Island Pain Specialists PC and Hasib Sarij, M.D., DAB CR6801 (2025)

DECISION

I affirm the determination of the Centers for Medicare & Medicaid Services (CMS) to revoke the Medicare enrollment and billing privileges of Petitioners, Island Pain Specialists PC (IPS) and Hasib Sarij, M.D. (Dr. Sarij), and to add Petitioners’ names to the CMS Preclusion List.

I.     Background and Procedural History

Dr. Sarij, a physician and pain management specialist, and his clinical/group practice, IPS, were enrolled in the Medicare program as suppliers.  CMS Exs. 21-22.

In a January 17, 2024 notice of initial determination, National Government Services (NGS), a Medicare contractor, informed IPS that its Medicare enrollment and billing

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privileges were being revoked effective February 16, 2024.  CMS Ex. 14.  The initial determination discussed the following four sets of claims that formed the basis for the revocation:

• The denial of 79 of 97 claims with dates of service from January 2, 2019 through May 30, 2019;
• The denial of 36 of 36 claims with dates of service from March 1, 2021 through May 3, 2021;
• The denial of 89 of 125 claims with dates of service from October 1, 2021 through June 15, 2022; and
• The denial of 71 of 86 claims with dates of service from May 22, 2023 through July 26, 2023.

CMS Ex. 14 at 1-2.  The claims were denied due to a lack of documentary support showing the medical necessity of the items or services furnished to beneficiaries, and IPS was sent letters in 2019, 2021, and 2023 to educate IPS regarding the submission of noncompliant billing.  CMS Ex. 14 at 1-2.  The initial determination summed up the reasons for revocation as follows:

Despite several instances of specific education, which detailed the correct billing procedures for medical necessity, [IPS] has continued to submit claims that fail to meet Medicare requirements.  Evidenced by the continued high percentage of submitted claims that were denied and the specific facts surrounding said non-compliance over which the pattern has continued, [IPS’s] . . . billing behavior constitutes a violation of 42 CFR 424.535(a)(8)(ii), and therefore, CMS has determined that the provider, “has a pattern or practice of submitting claims that fail to meet Medicare requirements.”

CMS Ex. 14 at 2.  The initial determination also stated that CMS barred IPS from re‑enrollment in the Medicare program for ten years and that CMS would add IPS’s name to the CMS Preclusion List.1  CMS Ex. 14 at 2-3.

In a January 30, 2024 notice of initial determination, NGS informed Dr. Sarij that his Medicare enrollment and billing privileges were being revoked, effective February 29,

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2024, for the same reasons that IPS’s enrollment had been revoked, and that Dr. Sarij’s name was being added to the CMS Preclusion List.  CMS Ex. 17 at 1-2.

Petitioners requested reconsideration of the initial determinations.  CMS Exs. 15-16.  In a June 27, 2024 reconsidered determination, a CMS hearing officer upheld NGS’s initial determinations.  CMS Ex. 23.

On August 26, 2024, Petitioners requested a hearing before an administrative law judge (ALJ) to challenge the reconsidered determination.  P. Ex. 8.  On August 27, 2024, the Civil Remedies Division acknowledged receipt of Petitioners’ hearing request and issued my Standing Order as well as the Civil Remedies Division Procedures (CRDP).

On October 31, 2024, CMS filed its prehearing exchange, which included a prehearing brief (CMS Br.) and 25 proposed exhibits (CMS Exs. 1-25).  On December 23, 2024, Petitioners filed their prehearing exchange, which included a prehearing brief (P. Br.) and ten proposed exhibits (P. Exs. 1-10).  Two of Petitioners’ proposed exhibits were the written direct testimony from witnesses (P. Exs. 9-10).  One of the proposed exhibits was a report authored by one of the witnesses (P. Ex. 1).  On January 13, 2025, CMS filed a reply brief (CMS Reply).

II.     Issues

1. Whether CMS had a legitimate basis for revoking Petitioners’ Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii).
2. Whether CMS had a legitimate basis to place Petitioners on the CMS Preclusion List under 42 C.F.R. §§ 422.2 and 423.100.

III.     Jurisdiction

I have jurisdiction to decide the issues identified in this case.  42 C.F.R. §§ 498.3(b)(17), (20), 498.5(l)(2), (n)(2); see 42 U.S.C. § 1395cc(j)(8); 42 C.F.R. §§ 424.545(a); 498.1(g).

IV.     Admission of Evidence 

Absent objection, I admit CMS Exhibits 1 through 25 and Petitioners Exhibits 2 through 10 into the record.  See Standing Order ¶ 10; CRDP § 14(e).

CMS objects to Petitioners Exhibit 1.  Petitioners Exhibit 1 is a December 2024 report from an expert in medical billing, coding, and compliance who was “retained to perform an analysis of [Petitioners’ revocation case] and render [an] opinion as to the viability for continued appeal.”  P. Ex. 1 at 3-4.  CMS argues that the report is not relevant to my review of this case because “[t]he purpose of this report appears to be to demonstrate the

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appropriateness of the medical claims that CMS previously denied as part of its review of Petitioners’ billing practices.  CMS stated that its decision to deny Petitioner’s claims is not reviewable in this forum.”  CMS Reply at 2-3 (internal citations omitted).

I overrule CMS’s objection and admit Petitioners Exhibit 1 into the record.  As explained below, I agree with CMS that the report (as well as the written direct testimony from witnesses) is mostly focused on impermissibly challenging the denial of Petitioners’ Medicare claims.  The determinations to deny Petitioners’ claims are now legally binding.  Petitioners were already afforded the opportunity to use an extensive statutory appeal process for denied claims and Petitioners, for the most part, chose not to do so.  However, some aspects of the report could be relevant to the consideration of 42 C.F.R. § 424.535(a)(8)(ii)(C).  Therefore, I admit Petitioners Exhibit 1 for that limited purpose.

V.     Decision on the Written Record

I directed the parties to submit written direct testimony from all witnesses that the parties wanted to present in this case and stated that the opposing party could request to cross-examine the witnesses.  Standing Order ¶¶ 11-12.  I also advised the following:

If the parties either do not file any written direct testimony or the parties do not request to cross-examine any of the witnesses from whom written direct testimony has been submitted, I will consider such actions by the parties to serve as a constructive request for a decision on the written record because there will be no reason to hold an in-person hearing.

Standing Order ¶ 7(g)(iii); see also Standing Order ¶ 13.  In addition, I stated: “Unless a hearing is required for cross-examination of a witness or witnesses, the record will be closed and the case will be ready for a decision after all the submission deadlines have passed.”  Standing Order ¶ 14.

In the present case, CMS did not file any written direct testimony and, while Petitioners submitted written direct testimony for two witnesses, CMS did not request to cross-examine those witnesses.  Therefore, I issue a decision based on the written record.  Anil Hanuman, D.O., DAB No. 3080 at 11-12 (2022); EI Med., Inc., DAB No. 3117 at 15 (2023); Vandalia Park, DAB No. 1940 (2004).

