Deriviere Medical Corporation, DAB CR5971 (2021)

DECISION

Petitioner, Deriviere Medical Corporation, was a home health agency, doing business in Massachusetts.  Until May 16, 2019, it participated in the Medicare program as a provider of services.  On May 16, the Centers for Medicare & Medicaid Services (CMS) revoked its enrollment.  CMS acted pursuant to 42 C.F.R. § 424.535(a)(12) because the Massachusetts Medicaid agency had terminated Deriviere's Medicaid participation, and CMS determined that the provider had exhausted its appeal rights.  CMS also acted pursuant to section 424.535(a)(4) because, notwithstanding its Medicaid termination, Deriviere denied having any adverse legal history when it answered questions on its Medicare reenrollment application.

Petitioner now appeals the revocation.

I find that CMS appropriately revoked Petitioner Deriviere's Medicare enrollment pursuant to 42 C.F.R. §§ 424.535(a)(4).

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Background

In a revocation notice, dated April 16, 2019, the Medicare contractor, National Government Services, revoked Petitioner Deriviere's Medicare enrollment, effective May 16, 2019.  As the notice letter explains, the contractor acted for two reasons:

• By letter dated July 13, 2018, the Massachusetts Medicaid agency terminated Petitioner's Medicaid participation, and its appeal rights had been exhausted.  See 42 C.F.R. § 424.535(a)(12).
• In its December 31, 2018 Medicare reenrollment application, Petitioner represented that it had no adverse legal history, even though its Medicaid participation had been terminated.  See 42 C.F.R. § 424.535(a)(4).

CMS Ex. 3 at 1.

The contractor imposed a three-year reenrollment bar, pursuant to 42 C.F.R. § 424.535(c).  CMS Ex. 3 at 2.

Petitioner requested reconsideration.  CMS Ex. 4.

In a reconsidered determination, dated August 14, 2019, a CMS hearing officer reversed the revocation under section 424.535(a)(12), but affirmed under section 424.535(a)(4).  The hearing officer concluded that Petitioner's rights to appeal its Medicaid termination had not been exhausted; an appeal was pending, and a hearing in the matter was in the process of being scheduled.  However, the hearing officer also found that Petitioner was required to disclose the termination on its enrollment application and failed to do so; it thus misrepresented its adverse legal history and was subject to revocation under section 424.535(a)(4).  CMS Ex. 5 at 5.

Petitioner appealed, and the matter is assigned to me.

Although CMS has 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 (Oct. 18, 2019) (Acknowledgment) at 4, 5 (¶¶ 4(c)(iv), 8, 9).  Neither party has any witnesses, and there are no written declarations.  An in-person hearing would therefore serve no purpose, and I may decide this case based on the written record.  Acknowledgment at 6 (¶ 10).

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CMS has filed a pre-hearing brief and motion for summary judgment (CMS Br.), along with 11 proposed exhibits (CMS Exs. 1-11).  Petitioner filed seven exhibits (P. Exs. 1-7) and appears to rely on the arguments it presented in its requests for reconsideration and for a hearing.  In the absence of any objections, I admit into evidence CMS Exs. 1-11 and P. Exs. 1-7.  Acknowledgment at 5 (¶ 7).

Discussion

Pursuant to 42 C.F.R. § 424.535(a)(4), CMS properly revoked Petitioner Deriviere's Medicare enrollment because, on its enrollment application, the provider falsely claimed that it had no adverse legal history when, in fact, the Massachusetts Medicaid agency had terminated its Medicaid participation.1

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, on its Medicare enrollment application, it certifies as "true" misleading or false information.  42 C.F.R. § 424.535(a)(4).  CMS may also revoke if it finds that a state Medicaid agency has terminated a provider's Medicaid billing privileges, and the provider has exhausted all applicable state appeal rights.  42 C.F.R. § 424.535(a)(12).

Termination of Petitioner's Medicaid participation.  Here, Petitioner was enrolled in the Medicare program as a home health agency.  CMS Ex. 7 at 1.  It also operated an adult foster care program (Deriviere Adult Family Care) that participated in the Massachusetts Medicaid program as an Adult Foster Care provider.  Deriviere Adult Family Care operated under the same National Provider Identifier (NPI) as the home health agency.  CMS Ex. 1 at 1; CMS Ex. 8 at 1.

