicare requirements, even after having received the notice from SafeGuard in 2017, was a relevant consideration.  E-File Doc. No. 1a at 6.  I agree with CMS that Petitioner had plenty of time after receiving notice of the audit for

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the 2016 Claims to correct its Medicare billing practices by the time of the 2019-2020 Claims.  The SafeGuard correspondence even placed Petitioner on notice that a failure to file compliant claims could result in revocation.  CMS Ex. 3 at 10.  Therefore, Petitioner was on notice how important it was to file accurate and fully supported claims.  As a result, this factor supports the finding of a pattern or practice of filing claims that do not meet Medicare requirements.

6. Petitioner does not present any legal or factual arguments disputing its inclusion on the Preclusion List.

CMS has established a single list of individuals and entities for whom Medicare Advantage plans cannot provide reimbursement for items and services they provide, and for prescribers to whom Medicare Part D plans cannot provide reimbursement for any prescriptions the individuals write.  42 C.F.R. §§ 422.222, 423.120(c)(6).  As relevant here, for CMS to include an individual, entity, or prescriber on its Preclusion List, the following three requirements must be met:

(i) The [individual, entity, or prescriber] is currently revoked from Medicare for a reason other than that stated in [42 C.F.R.] § 424.535(a)(3) . . . .

(ii) The [individual, entity, or prescriber] is currently under a reenrollment bar under [42 C.F.R] § 424.535(c).

(iii) CMS determines that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.  In making this determination under this paragraph . . . , CMS considers the following factors:

(A) The seriousness of the conduct underlying the . . . revocation.

(B) The degree to which the . . . conduct could affect the integrity of the [Medicare/Part D] program.

(C) Any other evidence that CMS deems relevant to its determination . . . .

42 C.F.R. §§ 422.2, 423.100.

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Petitioner opposes its inclusion on the Preclusion List.⁷  Petitioner’s initial argument is that CMS should not have revoked Petitioner’s Medicare enrollment and billing privileges.  P. Br. at 10.  However, having concluded above that revocation was legitimate, I reject Petitioner’s argument.  John O. Dimowo, M.D., DAB No. 3101 at 14 (2023).  I also note that there is no dispute that the first two factors for adding Petitioner to the Preclusion List are met because Petitioner was revoked and is currently under a re‑enrollment bar.

Finally, as to the third factor (i.e., CMS’s determination as to whether the underlying conduct that led to revocation is detrimental to the best interests of Medicare program), Petitioner argues:  “Nor is there any support for the seriousness or severity of any underlying conduct-aside from CMS’s boilerplate statements that Medicare funds are at risk.  [CMS Br. at 27].  At most, CMS noted documentation issues across a limited number of services rendered by [Petitioner].”  P. Br. at 10-11.

I disagree with Petitioner’s arguments as to the third factor.  CMS, through its hearing officer, provided a detailed analysis of the three elements it needed to consider when determining whether the basis for revocation is detrimental to the best interests of the Medicare program.

In the reconsidered determination, the CMS hearing officer discussed the following three regulatory factors to conclude that Petitioner’s conduct that resulted in revocation was detrimental to the best interests of the Medicare program:

Regarding factor (A), the revocation of [Petitioner’s] Medicare enrollment was the result of its pattern or practice of submitting claims that failed to meet Medicare requirements. . . . [Petitioner] submitted claims with a denial rate of 70% [and] 100% . . . . . Claims in each review were denied due to insufficient documentation to support the medical service billed or documentation was insufficient.  [Petitioner] received repeated education regarding documentation requirements, but it continued to submit noncompliant claims with insufficient or invalid documentation after each instance of education.  Regardless of the education CMS provides, suppliers have a duty to submit for payment claims that meet Medicare requirements.  [Petitioner] did not correct its improper behavior and

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continued to submit claims that failed to meet Medicare requirements.  For these reasons, CMS considers [Petitioner’s] pattern or practice of submitting claims that fail to meet Medicare requirements to be very serious.