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VI.     Findings of Fact, Conclusions of Law, and Analysis 

My findings of fact and conclusions of law (FFCL) are in bold and italics below.

1. Dr. Sarij owns IPS and is a physician who specializes in pain management.

Dr. Sarij is a physician licensed to practice medicine in New York State and is board certified in pain management.  P. Ex. 10 ¶¶ 2, 6; CMS Ex. 22 at 1.  Dr. Sarij owns IPS.  P. Ex. 10 ¶ 7; CMS Ex. 21 at 6.  Both Dr. Sarij and IPS were enrolled in the Medicare program.  CMS Exs. 21-22.  Medicare enrollment records for Dr. Sarij and IPS show 1111 Broadhollow Road, Suite 114, Farmingdale, New York 11735 as the primary mailing address.  CMS Ex. 21 at 1-2; CMS Ex. 22 at 2.

2. A Unified Program Integrity Contractor (UPIC) is a CMS contractor that analyzes Medicare claim payment information and investigates potential fraud, waste, and abuse.  SafeGuard Services, LLC (SafeGuard) is the UPIC for the northeastern United States.

SafeGuard is a UPIC contracted by CMS.  SafeGuard’s purpose is described as follows:

SafeGuard Services (SGS) is required by [CMS] to analyze claims payment data in order to identify areas with the greatest risk of inappropriate [Medicare] program payment.  Specifically, as [a] UPIC, the Northeastern Unified Program Integrity Contractor (NE UPIC) is required to investigate situations of potential fraud, waste, and abuse.

CMS Ex. 1 at 2.  SafeGuard’s responsibilities include “reviewing the accuracy and justification of all services reimbursed by the programs.”  CMS Ex. 3 at 2.  SafeGuard also “ensures the correct amount has been paid for covered and correctly coded services rendered to eligible beneficiaries by legitimate providers.”  CMS Ex. 3 at 2.

3. SafeGuard conducted a review of 97 Medicare claims submitted by IPS in 2019 (2019 Claims).  At SafeGuard’s request, IPS submitted medical records related to the reviewed claims.  SafeGuard determined that 476 out of 586 claimed services (i.e., 81.2%) should have been denied because IPS did not show there was medical necessity for those services and that IPS was overpaid $11,481.33.  There is no evidence in the record that Petitioners appealed the determination to deny those claims.

In a September 23, 2019 letter, SafeGuard requested that IPS provide medical records related to a list of Medicare claims that IPS filed with CMS.  CMS Ex. 1.  SafeGuard stated that its decision to reopen the listed claims “is based on credible evidence

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regarding data analysis findings, allegations regarding your billing practices, and/or medical review probe findings.”  CMS Ex. 1 at 2.  SafeGuard “selected a RANDOM SAMPLE of 97 claims for services provided to 10 beneficiaries paid between 2/7/2019 and 8/21/2019.”  CMS Ex. 1 at 2.  SafeGuard informed Petitioners that, “[t]he documentation that you submit for each of the claims will be reviewed to determine if the services billed are reasonable and necessary and meet all other requirements for Medicare coverage.”  CMS Ex. 1 at 4.

In a December 5, 2019 letter, SafeGuard informed IPS that it had completed its review of the 97 randomly selected claims.  CMS Ex. 3.  SafeGuard noted that IPS provided the medical records for the 10 beneficiaries related to those 97 claims.  CMS Ex. 3 at 3.  The 97 claims were for services provided between January 2, 2019 and May 30, 2019, which resulted in total payments to IPS of $19,113.86 from the Medicare program made between February 7, 2019 and August 21, 2019.  CMS Ex. 3 at 2.

SafeGuard’s letter stated that, based on its review of the medical records for the 97 claims, SafeGuard was:  denying 81.2% of the services identified in those claims (i.e.,   476 out of 586 services); reducing 6.7% of the services identified in those claims (i.e., 39 out of 586 services); and allowing 12.1% of the services identified in those claims (i.e., 71 out of 586 services).  CMS Ex. 3 at 3.  As a result, SafeGuard informed IPS that they were overpaid and that “[a]n overpayment amount of $11,481.33 is due to the Medicare Program.”  CMS Ex. 3 at 6 (emphasis omitted).  SafeGuard also stated that IPS would receive a demand letter from NGS for the overpayment and could appeal SafeGuard’s overpayment determination to NGS.  CMS Ex. 3 at 6.

SafeGuard’s letter provided a detailed explanation as to the reasons why the identified claims were being denied, and the letter informed IPS of the importance of documentation to support Medicare claims.  CMS Ex. 3 at 3-6.  SafeGuard stated that the letter “is intended to be educational in regards to the appropriate submission of Medicare claims.”  CMS Ex. 3 at 7.  SafeGuard also advised IPS that CMS had the authority to revoke the Medicare billing privileges for currently enrolled providers and suppliers if CMS determined that the provider or supplier has a pattern or practice of submitting claims that failed to meet Medicare requirements.  CMS Ex. 3 at 8.

SafeGuard sent the December 5, 2019 letter to IPS by Federal Express on December 5, 2019, and it was delivered to 1111 Broadhollow Road, Suite 114, Farmingdale, NY 11735 on December 6, 2019.  CMS Ex. 18.  Petitioners admit to receiving this letter.  P. Br. at 6.  There is no evidence in the record that IPS appealed the overpayment created by Saeguard’s review.

4. SafeGuard conducted a review of 36 Medicare claims that IPS filed in 2021 (2021 Claims).  At SafeGuard’s request, IPS submitted medical records concerning the reviewed claims.  SafeGuard determined that all (100%) of the

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reviewed claims should have been denied because IPS did not show there was medical necessity for those services.  Despite notice that Petitioners would need to repay $9,330.12 to the Medicare program, there is no evidence in the record that Petitioners appealed the determination to deny those claims.

In a May 20, 2021 letter, SafeGuard requested that IPS provide medical records related to a list of Medicare claims that IPS filed with CMS.  CMS Ex. 4.  SafeGuard stated that its decision to reopen the listed claims “is based on credible evidence regarding data analysis findings, allegations regarding your billing practices, and/or medical review probe findings.”  CMS Ex. 4 at 2.  SafeGuard “selected a RANDOM SAMPLE of 36 claims for services provided to 18 beneficiaries paid between March 25, 2021 and May 10, 2021.”  CMS Ex. 4 at 2.  SafeGuard informed IPS that, “[t]he documentation that you submit for each of the claims will be reviewed to determine if the services billed are reasonable and necessary and meet all other requirements for Medicare coverage.”  CMS Ex. 4 at 3.

In an August 12, 2021 letter, SafeGuard informed IPS that it had completed its review of the claims related to 18 beneficiaries.  CMS Ex. 6.  SafeGuard noted that it received the requested medical records for the 18 beneficiaries.  CMS Ex. 6 at 3.  The claims for the 18 beneficiaries were for services provided between March 1, 2021 to May 3, 2021, which resulted in total payments to IPS of $9,330.12 made by the Medicare program from March 25, 2021 to May 10, 2021.  CMS Ex. 6 at 3.

