Medic Transit EMS, Inc., DAB CR6832 (2026)

DECISION

The Centers for Medicare & Medicaid Services (CMS) revoked the Medicare enrollment and billing privileges of Petitioner, Medic Transit EMS, Inc.  CMS concluded that Petitioner had abused its billing privileges within the meaning of 42 C.F.R. § 424.535(a)(8)(ii).  For the reasons explained below, I find that CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges, based on 42 C.F.R. § 424.535(a)(8)(ii) (Abuse of billing privileges).  I also find that CMS had a legitimate basis to include Petitioner on the CMS Preclusion List, based on 42 C.F.R. §§ 422.2 and 422.222. 

I.  Background and Procedural History

Petitioner is an ambulance service supplier in Fresno, Texas, which first enrolled in the Medicare program in 2007.  See CMS Exhibit (Ex.) 1 at 3 (historical data listing Petitioner’s effective date as December 14, 2007); Request for Hearing (RFH) at 6 (Petitioner has sought reimbursement for eligible services provided to eligible beneficiaries since July 2007).

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Petitioner was the subject of one post-payment medical probe review by a Zone Program Integrity Contractor (ZPIC), and two post-payment medical probe reviews by a United Program Integrity Contractor (UPIC), which formed the basis for CMS’s decision to revoke Petitioner:

• A March 21, 2017 post-payment review (“first review”) of 31 claims determined that 20 claims failed to meet Medicare requirements and were denied.  CMS Exs. 5, 6.  A denial rate of 64.5% of the claims reviewed.  CMS Ex. 6 at 1.  The claims had dates of service from December 24, 2013 through July 5, 2016.  CMS Ex. 6 at 1.  Petitioner did not appeal the determinations in this post-payment review.
• A December 5, 2019 post-payment review (“second review”) of 67 claims determined that all 67 claims failed to meet Medicare requirements and were denied.  CMS Exs. 7, 8.  The denied claims had dates of service from April 1, 2019 through June 26, 2019.  CMS Ex. 8 at 1.  Petitioner appealed the 67 claim denials to CMS’s Medicare administrative contractor, Novitas Solutions, Inc. (Novitas), who upheld the denial determinations.  CMS Exs. 9, 10.  Petitioner appealed the unfavorable redeterminations to C2C Innovative Solutions, Inc. (C2C), a Qualified Independent Contractor (QIC), who issued favorable decisions for 21 of the 67 denied claims.  CMS Exs. 11, 12, 13.  Petitioner appealed the 46 remaining claim denials to the US Department of Health and Human Services Office of Medicare Hearings and Appeals (OMHA), who issued favorable decisions for 7 of the 46 denied claims.  CMS Ex. 14.  The second review resulted in overpayment amounts of $10,814.03 (CMS Ex. 15) and $720.44 (CMS Ex. 16).  After Petitioner’s appeals, 39 of the 67 denied claims were upheld, for a denial rate of 58% of the reviewed claims.  CMS Ex. 4 at 5, 7-8.
• A March 14, 2022 post-payment review (“third review”) of 16 claims determined that all 16 claims failed to meet Medicare requirements and were denied.  CMS Exs. 17, 18.  The denied claims had dates of service from July 30, 2021 through November 30, 2021.  CMS Ex. 18 at 1.  Petitioner did not appeal the determinations in this post-payment review.  The third review resulted in overpayment amounts of $2,724.13 (CMS Ex. 19) and $345.02 (CMS Ex. 20).

By letter dated September 16, 2022, CMS, through Novitas, notified Petitioner that its Medicare enrollment and billing privileges were revoked, effective October 16, 2022, pursuant to 42 C.F.R. § 424.535(a)(8)(ii).  CMS Ex. 2.  Petitioner was also placed on the Preclusion List.  CMS Ex. 2 at 2.

Petitioner timely requested reconsideration on October 17, 2022.  CMS Ex. 3.  On January 25, 2023, a CMS Hearing Officer issued an unfavorable decision upholding revocation pursuant to 42 C.F.R. § 424.535(a)(8)(ii) and the corresponding re-enrollment

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bar established under 42 C.F.R. § 424.535(c).  CMS Ex. 4 at 13.  The CMS Hearing Officer also upheld Petitioner’s placement on the Preclusion List and advised Petitioner of its rights to appeal the reconsidered determination before an Administrative Law Judge (ALJ) in the Civil Remedies Division.  Id. at 11-15.

II.  Decision on the Record

On March 24, 2023, Petitioner requested a hearing before an ALJ.  The revocation hearing request was docketed as C-23-365, and ALJ Jacinta L. Alves was designated to hear and decide the case.1  On March 29, 2023, ALJ Alves issued an Acknowledgment and Pre-hearing Order (Pre-hearing Order) in which she instructed the parties to file pre-hearing exchanges.  CMS filed a motion for summary judgment and brief (CMS Br.) along with 20 proposed exhibits (CMS Exs. 1-20) on May 3, 2023.  Petitioner filed a brief opposing summary judgment (P. Br.) and offered eight proposed exhibits (P. Exs. A through H) on June 6, 2023.

