Stephen W. Woodson, D.O. & Stephen W. Woodson, D.O. Inc., DAB CR6578 (2024)

DECISION

Novitas Solutions (Novitas), a Medicare administrative contractor for Respondent, the Centers for Medicare & Medicaid Services (CMS), revoked the Medicare enrollment and billing privileges of Petitioner Stephen W. Woodson, D.O. (Dr. Woodson) and his solely owned practice, Stephen W. Woodson, D.O. Inc. (the practice) (collectively referred to as “Petitioners”), pursuant to 42 C.F.R. § 424.535(a)(12) because the State of Oklahoma terminated Petitioner from the State’s Medicaid program.  CMS upheld Novitas’s initial revocation determination.  Petitioners timely sought a hearing before an administrative law judge (ALJ) to dispute the revocation.  Because Petitioners were terminated from the State of Oklahoma’s Medicaid program and have exhausted all applicable appeal rights regarding the terminations, I affirm CMS’s revocation. 

I.     Background

Dr. Woodson is a physician licensed and has a solely owned practice in Oklahoma.  In a letter dated April 5, 2022, the Oklahoma Health Care Authority (OHCA) informed Dr. Woodson that it was immediately terminating his SoonerCare provider contracts, but that

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he had 30 days to request an appeal of the decision.  CMS Ex. 1.  Dr. Woodson appealed that decision, and on June 9, 2022, the OHCA issued a Final Agency Decision affirming the termination.  CMS Ex. 2.  The June 9, 2022 notice stated that “[t]his is the final agency decision in the appeal of [Dr.] Woodson’s contract termination.”  Id. at 2. 

In revocation notices dated September 1, 2022, Novitas revoked the Medicare enrollment of Petitioners, stating that the contractor acted pursuant to 42 C.F.R. § 424.535(a)(12), because Dr. Woodson was terminated from the Oklahoma Medicaid program and appeal rights had been exhausted with respect to the termination.1  CMS Ex. 3 at 1; CMS Ex. 5 at 3-6.  Novitas barred Petitioners from re-enrolling in the Medicare program for five years.  CMS Ex. 3 at 3.  Novitas also informed Petitioners that they were being placed on the CMS Preclusion List, pursuant to 42 C.F.R. §§ 422.2, 422.222, 423.100, and 423.120(c)(6).  Id. at 1. 

Dr. Woodson requested reconsideration of the initial determinations but did not submit additional information with his request.  See CMS Ex. 4.  On February 22, 2023,2 CMS upheld Novitas’s initial determination to revoke Petitioners’ Medicare enrollment and billing privileges and to place Petitioners on the CMS Preclusion List.  CMS Ex. 5. 

On April 6, 2023, Petitioners timely sought review by an ALJ of CMS’s determination to revoke Petitioners’ Medicare enrollment and billing privileges.  The request for hearing did not challenge Petitioners’ placement on the CMS Preclusion List.  P. Req. for Hr’g (RFH).  This matter was initially assigned to ALJ Bill Thomas who issued an Acknowledgment and a Standing Pre-hearing Order (Pre-hearing Order) setting a schedule for the parties to submit arguments and evidence. 

On May 11, 2023, CMS timely submitted a pre-hearing brief and motion for summary judgment (CMS Br.) and five exhibits (CMS Ex. 1-5).  After failing to timely submit a pre-hearing exchange, and in response to an Order to Show Cause issued by ALJ Thomas, Petitioners filed a brief (P. Br.) and one exhibit (P. Ex. 1) on June 27, 2023.

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Based on Petitioners’ response, ALJ Thomas issued an Order Discharging the Order to Show Cause.  This case was reassigned to me on November 1, 2024. 

II.    Admission of Exhibits and Decision on the Record

Petitioners did not object to any of CMS’s proposed exhibits.  See P. Br.  I therefore admit CMS Exs. 1-5 into the record.  Pre-hearing Order ¶ 10; Civ. Remedies Div. P. § 14(e). 