SafeGuard’s letter stated that:  “A review of the medical records resulted in . . . [a]ll thirty-six (36) claims and seventy-one (71) services being 100 percent denied.”  CMS Ex. 6 at 3.  As a result of this, SafeGuard informed IPS that it was overpaid and that “[a]n overpayment amount of $9,330.12 is due to the Medicare program.”  CMS Ex. 6 at 5.  SafeGuard also stated that IPS would receive a demand letter from NGS for the overpayment and could appeal SafeGuard’s overpayment determination to NGS.  CMS Ex. 6 at 5.

SafeGuard’s letter provided a detailed explanation as to the reasons why the identified claims were being denied, and informed IPS of the importance of documentation to support Medicare claims.  CMS Ex. 6 at 3-5.  SafeGuard stated that the letter “is intended to be educational in regards to the appropriate submission of Medicare claims.”  CMS Ex. 6 at 6.  SafeGuard also advised IPS that CMS had the authority to revoke the Medicare billing privileges for currently enrolled providers and suppliers if CMS determined that the provider or supplier has a pattern or practice of submitting claims that failed to meet Medicare requirements.  CMS Ex. 6 at 7.

SafeGuard sent the August 12, 2021 letter to IPS by Federal Express on August 12, 2021, and it was delivered to 1111 Broadhollow Road, Suite 114, Farmingdale, NY 11735 on August 13, 2021.  CMS Ex. 19.  Although Petitioners assert in briefing that they never received the August 12, 2021 letter (P. Br. at 6), I find that it was delivered based on the

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Federal Express documentation of delivery.  CMS Ex. 19.  Further, Petitioners were aware of the review because Petitioners’ submitted medical documentation in response to a letter requesting documentation for the review.  CMS Ex. 4; CMS Ex. 6 at 3.  Finally, Dr. Sarij did not deny receipt in his written direct testimony.  See P. Ex. 10.  There is no evidence in the record that IPS appealed the overpayment created by SafeGuard’s review.

5. SafeGuard conducted a review of 179 claims that IPS filed in 2021 and 2022 (i.e., the 2021-2022 Claims).  At Safeguard’s request, IPS submitted medical records concerning the reviewed claims.  SafeGuard determined that 133 of the 348 claimed services (38.2%) should have been denied because IPS did not show there was medical necessity for those services.  This resulted in an overpayment of $27,159.09 for the reviewed claims.  However, the statistical denial rate was extrapolated to other claims that IPS had filed, resulting in an overpayment of $175,272.55.  IPS requested redetermination.  NGS upheld most of SafeGuard’s denials but decided that some of the denied claims should be allowed.  Therefore, NGS determined that IPS’s extrapolated overpayment was $168,307.13, or approximately $7,000 less than the overpayment found by SafeGuard.  There is no evidence in the record that Petitioners appealed the redetermination by NGS.

In a May 1, 2023 letter, SafeGuard requested that IPS provide medical records related to a list of Medicare claims that IPS filed with CMS.  CMS Ex. 7.  SafeGuard stated that its decision to reopen the listed claims “is based on credible evidence regarding data analysis findings, allegations regarding your billing practices, and/or medical review probe findings.”  CMS Ex. 7 at 2.  SafeGuard “selected a STATISTICALLY VALID RANDOM SAMPLE of 179 claims for services provided to 31 beneficiaries paid between October 1, 2021 and July 15, 2022.”  CMS Ex. 7 at 2.  SafeGuard informed IPS that, “[t]he documentation that you submit for each of the claims will be reviewed to determine if the services billed are reasonable and necessary and meet all other requirements for Medicare coverage.”  CMS Ex. 7 at 3.

In a September 11, 2023 letter, SafeGuard informed IPS that it had completed its review of the 179 claims related to 31 Medicare beneficiaries.  CMS Ex. 9.  SafeGuard noted that it received the requested medical records for the 31 beneficiaries.  CMS Ex. 9 at 3.  The claims for the 31 beneficiaries were for services provided between January 8, 2019 to June 27, 2022, which resulted in total payments to IPS of $322,737.73 made by the Medicare program from September 28, 2021 to July 19, 2022.  CMS Ex. 9 at 2.

SafeGuard’s letter stated that:  “A review of the medical records resulted in one hundred thirty-three (133) of the three hundred forty eight (348) lines of services or 38.2 percent being denied, and two hundred fifteen (215) lines of service or 61.8 percent being allowed.”  CMS Ex. 9 at 3.  As a result of this, SafeGuard informed IPS that it was overpaid and that “[t]he calculated overpayment determined from the sample is

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$27,159.09. . . . From the sample, the total projected overpayment is determined.  Based on the findings of this medical review, an extrapolated overpayment of $175,272.55 is due the Medicare Program.”  CMS Ex. 9 at 7 (emphasis omitted).  SafeGuard also stated that IPS would receive a demand letter from NGS for the overpayment and could appeal SafeGuard’s overpayment determination to NGS.  CMS Ex. 9 at 7.

SafeGuard’s letter provided a detailed explanation as to the reasons why the identified claims were being denied, and informed IPS of the importance of documentation to support Medicare claims.  CMS Ex. 9 at 3-8.  SafeGuard stated that the letter “is intended to be educational in regard to the appropriate submission of Medicare claims.”  CMS Ex. 9 at 9.  SafeGuard also advised IPS that CMS had the authority to revoke the Medicare billing privileges for currently enrolled providers and suppliers if CMS determined that the provider or supplier has a pattern or practice of submitting claims that failed to meet Medicare requirements.  CMS Ex. 9 at 9.

SafeGuard sent the September 11, 2023 letter to IPS by Federal Express on September 14, 2023, and it was delivered to 1111 Broadhollow Road, Suite 114, Farmingdale, NY 11735 on September 15, 2023.  CMS Ex. 20.

NGS sent a demand letter to IPS seeking repayment of $175,272.55.  CMS Ex. 10 at 3.   IPS requested redetermination by NGS.  CMS Ex. 10 at 1.

On February 6, 2024, NGS issued a partially favorable redetermination.  CMS Ex. 10.  NGS sent it to 1111 Broadhollow Road, Suite 114, Farmingdale, NY 11735.  CMS Ex. 10 at 1.  Because NGS found that some of the claims that SafeGuard denied should be allowed, NGS stated that IPS’s overpayment was $168,307.13, or approximately $7,000 less than the amount determined by SafeGuard.  CMS Ex. 10 at 3.  However, NGS upheld most of SafeGuard’s claims denials as well as statistical sampling and extrapolation.  CMS Ex. 10 at 4-5.  The redetermination notice explained that IPS could request reconsideration by a qualified independent contractor (QIC).  CMS Ex. 10 at 8-9.  There is no evidence in the record that IPS appealed the redetermination.