On June 7, 2023, ALJ Alves issued an Order Rejecting Exhibits and gave Petitioner ten days to refile exhibits which conform to the requirements of paragraph 6 of the Pre-hearing Order and paragraph 14 of the Civil Remedies Division Procedures (CRDP).  See Departmental Appeals Board Electronic Filing System (DAB E-file) Doc. No. 10.  Petitioner did not refile exhibits conforming to the Pre-hearing Order or the CRDP.  On June 29, 2023, ALJ Alves issued an Order to Show Cause asking why she should not proceed to a ruling on CMS’s motion for summary judgment without considering Petitioner’s exhibits supporting its response in opposition.  See DAB E-file Doc. No. 12.  By July 18, 2023, Petitioner had not filed a response or requested an extension.  The attorney advisor assigned to the file emailed Petitioner, who requested an extension to July 25, 2023 to file a response.  See DAB E-file Doc. No. 13 at 2-3.  Because CMS did not oppose the motion, ALJ Alves granted Petitioner’s extension request and extended Petitioner’s deadline to respond to the order to show cause to July 25, 2023 and CMS’s deadline to file objections to Petitioner’s proposed exhibits and to request cross-examination of Petitioner’s proposed witnesses to August 9, 2023.  See DAB E-file Doc. No. 13 at 1-2.  Petitioner never filed a response and never refiled exhibits conforming with ALJ Alves’s Pre-hearing Order or the CRDP.  As a result, Petitioner’s proposed exhibits A through H remain rejected and are not admitted2 into the record.

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CMS filed a notice waiving its reply to Petitioner’s brief opposing summary judgment on June 26, 2023.  Petitioner did not object to CMS’s proposed exhibits.  Therefore, in the absence of objections, I admit CMS Exs. 1-20 into the record.

CMS has moved for summary judgment or, in the alternative, for a decision on the written record.  Petitioner has indicated that it does not intend to call any witnesses at an oral hearing.  Consequently, an in-person hearing is not required, and I issue this decision based on the written record, without regard to whether the standards for summary judgment are met.  CRDP § 19(d). I deny CMS’s motion for summary judgment as moot.

III.  Issues

The issues in this case are whether CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii) (2022), and whether CMS has a legitimate basis to place Petitioner on the Preclusion List.  42 C.F.R. §§ 422.2, 423.100.

IV.  Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R. §§ 498.3(b)(17), (20), 498.5(l)(2), (n)(2); see also Social Security Act (Act) § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).

V.  Discussion

1.  Applicable law

The Act authorizes the Secretary of Health and Human Services (Secretary) to create regulations governing the enrollment of providers and suppliers to furnish health care items and services to Medicare program beneficiaries.  See 42 U.S.C. § 1395cc(j).  For purposes of the Medicare program, an ambulance service is considered a supplier.  42 C.F.R. §§ 410.40(b)(1), 498.2 (definition of Supplier); see also 42 U.S.C. § 1395x(d), (s)(7), (u).  Under the Secretary’s regulations, a supplier must enroll in the Medicare

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program to receive payment for covered Medicare items or services provided to beneficiaries.  42 C.F.R. §§ 424.505, 424.510.

As a condition of payment for ambulance services provided under Medicare Part B, the supplier must follow two conditions:

(1) The supplier meets the applicable vehicle, staff, and billing and reporting requirements of § 410.41 and the service meets the medical necessity and origin and destination requirements of paragraphs (e) and (f) of this section.

(2) Medicare Part A payment is not made directly or indirectly for the services.

42 C.F.R. § 410.40(b).

Medicare covers medically necessary ambulance transportation from specific origins and to specific destinations.  See 42 C.F.R. § 410.40(e), (f).  To be considered medically necessary and therefore eligible for reimbursement, a supplier must demonstrate that the beneficiary’s medical condition “is such that other means of transportation are contraindicated” and the beneficiary’s “condition must require both the ambulance transportation itself and the level of service provided . . . .”  42 C.F.R. § 410.40(e)(1).  Non-emergency ambulance transportation is covered when specific conditions are met, such as the beneficiary being bed-confined, or when a beneficiary has a condition precluding other methods of transportation or requiring ambulance transportation.  42 C.F.R. § 410.40(e)(1).  Non-emergency, scheduled, repetitive ambulance services are covered if, before providing the service, the supplier obtains a signed physician certification statement (PCS) dated within 60 days before the date the service is provided.  42 C.F.R. § 410.40(e)(2)(i).  Through the PCS and additional documentation, the supplier “must provide detailed explanations, that are consistent with the beneficiary’s current medical condition, that explains the beneficiary’s need for transport by an ambulance,” which “includes observation or other services rendered by qualified ambulance personnel.”  42 C.F.R. § 410.40(e)(2)(ii).  Medically necessary non-emergency ambulance services that are unscheduled or scheduled on a nonrepetitive basis are covered under specific circumstances, some of which require a signed PCS.  See 42 C.F.R. § 410.40(e)(3).  If a supplier is unable to obtain the required certification statement within 21 calendar days following the date of service, the supplier is required to document its efforts to obtain the requested certification before submitting the claim.  42 C.F.R. § 410.40(e)(3)(iv).  Suppliers are required to keep appropriate documentation on file and present it to CMS when requested.  42 C.F.R. § 410.40(e)(2)(ii), (e)(3)(v).  Although a signed PCS “does not alone demonstrate that transportation by ground ambulance was medically necessary, the PCS and additional documentation from the

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beneficiary’s medical record may be used to support a claim that transportation by ground ambulance is medically necessary.”  Id.

