Devine Solutions Group LLC, d/b/a Quick Response EMS, DAB No. 3159 (2024)

FINAL DECISION ON REVIEW OF
ADMINISTRATIVE LAW JUDGE DECISION

Devine Solutions Group LLC, d/b/a Quick Response EMS (Petitioner) appeals the decision of an Administrative Law Judge (ALJ), Devine Solutions Group LLC d/b/a Quick Response EMS, DAB CR5981 (ALJ Decision). The ALJ Decision upheld the determination of the Centers for Medicare & Medicaid Services (CMS) to revoke Petitioner’s Medicare enrollment and billing privileges, impose a three-year reenrollment bar, and add Petitioner’s name to the Medicare preclusion list. We affirm the ALJ Decision for the reasons stated below.

Legal Background

I. Medicare enrollment and revocation

Under the Social Security Act (Act), the Secretary of the Department of Health and Human Services (HHS) “shall prescribe such regulations as may be necessary to carry out” the Medicare program. Act ¶1871(a)(1). In 1977, HHS (formerly the Department of Health, Education, and Welfare) established CMS (formerly the Health Care Financing Administration or HCFA) and vested in it the Secretary’s full rulemaking powers under the Medicare statutes. See CMS; Statement of Organization, Functions and Delegations of Authority; Reorganization Order, 66 Fed. Reg. 35,437 (July 5, 2001); Statement of Organization, Functions, and Delegations of Authority, 49 Fed. Reg. 35,247 (Sept. 6, 1984); Reorganization Order, 42 Fed. Reg. 13,262 (Mar. 9, 1977).

The Act authorizes HHS, through CMS, to administer the Medicare program “through contracts with [M]edicare administrative contractors.” Act §§ 1816 (concerning Medicare Part A), 1842 (concerning Medicare Part B), 1874A (concerning various functions). The Act also authorizes HHS and CMS to promote the integrity of the Medicare program by using eligible contractors to review the activities of suppliers and educate them on payment integrity and quality assurance issues. Act § 1893(a)-(b).

The Act requires HHS to regulate the enrollment of health care practitioners into

Page 2

Medicare. Act § 1866(j)(1)(A). A supplier of health care services must be enrolled in Medicare to bill the program for services furnished to program beneficiaries. Act §§ 1835(a), 1842(h)(1); 42 C.F.R. §§ 424.500, 424.505.¹ An “Ambulance service provider,” such as Petitioner, is a supplier in the Medicare program. 42 C.F.R. § 498.2 (definition of “Supplier”). Ambulance services are considered “medical and other health services” for Medicare program purposes “where the use of other methods of transportation is contraindicated by the individual’s condition, but . . . only to the extent provided in regulations.” Act § 1861(s)(7). The regulations set requirements to be a supplier of ambulance services and to receive Medicare reimbursement for those services. 42 C.F.R. §§ 410.40, 410.41.

CMS may revoke an enrolled supplier’s Medicare enrollment and billing privileges for any reason listed in 42 C.F.R. § 424.535(a). One such reason occurs when “CMS determines that the 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). In making that determination, CMS considers six regulation-specified factors. 42 C.F.R. § 424.535(a)(8)(ii)(A)-(F).² We discuss each factor in detail later in this Decision, and summarize them here as: (A) claim denial percentage; (B) claim denial reason(s); (C)history of adverse actions; (D) length of noncompliant billing pattern; (E) length of enrollment in Medicare; and (F) other information CMS deems relevant. Id.

When CMS exercises its revocation authority, a supplier is “barred from participating in the Medicare program from the effective date of the revocation until the end of the reenrollment bar,” which generally “lasts a minimum of 1 year, but not greater than 10 years.” 42 C.F.R. § 424.535(c)(1)(i). Revocation generally is effective 30 days after CMS or its contractor mails notice of the determination to the supplier. Id. § 424.535(g).

CMS also may put a revoked supplier on CMS’s “preclusion list.” The preclusion list identifies individuals, entities, and prescribers who are precluded from being “paid for Medicare items or services by Medicare Advantage plans under Medicare Part C (Medicare + Choice Program) or by Medicare Part D (Voluntary Prescription Drug Benefit Program) prescription drug plans.” Syed M. Aziz, M.D., DAB No. 3124, at 2 (2023); see 42 C.F.R. § 422.2 (defining “Preclusion list” for purposes of “individuals and entities” with respect to Medicare Part C); see id. at § 423.100 (defining “Preclusion list”

Page 3

for purposes of “prescribers” with respect to Medicare Part D). As relevant here, CMS may place a supplier on the preclusion list when the supplier is revoked from Medicare, is barred from reenrollment under section 424.535(c), and “CMS determines that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.” 42 C.F.R. §§ 422.2 (definition of “Preclusion list” at subsection (1)). In making that determination, CMS considers the seriousness of the conduct underlying the revocation, the degree to which that conduct could affect the integrity of the Medicare program, and any other evidence that CMS deems relevant. Id.

An individual or entity may appeal revocation and placement on the preclusion list per 42 C.F.R. Part 498. 42 C.F.R. §§ 422.222(a)(2), (3); 423.120(c)(6)(v); 424.545(a). An individual or entity placed under either sanction may request reconsideration of an initial determination by CMS or its contractor, then a hearing on the reconsidered determination before an ALJ, then review of the ALJ’s decision by the Appellate Division of the Departmental Appeals Board (Board). Id. §§ 498.3(b)(17), (20); 498.5(l), (n); 498.22.

II. Medicare regulations at 42 C.F.R. Part 405, Subpart I

Claim denials are subject to a different and entirely separate administrative appeal process, which permits ultimate review by the Medicare Appeals Council (not this Board) and judicial review. See 42 U.S.C. § 1395ff; 42 C.F.R. Part 405, Subpart I. Each level of review, from initial determination onward, is final and binding on all parties unless further appealed per regulation. 42 C.F.R. §§ 405.928(b),405.958, 405.978.

Case Background³

Petitioner is a limited liability company based in Stafford, Texas, doing business as Quick Response EMS, which was incorporated in Texas in 2011 and licensed to provide ambulance services effective May 21, 2012. ALJ Decision at 6; CMS Ex. 1, at 1-3, 7; CMS Ex. 18, at 9, 11, 31. Petitioner was enrolled in Medicare as an ambulance service supplier effective January 15, 2013. ALJ Decision at 1, 6; CMS Ex. 1 at 1-2.

This case arises from three reviews in 2016, 2018, and 2019 of Medicare claims that Petitioner filed in 2014-2015, 2018, and 2019, respectively. Claims denied in those reviews formed the basis for CMS’s initial revocation determination of December 9, 2019, effective January 8, 2020, pursuant to 42 C.F.R. § 424.535(a)(8)(ii) for Petitioner’s pattern or practice of submitting claims that failed to meet Medicare requirements. We summarize below these 2016, 2018, and 2019 claim reviews, which became final and are not appealable to this Board, because they are relevant to Petitioner’s arguments concerning CMS’s 2019 revocation and preclusion determination.

Page 4

I. 2016 claim review, denying claims filed from 2014 to 2015

On March 8, 2016, CMS issued through a contractor, Health Integrity, LLC, a “Provider Education” letter notifying Petitioner of the results of a review of a random sample of Petitioner’s Medicare claims for service codes A0425 and A0428 with service dates from January 18, 2014 through February 7, 2015. ALJ Decision at 6; CMS Ex. 19, at 1; see P. Ex. 4, at 3 (explaining random sampling). The Provider Education letter stated that the review had resulted in denial of all 32 reviewed claims; 31 claims were denied because “the documentation did not support the ambulance transport billed,” and one claim was denied because “there was insufficient documentation or the services were not documented.” CMS Ex. 19, at 1. The letter gave examples of insufficient claims, explained their deficiencies, and listed helpful references in the Act, the Code of Federal Regulations, the Medicare Benefit Policy Manual, and a Local Coverage Determination. CMS Ex. 19, at 1-2. The letter also cautioned Petitioner that CMS had authority under 42 C.F.R. § 424.535(a)(8)(ii) “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.” Id. at 2.

