Casey Family Medical Center, Inc., DAB CR6887 (2026)

DECISION

Petitioner, Casey Family Medical Center, is a Medicare provider located in Illinois.  The Centers for Medicare & Medicaid Services (CMS), acting upon reviews by its administrative contractors, CoventBridge Group (Covent) and National Government Services (NGS), revoked the Medicare billing privileges of Petitioner pursuant to 42 C.F.R. § 424.535(a)(8)(ii), effective December 26, 2024.  Specifically, CMS revoked its billing privileges and placed Petitioner under a 10-year re-enrollment bar because it determined that Petitioner had engaged in a pattern or practice of abusive billing.  Additionally, because CMS determined that Petitioner engaged in a pattern of abusive billing that is detrimental to the best interests of the Medicare program, Petitioner was placed on the CMS Preclusion List.

Petitioner appeals.  I find that CMS is authorized to revoke Petitioner’s Medicare enrollment because CMS has established that Petitioner’s billing behavior constitutes an abuse of billing privileges under 42 C.F.R. § 424.535(a)(8)(ii) and that Petitioner has a pattern or practice of submitting claims that fail to meet Medicare requirements.  I also affirm Petitioner’s placement on the preclusion list.

Page 2

I.      Applicable Regulations

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

The regulations delegate to CMS the authority to revoke the enrollment and billing privileges of providers or suppliers.  See 42 C.F.R. § 424.535.  CMS or a Medicare administrative contractor, acting on behalf of CMS, may revoke a provider’s or supplier’s Medicare enrollment and billing privileges for numerous reasons, including, as relevant here, abuse of billing privileges.  42 C.F.R. § 424.535(a)(8).  Abuse of privileges includes when “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).  After CMS revokes a provider’s or supplier’s enrollment and billing privileges, CMS bars the supplier from re-enrolling in the Medicare program for a minimum of one year but not greater than ten years.  42 C.F.R. § 424.535(c)(1)(i).

When a provider is revoked from Medicare and barred from reenrollment under 42 C.F.R. § 424.535(c), and if CMS also determines that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program, CMS may place that individual on its “preclusion list.”  42 C.F.R. §§ 422.2, 423.100.  If a provider or supplier is placed on the preclusion list, it will not be paid for Medicare items or services by Medicare Advantage plans under Medicare Part C or by Medicare D prescription drug plans.  42 C.F.R. §§ 422.222(a), 422.224(a), (b), 423.120(c)(6).

II.     Procedural and Factual Background

Petitioner is a provider located in Illinois that enrolled in the Medicare program in 2009.  CMS Ex. 1 at 8.  CMS’s decision to revoke Petitioner’s enrollment was based on the findings of three individual audits.  CMS reviewed claims submitted by Petitioner from 2020 through 2023.  During the reviews, CMS identified claims that failed to meet Medicare requirements.  CMS Ex. 1 at 4.

1. The June 23, 2021 Medical Review

On June 23, 2021, Covent requested medical records for 13 beneficiaries for dates of service from May 2020 through May 2021.  CMS Ex. 1 at 3, 119.  Covent reviewed 23 claims which included 40 services.  Id. at 128.  By letter dated September 29, 2021, CMS

Page 3

notified Petitioner that overpayments were made in the amount of $1,342.34 and represented a payment error rate of 58.66%.  Id. at 127, 161.  CMS noted that the vast majority of these services were denied because the services rendered were not reasonable and necessary; the services were not rendered as billed; the services were not rendered as bill – changed / downgraded; and statutory exclusions.  Id. at 128.  CMS noted that the rate of error identified is significant.  Id. at 134. 

The September 29, 2021 letter included an explanation of what is required for a claim to be properly re-evaluated and what is required for sufficient documentation of claimed services.  CMS Ex. 1.  Further, the letter included the websites and available information concerning guidelines for providers submitting claims for payment under the Medicare program.  Id. at 133-135.  Additionally, CMS warned that Petitioner is subject to re-review of future billing practice to assure compliance with the information and recommendations of the letter.  Id.  Finally, CMS advised Petitioner that CMS has the authority to revoke a currently enrolled provider’s or supplier’s Medicare billing privileges if CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.  Id. at 136.

2. June 24, 2022 Medical Review

On June 24, 2022, Covent requested medical records for 12 beneficiaries for dates of service from November 2021 through May 2022.  CMS Ex. 1 at 3, 170.  Covent reviewed 28 claims which included 31 services.  Id. at 180.  By letter dated October 18, 2022, CMS notified Petitioner that overpayments were made and 93.59% or 28 of the 31 services were denied payment as services not reasonable and necessary.  Id. at 3, 180.  CMS noted that the vast majority of these services were denied because the services rendered were not reasonable and necessary; the services were not rendered as billed; and the required elements were not documented.  Id.  CMS noted that the rate of error identified is significant.  Id. at 185.  

Similar to the September 29, 2021 letter, the October 18, 2022 letter included an explanation of what is required for a claim to be properly re-evaluated and what is required for sufficient documentation of claimed services.  CMS Ex. 1.  Further, the letter included the websites and available information concerning guidelines for providers submitting claims for payment under the Medicare program.  Id. at 184-188.  Additionally, CMS warned that Petitioner is subject to re-review of future billing practice to assure compliance with the information and recommendations of the letter.  Id.  Finally, CMS advised Petitioner that CMS has the authority to revoke a currently enrolled provider’s or supplier’s Medicare billing privileges if CMS determines that the provider

Page 4

or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.  Id. at 187.