CMS may revoke a supplier’s enrollment and billing privileges for any reason stated in 42 C.F.R. § 424.535(a).  CMS is authorized to revoke the Medicare enrollment and billing privileges of a provider if a provider abuses its billing privileges, because “CMS determines that the 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).  In making this determination, CMS considers the following:

(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).
(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

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The effect of revocation is to terminate any provider agreement and to bar the provider or supplier “from participating in the Medicare program from the effective date of the revocation until the end of the re-enrollment bar.”  42 C.F.R. § 424.535(b), (c).  CMS may impose a re-enrollment bar anywhere from one to ten years.  42 C.F.R. § 424.535(c).  CMS also may place providers on the Preclusion List if the provider is revoked, under a re-enrollment bar, and CMS has determined the underlying conduct was detrimental to the best interests of the Medicare program.  42 C.F.R. § 422.2.

2.  Findings of Fact, Conclusions of Law, and Analysis4

1. Petitioner submitted 31 claims with dates of service between December 24, 2013 and July 5, 2016, seeking reimbursement for services provided to Medicare beneficiaries where the claims failed to meet Medicare requirements.

CMS’s first review of Petitioner’s claims resulted in the denial of 31 claims with dates of service between December 24, 2013 and July 5, 2016.  CMS Ex. 6.  A denial rate of 64.5% of the reviewed claims.  CMS Ex. 6 at 1.  The ZPIC denied 20 out of 31 claims in the targeted sample because the “documentation did not support the Medicare guidelines for Ambulance service, basic life support, non emergency transport or for insufficient documentation.”  CMS Ex. 6 at 1 (emphasis omitted).  The ZPIC cited Local Coverage Determination (LCD) L326065 for Ambulance Services (Ground Ambulance) as applicable to the dates of service reviewed.  CMS Ex. 6 at 2-3.  The ZPIC explained that “[e]leven claims were denied due to the documentation was not sufficient to support the beneficiary’s condition at the time of transport met Medicare guidelines for ambulance

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transport,” and “[n]ine claims were denied due to the provider failed to submit corresponding documentation (trip records) for the date of service billed.”  CMS Ex. 6 at 1 (emphasis omitted).

One patient example was provided to support the finding that Petitioner failed to submit trip records for the date of service billed on April 9, 2014.  Although Petitioner billed for non-emergency transportation and basic life support when transporting the beneficiary from a dialysis facility to a residence, “the documentation did not support” that the beneficiary was unable to sit in a chair and could not be transported by car or van, that another means of transportation would have been hazardous to their medical condition, or the number of loaded miles billed.  CMS Ex. 6 at 2.  The documentation also failed to identify “any special handling, monitoring, or treatments during transport.”  Id.  For this reason, the ZPIC found there was no corresponding documentation for the date of service billed.  Id.  The claims analyst made one additional finding, that “mileage denials coincide with transport denials.”  Id.  Further detail is not provided as to the specifics for why the ZPIC determined the documentation was inadequate in this regard.  See id.

The March 21, 2017 medical review records request indicated that the claims were selected from a computer-generated Statistically Valid Random Sample (SVRS).  CMS Ex. 5 at 1-2.  The record does not contain evidence of the number of claims that Petitioner submitted during this time period.

Petitioner did not appeal the determinations in this post-payment review, and as a result, they are administratively final pursuant to 42 C.F.R. § 405.928(b).

2. Petitioner submitted 67 claims with dates of service between April 1, 2019 and June 26, 2019 seeking reimbursement for services provided to Medicare beneficiaries where, following various appeals, 39 of the claims failed to meet Medicare requirements.

CMS’s second review of Petitioner’s claims initially resulted in the denial of 67 claims with dates of service between April 1, 2019 through June 26, 2019.  CMS Ex. 8 at 1.  The UPIC denied all 67 claims in the targeted sample because the “documentation did not meet Medicare criteria for repetitive non-emergency scheduled ambulance transports.”  CMS Ex. 8 at 2.  The UPIC cited to LCD L351626 for Ambulance Services (Ground Ambulance) as applicable to the dates of service reviewed.  CMS Ex. 8 at 4.  The UPIC generally found that for the denied claims, there was no run sheet or trip record for the date of service, the PCS was signed by a registered nurse instead of the attending

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physician, and that generalized descriptions were not adequately supported with contemporaneous objective observations that were documented at the time of the transport to prove that the beneficiary was unable to safely sit upright in a chair or wheelchair with proper positioning and support.  CMS Ex. 8 at 1.  The UPIC also found that for the denied claims, the record failed to support that the beneficiary was unable to be transported by any other means or required the level of medical care provided by the ambulance service, and that portions of the run sheet narratives were not legible.  CMS Ex. 8 at 1.

The UPIC provided three patient examples for failure to meet Medicare criteria for non-emergency scheduled ambulance transports.  CMS Ex. 8 at 2-4.  For one non-emergent basic life support transport from a residential home to a hemodialysis facility (hemodialysis transport), the UPIC determined that the PCS was signed by a registered nurse, but that under LCD L31562, repetitive non-emergency scheduled transports must be signed by the attending physician.  CMS Ex. 8 at 2.  The UPIC also found “[t]here was no ambulance run sheet or trip record found to support the ambulance transport from the beneficiary’s residence to a dialysis facility for the date of service under review . . . .”  Id.

For a second hemodialysis transport, the UPIC determined:

The submitted record failed to support that the beneficiary was unable to be transported by any other means or that the beneficiary required the level of medical care provided by an ambulance service.  The generalized descriptions of “abnormal gait” and “weakness” were not adequately supported with contemporaneous objective observations, documented at the time of the transport, to substantiate that the beneficiary was unable to safely sit upright in a chair/wheelchair with proper positioning and support.  Furthermore, the Physician Certification (PCS), dated 3/22/2019, was signed by a registered nurse.