On June 27, 2023, Petitioners submitted an untimely brief and one exhibit.  CMS has not objected to my admitting these documents.  Although I accept Petitioners’ untimely submitted brief into the record, the applicable regulation directs me to “examine any new documentary evidence” submitted for the first time at the ALJ level of review and to determine whether Petitioners had good cause for submitting the evidence for the first time, at this level.  42 C.F.R. § 498.56(e); see also Pre-hearing Order ¶ 9 (explaining that “Petitioner may not offer new documentary evidence absent a showing of good cause for failing to present that evidence previously to CMS.”).  Unless I find good cause, I must exclude the evidence and may not consider it in reaching a decision.  42 C.F.R. § 498.56(e)(2)(ii). 

Suppliers are expected to understand the regulatory requirements, including this one.  In addition, the contractor’s notice letter explicitly warned Dr. Woodson to submit additional information with the reconsideration request as it was the “only opportunity to submit information during the administrative appeals process unless an ALJ allows additional information to be submitted.”  CMS Ex. 3 at 3 (emphasis added). 

Dr. Woodson does not identify the exhibit as new evidence, but it is not part of the exhibits reviewed by CMS in its reconsidered determination.  CMS Ex. 5 at 2.  Nor was it attached to Dr. Woodson’s reconsideration request or otherwise identified or referred to therein.  See CMS Ex. 4.  As such, I find Dr. Woodson’s exhibit to be new evidence.  However, Dr. Woodson does not offer any explanation for failing to submit this document earlier in the administrative appeals process.  P. Br.  Therefore, I find Dr. Woodson has not shown good cause for failing to submit this exhibit at the reconsideration stage, and as such, I must exclude P. Ex. 1 and will not consider it in reaching my decision.  42 C.F.R. § 498.56(e)(2)(ii). 

Neither party offered the written direct testimony of a witness as part of its pre-hearing exchange, and as such, an in-person hearing is not necessary in this matter.  Pre-hearing Order ¶¶ 11-13.  Therefore, I will decide this case on the record, meaning the parties’ written submissions and arguments.  Civ. Remedies Div. P. § 19(d).  CMS’s motion for summary judgment is denied as moot. 

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III.   Issue

Whether CMS had a legitimate basis for revoking Petitioners’ Medicare billing privileges under 42 C.F.R. § 424.535(a)(12).3 

IV.    Jurisdiction

I have jurisdiction to decide the issue in this case.  42 U.S.C. § 1395cc(j)(8); 42 C.F.R. §§ 498.3(b)(17), 498.5(l)(2).

V.     Applicable Law

The Social Security Act authorizes the Secretary of Health and Human Services to establish regulations for enrolling providers and suppliers in the Medicare program.  42 U.S.C. § 1395cc(j)(1)(A).  Suppliers must enroll in the Medicare program and receive a billing number to obtain payment for services rendered to Medicare beneficiaries.  42 C.F.R. § 424.505.  

Relevant here, the regulations at 42 C.F.R. § 424.535 state that CMS may revoke a supplier’s Medicare enrollment and billing privileges where “a supplier is terminated, revoked or otherwise barred from participation in a State Medicaid program or any other federal health care program.”  42 C.F.R. § 424.535(a)(12)(i).  The regulations further provide that “Medicare may not revoke unless and until a . . . supplier has exhausted all applicable appeal rights.”  42 C.F.R. § 424.535(a)(12)(ii).  Upon revoking a supplier’s enrollment and billing privileges, CMS will bar that supplier from re-enrolling in the Medicare program for a period of one to 10 years.  42 C.F.R. § 424.535(c).

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VI.     Findings of Fact and Conclusions of Law

1. CMS had a legitimate basis for revoking Petitioners’ billing privileges under 42 C.F.R. § 424.535(a)(12) because the OHCA terminated Dr. Woodson’s SoonerCare Contract, and he exhausted all appeal rights. 