6. The revised initial determinations for the 2019 Claims and the 2021 Claims, and the redetermination for the 2021-2022 Claims, are legally binding on Petitioners and may serve as the evidentiary basis for CMS’s revocation of enrollment under 42 C.F.R. § 424.535(a)(8)(ii).

As detailed above, SafeGuard conducted three reviews of randomly selected claims from three different periods in time, and SafeGuard reopened many of those claims to deny them due to a lack of documentary support showing medical necessity for the claimed services.  For the third review (i.e., the 2021-2022 Claims), Petitioners appealed, seeking redetermination from NGS.  NGS provided limited relief, reversing the denial of some of the claims.

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Based on the three claims reviews, CMS revoked Petitioners’ Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii).  CMS Exs. 14, 17.  This regulation permits CMS to take that action when CMS determines that a provider or supplier has engaged in a pattern or practice of submitting claims that fail to meet Medicare requirements.

Petitioners argue that CMS did not conduct an independent review of SafeGuard’s determinations to reopen and deny many of Petitioners’ claims, accepting those determinations “at face value” to revoke Petitioners’ enrollments.  P. Br. at 8, 21-22.  Further, Petitioners criticize CMS’s reconsidered determination because the hearing officer incorrectly focused on the frequency of the urinary drug tests (UDTs) that Petitioners ordered.  P. Br. at 23.  In doing so, Petitioners cited to the report of their expert witness (P. Ex. 1) to show that CMS was incorrect.  P. Br. at 23.  In support of the expert’s report, Petitioners submitted medical records for some of the beneficiaries that they had previously submitted to SafeGuard during the claims review process.  P. Exs. 2-8.  Finally, Petitioners submitted the written testimony from the expert witness as well as written direct testimony from Dr. Sarij, both mostly meant to explain why Petitioners’ denied claims were actually legitimate.

I reject Petitioners’ argument and effort to show that the claims SafeGuard denied should have been allowed.  The validity of a Medicare claim is decided through a statutory claims appeal process, and decisions that have become legally binding in that process cannot be re-evaluated through the process to appeal the revocation of a supplier’s enrollment in the Medicare program.  Devine Solutions Group LLC, DAB No. 3159 at 17 (2024).

The Social Security Act (Act) provides for a Medicare claim adjudication process that includes an initial determination as to whether a claim should be paid and then four levels of administrative appeal if the claim is not paid.  42 U.S.C. § 1395ff(a)-(d).  After a claim is filed with the appropriate CMS contractor, the contractor must issue an initial determination as to whether the claimed items and services are covered or reimbursable under the Medicare program.  42 C.F.R. § 405.920.  Even if a claim is approved initially, a CMS contractor may reopen the initial determination and issue a revised initial determination to deny the claim.  42 C.F.R. § 405.980(a)(1)(i).

If a party is dissatisfied with an initial determination, that party has the right to file a request for redetermination.  42 C.F.R. §§ 405.940-405.946.  A CMS contractor will render a redetermination, based on the evidence of record, that affirms or reverses the initial determination.  42 C.F.R. § 405.954.  Significantly, initial determinations and revised initial determinations are binding on all parties to the initial determination or revised initial determination unless one of the parties requests a redetermination.  42 C.F.R. §§ 405.928(b), 405.984(a).

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If a party is not satisfied with a redetermination, the party may request reconsideration by a QIC.  42 C.F.R. §§ 405.960.  If a party is dissatisfied with the QIC’s reconsideration decision, the party may request a hearing before an ALJ.  42 C.F.R. § 405.1000.  Finally, if a party is dissatisfied with an ALJ’s decision, the party may request review by the Medicare Appeals Council.  42 C.F.R. § 405.1102.  Unless a party continues to appeal each determination, the last determination or decision to be issued is binding on the parties.  42 C.F.R. §§ 405.958, 405.978, 405.1048(a), 405.1130.

When promulgating section 424.535(a)(8)(ii), the Secretary of Health and Human Services (Secretary) received public comments that asked the Secretary not to base revocations on claims denials that were later overturned during the claims appeals process.  The Secretary agreed that “[a] provider or supplier’s claim denial that has been both – (1) fully (rather than partially) overturned on appeal; and (2) finally and fully adjudicated will be excluded from our consideration in determining whether the provider or supplier’s Medicare billing privileges should be revoked under § 424.535(a)(8)(ii).”  79 Fed. Reg. 72,500, 72,513 (Dec. 5, 2014).  The Secretary stated that “the term ‘finally and fully adjudicated’ means that – (1) the appeals process has been exhausted; or (2) the deadline for filing an appeal has passed.”  79 Fed. Reg. at 72,513.

Although this comment and response were primarily directed at final determinations that overturn a claim denial, I conclude that its reasoning also supports recognition of final claims denials when adjudicating a revocation based on section 424.535(a)(8)(ii).  Further, the response to the comment proceeds from an understanding that final denied claims may support a revocation under § 424.535(a)(8)(ii).  Therefore, in my review of this matter, I must defer to the binding determinations for the 2019 Claims, 2021 Claims, and the 2021-2022 Claims.  If Petitioners had reason to object to those determinations, they needed to use the statutory appeals process for those claims.  Because Petitioners did not, all of the claims determinations are binding.

Petitioners also argue that CMS should not have relied on the review of the 2021-2022 Claims because Petitioners appealed the overpayment determination for those claims and the appeal was still pending when CMS revoked Petitioners enrollment.  P. Br. at 24.  Again, I must reject Petitioners’ argument.

When promulgating 42 C.F.R. § 424.535(a)(8)(ii), the Secretary rejected a public comment “that claim denials under appeal be excluded from any measurement that takes into account the number or percentage of denied claims,” noting that CMS will exclude from consideration all claims denials overturned on appeal but that CMS will not exclude from consideration claims denials that are currently being appealed.  79 Fed. Reg. 72,500, 72,513 (Dec. 5, 2014).  In the present case, it is true that NGS issued the initial determinations to revoke Petitioners’ Medicare enrollments in January 2024 (CMS Ex. 14 at 1; CMS Ex. 17 at 1) and NGS issued its partially favorable redetermination of the

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2021-2022 Claims in February 2024 (CMS Ex. 10 at 1).  However, in the determination reconsidering the revocation, the CMS hearing officer acknowledged that NGS’s 2021-2022 Claims redetermination resulted in a decrease in denials for those claims.  CMS Ex. 23 at 10.  There is no evidence that Petitioners requested reconsideration of the 2021-2022 Claims redetermination, making the redetermination final and binding.  42 C.F.R. § 405.958.  Therefore, the CMS hearing officer acted appropriately in considering the modified/reduced claim denial percentage for the 2021-2022 Claims.  Because my review is based on the reconsidered determination, any imperfection in the initial determination is not relevant so long as the reconsidered determination is appropriately decided.  See Devine, DAB No. 3159 at 18 (the focus of ALJ review is on the reconsidered determination and not the initial determination).

