Farhad Nowzari, M.D., ALJ Ruling 2020-2 (HHS CRD Oct. 25, 2020)

REMAND

Petitioner, Farhad Nowzari, M.D., is a physician specializing in urology, who practices in Torrance, California.  After his Medicare billing privileges were deactivated, he applied to reenroll in the program.  The Centers for Medicare & Medicaid Services (CMS) granted his application, without citing the effective date in its notice. 

Petitioner appeals, primarily challenging the deactivation, an issue that I am not authorized to review.  However, because no evidence in this record establishes the date Petitioner filed his subsequently-approved enrollment application, and because CMS has offered, without explanation or support, different effective dates, I remand this matter to CMS to give the agency an opportunity to develop a coherent position as to the appropriate effective date for Petitioner’s enrollment. 

At the same time, I encourage CMS to consider whether the Medicare contractor fairly deactivated Petitioner’s Medicare enrollment.  The undisputed evidence in this record establishes that the contractor sent its revalidation notice to the wrong address – an address that differs from any mailing address it had on file.  Both the reconsidered determination and CMS’s brief refer to the address “on file at the time,” but the address they identify as “on file at the time” is not the address to which the notice was sent.

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Background

In a letter dated October 14, 2016, the Medicare contractor, Noridian Healthcare Solutions, advised Petitioner Nowzari that it approved his Medicare enrollment.  The letter does not mention the effective date of enrollment.  CMS Ex. 4.  A reconsidered determination, dated February 1, 2017, finds that September 27, 2016, is Petitioner’s effective date of enrollment.  CMS Ex. 2 at 2.

Nevertheless, at this level, CMS argues – inconsistently – that September 27 is the correct effective date (CMS Br. at 3, 6) and that October 12, 2016, is the correct effective date.  CMS Br. at 5, 8, 9; see also CMS Br. at 2 (“Subsequently, on or about September 27, 2016, Dr. Nowzari submitted his Medicare enrollment application to Noridian.  On or about October 14, 2016, Noridian sent Dr. Nowzari its unfavorable decision establishing an effective date of October 12, 2016.”) (emphases added).

Discussion

Enrollment.  Petitioner Nowzari participates in the Medicare program as a “supplier” of services.  Social Security Act § 1861(d); 42 C.F.R. § 498.2.  To receive Medicare payments for the services he furnishes to program beneficiaries, a prospective supplier must enroll in the program.  42 C.F.R. § 424.505.  “Enrollment” is the process by which CMS and its contractors: 1) identify the prospective supplier; 2) validate the supplier’s eligibility to provide items or services to Medicare beneficiaries; 3) identify and confirm a supplier’s owners and practice location; and 4) grant the supplier Medicare billing privileges. 42 C.F.R. § 424.502.  

To enroll, a prospective supplier must complete and submit an enrollment application.  42 C.F.R. §§ 424.510(d)(1), 424.515(a).  An enrollment application is either a CMS-approved paper application or an electronic process approved by the Office of Management and Budget.  42 C.F.R. § 424.502.1  When CMS determines that a prospective supplier meets the applicable enrollment requirements, it grants Medicare billing privileges, which means that the supplier can submit claims and receive payments from Medicare for covered services provided to program beneficiaries.  For a physician, the effective date for his billing privileges “is the later of the date of filing” a subsequently-approved enrollment application or “the date that [he] first began furnishing services at a new practice location.”  42 C.F.R. § 424.520(d) (emphasis added).

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Deactivation.  To maintain its billing privileges, a supplier must, at least every five years, resubmit and recertify the accuracy of his enrollment information, a process referred to as “revalidation.”  42 C.F.R. § 424.515.  In addition to periodic revalidations, CMS may, at other times and for its own reasons, ask a supplier to recertify the accuracy of his enrollment information.  42 C.F.R. § 424.515(d)-(e).  Within 60 days of receiving CMS’s notice to recertify, the supplier must submit an appropriate enrollment application with complete and accurate information and supporting documentation.  42 C.F.R. § 424.515(a)(2).