Pursuant to 42 C.F.R. § 424.535(a)(12), CMS may revoke a supplier’s Medicare billing privileges when two elements have been satisfied.  First, a supplier must be terminated, revoked or otherwise barred from participation in a State Medicaid program.  42 C.F.R. § 424.535(a)(12)(i).  Second, the supplier must have exhausted all applicable appeal rights.  Id. § 424.535(a)(12)(ii).  Based on the evidence of record, I conclude that both elements are satisfied here. 

SoonerCare is Oklahoma’s Medicaid program, and OHCA is the state agency that administers the program.  Okla. Admin. Code § 317:25-7-2 (2020).  On June 9, 2022, the OHCA issued a “Final Agency Decision on SoonerCare Contract Termination Appeal” for Dr. Woodson and his solely owned practice.  CMS Ex. 2.  The decision affirmed the termination of Dr. Woodson’s SoonerCare contract and further stated that the decision was the “final agency decision in the appeal of [Dr.] Woodson’s contract termination.”  Id. at 2 (emphasis added). 

Petitioners do not dispute either of these facts, but instead contend that their billing privileges were revoked based only on OHCA’s investigation, which they contend was biased, and CMS’s failure to perform its own investigation.  RFH; P. Br.  In this regard, Petitioners note Dr. Woodson’s previous record, which was free of malpractice cases, compliance issues, disciplinary actions, and penalties.  RFH; CMS Ex. 4.  Petitioners also argued before CMS that most of Dr. Woodson’s prior issues were related to documentation and that he has since joined a physicians group that will help with health care management and provider compliance, and that OHCA has allowed him to reapply as a participant in SoonerCare with that group.  CMS Ex. 4 at 2.  Petitioners request that I find CMS did not do its due diligence in deciding this case and request a further investigation be completed.  P. Br. 

The arguments raised by Petitioners constitute challenges to OHCA’s termination decision and CMS’s exercise of its discretion in making its revocation determination.  However, the regulations do not permit me to review the merits of the state agency’s decisions.  Douglas Bradley, M.D., DAB No. 2663 at 15-16 (2015) (stating that the regulation does not require a finding by CMS that the State Medicaid agency’s action was substantively correct under state law or consonant with due process).  Similarly, I am not authorized to review whether CMS wisely exercised its discretion to revoke, merely whether CMS acted permissibly based on the law and facts in a case.  Letantia Bussell, M.D., DAB No. 2196 at 13 (2008).  Although I do note that CMS explicitly considered

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the factors set forth in 42 C.F.R. § 424.535(i)(A)-(C) in its revocation analysis.  CMS Ex. 5 at 4-6.

The Board has consistently held the review of a revocation determination in this administrative appeals process is limited to deciding whether the regulatory elements required for revocation were present.  If those elements are present, as is the case here, then the revocation must be sustained.  Bussell, DAB No. 2196 at 13; see also Duke Ahn, M.D., DAB No. 3093 at 7 (2023).

2. I have no authority to reinstate Dr. Woodson’s Medicare enrollment and billing privileges based on his equitable arguments.

Petitioners state that Dr. Woodson provides services for a small rural community in Oklahoma.  RFH at 2.  They explain that the community needs providers, especially since the COVID-19 pandemic.  Id.  Petitioners assert that Dr. Woodson can no longer provide care to the elderly in nursing home care, or to residents in group home settings and that the community is at risk of losing its rural hospital because he no longer admits patients there for care.  Id.

However, general appeals to equity are not a basis to set aside the revocation.  While I have no reason to doubt the veracity of Petitioners’ contentions, I may not set aside the lawful exercise of discretion by CMS based on principles of equity no matter how compelling the circumstances.  US Ultrasound, DAB No. 2302 at 8 (2010); Cent. Kan. Cancer Inst., DAB No. 2749 at 10 (2016).

VII.   Conclusion

For the reasons explained above, I affirm CMS’s revocation of Petitioners’ Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(12).