Larry Couture, M.D., DAB CR5283 (2019)

DECISION

Petitioner, Larry Couture, M.D., is a California physician and the owner of two medical practice groups, Larry H Couture MD Inc. and Couture Medical Group Inc.  He and his practice groups participated in the Medicare program until May 8, 2016, when the Centers for Medicare & Medicaid Services (CMS) revoked their enrollments, citing 42 C.F.R. § 424.535(a)(12).  CMS took this action because, in its view, the California Medicaid Agency effectively terminated Petitioner Couture’s Medicaid (referred to as Medi-Cal) enrollment when, effective May 11, 2015, it deactivated his provider number.  Although Petitioner Couture initially (partially) appealed, he withdrew the appeal on June 17, 2015.

Petitioner now appeals his Medicare revocation.

I find that, pursuant to 42 C.F.R. § 424.535(a)(12), CMS appropriately revoked the Medicare enrollments of Petitioner Couture and his practice groups because the California Medicaid Agency terminated his Medicaid participation, and the state’s action is final.  I therefore affirm CMS’s determination.

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Background

In revocation notices, dated April 8, 2016, the Medicare contractor, Noridian Healthcare Solutions, revoked the Medicare enrollments of Petitioner Couture, Larry H Couture MD Inc., and Couture Medical Group Inc.  As the notice letters explain, the contractor acted pursuant to 42 C.F.R. § 424.535(a)(12) because the California Medicaid Agency had terminated Petitioner’s Medi-Cal participation, and his appeal rights had been exhausted.  CMS Ex. 1 at 14-19.

Petitioner requested further review.  CMS Ex. 1 at 1.  In a reconsidered determination, dated July 12, 2016, the contractor acknowledged that Petitioner Couture was allowed to participate in the Medi-Cal program through a managed care plan, but affirmed the revocation because Petitioner was barred from the Medi-Cal program as a fee-for-service provider.  CMS Ex. 3.

Petitioner appealed, and the parties have filed cross-motions for summary judgment.

Exhibits. With its pre-hearing brief and motion for summary judgment (CMS Br.), CMS filed three exhibits (CMS Exs. 1-3).  With his pre-hearing brief, opposition to CMS’s motion, and cross-motion for summary judgment (P. Br.), Petitioner filed fifteen exhibits.  (P. Exs. 1-15).  CMS replied to Petitioner’s cross-motion (CMS Reply), and Petitioner filed a sur-reply (P. Sur-reply).

In the absence of any objections, I admit into evidence CMS Exs. 1-3 and P. Exs. 1-15.

Summary Judgment.  Although the parties have moved for summary judgment, I find that this matter may be decided on the written record, without considering whether the standards for summary judgment are satisfied.  In my initial order, I instructed each party to submit the written direct testimony of any proposed witnesses and, if it wished to cross-examine an opposing witness, to state so affirmatively.  Acknowledgment and Pre-hearing Order at 5 (¶¶ 8, 9) (September 9, 2016).  CMS has no witnesses.  Petitioner lists three witnesses and submits their written declarations, but CMS does not ask to cross-examine any of them.  An in-person hearing would therefore serve no purpose, and I may decide this case based on the written record.  See Acknowledgment at 5 (¶ 10).

Discussion

Pursuant to 42 C.F.R. § 424.535(a)(12), CMS properly revoked Petitioner Couture’s Medicare enrollment and that of his practice groups because the California State Medicaid agency terminated their Medicaid billing privileges, and the state agency’s actions are final.1

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Statute and regulations.  CMS regulates the Medicare enrollment of providers and suppliers.  Social Security Act (Act) § 1866(j)(1)(A).  It may revoke a supplier’s enrollment in the Medicare program if a state Medicaid agency has terminated his Medicaid billing privileges, and he has exhausted all applicable appeal rights.  42 C.F.R. § 424.535(a)(12).  So long as I find that these two criteria are met, I must sustain the revocation.  Douglas Bradley, M.D., DAB No. 2663 at 6-7, 16 (2015); Letantia Bussell, M.D., DAB No. 2196 at 13 (2008).

