Blossomwood Medical, P.C., and Vytautas Pukis, M.D., DAB CR5068 (2018)

Department of Health and Human Services
Civil Remedies Division

Docket No. C-18-366 and C-18-367
Decision No. CR5068


I grant summary judgment sustaining the determination of a Medicare contractor, as affirmed on reconsideration, to revoke the Medicare participation of Petitioners, Blossomwood Medical, P.C. and Vytautas Pukis, M.D.

I.  Background

These two cases are docketed separately.  Petitioner Blossomwood Medical, P.C. (Petitioner Blossomwood) is docketed as C-18-366.  Petitioner Vytautas Pukis, M.D. (Petitioner Pukis, M.D.) is docketed as C-18-367.  The parties in these cases did not request that I consolidate them.  However, the two cases involve the same facts and law.  Petitioner Pukis, M.D. is affiliated with Petitioner Blossomwood, a professional corporation.  The contractor premised its determination in each of these two cases on identical facts (the same Medicare reimbursement claims).  The regulations that govern the outcome of each case are the same. 

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It is efficient that I decide these two cases in a single decision.  That does not compromise the parties’ appeal rights in any respect.  A party who is dissatisfied with the outcome as it affects that party may file an appeal without regard to whether the other, similarly situated party opts to appeal.

The Centers for Medicare & Medicaid Services (CMS) moved for summary judgment in each case and Petitioner in each case opposed CMS’s motion.  In C-18-366, CMS filed three exhibits that it identified as CMS Ex. 1-CMS Ex. 3.  Petitioner Blossomwood filed five exhibits that it identified as P. Ex. 1-P. Ex. 5.  In C-18-367, CMS filed four exhibits that it identified as CMS Ex. 1-CMS Ex. 4.  Petitioner Pukis, M.D., filed five exhibits that he identified as P. Ex. 1-P. Ex. 5.

It is unnecessary that I rule on the admissibility of the parties’ exhibits in either case because there are no disputed issues of material fact.  I cite to some of the exhibits in these decisions but only to illustrate facts that are not in dispute.  Where I cite to an exhibit I further identify it with the case docket number so as to avoid confusion.  For example, if I cite to CMS Ex. 1 in C-18-366 I cite it as “C-18-366 Ex. 1.”

II.  Issue, Findings of Fact and Conclusions of Law

A. Issue

The issue is whether a Medicare contractor, acting on behalf of CMS, may revoke each Petitioner’s Medicare participation.1

B. Findings of Fact and Conclusions of Law

The essential facts of these two cases are not in dispute.  Petitioners in these two cases submitted or caused to be submitted numerous claims for Medicare items or services that could not have been furnished as claimed.  Petitioner Blossomwood submitted reimbursement claims on behalf of Petitioner Pukis, M.D. for services allegedly performed by him during a span of about three years – from June 17, 2013 through June 20, 2016.  C-18-367 CMS Ex. 4.  Petitioner Blossomwood submitted 115 claims for services allegedly rendered to 108 Medicare beneficiaries by Petitioner Pukis, M.D.  C‑18-366 CMS Ex. 1 at 4; C-18-367 CMS Ex. 1 at 4; C-18-367 CMS Ex. 2.  Petitioner Pukis, M.D. could not possibly have provided the claimed services because he was not in the United States on the dates when the claimed services were allegedly rendered.  C‑18‑367 CMS Ex. 1 at 3-4.

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CMS revoked each Petitioner’s Medicare enrollment and billing privileges on the authority of 42 C.F.R. § 424.535(a)(8)(i).  This regulation allows CMS to revoke a supplier’s enrollment and billing privileges if the supplier “submits a claim or claims for services that could not have been furnished to a specific individual on the date of service.”  42 C.F.R. § 424.535(a)(8)(i).  

On its face, the regulation permits CMS to revoke Medicare enrollment and billing privileges in the circumstance where a supplier submits only a single claim for a service allegedly provided to a beneficiary under circumstances where the supplier could not possibly have provided the claimed service.  However, CMS has opted to invoke the regulation in the circumstance where a supplier submits “at least three” claims that could not have been provided.  73 Fed. Reg. 36,448, 36,455 (June 27, 2008).

Here, Petitioners submitted or caused to be submitted 115 claims for services allegedly provided to 108 beneficiaries by Petitioner Pukis, M.D. during a period of time when he could not possibly have provided the alleged services, given that he was out of the country on the dates when the alleged services were claimed to have been performed.  That is more than sufficient basis for CMS to revoke each Petitioner’s Medicare participation pursuant to 42 C.F.R. § 424.535(a)(8)(i).

Petitioners do not deny that they submitted or caused to be submitted the reimbursement claims that are at issue.  They contend, however, that these claims were inadvertent errors committed by the individuals or entities that filed the claims.  They argue that they should not be penalized for mistakes that do not evidence bad faith or fraud.  As support for this argument, Petitioners cite to the Federal Register preamble language of 42 C.F.R. § 424.535(a)(8), which states that revocation would not be effectuated where there are “isolated occurrences or accidental billing errors.”  73 Fed. Reg. 36,448, 36,455.  They also rely on the preamble’s language, which states that CMS would revoke only where suppliers engage in a “pattern of improper billing.”  Id.