In an April 22, 2016 letter, Health Integrity, LLC notified Petitioner of a consequent overpayment in the “extrapolated” amount of $563,195.16 and cautioned that “[w]e will continue to monitor your Medicare claim submission patterns” and CMS’s revocation of Petitioner’s billing privileges could result. P. Ex. 4, at 2, 4; see ALJ Decision at 6. In a May 5, 2016 letter to Petitioner, CMS contractor Novitas Solutions (Novitas) requested repayment of the overpayment and, if Petitioner disagreed, explained the rebuttal process Petitioner could pursue. ALJ Decision at 6; CMS Ex. 5; P. Ex. 5.

Petitioner was partially successful in challenging the 2016 overpayment determination. Initially, Novitas issued an unfavorable redetermination, ALJ Decision at 6-7, CMS Ex. 6, but Petitioner requested reconsideration by a “qualified independent contractor” (QIC). See 42 C.F.R. §§ 405.902 (defining QIC), 405.960, 405.976. On November 18, 2016, the QIC, C2C Innovative Solutions, Inc., issued a decision that found “the services rendered partially met the requirements to be considered reasonable and necessary in the treatment of the patient.” CMS Ex. 7, at 5; see ALJ Decision at 7. The QIC overturned 19 of the 32 claim denials but confirmed that the remaining 13 reviewed claims did not comply with Medicare regulations for establishing that ambulance transport was medically necessary. CMS Ex. 7, at 26-40, 43-53; CMS Ex. 12. The QIC concluded that “[t]he contractor should recalculate the demand amount based on a different (more conservative) extrapolation methodology” because a “valid partial overpayment” existed but its estimated amount was “not reasonable.” CMS Ex. 7, at 25, 43. The QIC further stated that the overpayment was non-waivable “because the provider/supplier was at fault for causing or accepting the Part B payments for the services at issue.” Id. at 22. The QIC informed Petitioner how to appeal the reconsideration decision to an ALJ. ALJ

Page 5

Decision at 7; CMS Ex. 7, at 42. By letter dated November 29, 2016, Novitas told Petitioner that repayment in the reduced amount of $3,280.51 was due by December 28, 2016, and reminded Petitioner that appeal to an ALJ regarding that “unfavorable amount” was still permissible. P. Ex. 3, at 2; see ALJ Decision at 7; CMS Ex. 8, at 2. Petitioner did not appeal the QIC decision to an ALJ. See ALJ Decision at 12.

II. 2018 claim review

Despite CMS’s 2016 education effort, Petitioner in 2018 again submitted claims found to be non-compliant with Medicare requirements. On December 31, 2018, Novitas sent Petitioner a “Notice of Medical Review Results” regarding a random sample of 39 claims for service codes A0425 and A0428 with dates of service from September 24, 2018 to October 13, 2018. CMS Ex. 20, at 1-2, 25-31. Novitas denied 35 (90%) of them as not meeting Medicare requirements because the documentation did not support the medical necessity of the ambulance transport. Id. at 2-3, 32-38; see CMS Exs. 14, 17; ALJ Decision at 7. Novitas advised that a purpose of medical review is to address claims errors through education, gave Petitioner pages of educational material and recommendations, and offered one-on-one education. CMS Ex. 20, at 3-6; ALJ Decision at 7-8. The letter explained that “[i]mproper billing and coding can significantly impact the Medicare program” and warned that, “[s]hould you continue to fail to meet [Medicare] requirements as described in this letter, your billing privileges may be revoked on this basis or any of the bases articulated in 42 CFR § 424.535(a).” CMS Ex. 20, at 3, 6. The letter also stated Petitioner’s right to request a redetermination within 120 days. CMS Ex. 20, at 6; ALJ Decision at 8.

III. 2019 claim review

Despite CMS’s 2016 and 2018 education efforts, a 2019 review again found Petitioner submitting ambulance transport claims that lacked documentation of medical necessity. In 2019, Qlarant, a CMS Unified Program Integrity Contractor, conducted a prepayment review of 27 Medicare claims for service code A0428 with dates of service from April 22, 2019 through April 27, 2019, and denied 22 (81.48%) of them as lacking required documentation. ALJ Decision at 2, 9; CMS Exs. 10, 16; CMS Ex. 21, at 1, ¶¶3, 6; see also Hr’g Transcript (Tr.) at 40-42 (discussing CMS Ex. 10). Qlarant sent its review results to Novitas. ALJ Decision at 9. In a June 24, 2019 Medicare Remittance Advice notice, Novitas denied 30 claims, including all 22 that Qlarant had denied, and told Petitioner of its right to request a further appeal within 120 days. ALJ Decision at 9-10; CMS Ex. 23, at 5. Qlarant’s records show no such request by Petitioner. CMS Ex. 21, at 1-2, ¶8; ALJ Decision at 10. On October 16, 2019, Qlarant notified Petitioner that CMS had suspended Petitioner’s Medicare payments effective October 11, 2019, due to “credible allegations of fraud.” CMS Ex. 11, at 2; P. Ex. 9, at 2; see ALJ Decision at 10.

Page 6

IV. CMS’s 2019 initial revocation and preclusion determination

By letter dated December 9, 2019, CMS, through Novitas, issued its initial determination to revoke Petitioner’s Medicare enrollment and billing privileges effective January 8, 2020, under 42 C.F.R. § 424.535(a)(8)(ii), because Petitioner had “engaged in a pattern or practice of submitting claims that failed to meet Medicare requirements.” CMS Ex. 2, at 1; see ALJ Decision at 1; P. Ex. 1, at 2. “Despite repeated instances of specific and targeted education,” the letter explained, Petitioner had “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. 2, at 1. The letter detailed that Petitioner had submitted such claims with dates of service from January 18, 2014, through February 7, 2015, from September 24, 2018 through October 13, 2018, and from April 22, 2019, through April 27, 2019.⁴ ALJ Decision at 2; CMS Ex. 2, at 1-2. CMS imposed a 10-year reenrollment bar pursuant to section 424.535(c) and placed Petitioner on the preclusion list “pursuant to 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6).” ALJ Decision at 2; CMS Ex. 2, at 2. The letter stated Petitioner’s appeal rights. Id. at 2.

V. Reconsideration of CMS’s revocation and preclusion determination

On February 5, 2020, Petitioner timely requested reconsideration by CMS on eleven specified grounds. ALJ Decision at 2; CMS Ex. 3. First, Petitioner argued that CMS improperly delegated its revocation authority to Novitas. CMS Ex. 3, at 1-2, 8-9. Second, Petitioner asserted that, even if CMS properly delegated the decision to Novitas, CMS or its contractor did not properly consider the required factors for imposing revocation. Id. at 2, 9-10. Petitioner’s third through fifth arguments were that the 2016, 2018, and 2019 claim reviews were all “improperly cited as a basis for imposition of the revocation” because Petitioner had appealed the 2016 denial successfully and lacked opportunity to appeal the 2018 and 2019 determinations. Id. at 2-3, 10-13. Sixth, Petitioner contended that CMS violated “the Constitution’s Takings and Due Process clauses.” Id. at 3, 13-14. Petitioner’s seventh and eighth arguments were general challenges to “each and every” factual finding and legal conclusion on which CMS relied to impose revocation. Id. at 3. Ninth, Petitioner argued that Novitas denied Petitioner due process of law by failing “to give proper and adequate notice of the basis of the revocation.” Id. at 3-4. Tenth, Petitioner alleged that Novitas illegally imposed a 10-year reenrollment bar when the applicable maximum was three years. Id. at 4, 14. Finally, Petitioner challenged its placement on the CMS preclusion list “[i]nasmuch as the revocation . . . is unwarranted.” Id. at 4; see id. at 14-15.

Page 7

In a reconsidered determination dated March 31, 2020, CMS upheld Petitioner’s revocation under 42 C.F.R. § 424.535(a)(8)(ii) and Petitioner’s placement on the preclusion list under sections 422.2 and 422.222 because all regulatory requirements were met.⁵ ALJ Decision at 3; CMS Ex. 4. CMS rejected Petitioner’s claim that CMS improperly delegated its revocation authority, explaining that Novitas’s role “was administrative only” as Novitas prepared and mailed the revocation notice “at CMS’ instruction,” and that Novitas was an authorized contractor for program integrity activities under section 1893 of the Act. CMS Ex. 4, at 8. CMS concluded “there is no merit to [Petitioner’s] claims that the relevant factors were not assessed in its revocation.” Id. at 6. Regarding the review of Petitioner’s 2014-2015 claims, CMS determined that the overturning of some initial denials at the QIC level “does not negate [Petitioner’s] history and pattern of submitting noncompliant claims supported by the medical review results.” Id. at 8. CMS rejected Petitioner’s challenges to the 2018 and 2019 claim reviews as contrary to both CMS’s records and its policy of including appealed claims when considering revocation.⁶ Id. at 6, 8. CMS rejected all of Petitioner’s constitutional and due process arguments, explaining that Petitioner’s “participation in this administrative appeal is a function of due process” and “the revocation was a proper implementation of CMS regulatory authority.” Id. at 8. CMS upheld the 10-year re-enrollment bar and Petitioner’s inclusion on the preclusion list, effective June 1, 2020. Id. at 9-10. CMS explained that the first two preclusion criteria of being “currently revoked” and “currently under a re-enrollment bar” were met, and Petitioner’s billing practices were “at minimum, negligent and at maximum, dishonest” and posed “a serious threat to the Medicare Program.” Id. at 9-10.