CMS Ex. 8 at 2.  For a third hemodialysis transport, the UPIC determined:

The submitted record failed to support that the beneficiary was unable to be transported by any other means or that the beneficiary required the level of medical care provided by an ambulance service.  The generalized descriptions of “dizziness/fainting”, “fatigue”, “SOB”, “blind”, “abdominal pain”, “non-ambulatory”, “fall risk”, and “bed confined” were not adequately supported with contemporaneous objective observations, documented at the time of the transport, to substantiate that the beneficiary was unable to safely sit

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upright in a chair/wheelchair with proper positioning and support.

CMS Ex. 8 at 3-4.

The December 23, 2019 medical review records request did not indicate that the claims were selected from a computer-generated SVRS.  CMS Ex. 7 at 2.  The request letter only stated:  “For this review we have chosen specific claims from the universe of your claims.  Included in the universe were only those beneficiaries for whom you were paid by Medicare and/or Medicaid.  The chosen claims were selected from a set of claims that met specific criteria.”  CMS Ex. 7 at 2.  The specific criteria for the claims identified for the second review were not listed in either the medical review records request or in the provider education letter.  See CMS Exs. 7, 8.  The record does not contain evidence of the number of claims that Petitioner submitted during this time period.

Petitioner appealed the 67 claim denials to Novitas, who upheld the denial determinations.  CMS Exs. 9, 10.  Petitioner appealed the unfavorable redeterminations to C2C, who overturned 21 of the 67 denied claims.7  CMS Exs. 11, 12, 13.  Petitioner appealed the 46 remaining claim denials to OMHA, who issued favorable decisions for 7 of the 46 denied claims.  CMS Ex. 14.  The second review resulted in overpayment amounts of $10,814.03 (CMS Ex. 15) and $720.44 (CMS Ex. 16).  After Petitioner’s appeals, 39 of the 67 denied claims were upheld, for a denial rate of 58%.  CMS Ex. 4 at 5.

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3. Petitioner submitted 16 claims with dates of service between July 30, 2021 and November 30, 2021, seeking reimbursement for services provided to Medicare beneficiaries where the claims failed to meet Medicare requirements.

CMS’s third review of Petitioner’s claims resulted in the denial of all 16 reviewed claims with dates of service between July 30, 2021 and November 30, 2021.  CMS Ex. 18 at 1.  The UPIC denied the 16 claims in the targeted sample because the documentation “did not contain a detailed description of the beneficiaries physical symptoms at the time of transport to support being unable to get up from a bed without assistance, unable to ambulate, or unable to sit in a chair (including a wheelchair),” that six of ten claims reviewed did not have a PCS, and that the PCS and trip records “did not adequately document sufficient details of the functional and mobility status to support that the beneficiary was unable to sit, or that another means of transportation would be hazardous to their medical condition.”  CMS Ex. 18 at 1.

The UPIC cited to LCD L35162 for Ambulance Services (Ground Ambulance) and to Novitas Local Coverage Article (LCA) for Ambulance Services (Ground Ambulance)8 as applicable to the dates of service reviewed.  CMS Ex. 18 at 4.  The UPIC explained:

• The trip/run sheet must “paint a picture” of the patient’s condition and must be consistent with documentation found in other supporting medical record documentation (including the physician’s certification).
• “Coverage will not be allowed if the trip/run sheet contains an insufficient description of the patient’s condition at the time of transfer for Medicare to reasonably determine that other means of transportation are contraindicated.”
• “The presence of [end stage renal disease] and the requirement for hemodialysis do not alone qualify a patient for ambulance transportation.”
• “The certification itself is not the sole factor used in determining whether payment for ambulance services will be allowed”.

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CMS Ex. 18 at 2-3.

Two patient examples were provided to support the finding that Petitioner failed to submit sufficient documentation for the dates of service billed on August 6, 2021 and October 20, 2021.  See CMS Ex. 18.

Regarding the first hemodialysis transfer, the UPIC found:

Although the trip record documented that the beneficiary required an ambulance/stretcher due to fall risk and weakness, there was no specific information at the time of transport to support that the beneficiary required transportation by ambulance.  The narrative portion of the trip record used to describe the beneficiary’s medical condition, at the time of the transport, had generalized statements that did not substantiate that the beneficiary was unable to safely sit upright in a chair/wheelchair.  The documentation did not clearly reflect the beneficiary having a condition such that an alternative method of ground transportation would be contraindicated or required special or unusual handling that could only be provided in an ambulance.  There were no special treatments or diagnostic tests provided while in transit.

The Physician Certification Statement (PCS) was signed on 07/19/2021 for transport on Monday, Wednesday and Friday from residence to dialysis facility.  The PCS checked off that the ambulance transport was necessary due to:  the patient not being able to get up from bed without assistance, not being able to ambulate, not able to sit in a chair or wheelchair.  The PCS also checked off that “Other means of transport are contraindicated because it would be harmful to the patient’s condition.”  The PCS additionally circled the physical conditions that “qualify the patient for ambulance” as:  Degenerative Aging Process, End stage disease, Terminal Condition, CHF, cannot sit safely, and fall precautions.  There were also multiple diagnoses written in for “Other”.  While both the trip run sheet and the PCS stated the beneficiary was not able to sit in a wheelchair, the trip run sheet submitted reported the beneficiary had been place in a wheelchair in the lobby on arrival to the dialysis facility.

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There were multiple other clinical notes submitted, but only one was dated prior to the date of service.  The clinical note dated 12/17/2020 was for a dialysis visit.  The practitioner notes did not support the need for transport to dialysis via ambulance.

