Birhiray Holdings, Inc., d/b/a/ Pulse EMS, DAB CR6456 (2024)

DECISION

Novitas Solutions (Novitas), an administrative contractor acting on behalf of the Centers for Medicare & Medicaid Services (CMS), revoked the Medicare enrollment and billing privileges of Petitioner, Birhiray Holdings, Inc., d/b/a/ Pulse EMS, pursuant to 42 C.F.R. § 424.535(a)(8)(ii) because Petitioner submitted claims that failed to meet Medicare requirements.  Novitas also added Petitioner to CMS’s Preclusion List.  CMS subsequently issued a reconsidered determination that upheld the initial determination.  I reverse the revocation of Petitioner’s Medicare enrollment and billing privileges and its placement on the Preclusion List.

I.    Background and Procedural History

Petitioner provides ambulance services.  See, e.g., CMS Ex. 4.¹

In a letter dated March 16, 2018, Qlarant Integrity Solutions, LLC (Qlarant), a Zone Program Integrity Contractor for CMS, informed Petitioner that it had performed a pre-payment review of 49 claims for services provided between December 11 and 29, 2017,

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and denied 29 of those claims.²  The letter referenced three of the 29 denied claims, and addressed the reasons for the denial of only those three claims.  CMS Ex. 4 at 1-3; see also CMS Ex. 18 at 3 (referring to this review as a pre-payment review).  The letter did not provide any appeal rights.³

On February 20, 2020, Qlarant informed Petitioner that it had performed a post-payment review of five claims for services rendered between December 1, 2018, and May 11, 2019, and determined that four of those claims should have been denied.  CMS Ex. 6.  The letter explained the specific reasons for the denial of one claim that had a date of service of May 10, 2019.  CMS Ex. 6 at 2-3.  An enclosure to the letter listed the five claims that were the subject of the medical review.  CMS Ex. 6 at 5-20.  Comments regarding bases for denial follow (CMS Ex. 6 at 21-36), but only one beneficiary name and date of service is identified (CMS Ex. 6 at 31-32).  The letter did not address the amount of any overpayment, nor did it provide appeal rights.⁴

On March 17 and April 29, 2021, Qlarant informed Petitioner that it would be conducting another medical review for program integrity and requested additional records from Petitioner.  CMS Exs. 7, 8.  Before notifying Petitioner of the results of that review, Qlarant, on October 14, 2021, notified Petitioner that it had suspended payments.⁵  See CMS Exs. 12, 13.  In a response dated November 5, 2021, Petitioner, through its newly retained and current counsel, disputed this action.⁶  CMS Ex. 12.

On May 12, 2022, Qlarant provided notice that it had conducted a post-payment review of 37 claims with dates of service between September 13, 2018 and September 13, 2021,

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and determined that 28 of those claims should have been denied.  The letter addressed the reasons for denial of three of those claims.  CMS Ex. 11 at 2-5.  The letter did not include a list of all the claims reviewed by Qlarant, nor did it reference an enclosure or attachment listing the claims that had been reviewed.⁷  CMS Ex. 11.

On September 6, 2022, Novitas informed Petitioner that its Medicare privileges were being revoked pursuant to 42 C.F.R. § 424.535(a)(8)(ii), explaining, “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. 3 at 1.  Even though Qlarant had previously informed Petitioner that the most recent claims review involved 37 claims for services provided between September 13, 2018, and September 13, 2021, 28 of which had been denied (CMS Ex. 11 at 1), the revocation notice informed Petitioner, without explanation, that the same review “consisted of 22 claims with dates of service from March 25, 2020 through September 13, 2021,” with 17 of the 22 claims denied.  CMS Ex. 3 at 2.  Novitas further explained:

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] above 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. . . .”