Termination of Petitioner’s Medicaid billing privileges.  Petitioner Couture apparently formed a third practice group, Parkview Medical Group.  On behalf of that group, he applied for Medi-Cal enrollment.

In a letter dated April 21, 2015, the California Medicaid Agency (California Department of Health Care Services) advised Petitioner that it was deactivating his and his practice’s Medi-Cal provider numbers (NPI 1649295676; NPI 1679582258) effective 20 days from the date of the letter (i.e., effective May 11, 2015).  CMS Ex. 1 at 22.  The Medi-Cal agency took this action because, in his Parkview application, Petitioner Couture did not disclose disciplinary actions taken against his medical license.  CMS Ex. 1 at 21.

Petitioner appealed Parkview’s denial of enrollment, but apparently did not appeal his own deactivation.  In any event, on June 17, 2015, he withdrew the Parkview appeal.  Petitioner thus exhausted his state appeal rights.  CMS Ex. 1 at 26; CMS Ex. 2.

Notwithstanding the plain language of the state’s notice letter and his exhaustion of his state appeal rights, Petitioner maintains that CMS wrongfully revoked his Medicare enrollment and that of his medical practice groups.  Petitioner concedes that the state agency “deactivated” his fee-for-service enrollment in the Medi-Cal program because he failed to disclose, in his medical group’s application, an earlier reprimand involving his medical license.  However, the state agency has allowed him to participate in the Medi-Cal program as a network provider for a Medi-Cal managed care plan, which, in Petitioner’s view, means that his Medicaid billing privileges were neither terminated nor revoked.

I disagree.  I find that CMS had the authority to revoke Petitioner’s Medicare enrollment (and that of his medical practice groups) because his Medi-Cal billing privileges were terminated.  In reaching this conclusion, I focus on the “nature and effect” of the state’s action and consider whether that action “is consistent with – and likely necessary to achieve – section 424.535(a)(12)’s purpose, which is to coordinate the effort of federally-financed healthcare programs to protect their fiscal integrity and beneficiaries.”  Douglas Bradley, DAB No. 2663 at 7.

Here, the California Medicaid Agency denied Petitioner the opportunity to bill the Medi-Cal program because he failed to disclose a disciplinary action involving his medical

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license.  As the Secretary of Health and Human Service has recognized, this type of omission establishes that a provider/supplier poses a threat to the program’s fiscal integrity.  42 C.F.R. § 424.535(a)(4) (allowing CMS to revoke Medicare enrollment based on false or misleading information on an enrollment application); 42 C.F.R. §§ 424.535(a)(9) and 424.516(d)(ii) (allowing CMS to revoke Medicare enrollment based on failing to report an adverse legal action).  Thus, the state agency’s termination of Petitioner’s billing privileges and CMS’s revocation of his Medicare enrollment coordinate to protect the fiscal integrity of both programs.

That the state agency allowed Petitioner to participate in Medi-Cal through a managed care organization does not change the potential threat he poses to the fiscal integrity of federally-financed healthcare programs.  Managed care organizations accept a set payment per member per month.  The provider or supplier of the services is removed from the billing, posing less-to-no risk to the program.

No one disputes that the state agency terminated Petitioner’s billing privileges and that its action is final.  That the state agency allowed him limited participation in the Medi-Cal program – participation that does not threaten its financial integrity – does not alter the fact that his fee-for-service enrollment was terminated, which gave CMS the authority to revoke his Medicare enrollment.

Conclusion

I affirm CMS’s determination.  I find that CMS may revoke Petitioner Couture’s Medicare enrollment because the California Medicaid Agency terminated his fee-for-service participation in the program, and that action is final.  CMS may therefore revoke his Medicare enrollment pursuant to 42 C.F.R. § 424.535(a)(12).