VI. Pre-Hearing Proceedings before the ALJ

On May 28, 2020, Petitioner filed an ALJ hearing request and supporting brief that largely repeated Petitioner’s reconsideration arguments to CMS.⁷ ALJ Decision at 3; ALJ Hearing Request to Dispute & Contest Novitas’ January 8, 2020, Revocation of Medicare Billing Privileges & Addition to Preclusion List (RFH); Br. in Support of RFH.

Page 8

Petitioner again argued that CMS improperly delegated its revocation authority, failed to consider or weigh the pertinent regulatory factors, and improperly relied on claim denials that Petitioner had appealed successfully, was still appealing, or never had opportunity to appeal. RFH at 1-2; Br. in Support of RFH at 4-9. Petitioner also reasserted its constitutional claims. RFH at 2-3; Br. in Support of RFH at 9-10. Finally, Petitioner again challenged CMS’s imposition of a 10-year re-enrollment bar and placement of Petitioner on the preclusion list. RFH at 3; Br. in Support of RFH at 11-12.

CMS timely filed a combined brief and motion for summary judgment along with 21 proposed exhibits. ALJ Decision at 3; CMS Mot. for Summ. J., or, In The Alternative, Pre-Hr’g Br. (CMS Br. to ALJ). CMS argued that the three sets of denied claims from 2014 through 2019 established a legitimate basis for revocation under 42 C.F.R. § 424.535(a)(8)(ii), and Petitioner did not effectively appeal them so they are administratively final. CMS Br. to ALJ at 1, 8-14. CMS further contended that the ALJ does not have regulatory authority to review CMS’s re-enrollment bar and CMS had a legitimate basis for placing Petitioner on the preclusion list. Id. at 14-15. CMS’s proposed exhibits included the written declarations of two employees of CMS contractors. ALJ Decision at 3; CMS Ex. 9; CMS Ex. 21; CMS Pre-Hr’g Exch. at 4.

Petitioner filed a timely response and cross-motion for summary judgment, reasserting prior arguments. ALJ Decision at 3; P. Resp. & Cross-Mot. for Summ. J. Petitioner proposed 10 exhibits and two witnesses (without providing their written testimony). ALJ Decision at 3; P.’s Proposed Ex. List; P.’s Proposed Witness List, Req. for Subpoena, & Req. to Cross-Examine Witnesses (P.’s Witness List). Petitioner requested a subpoena for one proposed witness, the Novitas employee who signed the initial determination. ALJ Decision at 3-4; P.’s Witness List at 1-2. Petitioner also requested the right to cross-examine any CMS witness. ALJ Decision at 4; P.’s Witness List at 2.

On September 2, 2020, the ALJ issued an Order addressing witness testimony issues. The Order gave Petitioner one week to file any request to cross-examine either of CMS’s witnesses who had submitted written declarations, forbade testimony by witnesses “if a party has not timely submitted written direct testimony for those witnesses,” and denied Petitioner’s subpoena request as “unnecessary” on several stated grounds. Order; ALJ Decision at 4. In response, Petitioner filed a new witness list naming CMS’s two declarants as witnesses and asking to cross-examine them. ALJ Decision at 4; P. Am. Witness List & Req. to Cross-Examine Witnesses.

In response to Petitioner’s cross-motion for summary judgment, CMS filed a reply brief and two new exhibits. CMS Resp. to P. Mot. for Summ. J. (CMS Reply Br. to ALJ) at 1; CMS Exs. 22, 23. CMS’s reply summarized that in “three separate periods (in 2015, 2018, and 2019), CMS reviewed Petitioner’s supporting documentation for a total of 98 ambulance transport claims and determined that 70 of those claims did not meet Medicare requirements.” CMS Reply Br. to ALJ at 1. “[T]hose claims,” CMS argued,

Page 9

“establish that Petitioner engaged in a pattern of abusive billing,” and thus “CMS had a legitimate basis to revoke Petitioner’s billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii).” Id. at 3. CMS further advised that it “recently revised Petitioner’s re-enrollment bar from 10 years to 3 years,” thus mooting Petitioner’s arguments concerning the length of the bar. Id. at 13 (citing CMS Ex. 22).

On February 2, 2020, the ALJ notified the parties of an evidentiary hearing by video teleconference scheduled for March 16, 2021. ALJ Decision at 4; Notice of Hr’g at 1. The ALJ admitted all proposed exhibits without objection. ALJ Decision at 4; Notice of Hr’g at 4. The ALJ denied the parties’ motions for summary judgment because “[b]oth parties dispute” whether the Medicare claims denied in 2018 and 2019 “are final or are on appeal/subject to appeal” and their finality “must be adjudicated.” Notice of Hr’g at 5. The ALJ also narrowed the issues for decision by rejecting Petitioner’s constitutional and improper delegation arguments. Id. The ALJ ruled that Petitioner had the right to cross-examine CMS’s two witnesses, but not to present any testimony of Petitioner’s own because Petitioner “did not submit written direct testimony” for any witness. Id.

VII. The ALJ hearing, post-hearing briefing, and the ALJ Decision

On March 16, 2021, the ALJ held the scheduled evidentiary hearing, at which Petitioner cross-examined CMS’s two witnesses. ALJ Decision at 5; Tr. at 1, 11-16, 19-21, 29-35, 38-39. Petitioner presented a February 15, 2019 letter by which Petitioner allegedly appealed the 2018 initial claim review determination. P. Ex. 7. However, a Novitas Appeals Department director testified that a search of Novitas’s records disclosed neither that letter nor any other appeal request from Petitioner.⁸ Tr. at 16-18. A Qlarant Medical Review Manager similarly testified that a review of company records and databases discovered no redetermination request from Petitioner concerning the 2018 or 2019 initial claim review determinations. Id. at 32, 38. At the hearing’s conclusion, the ALJ asked both parties for further briefing, including briefing of the question whether the ALJ should treat the claim denial determinations that prompted Petitioner’s revocation as legally binding or re-review each denied claim for compliance with Medicare requirements. Id. at 45, 47-48, 51; Notice of Receipt of Tr. and Order Directing Post-Hr’g Br. Schedule at 1; ALJ Decision at 5.

Both parties submitted post-hearing briefs. CMS Post-Hr’g Br.; P. Post-Hr’g Br.; CMS Reply to P.’s Post-Hr’g Br.; ALJ Decision at 5. CMS argued that the claim denials were binding and not further reviewable by the ALJ. CMS Post-Hr’g Br. at 16-17. Petitioner contended the ALJ could and should review each denied claim. P. Post-Hr’g Br. at 11.

Page 10

On November 19, 2021, the ALJ issued a written decision, which stated the two issues for determination as: “[w]hether CMS had a legitimate basis for revoking Petitioner’s Medicare enrollment and billing privileges” under 42 C.F.R. § 424.535(a)(8)(ii), and “[w]hether CMS had a legitimate basis to place Petitioner on CMS’s preclusion list.”⁹ ALJ Decision at 5. The ALJ explained that “CMS must make a prima facie showing” of the supplier’s non-compliance, and if CMS succeeded then the “supplier must prove, by a preponderance of the evidence, that it was in compliance.” Id. at 11 (citing authorities). The ALJ then itemized 23 factual findings. Id. at 6-10.