In addition, Petitioners assert that they never received the overpayment determination concerning the review of the 2021 Claims.  P. Br. at 5.  In FFCL 4, I concluded that the record did not support that assertion.  However, for purposes of concluding that the 2021 Claims determination is binding, I note that, even if Petitioners did not receive notice of that determination when it was originally sent, Petitioners learned of it through NGS’s initial determinations to revoke and CMS’s reconsidered determination.  CMS Exs. 14, 17, 23.  There is no evidence that Petitioners filed a request for redetermination of the 2021 Claims denial after receiving the initial determinations to revoke.  Petitioners could have asserted good cause for the late filing had they never received the 2021 Claims denial.  See 42 C.F.R. § 405.942(b)(3)(v) (stating that an example of good cause to file a late request for redetermination includes “[t]he party did not receive notice of the determination or decision.”).  Therefore, I consider the 2021 Claim determination binding.

Finally, for reasons similar as to why I must accept the final and binding determinations involving the 2019 Claims, 2021 Claims, and 2021-2022 Claims, I do not accept the conclusions related to a prepayment review undertaken in 2022.2  CMS only provided documentation that an internal review was completed but did not provide evidence that a formal determination was issued to Petitioners or evidence that such a determination was delivered to Petitioners’ address.  See CMS Exs. 12-13.  Petitioners assert they only learned of the review through “numerous conversations” with SafeGuard, but Petitioners never received a written determination denying claims.  P. Br. at 5-7.  Given that “[a] contractor’s prepayment review will result in an initial determination,” I cannot give effect to a review for which there is no evidence that such an initial determination was ever issued.  42 C.F.R. § 405.903(d).

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7. CMS had a legitimate basis to revoke Petitioners’ Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii) because CMS reasonably concluded, based on a consideration of relevant regulatory factors, that Petitioners had a pattern or practice of filing claims that did not meet Medicare requirements.

The Act authorizes the Secretary to establish regulations for enrolling providers and suppliers in the Medicare program.  42 U.S.C. § 1395cc(j)(1)(A).  Providers must enroll in the Medicare program and receive a billing number in order to obtain payment for services rendered to Medicare beneficiaries.  42 C.F.R. § 424.505.  Physicians and entities that are not specifically identified by the Act as a “provider of services” are considered to be “suppliers.”  42 U.S.C. § 1395x(d), (u). 

The regulations delegate to CMS the authority to revoke the enrollment and billing privileges of providers and suppliers.  42 C.F.R. § 424.535.  CMS or a Medicare contractor may revoke a provider’s or supplier’s Medicare enrollment and billing privileges for any of the reasons listed in 42 C.F.R. § 424.535(a).  42 C.F.R. §§ 405.800(b)(1), 424.535(a).  If CMS revokes a provider’s or supplier’s Medicare enrollment and billing privileges, the revocation becomes effective 30 days after CMS or one of its contractors mails the revocation notice to the provider or supplier, subject to some exceptions not applicable in this case.  42 C.F.R. §§ 405.800(b)(2), 424.535(g).  After CMS revokes a provider’s or supplier’s enrollment and billing privileges, CMS bars the provider or supplier from re-enrolling in the Medicare program for a minimum of one year, but no more than ten years.  42 C.F.R. § 424.535(c).

CMS may revoke the enrollment of a provider or supplier who engages in abuse of billing privileges.  42 C.F.R. § 424.535(a)(8).  CMS may determine that there has been an abuse of billing privileges if a provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.  42 C.F.R. § 424.535(a)(8)(ii).  To determine if there has been a pattern or practice, CMS considers, as applicable, one or more of the following four factors:

(A) The percentage of submitted claims that were denied during the period under consideration.

(B) Whether the provider or supplier has any history of final adverse actions and the nature of any such actions.

(C) The type of billing non-compliance and the specific facts surrounding said non-compliance (to the extent this can be determined).

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(D) Any other information regarding the provider or supplier’s specific circumstances that CMS deems relevant to its determination.

42 C.F.R. § 424.535(a)(8)(ii)(A)-(D).3

I conclude that the binding revised initial determinations involving the 2019 Claims and 2021 Claims, and the binding redetermination of the 2021-2022 Claims, establish that Petitioners submitted claims that failed to meet Medicare requirements.  I also conclude that CMS was able to reasonably conclude, based on the regulatory factors, that Petitioners engaged in a pattern or practice of submitting claims that did not meet Medicare requirements.4  Therefore, CMS was authorized to revoke Petitioners’ Medicare enrollment and billing privileges.  Below, I discuss each factor individually and address Petitioners’ arguments.

1. The percentage of the claims denied during the periods under consideration was very high and supports the finding of a pattern or practice of filing claims that do not meet Medicare requirements.

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The first factor is “[t]he percentage of submitted claims that were denied during the period under consideration.”  42 C.F.R. § 424.535(a)(8)(ii)(A).

As stated in FFCL 3, SafeGuard reviewed a random sample of Petitioners’ 2019 Claims and determined that 476 out of 586 services claimed, or 81.2%, should be denied.  As stated in FFCL 4, SafeGuard determined that 100% of the random sample of 2021 Claims should be denied.  And, as stated in FFCL 5, SafeGuard reviewed a random sample of Petitioners’ 2021-2022 Claims and determined that 133 out of 348 services claimed, or 38.2 %, should be denied.  On redetermination, NGS allowed eight additional claims, modestly reducing the number of denied claims.  CMS Exs. 10-11.

I conclude that these denial rates are “very high” and that CMS properly considered this factor as showing a pattern or practice of filing claims that did not meet Medicare requirements.  Devine, DAB No. 3159 at 19 (“the ALJ . . . reasonably agreed with CMS’s assessment of Petitioner’s successive claim denial rates of 41%, 90%, and 81% as ‘very high.’”).

Petitioners argue that CMS “must look at the total number of claims submitted during the time period at issue” and not just the individual periods of time that were subject to random reviews.  P. Br. at 14.  Petitioners claim, without citation to the record, is that they submitted 24,762 claims to CMS during the relevant period and that, based on the total number of claims submitted, there is only a denial rate of 1.4%.  P. Br. at 15.  According to Petitioners, this is an insufficient rate of denial to show a pattern or practice.  P. Br. at 16.

Although Petitioners consider these claims denials to be too few when compared with the total claims Petitioners submitted to Medicare over the period of several years, the applicable regulation only seeks the percentage of denied claims “during the period under consideration,” and not the total claims submitted to CMS.  42 C.F.R. § 424.535(a)(8)(ii)(A).  In the preamble to a final rule, the Secretary explained as follows the reason for this:

• In paragraph (a)(8)(ii)(A), we proposed revisions to focus on the percentage of denials within subsets of the provider’s or supplier’s claim submissions rather than across the entire universe of their claim submissions.  Specifically, we would consider the percentage of submitted claims that were denied during the timeframe under consideration.  We believe existing paragraph (a)(8)(ii)(A) inhibits our capacity to target brief periods involving a significant percentage of denied claims; this is because this factor has been interpreted to require said percentage to be weighed against claim denials over the entire period of the provider’s or supplier’s

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enrollment.  Proposed revised paragraph (a)(8)(ii)(A) would better enable CMS to address these non-compliant periods by restricting the scope of denial percentages to a shorter duration.