CMS Ex. 18 at 2.  Regarding the second hemodialysis transfer, the UPIC found:

Although the trip record documented that the beneficiary required an ambulance/stretcher due to CVA (L), paralysis, and fall risk, there was no specific information at the time of transport to support that the beneficiary required transportation by ambulance.  The narrative portion of the trip record used to describe the beneficiary’s medical condition, at the time of the transport, had generalized statements that did not substantiate that the beneficiary was unable to safely sit upright in a chair/wheelchair.  The documentation did not clearly reflect the beneficiary having a condition such that an alternative method of ground transportation would be contraindicated or required special or unusual handling that could only be provided in an ambulance.  There were no special treatments or diagnostic tests provided while in transit.

A “To Whom it May Concern” letter dated 10/15/2021 was submitted, however, there was no practitioner notes to support the letter nor a Physician Certification Statement (PCS) submitted for this claim.

CMS Ex. 18 at 3.

The March 14, 2022 medical review records request did not indicate that the claims were selected from a computer-generated SVRS.  CMS Ex. 17 at 2.  The request letter only stated:

For this review we have chosen specific claims from the universe of your claims.  Included in the universe were only those beneficiaries for whom you were paid by Medicare or Medicaid.  The chosen claims were selected from a set of claims that met specific criteria.

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CMS Ex. 17 at 2.  The specific criteria for the claims identified for the third review were not listed in either the medical review records request or in the provider education letter.  See CMS Exs. 17, 18.

The June 29, 2022 provider education letter listed dates of service from July 30, 2021 through November 30, 2021.  CMS Ex. 18 at 1.  Petitioner did not appeal the determinations in this post-payment review, and as a result, they are administratively final pursuant to 42 C.F.R. § 405.928(b).  The third review resulted in overpayment amounts of $2,724.13 (CMS Ex. 19) and $345.02 (CMS Ex. 20).

4. Petitioner engaged in a pattern or practice of abusive billing within the meaning of 42 C.F.R. § 424.535(a)(8)(ii), and CMS therefore had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges.

42 C.F.R. § 424.535(a) provides that CMS may revoke a currently enrolled supplier’s Medicare enrollment and any corresponding supplier agreement for reasons, which include, as relevant here, abuse of billing privileges.  Under § 424.535(a)(8)(ii), before determining that the supplier abused its billing privileges, CMS must first determine that a supplier demonstrated a pattern or practice of submitting claims that do not meet Medicare requirements.  In making this determination, CMS considers the percentage of submitted claims that were denied, the supplier’s history of final adverse actions and their nature, the type of billing non-compliance and the facts surrounding the non-compliance, and any other information regarding the supplier’s circumstances relevant to CMS’s determination as to whether the supplier demonstrated a pattern or practice of submitting claims that do not meet Medicare requirements.  42 C.F.R. § 424.535(a)(8)(ii).

In implementing the abuse of billing authority under 42 C.F.R. § 424.535(a)(8)(ii), CMS stated that it would not define the term “pattern or practice,” but it would implement a revocation under this basis:  (1) in situations where the behavior could not be considered sporadic, and (2) after the most careful and thorough consideration of the relevant factors.  See 79 Fed. Reg. 72,500, 72,517 (December 5, 2014).  The preamble explained that “[t]he term ‘abusive,’ as used in the context of § 424.535(a)(8)(ii), is meant to capture a variety of situations in which a provider or supplier regularly and repeatedly submits non-compliant claims over a period of time.”  Id. at 72,515.  The expectation stated in the preamble is that “a repeated pattern of submitting non-compliant claims indicates that the associated claims denials are not altering the provider’s behavior. . . . this final rule is focused on providers who cannot or will not come into compliance with our payment requirements after repeated claims denials.”  Id.  The preamble additionally states that CMS will only apply 42 C.F.R. § 424.535(a)(8)(ii) “in situations where the behavior could not be considered sporadic,” instead focusing on “providers and suppliers that engage in a systemic, ongoing, and repetitive practice of improper billing.”  Id. at 72,514, 72,519.

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In concluding that Petitioner’s Medicare enrollment and billing privileges should be revoked pursuant to 42 C.F.R. § 424.535(a)(8)(ii), CMS reasoned that “[d]espite repeated instances of specific and targeted education from July 2017 through June 2022, [Petitioner] continued to submit noncompliant claims without sufficient documentation to support that the ambulance services billed were medically necessary.”  CMS Ex. 4 at 5.  CMS reviewed the four factors enumerated at 42 C.F.R. § 424.535(a)(8)(ii) in making its determination.  Id. at 5-6.  For the reasons discussed below, the relevant factors as discussed in CMS’s reconsideration determination support a finding that there was a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii).

Regarding the first factor – the percentage of submitted claims that were denied – CMS argues that Petitioner had an “extraordinarily high denial percent” and that this demonstrates an abusive pattern and practice of submitting deficient claims to Medicare.  CMS Br. at 12.  CMS asserts that “the three reviews resulted in a denial rate of 65%, 58%, and 100%, for a total denial rate of 66%.”  Id.  Petitioner argues that the sample size of the claims reviewed represent a small fraction of the total number of claims that it submitted.  P. Br. at 3.  Petitioner asserts that it submitted approximately 2,000 claims between December 24, 2013 and July 5, 2016 (the dates of the first review), approximately 779 claims between April 1, 2019 and June 26, 2019 (the dates of the second review), and approximately 1,700 claims between July 30, 2021 and November 30, 2021 (the dates of the third review).  Id.  Petitioner argues that if you accurately consider the percentage of submitted claims that were denied, the first review would have resulted in 1%, the second review would have resulted in 6%, and the third review would have resulted in 1%.  Petitioner further alleges that those lowered percentages do not establish a pattern or practice of submitting claims that do not meet Medicare requirements.  Id. at 3-4.