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CMS Ex. 3 at 2.  Novitas also imposed a 10-year bar to re-enrollment, and placed Petitioner on CMS’s Preclusion List.  CMS Ex. 3 at 2, 4.  The letter includes “[a] sample of the noncompliant billing” in three enclosures that list 10 of the claims that were denied in the first review (Enclosure A), the four claims that were denied during the second review (Enclosure B), and 10 of the claims that were denied during the third review (Enclosure C).  CMS Ex. 3 at 5-7.

Petitioner, through counsel, submitted a request for reconsideration dated November 6, 2022.  CMS Ex. 1.  In a letter dated April 25, 2023, CMS reopened, vacated, and superseded an April 21, 2023 reconsidered determination.⁸  CMS explained that pre-payment and post-payment reviews had been conducted, yielding a “high” and “very high” error rate across the reviews.  CMS Ex. 18 at 6.  CMS explained:

Despite repeated instances of specific and targeted education from 2018 through 2022, [Petitioner] continued to fail to meet Medicare requirements by submitting noncompliant claims without sufficient documentation to support that services were reasonable or necessary.  As a result, on September 6, 2022, Novitas informed [Petitioner] of the revocation of its Medicare enrollment under § 424.535(a)(8)(ii) for abuse of billing privileges.  Novitas also notified [Petitioner] that it would be placed on the CMS Preclusion List, effective the date of an unfavorable reconsideration decision (see Exhibit 3).  The letter also informed [Petitioner] that it would be subject to a 10-year re-enrollment bar, effective 30 days after the post-mark date of the letter, pursuant to § 424.535(c).  The September 6th letter also included samples of the noncompliant billing in Enclosures A, B, and C.  In response, on November 6, 2022, [Petitioner] requested reconsideration of the revocation, reenrollment bar, and its placement on the CMS Preclusion List. . . .

CMS Ex. 18 at 4.  In summarizing the basis for revocation, CMS explained:  “This administrative action under § 424.535(a)(8)(ii) is based on [Petitioner’s] repeated submission of similar claims that failed to meet Medicare requirements for similar reasons after having been repeatedly informed that the claims did not meet Medicare requirements.”  CMS Ex. 18 at 7.  CMS also upheld the 10-year bar to re-enrollment and Petitioner’s placement on the Preclusion List.  CMS Ex. 18 at 8-9.

Petitioner, through counsel, filed a request for an administrative law judge (ALJ) hearing on June 21, 2023.  Thereafter, the Civil Remedies Division acknowledged receipt of

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Petitioner’s request for hearing and issued my Standing Pre-Hearing Order directing the parties to file pre-hearing exchanges in accordance with specific requirements and deadlines.  CMS filed a pre-hearing brief (CMS Br.), along with 19 proposed exhibits (CMS Exs. 1-19).  Petitioner filed a brief and two proposed exhibits (P. Exs. 1-2).

Nearly two months after it submitted its pre-hearing exchange, Petitioner submitted P. Ex. 3, which it reported was a copy of a November 2023 ALJ decision.  On March 11, 2024, I ordered the parties to address the following:  whether there is good cause pursuant to 42 C.F.R. § 498.56(e) for the admission of this evidence; the date of issuance of the ALJ decision; whether a party had appealed the decision or is aware of a pending appeal; and the significance, if any, of the decision on these proceedings.

Based on CMS’s concession that good cause exists for the admission of P. Ex. 3, I admit P. Ex. 3, along with CMS Exs. 1-19 and P. Exs. 1-2 into the evidentiary record.

Because neither party submitted the testimony of any witnesses, a hearing is not necessary for the purpose of cross-examination.  Standing Pre‑Hearing Order §§ 12-14.  I consider the record to be closed and the matter ready for a decision on the merits.

II.    Issues

Whether CMS had a legitimate basis to uphold the revocation of Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii).

Whether CMS had a legitimate basis to uphold Petitioner’s placement on its Preclusion List pursuant to 42 C.F.R. §§ 422.2 and 423.100.