• For reasons similar to our revision of § 424.535(a)(8)(ii)(A), we proposed to remove § 424.535(a)(8)(ii)(D) altogether.  As already indicated, short but very intense periods of improper billing can endanger the Medicare program no less than a longer pattern of non-compliant yet merely moderate-volume billing.  Yet the “length of time” standard in paragraph (a)(8)(ii)(D) often deters us from taking action under paragraph (a)(8)(ii) to address these shorter timeframes.  Given this, we believed that eliminating paragraph (a)(8)(ii)(D) would strengthen our program integrity efforts.

86 Fed. Reg. 64,996, 65,334 (Nov. 19, 2021) (emphasis added).

I do not interpret this factor to require that CMS consider the denied claims against all of the claims Petitioners submitted from 2019 through 2022.  SafeGuard’s reviews were of random samples of claims during specific periods of time, with time in between each review to permit Petitioners to learn from the educational efforts SafeGuard provided to Petitioners.  It is not possible for CMS to review all of the claims submitted by a prolific Medicare biller like Petitioners.  Indeed, the review of the 2021-2022 Claims resulted in an extrapolation of the denied claims to a wider group of claims resulting in an extrapolated overpayment of $175,272.55.  CMS Ex. 9 at 7.  Extrapolation can only be used to determine overpayment amounts when there is a sustained or high level of payment error or documented educational interventions have failed to correct the payment error.  42 U.S.C. § 1395ddd(f)(3).

I interpret this factor to mean that the period under consideration to determine a percentage of denied claims is each period that is subject to a review.  This is the only period that can be meaningfully determined.  It would make no sense to mix the results of random samples with all other unsampled claims across several years to obtain a percentage.  That percentage would necessarily be wrong because all unsampled claims would be assumed to have been correct, even though they had not been checked.  This cannot be what the Secretary meant when revising this factor to ensure better program integrity.

Therefore, CMS’s use of this factor to support its conclusion that Petitioners engaged in a pattern or practice of submitting Medicare claims that did not meet Medicare requirements was appropriate.  The length of time between audits is not material to the

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consideration of this factor.  In fact, these periods of time were to allow Petitioners to ensure that they started to file compliant claims.

The first review yielded a rate of denial that was over 80%.  Despite educational information from SafeGuard, the next review two years later resulted in a 100% denial rate.  While the third review improved, claims were denied at a rate of more than one in three.  Therefore, this factor provides significant support for CMS’s determination that a pattern or practice of filing claims that do not meet Medicare requirements existed.

2. Petitioners do not have a history of final adverse actions.  Therefore, this factor does not support the finding of a pattern or practice of filing claims that do not meet Medicare requirements.

Another factor that may be considered when determining if there is a pattern or practice of filing claims that do not meet Medicare requirements is the provider’s or supplier’s history of final adverse actions.  42 C.F.R. § 424.535(a)(8)(ii)(B). 

Final adverse actions include:  

(1) A Medicare-imposed revocation of any Medicare billing privileges;

(2) Suspension or revocation of a license to provide health care by any State licensing authority;

(3) Revocation or suspension by an accreditation organization;

(4) A conviction of a Federal or State felony offense (as defined in § 424.535(a)(3)(i)) within the last 10 years preceding enrollment, revalidation, or re-enrollment; or

(5) An exclusion or debarment from participation in a Federal or State health care program.

42 C.F.R. § 424.502 (definition of “Final adverse action”). 

There is no evidence in the record that Petitioners have been subject to a final adverse action.  Therefore, this factor does not support a finding of a pattern or practice. 

3. The billing non-compliance in this case generally involves Petitioners’ failure to provide accurate information, provide necessary documentation to support the claims, and a failure to meet requirements in a local

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coverage determination (LCD).  Because providers and suppliers have the duty to submit accurate and supported claims, this billing non‑compliance supports the finding of a pattern or practice of filing claims that do not meet Medicare requirements.

Another factor CMS may consider is:  “The type of billing non-compliance and the specific facts surrounding said non-compliance (to the extent this can be determined).”  42 C.F.R. § 424.535(a)(8)(ii)(C).

When providers or suppliers seek reimbursement from the Medicare program for items or services provided to Medicare beneficiaries, CMS may not make payment unless the items or services are “reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”  42 U.S.C. § 1395y(a)(1)(A).  CMS contractors may issue LCDs “respecting whether or not a particular item or service is covered” under 42 U.S.C. § 1395y(a)(1)(A).  42 U.S.C. §§ 1395y(l)(5)(D), 1395ff(f)(2)(B).

2019 Claims Review

SafeGuard’s 2019 Claims review based its conclusions on a lack of documentation to support the claimed services, including a failure for those claims to meet the requirements in an applicable LCD.5  CMS Ex. 3 at 3.  The review “was predicated on data analysis which revealed billing for potentially medically unnecessary [UDTs] both Presumptive and Definitive CPT codes on the same date of service.”  CMS Ex. 3 at 2.  As to this review, SafeGuard noted:

Most of the beneficiaries sampled had a history of alcohol abuse, opioid abuse, or chronic opioid use and for these

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reasons the need for more frequent presumptive drug testing would be necessary.  However, the need for a more specific urine drug testing reflected would not be necessary if the presumptive drug test results were consistent with the expected result, the beneficiary’s self-report that no illicit drugs were used, presentation, medical history, or current prescribed medication plan.

CMS Ex. 3 at 3.  SafeGuard stated that the services did not meet the applicable LCD’s requirements, such as the following:

• Drug tests, presumptive:  “No presumptive drug screen results were submitted or documented to confirm this drug screen was completed as billed.”
• Drug test(s), definitive:  “Documentation did not support that the presumptive test results were inconsistent with the expected result, the beneficiary’s self-report that no illicit drugs were used, presentation, medical history, or current prescribed medication plan.”
• Trigger point injection:  “The record does not include a detailed history to support what prior non-invasive treatments have been tried or that non-invasive treatments were contraindicated.”
• Chemo denervation of muscles:  “The office visit note includes chronic migraine as a diagnosis however, documentation did not include headache as a reason for the visit and the general examination did not clearly support a migraine headache.”
• Onabotuliumtoxina injections:  “information fails to support need for this service.”

CMS Ex. 3 at 3-4.  SafeGuard also denied other claimed services:

• Ultrasonic guidance for needle placement:  “The trigger point injection procedures were denied therefore, the associated ultrasonic guidance is denied.”
• Vitamin B-12 cyanocobalamin injection:  “There is a diagnosis of B-12 deficiency however, there are no labs to confirm the B-12 deficiency required an injectable treatment over oral.”
• Therapeutic, prophylactic, or diagnostic injection:  “the injection procedure was denied therefore, the associated injection was denied.”