With respect to the first factor, CMS explained in the preamble why it chose not to establish numerical thresholds:

[W]e have concluded that numerical thresholds should not be established because we need the flexibility to address a myriad of scenarios.  For example, merely because a provider had over 30 percent of its claims denied does not automatically mean that a § 424.535(a)(8)(ii) revocation should be imposed; likewise, an under-30 percent denial rate does not mean that a § 424.535(a)(8)(ii) revocation is never warranted.  Each case must be judged on its own specific facts, and establishing numerical thresholds would, we believe, hinder our ability to do so.

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79 Fed. Reg. at 72,514.

In the reconsidered determination, CMS addresses, but does not dispute, Petitioner’s assertion of the total number of submitted claims.  CMS Ex. 4 at 5, 7-8.  Pertaining to the first factor, CMS stated:

[Petitioner] argues that the sample sizes for all three of these reviews were small and represent a small fraction of the total claims billed to the Medicare program by [Petitioner].  However, all of the 75 denied claims have one thing in common:  they lacked the required medical documentation to support the Medicare guidelines for ambulance service, basic life support, or non-emergency transport.  Despite being given targeted and specific education on more than two occasions, the percentages of denials remained high as [Petitioner] continued to submit noncompliant claims and, thereby, failed to correct its previously identified billing errors.  Notwithstanding of any education that HI and Qlarant have provided to [Petitioner], providers and suppliers have a duty to submit for payment only those claims that meet Medicare requirements.

CMS Ex. 4 at 8.

It is clear that CMS does not view the first factor – the percentage of submitted claims that were denied – as requiring it to review the number of reviewed claims that were denied against the total number of submitted claims during the dates of service reviewed.  Instead, CMS argues that because it provided targeted and specific education to Petitioner regarding billing privileges and because Petitioner has declined or exhausted its appeal rights regarding the three reviews, the claims determinations are binding and Petitioner can no longer challenge the determinations.  CMS Br. at 12 (citing CMS Exs. 6, 8, 14, 8; 42 C.F.R. §§ 405.928(b), 405.1048(a)).  Finally, CMS argues that determining when submissions of denied claims rise to the level of an abusive pattern or practice to fall within the scope of CMS’s discretionary authority to revoke.  CMS Br. at 13 (citing Letantia Bussell, M.D., DAB No. 2196 at 13 (2008)).

Here, Petitioner did not challenge the first or third reviews and has exhausted its appeal rights regarding the second review.  Petitioner did not submit evidence regarding the number of claims it actually submitted during the service dates of the reviews to contest whether CMS adequately considered the percentage of submitted claims that were denied.  The claims denials for all three reviews pertained to documentation supporting non-emergency ground transportation via ambulance, even following CMS’s remedial education.  See CMS Exs. 6, 8, 18.  As a result, given the specific facts and circumstances

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of this case, I find that Petitioner’s submitted claims denial rate rises to the level of abusive billing under § 424.535(a)(8)(ii).

Regarding the second factor – the supplier’s history of final adverse actions and their nature – the reconsideration determination acknowledges that Petitioner’ has not been the subject of any final adverse actions and that this factor is not dispositive of CMS’s determination here.  CMS Ex. 4 at 8; CMS Br. at 12.

Regarding the third factor – the type of billing non-compliance and the facts surrounding the non-compliance – CMS determined that all three reviews resulted in claims denials based on the validity and the sufficiency of supporting documentation.  CMS Ex. 4 at 8, 10.  The reconsideration determination cited to the denials where Petitioner failed to meet the documentation requirements required by the LCD for ambulance services.  Id. at 9-10.  CMS highlighted that the reasons for the three sets of claims denials were the same or substantially similar:  missing or insufficient documentation to support ambulance service, basic life support, and non-emergency transport.  Id.  CMS determined that Petitioner “has a habit of submitting the same types of claims that continued to be denied for the same or similar reasons due to its failure to comply with Medicare requirements.”  Id. at 10.  CMS concluded that the evidence demonstrates Petitioner’s refusal to correct their billing errors or to implement changes to their erroneous billing patterns, even following educations in 2017, 2020, and 2022 for “the same billing aberrancies.”  Id.  CMS again highlighted that suppliers have a duty to meet Medicare requirements regardless of the education CMS provides.  Id.

Petitioner provides patient records in an effort to explain the beneficiaries’ conditions, so “a determination can be made regarding whether the service provided should be paid.”  P. Br. at 4.  However, this is not an issue I can review here.  See 42 C.F.R. §§ 498.3(b) (initial determinations), 498.5 (appeal rights of prospective providers or suppliers).  Petitioner argues that it routinely provided documentation regarding the beneficiaries’ medical conditions and that CMS would not provide examples of acceptable documentation or greater detail regarding what support was sufficient to qualify for reimbursement.  P. Br. at 4.  Petitioner reviews eight patients’ documentation and argues that the documentation was sufficient to support the services billed.  See P. Br. at 4-7.  However, Petitioner has either declined to appeal or has exhausted its appeal rights pertaining to these patients.  At this review level, the question is whether CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii).  Here, CMS determined that Petitioner’s failure to correct its billing practices to comply with Medicare requirements despite repeated education on the same requirement demonstrated a systemic abuse of Petitioner’s Medicare billing privileges.  CMS Ex. 4 at 10.  CMS argues that habitually submitting the same types of claims that CMS repeatedly denied is legitimate cause to determine Petitioner’s behavior part of a pattern and practice of abusive billing.  CMS Br. at 13.  Petitioner’s arguments are insufficient to rebut CMS’s finding that the type of billing

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non-compliance and the facts surrounding the non-compliance support its determination that Petitioner had a pattern and practice of abusive billing.