Based upon the ALJ’s specified factual findings and ensuing legal conclusions, the ALJ decided to “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 CMS’s preclusion list.” ALJ Decision at 20. The ALJ first determined that the 2016 reconsideration decision and the 2018 and 2019 initial determinations were “final and binding” on Petitioner “under 42 C.F.R. §§ 405.928 and 405.978,” and were, “at a minimum, prima facie evidence that those claims did not meet Medicare requirements.” Id. at 11-13. The ALJ declined to review the individual claim denials, which were administratively final, and noted that “Medicare claims adjudicators are in the best position to make those determinations”; in any event, Petitioner had made “no effort” to show that the denied claims were wrongly decided. Id. at 13-14. By applying the six factors under section 424.535(a)(8)(ii) to CMS’s unrebutted evidence, the ALJ next determined that Petitioner’s billing constituted a pattern or practice of submitting ambulance service claims that did not comply with Medicare requirements and gave CMS a legal basis for revocation. Id. at 14-18. Finally, the ALJ upheld Petitioner’s placement on the preclusion list because the revocation was “legitimate,” Petitioner was under a reenrollment bar, and the ALJ agreed with CMS that Petitioner’s underlying conduct was “detrimental to the best interests of the Medicare program.” Id. at 19.

VIII. Petitioner’s appeal to the Board

Petitioner timely appealed to the Board, alleging several errors in the ALJ Decision. First, Petitioner asserts that “[t]he ALJ erred in determining CMS properly delegated its authority to revoke Petitioner’s billing privileges.” Request for Review (RR) at 1.

Page 11

Petitioner next criticizes the ALJ’s reliance on the 2016, 2018, and 2019 claims denial determinations, as Petitioner allegedly “prevailed at reconsideration” of the 2016 decision, had a pending appeal from the 2018 determination, and could not appeal from the 2019 determination. Id. at 2-3. Petitioner next contends that the ALJ erred in determining that “Petitioner engaged in a pattern or practice of submitting claims that did not meet Medicare requirements.” Id. Petitioner further asserts that CMS violated “the Constitution’s Takings and Due Process Clauses by improperly delegating the revocation authority and imposing the unwarranted revocation.” Id. Petitioner also claims denial of due process of law because Novitas “failed to give proper and adequate notice of the basis of the revocation.” Id. Finally, Petitioner argues that the ALJ erroneously upheld Petitioner’s inclusion on the preclusion list because the revocation “is unwarranted and should be set aside.” Id. at 4. Petitioner no longer challenges the enrollment bar (which CMS reduced during the proceedings before the ALJ from 10 years to three years ending on January 7, 2023, see ALJ Decision at 2, CMS Ex. 22).¹⁰

CMS has responded to each of Petitioner’s arguments. CMS’s Resp. to Devine Solution’s Req. for Review of the ALJ’s Decision (CMS Br.). CMS primarily argues that, for many reasons, the ALJ correctly held that CMS had a legitimate basis to revoke Petitioner’s billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii). Id. at 11-20. CMS argues that Petitioner’s three sets of reviewed claims furnish CMS valid cause for revocation under section 424.535(a)(8)(ii). Id. at 12. CMS argues that Petitioner’s “repeated failures to comply with Medicare claim requirements – especially after CMS’s efforts to educate” it, “establish a blatant disregard of Medicare billing requirements,” which, “whether it was intentional or not, provides CMS with a legitimate basis” for revocation. Id. at 13. CMS also asserts that the ALJ correctly found CMS had a legitimate basis to place Petitioner on the preclusion list, and Petitioner’s remaining arguments lack merit. Id. at 20-28.

Petitioner has filed a reply brief reiterating its charges of error. Appellant’s Reply to CMS’s Resp. (P. Reply). The record is now closed.

Standard of Review

In cases proceeding under 42 C.F.R. Part 498, the Board reviews disputed factual issues to determine whether the ALJ’s decision is supported by substantial evidence in the

Page 12

record as a whole, and reviews disputed legal issues to determine whether the ALJ decision is erroneous. See Guidelines – Appellate Review of Decisions of Administrative Law Judges Affecting a Provider’s or Supplier’s Enrollment in the Medicare Program (Board Guidelines), “Completion of the Review Process,” ¶(c), available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/enrollment/index.html.

Analysis

We first summarize the parties’ evidentiary burdens. “The Board applies to provider and supplier enrollment appeals the same burden of proof that it applies to other cases subject to the appeal procedures in Part 498.” Adora Healthcare Services, Inc., DAB No. 2714, at 4 (2016), recons. denied, DAB Ruling No. 2017-4 (May 18, 2017). “CMS has the burden of coming forward with evidence that establishes a prima facie case that the cited basis for the revocation exists.” Id. at 5. “If CMS meets this burden,” the supplier “then has the burden to prove its case, that is, to rebut the basis for the revocation, by a preponderance of the evidence.” Id.

Board review of a revocation under 42 C.F.R. § 424.535 “is limited to determining only whether CMS had a legal basis for its decision.” Blair Allen Nelson, M.D., DAB No. 3024, at 11 (2020); see Lorrie Laurel, PT, DAB No. 2524, at 7 (2013). If the regulatory elements for revocation are met, “then the revocation must be sustained.” Douglas Bradley, M.D., DAB No. 2663, at 13 (2015).

As explained below, we hold that CMS met its burden of proof and Petitioner did not. CMS showed a valid basis for revocation under 42 C.F.R. § 424.535(a)(8)(ii) and valid grounds for placing Petitioner on the preclusion list, and Petitioner did not rebut CMS’s evidence. Therefore, we uphold CMS’s revocation and preclusion determination.

I. The ALJ did not err in determining that CMS lawfully administered its revocation authority through contractors.

Addressing Petitioner’s argument that CMS impermissibly delegated its revocation authority, the ALJ determined that “Petitioner is factually and legally incorrect.” Notice of Hr’g at 5; ALJ Decision at 4. The ALJ reasoned that “CMS made the [initial] determination, but the contractor effectuated that decision,” and “a CMS official rendered” the reconsidered determination directly. Notice of Hr’g at 5; ALJ Decision at 4; see CMS Exs. 2, 4. “Finally,” the ALJ ruled, “while CMS indicated in preamble language in the Federal Register that it, and not contractors, would make decisions to revoke under § 424.535(a)(8)(ii), duly promulgated regulations permit CMS contractors to revoke enrollments and billing privileges.” Notice of Hr’g at 5; ALJ Decision at 4-5; see also 42 C.F.R. § 405.800(b) (specifying notice requirements when “CMS or a CMS contractor revokes a provider’s or supplier’s Medicare billing privileges”).

Page 13

Substantial evidence supports the ALJ’s determination. The December 9, 2019 initial determination letter stated that the “Centers for Medicare & Medicaid Services (CMS) has determined that [Petitioner] has engaged in a pattern or practice of submitting claims that fail to meet Medicare requirements.” P. Ex. 1, at 2; CMS Ex. 2, at 1. A CMS Hearing Officer made the March 31, 2020 reconsideration decision. CMS Ex. 4. A Qlarant manager testified that although the contractor could “identify a concern” with a supplier’s billing, that concern would be “reported up through CMS,” and “the group at CMS that it goes to is who makes that determination.” Tr. at 34. The Qlarant manager reiterated: “We can make a referral. We don’t make the decision. . . .” Id.

The ALJ also did not err in applying governing law. HHS administers Medicare through CMS, which in turn lawfully administers the program through contractors. Act §§ 1816, 1842, 1874A,1893(a)-(b). HHS also lawfully prescribes Medicare regulations through CMS. Act § 1871(a)(1); 66 Fed. Reg. 35,437; 49 Fed. Reg. 35,247; 42 Fed. Reg. 13,262. In response to public comment, CMS stated when adopting 42 C.F.R. § 424.535(a)(8)(ii) that a Medicare administrative contractor “must receive prior CMS approval before revoking a provider’s Medicare billing privileges.” Medicare Program; Requirements for the Medicare Incentive Reward Program and Provider Enrollment, 79 Fed. Reg. 72,500, 72,526 (Dec. 5, 2014) (Final Rule). The Board has recognized that “while a contractor may determine that there is a basis for a revocation action and recommend an action to CMS, a notice of revocation ultimately issued by a contractor represents a revocation decision by CMS.” Saeed Bajwa, DAB No. 2799, at 13 (2017). “As reflected in CMS regulations and program manuals, many of the day-to-day functions of the program, including the enrollment of providers and suppliers, are carried out by Medicare administrative contractors like Novitas.” Lilia Gorovits, M.D., P.C., DAB No. 2985, at 8 (2020), aff’d, No. 2:20-CV-01850, 2021 WL 1962903 (E.D. Pa. May 17, 2021). A contractor’s issuance of a revocation notice also is lawful because HHS “has, in effect, retained final authority over contractor-issued revocation determinations by subjecting them to review, when challenged, by departmental ALJs and the Board.” FadyFayad, M.D., DAB No. 2266, at 19 (2009), aff’d, 803 F. Supp. 2d 699 (E.D. Mich. 2011).