Regarding factor (B), CMS considers the conduct underlying [Petitioner’s] revocation to be very serious and harmful to the integrity of the Medicare program.  Medicare relies on its partners to submit only those claims that meet Medicare requirements.  [Petitioner] engaged in abuse of its billing privileges when it continued to submit claims for the same or similar services that failed to meet Medicare requirements for the same or similar reasons.  This conduct calls into question its ability and willingness to be a trustworthy Medicare partner, as it repeatedly failed to submit documentation to show its claims were medically necessary.  The integrity of the Medicare program is dependent upon the integrity of its partners.  During rulemaking, CMS stated that “a provider or supplier should be responsible for submitting valid claims at all times and that the provider or supplier’s repeated failure to do so poses a risk to the Medicare Trust Funds” (79 Fed. Reg. at 72,513 (Dec. 5, 2014)). . . . [Petitioner’s] pattern or practice of submitting noncompliant claims puts the Medicare Trust Funds at serious risk, which supports CMS’ finding that [Petitioner’s] conduct is detrimental to the best interests of the Medicare program.

Regarding factor (C), CMS finds relevant that [Petitioner] continued to submit noncompliant claims, despite . . . targeted and specific education from SafeGuard.  All suppliers are responsible for submitting payable, compliant claims regardless of any education CMS or its contractors provide.  [Petitioner’s] continued abusive billing after the education was provided calls into question whether it is willing, or even able, to submit only those claims that meet Medicare requirements.

Therefore, with consideration of the factors discussed above, CMS finds that [Petitioner’s] conduct that led to the revocation is detrimental to the best interest of the Medicare program, and forms an appropriate basis to include it on the CMS Preclusion List.

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E-File Doc. No. 1a at 7-8.

In the quote above, I omitted the CMS hearing officer’s reference to the 2021 Claims.  I conclude that the CMS hearing officer’s analysis, minus its discussion of the 2021 Claims, provides a sufficient reason for concluding that the underlying reason for the revocation is detrimental to the Medicare program.  As stated earlier in this decision, a failure to file claims that provide accurate information and/or are not supported by documentation that the claimed tests were performed or that the tests met the medical necessity requirement for payment, is detrimental to the Medicare Trust Fund and, thus, the Medicare program.  The audits revealed many claims that failed to meet Medicare requirements that were filed over the course of three years (i.e., 2016, 2019, and 2020).  Therefore, I conclude that CMS reasonably found that the basis for the revocation was detrimental to the Medicare program and that CMS legitimately added Petitioner’s name to the Preclusion List.

VII.   Conclusion

For the foregoing reasons, I grant CMS’s summary judgment motion, affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii), and uphold Petitioner’s inclusion on the CMS Preclusion List.

Endnotes

¹ The revocation notice advised that, while Petitioner’s name is on the Preclusion List, Medicare Advantage Plans (Medicare Part C) will deny any claims based on services provided by Petitioner or Petitioner’s employees.  Further, Medicare Part D drug plans will deny payment for any medications that Petitioner prescribes.  CMS Ex. 12 at 9-10.

² The Departmental Appeals Board applies the regulations that were in effect on the date of the revocation.  See, e.g., John P. McDonough III, Ph.D., DAB No. 2728 at 2 n.1 (2016).

³ It is important to note that the Secretary did not define the term “pattern or practice,” leaving the decision as to whether there was a pattern or practice to an assessment of the regulatory factors.  79 Fed. Reg. at 72,519.

⁴ One of Petitioner’s arguments is that the denials of the 2021 Claims should not be considered because they are on appeal and use of them is premature.  P. Br. at 2, 8-9.  As stated above, for purposes of granting summary judgment, I do not rely on the 2021 Claims.

⁵ Although the Council decisions cited here are not precedential, I find them persuasive on Medicare benefit claims issues.

⁶ This decision does not show a docket number.  This decision is accessible at https://www.hhs.gov/sites/default/files/static/dab/decisions/council-decisions/case_kgv_leasing.pdf.

⁷ Petitioner also argues that the audit of the 2021 Claims is not appropriately considered because they are currently on appeal.  P. Br. at 10.  For purposes of summary judgment, I will not consider those claims denials when deciding the question as to whether CMS legitimately added Petitioner’s name to the Preclusion List.