III.    Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R. §§ 498.1(g), 498.3(b)(17), (20), 498.5(l)(2), (n)(2); see also 42 U.S.C. § 1395cc(j)(8), 42 C.F.R. §§ 405.803(a), 424.545(a).

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

1. Petitioner is a supplier of ambulance services that was enrolled in the Medicare program.
2. On or about March 16, 2018, Qlarant performed a pre-payment review of 49 claims with dates of service in December 2017 and denied 29 of those claims.  The evidentiary record indicates that Qlarant provided the specific reasons for denying three of those claims.  The

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2. evidentiary record does not indicate that Petitioner, which was unrepresented at the time, was given appeal rights.
3. On or about February 20, 2020, Qlarant reviewed five claims with dates of service between December 2018 and May 2019 and denied four of those claims, with its letter to Petitioner including the specific reasons for the denial of one of those claims.  An enclosure to that notice includes various comments addressing the claims, with only one beneficiary name and date of service identified in the comments.  The evidentiary record does not indicate that Petitioner, which was unrepresented at the time, was given appeal rights.
4. On or about May 12, 2022, Qlarant reported that it had reviewed 37 claims for services provided between September 2018 and September 2021 and denied 28 of those claims; on September 6, 2022, Novitas reported that the same review “consisted of 22 claims with dates of service from March 25, 2020 through September 13, 2021,” with 17 of those claims denied.  The evidentiary record does not include a list of all the claims that were reviewed and/or denied during the third medical review.
5. The evidentiary record indicates that of the 10 claims listed in Enclosure C to the revocation determination as examples of noncompliant billing found during the third medical record review, an Office of Medicare Hearings and Appeals (OMHA) ALJ ruled in Petitioner’s favor on eight of those claims.
6. Novitas revoked Petitioner’s Medicare enrollment and billing privileges effective October 6, 2022, pursuant to 42 C.F.R. § 424.535(a)(8)(ii) and informed Petitioner that it would be placed on the Preclusion List pursuant to 42 C.F.R. §§ 422.2 and 423.100.
7. On April 25, 2023, CMS upheld the revocation of Petitioner’s Medicare enrollment and billing privileges and its placement on CMS’s Preclusion List.
8. The rationale underlying CMS’s determination upholding Petitioner’s revocation is based on the totality of all three medical reviews and the conclusion that Petitioner had a “high” or “very high” error rate with each review.  In particular, CMS relied on its determination of a continued high error rate after the third review that followed “repeated instances of education,” with CMS summarizing, “This administrative action under § 424.535(a)(8)(ii) is

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8. based on [Petitioner’s] repeated submission of similar claims that failed to meet Medicare requirements for similar reasons after having been repeatedly informed that the claims did not meet Medicare requirements.”
9. Nothing on the face of the reconsidered determination supports that the denial rate in the third medical review is high or very high as contemplated by CMS in the reconsidered determination, or that CMS intended to uphold Petitioner’s revocation based only on the first and second medical reviews.
10. Without factoring in the third medical review that CMS had determined yielded a 77.27 percent error rate following repeated education, the discussion in CMS’s reconsidered determination does not provide a legitimate basis for upholding the revocation of Petitioner’s Medicare enrollment and billing privileges based only on the first and second medical reviews.  Therefore, the revocation is reversed.
11. Because the revocation of Petitioner’s Medicare enrollment has not been upheld, the requirements for inclusion on CMS’s Preclusion List are not met; therefore, the determination placing Petitioner on the Preclusion List is reversed.

Pursuant to 42 U.S.C. § 1395cc(j)(1)(A), CMS has promulgated enrollment regulations.  See 42 C.F.R. § 424.500 et seq.  These regulations give CMS the authority to revoke the billing privileges of an enrolled supplier if CMS determines that certain circumstances exist.  42 C.F.R. § 424.535(a).  Relevant to this case, CMS may revoke a supplier’s billing privileges when it determines that the supplier has abused its billing privileges.  42 C.F.R. § 424.535(a)(8).