Thus, the Board rejects Petitioner’s argument, which is akin to arguments the Board has rejected previously. See Bradley at 14-15; Brian K. Ellefsen, D.O., DAB No. 2626, at 5-6 (2015). We affirm the ALJ’s determination of this issue.

II. The ALJ did not err in determining that Petitioner’s 2016, 2018, and 2019 claim reviews and denials were finally and fully adjudicated and provided a lawful basis for revocation under 42 C.F.R. § 424.535(a)(8)(ii).

The ALJ justifiably rejected Petitioner’s arguments that CMS improperly relied on the 2016, 2018, and 2019 claim denial determinations and did not appropriately consider the pertinent regulatory factors. From numerous detailed factual findings, the ALJ concluded

Page 14

that all three determinations were final and binding. ALJ Decision at 6-12. The ALJ further concluded that CMS “met its burden to show Petitioner filed claims that failed to meet Medicare requirements” and CMS’s reconsidered decision “expressly discusses the regulatory factors.” Id. at 14-15. Ultimately the ALJ determined that “Petitioner’s failure to comply with Medicare requirements based on three reviews made in different years and after education efforts by CMS contractors shows that CMS was authorized to revoke Petitioner’s enrollment in the Medicare program” under 42 C.F.R. § 424.535(a)(8)(ii). Id. at 18.

We uphold these determinations by the ALJ because, as we discuss below, each was supported by substantial evidence and free of legal error.

A. Petitioner’s 2016, 2018, and 2019 claim reviews and denials were fully and finally adjudicated.

Petitioner raises various arguments relating to the finality of the 2016, 2018, and 2019 claim reviews. Petitioner contends that the 2016 review of claims from 2014-2015 culminated in the reduction of “over 99%” of Petitioner’s overpayment liability, so “CMS has used claims denials that have effectively been negated on appeal.” RR at 3. Concerning the 2018 determination, Petitioner claims it “filed an administrative appeal on February 15, 2019, which is presently pending at the determination stage of the administrative process,” and Novitas’s Appeal Manager “did not deny that [the appeal] could have been routed to the wrong department.” RR at 2; P. Reply at 6; P. Post-Hr’g Br. before ALJ at 7; P. Ex. 7. Regarding the 2019 determination, Petitioner contended initially that “no administrative appeal was made available,” RR at 2, but later noted, without evidence, that Petitioner “received a formal notice of overpayment during this revocation appeal and is in the process of appealing these claims,” P. Reply at 6 n.1.

Substantial evidence supports the ALJ’s finding that the 2016 claim review process underwent full and final adjudication and “Petitioner does not dispute” that finality. ALJ Decision at 12. Petitioner pursued an appeal that “set aside over 99% of the liability” and admittedly “resolved the alleged debt” that remained “by paying $3,280.51.” P. Br. to ALJ at 7 (citing P. Ex. 3). Petitioner does not dispute that, regardless of how the overpayment issue was resolved, 13 of the 32 originally reviewed claims remained denied and Petitioner did not challenge those denials further. See P. Reply at 7. Thus, in a sample size of 32 claims, 41% of the claims – not a de minimis number – were denied because the transport was not medically necessary or the claims lacked required documentation. CMS Ex. 7.

The ALJ also supportably found that the 2018 claim denial determination was fully and finally adjudicated. ALJ Decision at 11-12. CMS’s December 31, 2018, initial determination letter detailed the claim denials and the reasons for them and “advised Petitioner of its right to request a redetermination within 120 days.” ALJ Decision at 8;

Page 15

see CMS Ex. 20, at 3-6. The ALJ acknowledged that “[t]he record contains a February 15, 2019 letter, purportedly from Petitioner to Novitas, requesting redetermination of the December 31, 2018 initial determination.” ALJ Decision at 8 (citing P. Ex. 7). However, as the ALJ found, “[t]here is no testimony or other evidence in the record that this letter was mailed to Novitas,” id., much less that Novitas received it. A Novitas Appeals Department manager testified that the mailing address on Petitioner’s letter was not the correct address for submitting a redetermination request. Tr. at 18. Petitioner also supplied no receipt, tracking number, or delivery confirmation from the United States Postal Service or any commercial delivery service; nothing from Novitas acknowledging receipt; and no witness testimony about who purportedly mailed the letter, when, or how. “In contrast, CMS provided testimony from a witness who inquired into the matter and concluded that there is no record of Novitas having received the redetermination request.” ALJ Decision at 12; see CMS Ex. 9; Tr. at 13. CMS also presented testimony that Novitas has an online “status tool” where filers of redetermination requests “can verify that they have submitted the request and it has been received.” Tr. at 20-21; see id. at 37 (describing the “Novitasphere” system, “an online thing for providers to sign in to” where “they can access all kinds of information about their claims”). Petitioner presented no evidence of confirming – or even trying to confirm – Novitas’s receipt of the February 15, 2019 letter through that online tool or otherwise.

The ALJ further supportably found that the 2019 claim denial determination was fully and finally adjudicated. Documentary evidence and hearing testimony support the ALJ’s finding that the June 24, 2019 Medicare Remittance Advice confirmed denial of the 22 noncompliant claims that Qlarant had identified and gave “notice of Petitioner’s right to appeal denied claims.” ALJ Decision at 9-10 (citing CMS Ex. 23, at 5, and Tr. at 31, 37.) As the ALJ further explained, “Petitioner neither expressly disputed receipt of the initial determination nor alleged the filing of a redetermination request.” ALJ Decision at 12. The ALJ explained that “CMS also provided testimony that there is no record that an appeal was received or is pending adjudication.” Id. at 12; CMS Ex. 21, at 1-2, ¶8; Tr. at 32, 38. Thus, substantial evidence in the record establishes that Petitioner had notice of its right to appeal the 2019 claims determinations but opted not to exercise it.

From these findings, the ALJ committed no legal error in determining that the 2016, 2018, and 2019 claim review determinations were final and binding under the governing standards. CMS explained in adopting 42 C.F.R. § 424.535(a)(8)(ii) that, when considering revocation under the regulation, the agency would exclude from consideration any “claim denial that has been both (1) fully (rather than partially) overturned on appeal; and (2) finally and fully adjudicated.” 79 Fed. Reg. at 72,513 (emphasis added); see also id. at 72,517 (“[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 [CMS’s] § 424.535(a)(8)(ii) determinations.”) (emphasis added). CMS considers a claim denial to be “finally and fully adjudicated” when “(1) the appeals process has been exhausted; or (2) the deadline for filing an appeal

Page 16

has passed.” Id. at 72,513. Substantial evidence in the record showed that the 2016 claim denials were only partially overturned on appeal, the 2018 and 2019 claim denials were not overturned on appeal, and Petitioner’s deadlines for further appeal had passed.

Thus, the 2016 claim review determination was legally binding, despite Petitioner’s contrary contentions. As CMS accurately summarizes, Petitioner ultimately “prevailed on 19 of the 32 claims” initially denied but “declined to further appeal the 13 claims denials to an ALJ.” CMS Br. at 13-14. That was Petitioner’s choice, and Petitioner’s assessment that further appeal was not worthwhile after a 99% reduction in the overpayment amount plays no part in our substantive analysis. As CMS correctly notes, the reduction of Petitioner’s overpayment liability during the appeal process is “neither a material nor relevant fact” because it is not a factor CMS must consider pursuant to 42 C.F.R. § 424.535(a)(8)(ii). CMS Br. at 14 n.1. Petitioner was on notice how to appeal the QIC’s decision, CMS Ex. 7, at 42, yet chose not to appeal; therefore, the 2016 reconsideration’s finding that 13 claims were noncompliant with Medicare regulations was “binding on all parties.” See 42 C.F.R. § 405.978. Petitioner’s assertion that CMS relied on “negated” claims denials, RR at 3, is incorrect, because CMS relied only on the 13 claims the QIC confirmed as noncompliant. CMS Ex. 2, at 1; CMS Ex. 4, at 5.