Petitioners assert that the claims at issue result from three categories of inadvertent mistakes: incompatibility between Petitioner Blossomwood’s electronic health record system and its web-based billing system; inadvertent charting and billing errors by certified registered nurse practitioners employed by Petitioner Blossomwood; or Petitioner Pukis M.D.’s certification of home healthcare orders for patients that had been released from hospital care when he was out of the country.  Petitioners additionally argue that the 115 claims at issue diminish greatly in significance when measured against the large number of patients that Petitioner Pukis, M.D. sees in the course of providing care.

Petitioner’s arguments are not persuasive.  They rest on a mischaracterization of 42 C.F.R. § 424.535(a)(8)(i).  The authority to revoke provided by this regulation does

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not depend on a finding of fraud or negligence by a supplier.  The regulation plainly allows CMS to revoke Medicare enrollment and billing privileges for any instance in which a supplier files a claim for a beneficiary when the supplier is not in the state or country when services were furnished.  42 C.F.R. § 424.535(a)(8)(i)(B); see Patrick Brueggeman, D.P.M., DAB No. 2725 at 10-11 (2016); Louis J. Gaefke, D.P.M., DAB No. 2554 at 7 (2013); Howard B. Reife, D.P.M., DAB No. 2527 at 5 (2013).  As a matter of discretion, the Secretary of Health and Human Services (Secretary) interprets the regulation to apply where there are three or more such claims.  However, once a supplier submits three or more such claims, the regulation conclusively allows CMS to revoke.  Med-Care Diabetic & Med. Supplies, Inc., DAB No. 2764 at 17 (2017). 

The regulation imposes a very heavy burden on suppliers to assure that they do not submit reimbursement claims for services that could not have been provided on the claimed service dates.  The regulation requires strict vigilance by suppliers at least in part because the Medicare program processes millions of reimbursement claims annually.  The program cannot tolerate lax claims submissions because the costs to the program could be enormous in total.  Thus, Medicare holds its suppliers to an extremely strict standard of accuracy.

Even multiple false claims filed accidentally or through errors committed by subordinate employees support revocation of Medicare billing privileges.  As I have stated, the requirement for strict vigilance does not excuse a series of billing errors by a provider.  In this case the total number of errors is very substantial – 115 false claims – and that amply justifies the contractor’s determinations.

Thus, Petitioners’ assertions of inadvertent or innocent mistakes do not raise material issues of disputed facts.  Revocation is justified in these cases even if Petitioners submitted the 115 claims inadvertently.  However, I find also that Petitioners did not adduce facts that support their claims of inadvertence.  In examining Petitioners’ exhibits I find only conclusions.  See, e.g., C-18-366 P. Ex. 2, Appendices.  There is nothing in those documents that might prove, for example, that the false claims at issue were the consequence of some incompatibility between billing systems as Petitioners allege.

Petitioners contend that CMS’s application of 42 C.F.R. § 424.535(a)(8)(i) allows for “arbitrary” outcomes.  That assertion is incorrect.  As I have discussed, the regulation permits CMS or one of its contractors to revoke Medicare participation where there is even one false claim, without regard to the reason for submitting that claim.  The Secretary has provided a small amount of leeway, allowing for submission of up to three such claims before revocation may be effectuated based on a pattern of false claims.  That standard is very strict and it imposes a duty on suppliers to police their claims for accuracy.  However, strictness is not synonymous with arbitrariness.  The regulation’s standard is plain on its face and quite easy to understand.

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I also find to be without merit Petitioners’ assertions that some of the claims at issue may be excused because they are for home healthcare services that Petitioner Pukis, M.D. authorized before he left the United States.  Petitioners’ theory apparently is that once Petitioner Pukis, M.D. authorized the services, future services could be claimed under his provider number even if he was not around to supervise the provision of these services.  Nothing in the regulations governing home healthcare services supports this theory.  See 42 C.F.R. § 424.22(a)(2).  This regulation allows a home healthcare agency to obtain a certificate of need from a treating physician at the time when a beneficiary is admitted to the agency’s care.  It does not suggest that a physician’s duty to supervise and to assure that services are rendered as claimed ends once he or she signs the certification.  To the contrary, the physician remains under a continuing duty to supervise all physician‑authorized services rendered by the home healthcare agency and to assure that claims for those services are correct and accurate.  It begs reality to contend that a physician is excused from this continuing obligation while he or she is out of this country.

I am not persuaded by Petitioners’ assertions that the claims at issue are diminished in legal effect because they are a small fraction of the total number of services that Petitioner Pukis, M.D. provided.  The 115 claims at issue are sufficient in and of themselves to provide CMS with authority to revoke Petitioners’ Medicare participation and billing privileges.  CMS is not required to prove that these claims represent a substantial percentage of the total services that Petitioner Pukis, M.D. provided.

Petitioners argue additionally that Medicare beneficiaries in the community that they serve will be affected adversely if Petitioners’ Medicare participation is revoked.  That is not an argument that I may hear and decide.  The regulation governing revocation does not make CMS’s or a contractor’s authority to revoke participation contingent on findings that revocation will not adversely affect a local beneficiary population.2

  • 1. The contractor imposed a three-year bar on reenrollment in Medicare on each Petitioner in addition to revoking that Petitioner’s Medicare participation. Petitioners did not challenge the length of the reenrollment bar. I note that the duration of such a bar is not an initial determination that gives rise a right to a hearing.
  • 2. CMS contends that it reviewed Petitioners’ claim that local beneficiaries would be adversely affected by the contractor’s determinations to revoke participation and rejected that claim. See C-18-366 CMS Ex. 1.