In November 2021 the Secretary substantially revised section 424.535(a)(8), explaining, among other things, that the wording of the regulation “hampered” its ability to revoke certain suppliers and that non-compliant billing for relatively brief periods can harm the Medicare program.  86 Fed. Reg. 64,996, 65,334 (Nov. 19, 2021).  The Secretary explained that it revised 42 C.F.R. § 424.535(a)(8)(ii)(A) “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.”  86 Fed. Reg. 65,334.  The Secretary further explained that the predecessor version of that provision “inhibits our capacity to target brief periods involving a significant percentage of denied claims” because this factor had been interpreted “to require said percentage to be weighed against the entire period of the provider’s or supplier’s enrollment.”  Id.  The Secretary also discussed that the revised regulation “would better enable CMS to address these non-compliant periods

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by restricting the scope of denial percentages to a shorter duration.”  Id.  The rulemaking removed subsection 424.535(a)(8)(ii)(B) because the reason for a claim denial is not “particularly germane,” and also removed subsection 424.535(a)(8)(ii)(D) “altogether” because “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.”  86 Fed. Reg. 65,334.  The Secretary also removed subsection (E) pertaining to the length of the provider or supplier’s enrollment, explaining that the length of enrollment has no bearing with the “main issue” being “the behavior itself and not the period of enrollment.”  86 Fed. Reg. 65,335.  The rulemaking added a new provision in subsection (C) that allows CMS to “consider the type of billing non-compliance and the precise facts surrounding said non-compliance (to the extent this can be determined).”  Id.

The revised version of 42 C.F.R. § 424.535(a)(8)(ii) that became effective on January 1, 2022, allows CMS to revoke enrollment and billing privileges under the following circumstances:⁹

(ii)  CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.  In making this determination, CMS considers, as appropriate or applicable, the following:

(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).

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CMS has also 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, in order for CMS to include an individual, entity, or prescriber on its Preclusion List, all of the following three requirements must be met:

(i) The [individual, entity, or prescriber] is currently revoked from Medicare for a reason other than 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. 

Novitas informed Petitioner that it had revoked its Medicare enrollment and billing privileges based on a pattern or practice of submitting claims that failed to meet Medicare requirements, stating:

[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 [§ ] 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. 3 at 1.  Novitas discussed that Petitioner was “educated” regarding the submission of noncompliant billings after both the initial review of 49 claims for services provided in December 2017 and second review of five claims for services provided between December 2018 and May 2019.¹⁰  CMS Ex. 3 at 1.  Novitas explained that a

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third review of 22 claims with dates of service between March 2020 and September 2021 was completed, and cited a “sample of the noncompliant billing . . . on the attachment titled Enclosure C.”  CMS Ex. 3 at 2.  Novitas explained that “[d]espite 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.”  CMS Ex. 3 at 2.  Novitas further explained, “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] above billing behavior constitutes a violation of 42 [C.F.R. § ] 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. 3 at 3.

Thereafter, CMS upheld this determination in its April 25, 2023 revised reconsidered determination.  CMS Ex. 18.  CMS explained that after both the first and second review, Qlarant sent Petitioner a letter notifying it of the results of the review.  CMS Ex. 18 at 3-4.  CMS did not address whether appeal rights had been provided, and the evidentiary record does not contain, much less reference, any document that notified Petitioner of its right to appeal the claims denied in the first two medical reviews.  See CMS Ex. 18; see also CMS Exs. 4, 6.  CMS explained that Qlarant conducted a third medical review of 37 claims, with 17 of 22 “relevant” claims “denied as the documentation was insufficient to support that the services rendered were reasonable or necessary.”¹¹  CMS Ex. 18 at 4.  After addressing the third medical review, CMS stated the following:

Despite repeated instances of specific and targeted education from 2018 through 2022, [Petitioner] continued to fail to meet Medicare requirements by submitting noncompliant claims without sufficient documentation to support that services were reasonable or necessary.  As a result, on September 6, 2022, Novitas informed [Petitioner] of the revocation of its Medicare enrollment under § 424.535(a)(8)(ii) for abuse of billing privileges.