The 2018 claim review determination also was legally binding, even though Petitioner maintains it “filed an administrative appeal on February 15, 2019, which is presently pending.” RR at 2. As discussed above, the ALJ weighed the evidence and found Petitioner’s less persuasive than CMS’s. “The Board defers to an ALJ’s determinations of credibility and weighing of the evidence absent a compelling reason to do otherwise,” and Petitioner has presented no such reason. See Rosewood Care Ctr. of Swansea, DAB No. 2721, at 7 (2016), aff’d, 868 F.3d 605 (7th Cir. 2017); see also Adel A. Kallini, MD, DAB No. 3021, at 11 (2020) (“The Board will . . . defer to the ALJ’s determinations of the credibility accorded to witness testimony and of the weight given to evidence, absent a compelling reason to do otherwise.”). “[U]nder the substantial evidence standard applicable to findings of fact by an ALJ (or other trier-of-fact), the Board does not make credibility findings, re-weigh the evidence, or substitute its evaluation of the evidence for that of the ALJ.”E & I Med. Supply Servs., Inc., DAB No. 2363, at 9 (2011).

We see no legal error in the ALJ’s conclusion that the 2019 claim review determination was final and binding as well, even though Petitioner “made vague arguments that it was denied due process.” ALJ Decision at 12. The ALJ observed that Petitioner “neither expressly disputed receipt of the initial determination nor alleged the filing of a redetermination request,” whereas CMS presented testimony that Qlarant found no such request on file, including in the Medicare Appeals System. Id. at 10, 12. Again, Petitioner presents no reason, compelling or otherwise, for the Board to reject the ALJ’s assessment of the evidence. See Rosewood at 7. Regarding the 2019 claim review, Petitioner claims that it “received a formal notice of overpayment during this revocation appeal and is in the process of appealing these claims,” see P. Reply at 6 n.1, but we

Page 17

reject that assertion as unsupported in the record. CMS placed into evidence a June 24, 2019 Medicare Remittance Advice (CMS Ex. 23) that alerted Petitioner of its right to appeal within 120 days after receiving that notice, but Petitioner presented no evidence that it timely appealed. ALJ Decision at 9-10; CMS Ex. 23, at 5.

Finally, to the extent Petitioner is requesting that the Board review the merits of each Medicare payment claim denial in each claim review, the Board has no authority to do so. The governing regulations in 42 C.F.R. Part 498 permit a Medicare supplier to appeal only certain types of CMS “initial determinations,” as specified in section 498.3(b). “Denials of individual Medicare payment claims are not among the initial determinations in Part 498 that the Board or its administrative law judges are authorized to review.” BioniCare Med. Techs., Inc., DAB No. 2338, at 3 (2010). Instead, “[a] supplier or provider may appeal claim denials to a CMS contractor in accordance with procedures set out in 42 C.F.R. Part 405,” as the ALJ appropriately recognized. Ronald J. Grason, M.D., DAB No. 2592, at 8 (2014), aff’d, No. 14-2267 (C.D. Ill. Feb. 23, 2016), aff’d, 659 F. App’x. 899 (7th Cir. 2016), cert. denied, 583 U.S. 842 (2017); see ALJ Decision at 13-14. That process “includes review by administrative law judges in the Office of Medicare Hearing and Appeals and then, if appropriate, by the Departmental Appeals Board’s Medicare Appeals Council.” Vijendra Dave, M.D., DAB No. 2672, at 12 (2016). In a Part 498 appeal from a revocation determination, like this one, we have held consistently that our review “is limited to deciding whether CMS had a ‘legal basis’ for that action.” Bradley at 13.

We hold that “the ALJ correctly determined that CMS had a legal basis for revoking Petitioner’s billing privileges and, accordingly, was required, as is the Board, to uphold the revocation.” Donna Maneice, M.D., DAB No. 2826, at 8 (2017), reopening denied, DAB Ruling No. 2018-1 (Apr. 3, 2018).

B. The fully and finally adjudicated claim denials resulting from the 2016, 2018, and 2019 reviews of Petitioner’s claims provided a lawful basis for revocation of Petitioner’s Medicare billing privileges under 42 C.F.R. § 424.535(a)(8)(ii).

CMS considers six regulation-specified factors, as appropriate, in determining whether a supplier or provider has a “pattern or practice of submitting claims that fail to meet Medicare requirements.” 42 C.F.R. § 424.535(a)(8)(ii). Those factors are:

(A) The percentage of submitted claims that were denied.

(B) The reason(s) for the claim denials.

(C) Whether the provider or supplier has any history of final adverse actions
(as that term is defined under § 424.502) and the nature of any such actions.

Page 18

(D) The length of time over which the pattern has continued.

(E) How long the provider or supplier has been enrolled in Medicare.

(F) Any other information regarding the provider or supplier’s specific circumstances that CMS deems relevant to its determination as to whether the provider or supplier has or has not engaged in the pattern or practice described in this paragraph.

Id. § 424.535(a)(8)(ii)(A)-(F). In adopting these factors, CMS explained that no single factor is more important than another. 79 Fed. Reg. at 72,517 (“We have decided not to give certain factors greater weight in our § 424.535(a)(8)(ii) determinations than other[s], for the importance of each factor may vary based on the particular situation.”).

Petitioner argues that CMS did not properly consider the regulatory factors in 42 C.F.R. § 424.535(a)(8)(ii) to determine whether revocation was warranted. RR at 2. Petitioner contends there is “no indication that CMS properly considered the factors required for imposing revocation,” as the initial determination “contain[ed] no discussion of these factors.” Id.; P. Reply at 5. Petitioner asserts that “no credible evidence exists to show that the government considered and weighed any of the relevant factors,” and therefore CMS “has failed to satisfy its duty of applying the relevant factors to determine to impose the revocation.” P. Reply at 5, 6. Thus, Petitioner contends, “no proper legal basis to revoke has been established.” Id. at 6.

There was no error in the ALJ’s rejection of Petitioner’s contentions, for several reasons. First, Petitioner’s inference that CMS did not consider the relevant factors is baseless. See RR at 2; P. Reply at 5. The initial determination referenced the substance of 42 C.F.R. § 424.535(a)(8)(ii)(A), (B), and (D) by basing revocation on “the continued high percentage of submitted claims that were denied, the reasons for the claim denials and the length of time over which the pattern has continued.” CMS Ex. 2, at 2. CMS’s initial determination presumptively considered the remaining regulatory factors as well, because a reviewing official like the ALJ may presume that “government officials have ‘properly discharged their official duties’ absent ‘clear evidence to the contrary.’” See Bradley at 14 (internal citations omitted). Furthermore, the ALJ appropriately recognized that, despite Petitioner’s misplaced focus, it is the reconsidered determination and not the initial determination that formed the basis for Petitioner’s hearing request. ALJ Decision at 15. “A supplier’s right of appeal is from the reconsidered determination, not the initial determination.” OC Housecalls, Inc., DAB No. 2893, at 4 (2018) (citing 42 C.F.R. § 498.5(l)(2); see Neb Group of Arizona, LLC, DAB No. 2573, at 7 (2014) (stating petitioner’s “right of appeal was from the reconsidered determination, not the initial determination”). “In an appeal of a revocation determination, the basis for revocation as cited in the reconsidered determination controls.” Maneice at 8.

Page 19

Substantial evidence supports the ALJ’s determination that “CMS, in the reconsidered determination, expressly discusses the regulatory factors listed above.” ALJ Decision at 15. The reconsidered determination, issued on CMS letterhead by a CMS Hearing Officer, confirmed that “CMS considers, as appropriate or applicable, six factors,” and listed them. CMS Ex. 4, at 1, 6, 12. As to 42 C.F.R. § 424.535(a)(8)(ii)(A), CMS explained that the claims for 2014-2015, 2018, and 2019, had “very high error rates” of “41%, 90%, and 81%, respectively,” even after accounting for “the claims overturned by the QIC on appeal.” Id. at 7. As to section 424.535(a)(8)(ii)(B), CMS stated the medical records Petitioner provided “did not support the medical necessity of an ambulance transport” and the claim review findings established Petitioner’s “habit of submitting the same types of claims that continue to be denied.” Id. As for section 424.535(a)(8)(ii)(C), CMS acknowledged it knew of no “history of final adverse actions” against Petitioner but emphasized “this is only one factor considered” and was not in itself “determinative.” Id. Concerning section 424.535(a)(8)(ii)(D), CMS summarized Petitioner’s multi-year history of submitting non-compliant claims from 2015 through 2019. Id. With respect to section 424.535(a)(8)(ii)(E), CMS found it “particularly concerning” that Petitioner had engaged in noncompliant billing practices for most of the seven years since its 2013 enrollment, even “after being educated at least twice and made aware of its consistent billing errors and how to correct them.” Id. Concerning section 424.535(a)(8)(ii)(F), CMS found it “particularly relevant that [Petitioner] received written education regarding proper billing and submission of claims for documenting the medical necessity of an ambulance transport” repeatedly after each claim review, yet “continued to submit claims to Medicare for payment that failed to meet Medicare requirements.” Id.