In a letter dated April 23, 2018, the Massachusetts Medicaid agency (Executive Office of Health and Human Services, Office of Medicaid) advised Petitioner that, effective June 1, 2018, it was terminating Deriviere Adult Foster Care's Participation in the Commonwealth's adult foster care program.  The Medicaid agency took this action because it found that Deriviere was "not operating in compliance with numerous basic core requirements of" the adult foster care program.  CMS Ex. 1 at 2.  In a subsequent letter, dated July 13, 2018, the Medicaid agency affirmed the termination, with a modified effective date of July 13, 2018.  CMS Ex. 1 at 6-10.  The letter advised Petitioner of its right to request an adjudicatory hearing.  CMS Ex. 1 at 9.

Petitioner timely appealed the Medicaid termination.  CMS Ex. 6 at 13-24; P. Ex. 7.

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The record is silent as to the current status of Petitioner's Medicaid appeal.  CMS points out that Petitioner is listed as "suspended or excluded" on the Medicaid Agency's website and, according to the website for the Corporations Division of the Secretary of the Commonwealth, its registration as a Massachusetts corporation was involuntarily revoked on June 28, 2019.  CMS Ex. 8 at 1; CMS Ex. 9 at 9.  For its part, Petitioner does not mention whether its Medicaid appeal is still pending.

The misrepresentation on Petitioner's enrollment application.  I may nevertheless decide this case without determining whether Petitioner has exhausted its Medicaid appeal rights.  So long as CMS shows that one of the regulatory bases for revocation exists, I must uphold the revocation.  Wassim Younes, M.D. and Wassim Younes, M.D., P.L.C., DAB No. 2861 at 8 (2018) (citing Patrick Brueggeman, D.P.M., DAB No. 2725 at 15 (2016)).

Here, Petitioner's Medicaid participation was unquestionably terminated.  Nevertheless, on its revalidation application (Form CMS-855A), received December 19, 2018 with corrections received December 31, 2018, the provider responded "No" to the question:  "Has a final adverse legal action ever been imposed against an applicant under any current or former name of business entity."  CMS Ex. 2 at 2.  The enrollment instructions that accompany the application form are explicit:  "All applicable final adverse legal actions must be reported, regardless of whether any [appeals] are pending."  CMS Ex. 10 at 1, 23 (emphasis added).  This is consistent with the federal regulation defining "final adverse action" as an "exclusion or debarment from participation in a Federal or State health care program."  42 C.F.R. § 424.502; see 73 Fed. Reg. 69,726, 69,777 (2008) (explaining that an adverse action is considered final at the time "the sanction is imposed and not when a [provider] has exhausted all of the appeal rights associated with the action itself.").

For this reason, Petitioner's principal defense – that it was not required to disclose its Medicaid termination because an appeal was pending – fails.

Moreover, even assuming that Petitioner misunderstood the question and inadvertently provided false information, CMS would have the authority to revoke its program participation.  As the Departmental Appeals Board has observed, section 424.535(a)(4) "does not require proof that [the applicant] subjectively intended to provide false information, only proof that [it] in fact provided misleading or false information that [it] certified as true."  Sandra E. Johnson, CRNA, DAB No. 2708 at 15 (2016) (quoting Mark Koch, D.O., DAB No. 2610 at 4-5 (2014) (emphasis in original)).

Finally, Petitioner attacks the actions and motivations of the Massachusetts Medicaid agency in terminating its Medicaid participation.  I have no authority to review the Commonwealth's actions; such challenges are appropriately made through the Commonwealth's own review process (of which Petitioner has taken full advantage).  In

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any event, the actions of the Medicaid agency are irrelevant to the issue of whether Petitioner furnished false information on its reenrollment application.

Conclusion

I affirm CMS's determination.  CMS was authorized to revoke Petitioner Deriviere's Medicare enrollment under 42 C.F.R. § 424.535(a)(4), because the provider submitted false information on its Medicare reenrollment application.