CMS Ex. 18 at 4.

In addressing the first of the four factors that must be considered in a revocation pursuant to 42 C.F.R. § 424.535(a)(8)(ii) (the percentage of submitted claims that were denied during the period under consideration), CMS discussed the percentage of claims denied

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in each review and stated, in a conclusory statement, “Despite being given specific education on more than one occasion, the percentages of denials remained high.”  CMS Ex. 18 at 6.  CMS considered the aggregate of all three reviews, along with education provided, as the evidence of this factor.

Addressing the third factor at 42 C.F.R. § 424.535(a)(8)(ii)(C) (the type of billing non-compliance and the specific facts surrounding said non-compliance), CMS explained that its consideration was based on “all three reviews” and it did not indicate it would have applied this factor based on fewer than the results all three of the reviews of claims that had submitted over the span of nearly four years.  CMS Ex. 18 at 6-7.

And addressing the final factor at 42 C.F.R. § 424.535(a)(8)(ii)(D), CMS explained the following:

Regarding factor (D), CMS finds it highly relevant that the type of claims reasons for the denials and noncompliant billing were consistent over more than three and half years of claims reviews.  Further, [Petitioner] has been enrolled in the Medicare program for more than 10 years.^[12]  This is ample time for it to become familiar with compliant billing practices.  In this case, [Petitioner] continued to submit claims that did not meet Medicare requirements, even after receiving education about the documentation required to meet applicable requirements.  Notwithstanding of any education that was provided to [Petitioner], suppliers have a duty to submit for payment only those claims that meet Medicare requirements.  This weighs heavily in favor of the determination that [Petitioner] engaged in a pattern or practice of submitting claims that fail to meet Medicare requirements.

CMS Ex. 18 at 7.

In summarizing why it upheld Petitioner’s revocation, CMS stated the following:

This administrative action under § 424.535(a)(8)(ii) is based on [Petitioner’s] repeated submission of similar claims that failed to meet Medicare requirements for similar reasons after having been repeatedly informed that the claims did not meet Medicare requirements.  This ongoing noncompliant behavior is a clear indication to CMS that revocation is the appropriate action here.  Based on the regulatory factors reviewed

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above, [Petitioner’s] conduct amounts to a pattern or practice of abusive billing.  Therefore, CMS upholds the revocation of [Petitioner’s] enrollment under § 424.535(a)(8)(ii).

CMS Ex. 18 at 7.

Since the issuance of the reconsidered determination in April 2023, an OMHA ALJ issued a largely favorable decision on the claims denials appealed by Petitioner.  P. Ex. 3.  Although Qlarant stated that the third review consisted of 37 claims and CMS determined that the third review consistent of 22 “relevant” claims, CMS has not submitted a list of all the claims that were the subject of the third review and their dispositions.  Therefore, I rely upon the “sample of the noncompliant billing . . . reflected on the attachment titled Enclosure C.”  CMS Ex. 3 at 2.  In reviewing Enclosure C and cross-referencing it with P. Ex. 3, Petitioner received a favorable ruling on eight of the 10 claims listed in Enclosure C, yielding a far lower error rate than 77.27 percent with respect to the sample claims referenced in the revocation determination.  While the submission of two out of 10 noncompliant claims, based on the limited sample of noncompliant billing listed in Enclosure C, undoubtedly leaves room for improvement, the apparent error rate yielded from the third review is starkly lower than the 77.27 percent error rate that CMS considered to be a “high” or “very high” error rate in the reconsidered determination.  See CMS Ex. 18 at 6.