Regarding the fourth factor – any other information regarding the supplier’s circumstances relevant to CMS’s determination – CMS found it relevant that the underlying conduct resulting in the revocation of Petitioner’s Medicare enrollment and billing privileges is detrimental to the best interests of the Medicare program.  CMS Ex. 4 at 10-11.  CMS reviewed the length of time over which the pattern has continued – nearly eight years – and the length of time that Petitioner has been enrolled in the Medicare program – since July of 2007.9  Id. at 10.  CMS reasoned that a supplier who has been enrolled in the Medicare program 16 years has had plenty of time to become aware of and familiar with Medicare program requirements.  Id. at 10-11.  Petitioner’s failure to correct its noncompliant billing for nearly half of the time it had been enrolled in the program was significant in CMS’s determination that Petitioner engaged in a pattern and practice of abusive billing practices.  Id. at 11; CMS Br. at 13.

CMS misconstrues the submitted claims denial rate as the error rate of reviews with very small sample sizes – two of which were non-statistical, non-random reviews.  However, the record before me demonstrates that Petitioner could not or would not come into compliance with Medicare payment requirements, despite repeated claims denials and remedial education.  See 79 Fed. Reg. at 72,515 (“[T]his final rule is focused on providers who cannot or will not come into compliance with our payment requirements after repeated claim denials.”).  The evidence supports a finding that, over a period of eight years, Petitioner submitted claims that were repeatedly denied for the same reasons:  missing or insufficient documentation to support non-emergency ambulance transportation services.  CMS provided remedial education to Petitioner, but Petitioner did not change its billing practices.  Taken together in light of the above analysis of the four factors, I find, by a preponderance of the evidence presented, that Petitioner engaged in a pattern or practice of abusive billing as articulated in 42 C.F.R. § 424.535(a)(8)(ii).

5. CMS had a legitimate basis to place Petitioner on the Preclusion List, as defined at 42 C.F.R. §§ 422.2 and 423.100.

Effective June 15, 2018, the regulations permitted CMS to put an individual on a list of providers or suppliers who are precluded from reimbursement for health care items or services furnished under a Medicare Advantage benefit or from submitting pharmacy claims for prescription drug coverage under Medicare Part D, known as the CMS preclusion list.  42 C.F.R. §§ 422.2, 422.222, 423.100, 423.120(c)(6); 83 Fed. Reg.

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16,440, 16,641-67 (Apr. 16, 2018).  No payment under Medicare Parts C and D may be made to anyone on the preclusion list.  42 C.F.R. §§ 422.222-.224, 422.504(i)(2)(v), 423.120(c)(6).  Because CMS considered Petitioner’s pattern and practice of abusive billing to be detrimental to the Medicare program, CMS considered whether Petitioner should be placed on the Preclusion List.  42 C.F.R. §§ 422.2, 423.100.

Based on its consideration of the regulatory factors set forth in 42 C.F.R. §§ 422.2 and 423.100, CMS had a legitimate basis to uphold Petitioner’s placement on the Preclusion List.  In assessing a placement on the Preclusion List pursuant to 42 C.F.R. §§ 422.2 and 423.100, CMS is required to consider the factors of (1) severity, (2) when the offense occurred, and (3) any other information it deems relevant to its determination of whether Petitioner’s pattern and practice of abusive billing is detrimental to the best interests of the Medicare program.

CMS argues that I do not have the authority to review CMS’s exercise of discretion in determining that Petitioner’s underlying conduct was detrimental to the Medicare program and in adding Petitioner to the Preclusion List and does not even discuss the factors under 42 C.F.R. § 422.2(1)(iii).  CMS Br. at 14.  I do not agree with the position CMS takes, nor does CMS cite to Departmental Appeals Board (Board) authority for the position that, in determining whether CMS had a legitimate basis to add Petitioner to the Preclusion List, I am not to provide at least a cursory review of the factors CMS considered.  In reviewing CMS’s decision to place a supplier on the Preclusion List, an ALJ is not permitted to re-weigh the factors set forth in 42 C.F.R. §§ 422.2 and 423.100.  Where the regulations have granted CMS discretion to determine whether a supplier’s underlying conduct is detrimental to the Medicare program, the ALJ may not substitute their own judgment as to whether CMS properly exercised that discretion.  Brian K. Ellefsen, DO, DAB No. 2626 at 7 (2015); see also Pa. Physicians, P.C., DAB No. 2980 at 13 (2019).  However, I must still decide whether the regulatory prerequisites have been satisfied.  See Willie Goffney, Jr., M.D., DAB No. 2763 at 4 (2017) (explaining that the reconsideration determination the supplier is appealing “sets the parameters of the issues before the ALJ (and the Board) which are reviewable under the regulations”), aff’d, Goffney v. Azar, CV 17-8032 MRW (C.D. Cal. Sept. 25, 2019); see also Pa. Physicians, DAB No. 2980 at 5, 13 (citing Cornelius M. Donohue, DPM, DAB No. 2888 at 10 (2018)).