If, within 90 days from receipt of CMS’s notice, the supplier does not furnish complete and accurate information and all supporting documentation or does not resubmit and certify the accuracy of its enrollment information, CMS may deactivate his billing privileges, and no Medicare payments will be made.  42 C.F.R. §§ 424.540(a)(3), 424.555(b).  To reactivate his billing privileges, the supplier must complete and submit a new enrollment application.  42 C.F.R. § 424.540(b)(1).  It is settled that, following deactivation, section 424.520(d) governs the effective date of reenrollment.  Urology Grp. of NJ, LLC, DAB No. 2860 at 7 (2018); Willie Goffney, Jr., M.D., DAB No. 2763 at 7 (2017).

Petitioner’s deactivation and reenrollment.  In a notice letter, dated April 15, 2016, the contractor directed Petitioner to revalidate his Medicare enrollment by updating or confirming the information in his record.  The letter directed Petitioner to the PECOS website and explained that a supplier could revalidate through the PECOS system or by mailing to the contractor a completed CMS-855 Medicare enrollment application.  CMS Ex. 1 at 1-2.  The letter warned that Petitioner had to revalidate by September 30, 2016, or risk his Medicare enrollment being deactivated; it explained that, during the period of deactivation, Medicare would not pay for the services rendered.  CMS Ex. 1. 

Both the reconsidered determination and CMS’s exhibits establish that the contractor sent this notice letter to the wrong address.  The notice is addressed to:  5555 Ferguson Drive, Suite 310-15, Commerce, California.  In its reconsidered determination, the contractor maintains that it sent the notice “to the correspondence address that was on file at the time, 4305 Torrance Blvd., Ste 500, Torrance, CA.”  CMS Ex. 2 at 2.  These are obviously different addresses, and I find it baffling that neither the contractor nor CMS seems to have noticed that fact, or, if they did, they disregarded it. 

But it gets worse.  In its brief, CMS also claims that the contractor sent the notice letter to “the mailing address on file for Dr. Nowzari,” and provides a screen shot of that address:  4305 Torrance Blvd., Ste. 500, Torrance, CA.  CMS Br. at 6 (citing CMS Ex. 6).  CMS also claims that the contractor notifies suppliers, by e-mail and telephone, of revalidation requests, but it provides no evidence that the contractor did so in this case. 

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Moreover, according to Petitioner’s “Enrollment Record Summary,” since his initial enrollment in the Medicare program, Petitioner has had two addresses on file, the 4305 Torrance Blvd. address, and an earlier address:  20911 Earl Street, Suite 140, Torrance, California.  CMS Ex. 3 at 3.  The Ferguson Drive address, to which the notice was mailed, does not appear in the enrollment summary.

Thus, the evidence submitted establishes that CMS sent its revalidation notice to the wrong address.  I encourage CMS to correct this error.  Although I may lack the authority to review the issue, I am not necessarily the final decision-maker here; and federal courts expect generally agencies to comply with notice requirements.  Moreover, Congress has afforded CMS broad discretion to administer the Medicare program, expecting the agency to do so fairly.  CMS should not abuse that discretion.

CMS sent the notice letter to the wrong address; Petitioner was not at that address and never had been.  No evidence in the record suggests that the contractor made any other efforts to contact him.  Unsurprisingly, he did not revalidate his enrollment. 

Thereafter, the contractor apparently deactivated Petitioner’s Medicare enrollment, although the record contains no evidence of the effective date of the deactivation.  In any event, I have no authority to review the deactivation.  Ark. Health Grp., DAB No. 2929 at 7-9 (2019) (and cases cited therein).

Petitioner subsequently filed a new enrollment application, which CMS approved.  CMS submits an “Enrollment Record Summary” of that application, but no copy of the application itself.  CMS Ex. 3.  The summary is not signed nor dated.  CMS Ex. 3 at 8.  In fact, no evidence in this record establishes the date that Petitioner filed his subsequently-approved enrollment application.  I am therefore unable to determine the correct effective date of Petitioner’s Medicare enrollment. 

Conclusion

As the above discussion shows, much is missing from this record.  I therefore remand this case to CMS to give the agency an opportunity to develop the record fully and properly and to correct multiple errors.  See 42 C.F.R. § 498.56(d).  CMS should consider whether it properly notified Petitioner to revalidate his Medicare enrollment.  If CMS decides that its deactivation was appropriate and that Petitioner was therefore required to reenroll, it should develop a coherent position as to the appropriate effective date of that enrollment.