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• Alcohol and/or substance abuse structured assessment, and brief intervention 15 to 30 minutes:  “There was no structured assessment and brief intervention form submitted for review.”

CMS Ex. 3 at 4.

SafeGuard also noted that IPS billed for services using the wrong codes.  CMS Ex. 3 at 4-5.

The CMS hearing officer accurately summarized these findings when considering this factor.  CMS Ex. 23 at 9.

2021 Claims Review

SafeGuard based its conclusions on a lack of documentation to support the claimed services, including a failure for those claims to meet the requirements in an applicable LCD.  CMS Ex. 6 at 3.  The review “was predicated on data analysis which revealed continued statically billing presumptive and definitive drug testing codes on the same date of service following previous education.”  CMS Ex. 6 at 2.

SafeGuard provided specific reasons for its decision, which included:

• Drug test, presumptive:  “The medical record fails to show how the clinician is using the results in the management of prescribing/renewing a controlled substance for every risk group.  Low Risk individuals should have random testing 1-2 times every 12 months.  Moderate Risk individuals should have random testing 1-2 times every 6 months.  Lastly, High Risk individuals should obtain random testing performed 1-3 times every 3 months.  Individuals are being billed for drug testing ranging from weekly to monthly basis. . . . Patients report no personal or family history of drug or alcohol abuse.”
• Drug test, definitive:  “Documentation did not support that the presumptive test results were inconsistent with the expected result, the beneficiary’s self-report that no illicit drugs were used, presentation, medical history, or current prescribed medication plan.”
• Documentation in physician progress notes from visit to visit are nearly identical.
• A generic non-patient specific indication was noted for the presumptive and definitive urine toxicology tests.

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• There is no documentation in the record indicating the severity of the pain and/or how it affects the patient’s career or lifestyle.
• No signature or date present on presumptive and definitive test results.
• Progress notes are not signed and dated on date of service; the majority of the progress notes are signed and dated months later.

CMS Ex. 6 at 3-4. 

The CMS hearing officer accurately summarized these findings when considering this factor.  CMS Ex. 23 at 9-10.

2021-2022 Claims Review

SafeGuard provided specific reasons for the denial of claims, which included:

• Presumptive UDT is not reasonable and necessary:  Two beneficiaries should not have been ordered presumptive UDT because the IPS provider was not writing prescriptions for those patients; therefore, it was not necessary to monitor the beneficiaries for additional medication or substance use.  Although a third beneficiary potentially could have been ordered a presumptive UDT, “there was insufficient documentation regarding his history, stage of treatment or frequency of testing to support LCD guidelines and determine medical necessity for UDT.”
• Definitive UDT is not reasonable and necessary:  “Claim history and testing results demonstrated that in most cases, definitive testing was ordered every time and on the same day as the presumptive testing and [t]his lack of documentation of the [point of care] results did not indicate ordering the definitive testing based on the results of the presumptive test.  For the majority of patients, there was no rationale given as to why definitive testing was being performed for that patient and no documentation of the specific tests and the rationale as to why confirmatory testing was needed for those particular medications.”
• There were no test results submitted to support services rendered:  “There were some claims for which there were no presumptive and/or definitive test results submitted to support services were rendered on that [date of service].”
• No order submitted for the billed service:  “Some of the submitted medical records were missing orders for the definitive UDT and neither was there any documentation of the specific tests being ordered and why.”

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• Date of service on the claim is not valid:  “When the [date of service] on the claim was not the date that the urine was collected as documented on the order and/or the result, the claim for the UDT was denied.”
• “The notes were often inconsistent as to the results of the test performed.”
• “The provider was noted to be inconsistent in his risk assessment.”

CMS Ex. 9 at 3-6.

The CMS hearing officer accurately summarized these findings when considering this factor.  CMS Ex. 23 at 10.

CMS argues the following in its brief when summarizing the reasons for the denial of claims:

For example, claims were denied because presumptive drug test results were not submitted or documented to confirm that the drug test was completed as billed, or the supplied documentation failed to support the need for definitive drug tests because the results of the presumptive urine drug test were not inconsistent with the expected result.  (See CMS Ex. 3 at 3-4).  In another review, Petitioner provided no rationale or explanation as to why definitive testing was being performed for the majority of its patients, and no documentation of the specific tests was provided.  (CMS Ex. 9 at 3-6).  Petitioner does not dispute that it failed to submit required documentation with many of its claims.  (See generally Pet. Hearing Req.).

CMS Br. at 9.

Petitioners argue that the reconsidered determination does not sufficiently consider the bases for the claims denials and that “the Reconsidered Decision and CMS’s brief do little more than recite the explanation provided in the relevant demand letters.”  P. Br. at 17.  Rather than discuss the basis for the denial of claims, as stated in the binding determinations concerning the 2019 Claims, 2021 Claims, and the 2021-2022 Claims, Petitioners appear to primarily dispute the reasons for denials.

Dr. Sarij testified at length as to why his claims were proper.  Dr. Sarij testified that a pain management physician “cannot rely on presumptive urine tests at any point as the sole method of determining compliance with an opioid regimen for a patient with chronic

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pain.”  P. Ex. 10 ¶ 8.  Dr. Sarij explained that presumptive positive test results are not definitive because there are a variety of variables that must be considered; however, under CMS guidelines, presumptive positive immunoassay tests detect the presence of a drug or substance in urine when the substance meets or exceeds a “cut-off” value, but the test result will be negative when the concentration of the drug is under the “cut-off” value.  P. Ex. 10 ¶ 9.   Dr. Sarij testified that presumptive UDT is limited because it screens for drug classes rather than specific drugs, they produce erroneous results due to cross-reactivity with other compounds, and they do not detect all drugs within a drug class.  P. Ex. 10 ¶ 11.  As a result, a physician using this information may result in erroneous assumptions or clinical decisions.  P. Ex. 10 ¶ 11.  Dr. Sarij also testified that pain management is inherently challenging because pain management physicians are mandated to monitor compliance with prescribed medications.  P. Ex. 10 ¶ 17.  He explained he “conducted toxicology testing to monitor patients based on the best available scientific evidence, without bias regarding their insurance coverage.”  P. Ex. 10 ¶  18.

Petitioner also offered the testimony of James Tudor, an individual with 35 years of medical billing, coding, and compliance, who also testified about CMS’s basis for revocation in this matter.  P. Ex. 9.  Mr. Tudor also authored a report as to his assessment of Petitioners’ claims and CMS’s decisions.  P. Ex. 1.  His overall conclusion appears to be that his analysis  “systematically refuted” CMS.  P. Ex. 9 ¶ 29.  Mr. Tudor testified that, in the current health care environment, redundant and conflicting entries in medical records is common, and that CMS’s concern over a lack of detail involved matters that could be inferred from the records.  P. Ex. 9 ¶ 4.  Mr. Tudor disputed the reconsidered determination’s conclusion that the medical records failed to show how test results were used in pharmacological management.  P. Ex. 9 ¶ 6.  Mr. Tudor used specific beneficiaries as examples to show why Petitioners’ claims were appropriate.  P. Ex. 9 ¶¶ 11-21.