I review those regulatory prerequisites now.  In its reconsidered determination, CMS observed that Petitioner’s Medicare enrollment was revoked under 42 C.F.R. § 424.535(a)(8)(ii) and that it is subject to a 10-year reenrollment bar under § 424.535(c).  CMS Ex. 4 at 11.  CMS then explicitly weighed the factors at 42 C.F.R. §§ 422.2 and 423.100.  Id. at 11-12.

Regarding the first factor – the seriousness of the conduct underlying Petitioner’s revocation – CMS found the fact that the revocation was based on a pattern or practice of

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submitting claims that failed to meet Medicare requirements was very serious.  CMS Ex. 4 at 12.  CMS again misconstrues the submitted claims denial rate as the error rate of reviews and argues that the denial rate is over 58%.  Id.  However, CMS points out that the claims were all denied for the same reason:  “the submitted documentation did not support that ambulance services were medically necessary and failure to meet Medicare guidelines for ambulance transports, specifically as noted in LCD L35162.”  Id.  CMS found Petitioner’s failure to correct its improper billing practices following two separate and targeted education efforts regarding supporting documentation requirements to be a repeated and consistent submission of noncompliant claims, and to be very serious.  Id.

Regarding the second factor – the degree to which Petitioner’s conduct could affect the integrity of the Medicare program – CMS found Petitioner’s pattern or practice of abusing its billing privileges constitutes a threat to the Medicare program.  CMS Ex. 4 at 12.  Because CMS relies on its partners to submit claims that meet Medicare requirements, the integrity of the program depends on the integrity of its partners.  Id.  CMS found the conduct calls into question Petitioner’s ability and willingness to be a trustworthy Medicare partner.  Id.  CMS found Petitioner’s threat to the Medicare program was illustrated by the overpayments made to Petitioner, which puts the Medicare Trust Funds at risk.  Id.  Ultimately, because Petitioner’s conduct resulted in overpayments and called its integrity into question, CMS determined that the Trust Funds and the program’s integrity are threatened.  Id.

Regarding the third factor – any other evidence that CMS deems relevant to its determination that the conduct resulting in Petitioner’s revocation is detrimental to the best interests of the Medicare program – CMS found it relevant that Petitioner continued to submit noncompliant claims following two separate instances of targeted and specific education.  CMS Ex. 4 at 12.  CMS highlighted that suppliers have a duty to meet Medicare requirements regardless of the education CMS provides.  Id.  Finally, CMS asserted that the fact that Petitioner “continued abusive billing after the education was provided calls into question whether [Petitioner] is willing, or even able, to submit only those claims that meet Medicare requirements.”  Id.

Petitioner does not dispute that it is currently revoked and currently under a reenrollment bar.  P. Br. at 7-8.  Other than arguing that CMS has not demonstrated a legitimate basis for placing Petitioner on the Preclusion List and that this is Petitioner’s first revocation and reenrollment bar, Petitioner does not offer any other arguments as to why it should not be placed on the Preclusion List.  Id.

Based on its consideration of the regulatory factors set forth in 42 C.F.R. §§ 422.2 and 423.100, the regulatory requirements for Petitioner’s inclusion on CMS’s Preclusion List have been met.  42 C.F.R. § 422.2.  CMS had a legitimate basis to uphold Petitioner’s placement on the Preclusion List.

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6. I have no authority to review CMS’s determination to impose a 10-year reenrollment bar.

Although Petitioner does not specifically address CMS’s determination to impose a 10-year reenrollment bar, its hearing request appears to request an appeal of the determination to uphold the 10-year reenrollment bar.  RFH at 1.  To the extent this constitutes a challenge to CMS’s determination to impose a 10-year reenrollment bar, I am unable to consider any request to reduce the length of the reenrollment bar or to reverse it.  As discussed above, the only CMS actions that are subject to my review in this matter are the initial determinations specified by 42 C.F.R. § 498.3(b).  The Board has held that CMS’s determination of the length of the reenrollment bar under § 498.535(c) is not subject to review:

Although the [reenrollment] bar is a direct and legally mandated consequence of an appealable revocation determination, nothing in Part 498 authorizes the Board to review the length of the bar despite that relationship between a revocation and a reenrollment bar.  Given section 498.3(b)’s precise and exclusive enumeration of appealable determinations, we cannot find a CMS action to be appealable under Part 498 unless section 498.3(b) describes the subject matter of that action.  See North Ridge Care Ctr., DAB No. 1857 at 8 (2002) (stating that “[b]y its very terms, Part 498 provides appeal rights only for these listed actions”).  On its face, section 498.3(b) does not describe any matter related to a post-revocation [reenrollment] bar.

Vijendra Dave, M.D., DAB No. 2672 at 10 (2016); see also CMS Br. at 14-15 (citing Dave, DAB No. 2672 at 9 and Lilia Gorovits, M.D., P.C., DAB No. 2985 at 15-16 (2020)).  Other than to argue that this is Petitioner’s first reenrollment bar, Petitioner does not offer any other arguments or cite any authority to the contrary.  See P. Br. at 7-8.  Therefore, I have no authority to review CMS’s determination to impose a 10-year reenrollment bar.

VI.  Conclusion

Based on the record before me, I find that Petitioner engaged in a pattern or practice of abusive billing within the meaning of 42 C.F.R. § 424.535(a)(8)(ii).  For the reasons

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explained in this decision, I conclude that CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges.  I also conclude that CMS had a legal basis to include Petitioner on the Preclusion List.