In its brief, CMS argued, with respect to the claims reviewed in the first medical review, that “Petitioner did not appeal the denials.”  CMS Br. at 2.  CMS reiterated, with respect to the four claims denied in the second review, that “Petitioner again did not request a redetermination of these denials, rendering it administratively final.”  CMS Br. at 3.  While CMS argues a lack of appeals and administrative finality, it has not presented any evidence that it provided notice that Petitioner could appeal the denial of its claims.  CMS Exs. 4, 6.  I observe that only after Petitioner retained counsel on November 5, 2021, did it avail itself of the appeals process, which yielded a largely favorable outcome.  See P. Ex. 3.  Because I have reversed the revocation determination, I do not further address the question of administrative finality at this time.

Although CMS argues in its brief that the first review of December 2017 claims, alone, “establishes a legitimate basis to revoke Petitioner’s Medicare billing privileges” and “[t]hese 29 improper claims alone establish that CMS had a legitimate basis to revoke Petitioner’s billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii)” (CMS Br. at 9), such statements amount to a post hoc rationalization and do not reflect CMS’s stated reasons for upholding Petitioner’s revocation.  CMS Ex. 18.  Similarly, CMS argues that “[t]he second review,” consisting of four out of five claims denied, “establishes a second basis for CMS’s decision to revoke Petitioner pursuant to 42 CFR [sic] § 424.535(a)(8)(ii).”  CMS Br. at 11.  However, CMS unquestionably upheld the revocation based on the aggregate of the three medical record reviews, stressing that

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revocation was warranted because Petitioner continued to have a high error rate after “repeated” education.  CMS Ex. 18 at 6.  Had CMS believed that revocation was warranted based on the review of December 2017 and December 2018 through May 2019 claims, it is difficult to speculate why it did not say so in the reconsidered determination.  Moreover, CMS has not explained why, after the second review of claims was completed in February 2020, it allowed Petitioner to remain in the Medicare program until the instant revocation action in September 2022 if the first two reviews independently established a basis to revoke Petitioner’s enrollment.  See CMS Ex. 3.  More significantly, nothing in the reconsidered determination provides any indicia that CMS considered the first and second claims reviews, alone, as the reason for upholding the revocation of Petitioner’s enrollment.  CMS Ex. 18.  Rather, CMS repeatedly cited to all three medical reviews as the basis for revocation, and with an emphasis on the “high” or “very high” error rate of the third review after “repeated” education.  CMS Ex. 18 at 6.

In short, nothing in CMS’s discussion in the reconsidered determination, when considered with the evidence of record, indicates that CMS upheld Petitioner’s revocation based on the first two medical reviews, alone.  Further, nothing in this determination indicates that the error rate for claims reviewed in the third review, in light of the largely favorable ALJ determination, was “high” or “very high” as contemplated by the 77.27 percent error rate referenced in that determination.  In the conclusory paragraph of its revocation analysis, CMS summarized that its “administrative action under § 424.535(a)(8)(ii) is based on [Petitioner’s] repeated submission of similar claims that failed to meet Medicare requirements for similar reasons after having been repeatedly informed that the claims did not meet Medicare requirements,” and that the “ongoing noncompliant behavior is a clear indication to CMS that revocation is the appropriate action here.”  CMS Ex. 18 at 11.  Although CMS could have determined the remote first and second medical reviews constituted a sufficient basis for revocation, or stated that a much lower error rate for the third review would have supported a revocation determination, it did not do so.  There is simply no indication that CMS intended to uphold the revocation of a supplier that substantially decreased its error rate after the first two medical reviews of its claims in 2017 and 2018-2019.  Absent such reasoning by CMS, I decline to make such reasoning on its behalf.  Based on CMS’s explanation for why it upheld Petitioner’s revocation, to include its consideration of the factors pursuant to 42 C.F.R. § 424.535(a)(8)(ii)(A)-(D), in combination with the evidence of record, CMS did not provide a legitimate basis for upholding the revocation of Petitioner’s enrollment.