Mr. Tudor’s report is consistent with his testimony.  In the report, he provided the goal of his analysis:

Given these considerations, our focus was aimed at thoroughly analyzing medical appropriateness of the services rendered.  This analysis involved a detailed review of the processes and methodologies employed by the practice to justify the UDT orders.  By examining the rationale behind these tests and assessing how they align with clinical guidelines and best practices, we aimed to provide a clearer understanding of the situation and the validity of the claims made by CMS.

P. Ex. 1 at 6.

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The testimonial evidence and that in the report contradict the reasons why SafeGuard denied the claims in question in this case rather than discuss the reasons identified by SafeGuard.  Petitioners should have submitted this evidence as part of an administrative appeal for the denied claims.

I note that Mr. Tudor did take issue with the reconsidered determination’s assessment of the claims denials and, both his testimony and that of Dr. Sarij provide some additional background information related to the claims denials that may be generally considered.  Mr. Tudor’s report argues that the reconsidered determination was wrong in its statement that “[r]ecords failed to show how the results were used in pharmacological management of a controlled substance.”  P. Ex. 1 at 7.  However, that is a matter that SafeGuard raised in its 2021-2022 Claims determination and the CMS hearing officer was referencing SafeGuard’s assessment.  CMS Ex. 6 at 3.  Mr. Tudor also takes issue with the aspects of the claims denials that involved frequency of testing, arguing that the relevant LCD “does not reference any specific frequency thresholds for patients receiving ongoing monitoring.”  P. Ex. 1 at 16.  However, the application of the LCD is a matter that needed to be raised on an appeal of the claims denials.

Despite all that Petitioners’ witnesses state, they do not really address one of the persistent problems noted by SafeGuard, i.e., Petitioners lacked sufficient medical documentation to support the testing, included documentation for multiple beneficiaries that appeared identical, as well as a lack of test results and a failure of other documents to be properly signed by a physician.  In short, even if Petitioners are correct and some of their claims were for services properly provided, Petitioners often filed claims that were defective in terms of documentation.  The Secretary has made it clear that “providers and suppliers have a responsibility to always submit correct claims.”  86 Fed. Reg. at 65,335.  A goal of 42 C.F.R. § 424.535(a)(8)(ii) is to incentivize the filing of claims that meet Medicare requirements, rather than stop any one type of claims error.

[T]he overall purpose of paragraph (a)(8)(ii) has always been to deter non-compliant billing, regardless of the reason for it.  Even if a period of erroneous claim submissions reflected no nefarious intent by the provider, the latter still failed to comply with Medicare billing requirements and thus presented a risk to the Medicare program.  For this reason, we do not view the claim denial reason as particularly germane to the question of whether paragraph (a)(8)(ii) should apply in a particular case.

86 Fed. Reg. at 65,335.

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CMS satisfactorily considered this factor and properly determined that this factor supported a finding of a pattern or practice of filing claims that did not meet Medicare requirements.

4. CMS also considered the amount of money that was overpaid to Petitioners and the fact that Petitioners received education from SafeGuard on proper billing practices.

The CMS hearing officer’s reconsidered determination also considered that the three claims reviews resulted in an overpayment of $189,118.48 and that Petitioners had received education from SafeGuard during each claim review to help Petitioners become compliant in their billing.  CMS Ex. 23 at 10-11.

Petitioners argue that the overpayments from the claims review only amounted to $47,970.54.  P. Br. at 18.  Petitioners disputed that the extrapolated amount of overpayment should be considered.  P. Br. at 18.

While I agree with Petitioners that the actual overpayment as determined by the claims that were denied is more relevant than an extrapolated amount, I consider the loss of nearly $48,000 to the Medicare program based on claims that do not meet Medicare requirements to be significant.  It supports CMS’s finding of a pattern or practice of filing claims that do not meet Medicare requirements.  CMS also properly considered the fact that Petitioners continued to file claims that did not meet requirements after SafeGuard twice provided detailed written “education” as to how Petitioners could correct their practices.  This included a clear explanation as to the importance of documentation to support claims.  Petitioners may have improved their claims filings by the third review; however, this was still not sufficient to ensure Medicare program integrity.

Based on a review of the factors above, CMS had a legitimate basis to revoke Petitioners’ Medicare enrollment under 42 C.F.R. § 424.535(a)(8)(ii).

8. Petitioners do not present any legal or factual arguments disputing their inclusion on the Preclusion List.

CMS has established a single list of individuals and entities for whom Medicare Advantage plans cannot provide reimbursement for items and services they provide, and for prescribers to whom Medicare Part D plans cannot provide reimbursement for any prescriptions the individuals write.  42 C.F.R. §§ 422.222, 423.120(c)(6).  As relevant here, for CMS to include an individual, entity, or prescriber on its Preclusion List, the following three requirements must be met:

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(i) The [individual, entity, or prescriber] is currently revoked from Medicare for a reason other than that stated in [42 C.F.R.] § 424.535(a)(3) . . . .

(ii) The [individual, entity, or prescriber] is currently under a reenrollment bar under [42 C.F.R] § 424.535(c).

(iii) CMS determines that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.  In making this determination under this paragraph . . . , CMS considers the following factors:

(A) The seriousness of the conduct underlying the . . . revocation.

(B) The degree to which the . . . conduct could affect the integrity of the [Medicare/Part D] program.

(C) Any other evidence that CMS deems relevant to its determination . . . .

42 C.F.R. §§ 422.2, 423.100.

The CMS hearing officer considered these factors in some detail in the reconsidered determination.  CMS Ex. 23 at 12-13.

In Petitioners’ brief, Petitioners did not expressly challenge the placement of their names on the CMS Preclusion List, other than as part of their general challenges to the revocation of enrollment.  P. Br. at 3, 8, 17-19, 24.  This is consistent with Petitioners’ hearing request that only disputed the placement of their names on the Preclusion List because the revocation was allegedly improper.  P. Ex. 8 at 10.

Because I have concluded above that revocation was legitimate, I reject Petitioners’ argument concerning the Preclusion List.  Devine, DAB No. 3159 at 23; John O. Dimowo, M.D., DAB No. 3101 at 14 (2023).  Petitioners have been revoked and are under a re-enrollment bar, and the reconsidered determination sufficiently explains why the basis for revocation is detrimental to the best interests of the Medicare program.  Indeed, a pattern or practice of filing Medicare claims that fail to meet program requirements is, without a doubt, detrimental to the best interests of the Medicare program.

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VII.     Conclusion

I affirm CMS’s revocation of Petitioners’ Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii), and uphold Petitioners’ inclusion on the CMS Preclusion List.