The ALJ’s own assessment of each factor was equally free of error. Regarding 42 C.F.R. § 424.535(a)(8)(ii)(A), the ALJ correctly found that Petitioner’s eventually reduced overpayment amount “does not change a 41% denial rate for the 2014-2015 claim review,” and reasonably agreed with CMS’s assessment of Petitioner’s successive claim denial rates of 41%, 90%, and 81% as “very high.” ALJ Decision at 15-16 (citing CMS Exs. 4, 7, 10, 16, 20, 23). Regarding section 424.535(a)(8)(ii)(B), the ALJ reasonably found Petitioner’s “consistent failure to show medical necessity” and “failure to provide properly executed physician certifications for non-emergency ambulance transports” to be “troubling.” Id. at 16-17 (citing CMS Exs. 4, 7, 10, 16, 20, 23). Regarding section 424.535(a)(8)(ii)(C), the ALJ confirmed that “the record is devoid” of evidence of final adverse actions against Petitioner. Id. at 17. Regarding section 424.535(a)(8)(ii)(D), the ALJ correctly found that “[t]he record supports that denied claims were filed in 2014, 2015, 2018, and 2019,” a multi-year period during which Petitioner received repeated educational efforts yet remained noncompliant. Id. (citing CMS Exs. 4, 7, 20, 23). Regarding section 424.535(a)(8)(ii)(E), the ALJ supportably found that “Petitioner was enrolled in the Medicare program in 2013,” and thus “has had ample time to conform to the requirements for filing valid claims.” Id. (citing CMS Exs. 1, 4). Finally, regarding section 424.535(a)(8)(ii)(F), the ALJ recognized that CMS “found it particularly relevant

Page 20

that Petitioner received written education regarding proper billing and submission of claims in 2016 and 2018,” and the ALJ “agree[d] that the record supports CMS’s efforts to educate Petitioner.” Id. (citing CMS Exs. 4, 19, 20). The ALJ considered each factor, and substantial evidence in the record supports the ALJ’s assessment of the factors.

The ALJ thus committed no legal error in concluding that “Petitioner’s failure to comply with Medicare requirements based on three reviews made in different years and after education efforts by CMS contractors shows that CMS was authorized to revoke Petitioner’s enrollment in the Medicare program.” ALJ Decision at 18. The ALJ reasonably concluded, regarding the outcome of Petitioner’s appeal from the 2016 claim review, that even the reduced claim denial rate of 41% was still very high. The ALJ further reasonably concluded that the 41% denial rate, considered in combination with 81% and 90% denial rates from other reviews and all other factors, certainly was high enough to warrant a determination that Petitioner has a pattern or practice of submitting claims that fail to meet Medicare requirements. See Donald W. Hayes, D.P.M., DAB No. 2862, at 10 (2018) (stating that, even if an “audit might have been inaccurate in some respects,” any inaccurate conclusions by auditor “do not constitute a basis to disregard the 16 claims Petitioner does not dispute he submitted and which CMS determined were indicative of a pattern of abusive billing”).

We reject Petitioner’s argument that “the three referenced reviews” in 2016, 2018, and 2019 “only indicate sporadic denials based upon medical necessity, which does not support revocation.” RR at 2; see also P. Reply at 7 (“At most, the adjudicated claims (and remaining denied claims) in the administrative appeal establish only that the conduct is sporadic, and would not necessarily support a ‘pattern or practice’ as required under § 424.535(a)(8)(ii).”). When adopting 42 C.F.R. § 424.535(a)(8)(ii), CMS stated that “sporadic billing errors would not result in revocation” and “occasional misunderstandings” of Medicare requirements resulting in claims denials “will generally not rise to the level of a ‘pattern or practice’ of improper billing” warranting revocation. 79 Fed. Reg. at 72,514. CMS stressed that the regulation would apply only “where the behavior could not be considered sporadic,” distinguishing “sporadic or occasional claim denials” from “[c]onstant, repeated, and systemic claim denials.” Id. To illustrate the circumstances when “revocation could be proper, once all of the appropriate factors have been considered,” CMS listed these hypothetical facts:

• There is a demonstrable pattern or practice;
• The pattern is long-term or has otherwise continued over a period of time;
• Education regarding appropriate billing is or has been made available to the provider in the form of claim denial notices, CMS instructional materials (such as manuals and articles) on CMS’ Web site, etc., yet the provider or supplier continues to submit noncompliant claims, and

Page 21

• A significant percentage of the provider’s or supplier’s claims have been denied.

Id. at 72,519.

Based on the ALJ’s well-supported factual findings, discussed above, Petitioner’s case dovetails with CMS’s example of an appropriate revocation under 42 C.F.R. § 424.535(a)(8)(ii). Three reviews of Petitioner’s claims in different years resulted in denial of 70 of the 98 claims primarily for one reason: lack of documentation supporting the medical necessity of ambulance transport. CMS repeatedly tried to teach Petitioner about the documentation that must accompany ambulance transport claims (particularly for procedure codes A0425 and A0428) to make them compliant. CMS repeatedly warned of potential revocation if Petitioner’s errors continued. Yet Petitioner continued submitting the same types of non-compliant claims that CMS already had denied. These persistent errors were not “sporadic.”

Petitioner also fails to recognize the fundamental importance of documented medical necessity to the approval of Medicare claims. “Medical necessity is the most basic requirement for a Medicare claim,” as the ALJ recognized, and accordingly “ambulance service suppliers must maintain appropriate documentation” of medical necessity to present to a CMS contractor on request. ALJ Decision at 16; see Act § 1862(a)(1)(A) (excluding Medicare payments for “items and services [that] are not reasonable and necessary for the diagnosis or treatment of illness or injury”); 42 C.F.R. § 410.40(d) (detailing medical necessity requirements for Medicare-covered ambulance services).

Furthermore, as the ALJ correctly stated, “CMS explained in rulemaking for 42 C.F.R. § 424.535(a)(8)(ii) 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.’” ALJ Decision at 18 (quoting 79 Fed. Reg. at 72,513); see also 79 Fed. Reg. at 72,516 (“[I]t 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.”). The Board repeatedly has confirmed the responsibility of providers and suppliers to comply with Medicare statutes and regulations when submitting claims for reimbursement. See, e.g., Monique Barbour, M.D., DAB No. 2958, at 14 (2019) (applying principle, while affirming revocation under section 424.535(a)(8), that “CMS holds providers and suppliers responsible for the claims they submit or the claims submitted on their behalf”); Meadowmere Emergency Physicians, PLLC, DAB No. 2881, at 11 (2018) (confirming, in revocation case, the duty of Medicare providers and suppliers, as Medicare program participants, to familiarize themselves with Medicare requirements). For providers and suppliers, a certification that they agree “to abide by the Medicare laws, regulations, and program instructions” is a condition of enrollment in the Medicare program, and

Page 22

Petitioner has made that certification and agreement. CMS Ex. 18, at 23-29.

We repeat that by governing regulation, CMS has discretionary authority to revoke or not revoke in a particular case, and the role of the ALJ and the Board“is limited to determining whether CMS’s action is legally authorized and does not extend to second-guessing whether CMS properly exercised its discretion.” Acute Care Homenursing Servs., Inc., DAB No. 2837, at 9 (2017). “ALJs and this Board may review only whether CMS had a valid legal basis to revoke billing privileges, and, if it did, may not address whether it properly exercised its discretion to do so.” Wendell Foo, M.D., DAB No. 2904, at 25 (2018), aff’d, 420 F. Supp. 3d 1100 (D. Haw. 2019); see also George M. Young, M.D., DAB No. 2750, at 11 (2016) (“To the extent CMS exercised its discretion in ultimately deciding to go forward with revocation in Petitioner’s case, it is not for the ALJ and the Board to look behind that exercise of discretion to ask whether [the ALJ], or the Board, standing in CMS’s shoes, would reach the same decision to revoke.”). In short, we determine whether CMS could revoke, not whether it should revoke, and in this case we conclude that CMS lawfully could revoke and had ample basis to do so.