Because I do not uphold Petitioner’s revocation, the requirements for inclusion on the Preclusion List are not met.  42 C.F.R. §§ 422.2, 423.100.  I therefore reverse that determination.

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V.    Conclusion

I reverse the determinations revoking Petitioner’s Medicare enrollment and billing privileges and placing it on CMS’s Preclusion List.

Endnotes

¹ CMS did not submit a copy of Petitioner’s enrollment record.

² Although Qlarant referenced an “attached spreadsheet for a complete listing of the claims reviewed, along with their respective medical review determinations” (CMS Ex. 4 at 3), CMS did not submit the attached spreadsheet or any of the medical review determinations.

³ CMS did not submit a copy of any notice informing Petitioner of its appeal rights.

⁴ CMS did not submit a copy of any notice informing Petitioner of an overpayment or its appeal rights.

⁵ Although CMS submitted a copy of Petitioner’s response to the letter and subsequent correspondence rescinding the suspension, it did not submit a copy of the October 14, 2021 letter suspending Petitioner’s payments.

⁶ In a letter dated September 27, 2022, after Novitas revoked Petitioner’s enrollment and billing privileges, Qlarant informed Petitioner that it had terminated the payment suspension.  CMS Ex. 13; see CMS Ex. 3.

⁷ CMS did not submit a list of the claims that had been reviewed and/or denied through the post-payment review.  Rather, CMS submitted CMS Ex. 17, which is a single exhibit containing numerous redeterminations conducted in January 2023 for claims with dates of service ranging between 2018 and 2021.  See Standing Pre-Hearing Order § 9(e) (“Each document must be filed as a separate exhibit and uploaded as a separate exhibit in the DAB E-File system, and multiple documents should not be submitted as a single exhibit.”).  Quizzically, CMS identified CMS Ex. 17 as a “Claims Activity Chart” in its list of exhibits, but this exhibit lacks any charts, much less an index of its contents.  Rather, CMS Ex. 17 is a 220-page dump of numerous determinations without any apparent order or organization.  Because CMS did not file a list of the 37 claims that were the subject of the third review (or the 22 claims that were the subject of the revocation), the evidentiary record lacks a basis to meaningfully assess the significance, if any, of the redeterminations.

⁸ CMS did not submit a copy of the April 21, 2023 reconsidered determination, and neither CMS’s April 25, 2023 letter nor the record indicate why CMS reopened and revised the reconsidered determination.

⁹ Although the reconsidered determination correctly addressed the current version of 42 C.F.R. § 424.535(a)(8)(ii) (CMS Ex. 18 at 6-7), CMS, in its brief, argued that the predecessor version of the same regulation is the applicable authority.  CMS Br. at 8-14.  In fact, even though subparts (E) and (F) of 42 C.F.R. § 424.535(a)(8)(ii) were not addressed in the reconsidered determination, presumably because neither provision is contained in the current version of 42 C.F.R. § 424.535(a)(8)(ii), CMS argued that “[t]he other factors outlined in 42 C.F.R. § 424.535(a)(8)(ii)(D-F) additionally buttress CMS’s decision to revoke Petitioner’s billing privileges.”  CMS Br. at 13.

¹⁰ Because CMS did not submit a copy of the spreadsheet listing the claims reviewed and providing medical review determinations that was reportedly attached to the letter, it has not demonstrated that Petitioner received education regarding the reasons for denial of each the claims.  See CMS Ex. 4 at 3.  Because I have reversed the revocation determination, I will not further address this issue at this time.

¹¹ CMS did not address why only 22 of the 37 claims were “relevant,” which, in addition to the lack of a list of claims reviewed, raised questions about how it calculated the error rate.  CMS Ex. 18 at 4, 6.

¹² CMS did not submit an enrollment record, and the evidentiary record does not indicate when Petitioner first enrolled in the Medicare program.  Therefore, I cannot verify that CMS appropriately considered the length of Petitioner’s enrollment in the Medicare program when it considered this factor.