III. The ALJ did not err in rejecting Petitioner’s constitutional arguments.

The ALJ did not err in refusing to address Petitioner’s constitutional arguments. The ALJ and the Board lack authority to overturn a legally valid revocation on constitutional grounds. See Pennsylvania Physicians, P.C., DAB No. 2980, at 7 (2019); see also Gorovits at 18-19 (“The Board has repeatedly held that ALJs and the Board are bound by the Medicare enrollment regulations” and lack authority to overturn a lawfully imposed revocation on constitutional grounds); Michael Scott Edwards, OD, & M. Scott Edwards, OD, PA, DAB No. 2975, at 17 (2019) (“The Board and the ALJ must follow the applicable enrollment law and regulations and have no authority to refuse to apply those authorities based on constitutional challenges.”); Cornelius M. Donohue, DAB No. 2888, at 8-9 (2018) (“[W]e lack the authority to overturn, on constitutional grounds, a revocation that was imposed in accordance with the applicable law and regulations; if the regulatory prerequisites for revocation (both procedural and substantive) are satisfied, as they were here, we must apply the regulations and sustain the revocation.”); Bajwa at 15 (“ALJs and the Board are bound by the regulations and may not declare them unconstitutional or decline to follow them on that basis.”).

Even if not all of Petitioner’s “due process” arguments are of constitutional dimension, we see no error in the ALJ’s disposition of Petitioner’s “vague arguments that it was denied due process” generally, because Petitioner established no such denial. See ALJ Decision at 12. The “essence of due process” is that a person at risk of serious loss of liberty or property interests must receive notice of the opposing party’s case and an opportunity to address it. Mathews v. Eldridge, 424 U.S. 319, 332, 348 (1976). Petitioner was on ample notice why its claims did not meet Medicare requirements and that revocation was possible if Petitioner kept submitting such claims. See, e.g., CMS

Page 23

Ex. 19, at 2; CMS Ex. 20, at 6. Furthermore, “no violation of due process occurs where deficient notice results in no prejudice.” Hayes at 14. Even if Petitioner had proven non-receipt of any of the myriad notices of its deficient claims and appeal rights, Petitioner failed to prove any resulting prejudice. Petitioner has had full opportunity in this appeal to challenge the legal basis for its revocation under 42 C.F.R. § 424.535(a)(8)(ii).

IV. The ALJ did not err in concluding that CMS had a legitimate basis to include Petitioner on the preclusion list.

Petitioner challenges placement on the preclusion list only by challenging the revocation itself.SeeRR at 4 (“Inasmuch as the revocation under 42 C.F.R. § 424.535[a](8)(ii) is unwarranted and should be set aside, Petitioner should not have been added to the CMS Preclusion List effective June 1, 2020.”). Petitioner otherwise alleges no error by CMS in applying the governing regulatory requirements.

Under such circumstances, affirmance is appropriate. Cf. Duke Ahn, M.D., DAB No. 3093, at 14 (2023). Having determined that CMS had a lawful basis for revocation under 42 C.F.R. § 424.535(a)(8)(ii), we affirm the ALJ’s conclusion that all requirements were met for CMS’s addition of Petitioner to the preclusion list.

Conclusion

We affirm the ALJ’s conclusion that CMS lawfully revoked Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii) and lawfully placed Petitioner on the preclusion list.

Endnotes

¹ We cite to and apply the regulations in effect on December 9, 2019, when CMS’s contractor issued the initial determination revoking Petitioner’s enrollment. See Meadowmere Emergency Physicians, PLLC, DAB No.2881, at 2 n.2 (2018).

² Effective January 1, 2022, CMS amended the factors listed in 42 C.F.R. § 424.535(a)(8)(ii) and reduced the number of factors to four. Medicare Program; CY 2022 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment Policies; Medicare Shared Savings Program Requirements; Provider Enrollment Regulation Updates; and Provider and Supplier Prepayment and Post-Payment Medical Review Requirements, 86 Fed. Reg. 64,996, 65,334-35 (Nov. 19, 2021) (Final Rule). The CMS determinations on appeal here predate that amendment, which therefore plays no part in this case.

³ This section, drawn from the record, provides context and does not replace or modify the ALJ’s findings.

⁴ Regarding the reviewed 2019 claims, CMS and the ALJ relied only on the 22 that Qlarant denied, and not on any others referenced in Novitas’s later June 24, 2019 Medicare Remittance Advice notice. ALJ Decision at 9-10 n.5; CMS Ex. 2, at 2; see CMS Reply Br. to ALJ at 11 n.1 (“The electronic remittance include[d] information regarding 30 total denied claims . . . . 22 of these were cited as a basis for CMS’s revocation decision.”).

⁵ CMS’s reconsidered determination noted that the initial determination had listed 42 C.F.R. §§ 423.100 and 423.120(c)(6) as authorities supporting Petitioner’s placement on the preclusion list, but as Petitioner “is not an individual prescriber, these authorities were included in error.” CMS Ex. 4, at 1 n.1.

⁶ CMS noted that the December 9, 2019 revocation letter incorrectly stated that 36 (not 35) of the claims reviewed in 2018 were denied. CMS Ex. 4, at 3 n.2; see CMS Ex. 2, at 1; ALJ Decision at 2. The December 31, 2018, Notice of Medical Review Results shows that 35 (not 36) claims were denied and the remaining four claims (Nos. 3918288682570, 3918288682590, 3818274709110, and 3818274709120) were approved. CMS Ex. 20, at 8-24. The revocation letter’s minor error on this point was inconsequential, because both CMS on reconsideration and the ALJ on further review recognized that the percentage of claims actually denied in the 2018 review was 89.7% (that is, 35 divided by 39), rounded to 90%. CMS Ex. 4, at 3; ALJ Decision at 15-16.

⁷ Petitioner’s May 28, 2020 filings included an unpaginated set of 10 exhibits; Petitioner refiled them as a paginated set on August 10, 2020. This Decision cites to the latter exhibit set.

⁸ The written Declaration of the Novitas Appeals Department director contained a misdated reference to Petitioner’s “redetermination request stemming from the October 31, 2018, Medical Review letter.” CMS Ex. 9, at 2 (emphasis added). The Declaration also referred to “the December 31, 2018, Medical Review letter,” id. at 1, and the Novitas employee’s oral testimony confirmed December 31, 2018 as the correct date. Tr. at 21-22.

⁹ The ALJ cited “42 C.F.R. §§ 422.2 and 423.100” as the authorities relevant to the preclusion list determination. ALJ Decision at 5; see also id. at 19. As previously noted, CMS’s reconsidered determination stated section 423.100 did not apply because Petitioner “is not an individual prescriber” subject to that provision. CMS Ex. 4, at 1 n.1. Petitioner claims no error concerning this issue, so it is not before us. Even if it were, we would consider the ALJ’s citation to section 423.100, if error at all, to be harmless because the pertinent criteria under sections 422.2 and 423.100 are substantively identical and would produce the same result. Cf. Foot Specialists of Northridge, DAB No. 2773, at 10-11 (2017) (treating ALJ’s alleged citation to wrong version of regulation as harmless error “because the two versions of the regulation are substantively the same”); Denise A. Hardy, D.P.M., DAB No. 2464, at 5 (2012) (concluding ALJ’s reliance on wrong regulatory subsection was harmless error because the correctly cited subsection required the same result).

¹⁰ Petitioner has not preserved any further factual or legal issue through general claims of error. For example, Petitioner broadly asserts, “We dispute and contest each and every finding of fact relied upon by the ALJ to sustain Novitas’s decision to impose revocation,” and the “revocation was based upon incorrect, inadequate or improperly weighed evidence and/or an improper application of the law.” RR at 3. Those assertions cannot and do not preserve any appellate issue beyond the ones that Petitioner has specified and challenged by concisely stated arguments supported with record citations and relevant legal authority. See Board Guidelines, “Starting The Review Process,” ¶(d) (requiring request for review to “specify each finding of fact and conclusion of law” disagreed with and set forth “the basis for each challenge” separately, with “concisely stated” arguments supported “by precise citations to the record and/or by precise citations to statutes, regulations or other relevant authorities”).