3. January 17, 2024 Medical Review

By letter dated September 5, 2024, Covent notified Petitioner of the results of an additional medical review initiated on January 17, 2024, that covered dates of service between December 26, 2022 and June 29, 2023.  CMS Ex. 1 at 217.  Of the claims reviewed, CMS found a payment error rate of 86.79%.  Id. at 4.  CMS noted that the vast majority of these services were denied because the services rendered were not reasonable and necessary; the services were not rendered as billed; the required elements were not documented; and there was incorrect coding.  Id. at 217.  CMS noted that the rate of error identified is significant.  Id. at 220.

4. CMS’s Determination of a Violation

On November 26, 2024, NGS issued an initial determination letter informing Petitioner that pursuant to 42 C.F.R. § 424.535(a)(8)(ii), its Medicare billing privileges were revoked effective December 26, 2024, that it was placed on the CMS Preclusion List, and that CMS imposed a 10-year re-enrollment bar.  CMS Ex. 1 at 14-17.  The determination letter discussed all three of the audits and the repeated education opportunities that were offered to Petitioner.  Id.  The letter stated that the determination that Petitioner’s billing behavior constitutes a violation was based on the continued high percentage of submitted claims that were denied, the reasons for the claim denials, and the length of time over which the pattern has continued.  Id. at 15.  The letter informed Petitioner of its right to submit a reconsideration request.  Id. at 16-17.

Petitioner timely submitted a reconsideration request.  CMS Ex. 1 at 22.  On October 29, 2025, CMS issued a reconsidered determination upholding Petitioner’s revocation, 10-year reenrollment bar, and inclusion on CMS’s preclusion list.  Id. at 1.  The reconsidered determination notified Petitioner of his right to request administrative law judge (ALJ) review of the reconsidered determination.  Id. at 11.

On November 3, 2025, Petitioner timely requested a hearing before an ALJ.  On November 12, 2025, the Civil Remedies Division issued an Acknowledgment Letter and Standing Order.  Among other things, the Standing Order instructed the parties to file prehearing exchanges.

On January 29, 2026, CMS filed a motion for summary judgment and brief (CMS Br.) with 2 exhibits (CMS Exs. 1-2).  On March 16, 2026, Petitioner filed its brief in

Page 5

opposition of CMS’s motion for summary judgment (P. Br.) with three exhibits (P. Exs. 1-3).  On April 10, 2026, CMS filed its reply brief.

III.   Exhibits and Decision on the Record

Because Petitioner did not object to CMS’s exhibits, I admit into evidence CMS Exs. 1-2.  Because CMS did not object to Petitioner’s exhibits and 42 C.F.R. § 498.56(e) does not preclude me from admitting the exhibits proffered by Petitioner, I admit into evidence P. Exs. 1-3.  See Arkady B. Stern, M.D., DAB No. 2329 at 4 n.4 (2010) (“Testimonial evidence that is submitted in written form in lieu of live in-person testimony is not ‘documentary evidence’ within the meaning of 42 C.F.R. § 498.56(e), which requires good cause for submitting new documentary evidence to the ALJ.”).

In the Standing Order, the parties were directed to list all proposed witnesses and to submit, as a proposed exhibit, the written direct testimony of those witnesses.  Standing Order §§ 11, 12.  Further, the parties were informed that “[a]n in-person hearing to cross-examine witnesses will be necessary only if a party files admissible, written direct testimony, and the opposing party requests cross-examination.”  Standing Order § 13.  CMS did not offer any witnesses, and Petitioner offered only one witness for examination.  However, CMS did not request cross-examination of Petitioner’s proposed witness.  Because the opposing party, i.e., CMS, did not request cross-examination of Petitioner’s witness, an in-person hearing would serve no purpose, and I may decide this case based on the written record without considering whether the standards for summary judgment have been met.  See El Med., Inc., DAB No. 3117 at 15 (2023).

IV.   Issues

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); and

Whether CMS had a legitimate basis to place Petitioner on the preclusion list.

V.     Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R. §§ 498.3(b)(17), 498.5(1)(2); see also Act § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).

Page 6

VI.   Discussion

1. CMS had a legitimate basis to revoke Petitioner’s Medicare billing privileges.1

To maintain its billing privileges, a provider must comply with CMS’s conditions of coverage, payment, and participation outlined in the regulations, and refrain from certain prohibited conduct.  42 C.F.R. § 424.535(a)(8)(ii) provides that a provider’s billing privileges, as well as its enrollment agreement, may be revoked for abuse of billing privileges.  CMS determines that there is an abuse of billing privileges when 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 percentage of submitted claims that were denied and the reason(s) for the claim denials.  Id.  CMS also considers whether the provider or supplier has any history of final adverse actions, the length of time over which the pattern has continued, how long the provider or supplier has been enrolled in Medicare, and any other information regarding the provider or supplier’s circumstances that CMS deems relevant to its determination as to whether the provider or supplier has or has not engaged in the pattern or practice under review.  Id. 

In reviewing the criteria for determining abusive billing, I note that for the three separate audits, the percentages of payment error rates were extremely high:  58.66%, 93.59%, and 86.79%.  CMS Ex. 1.  Among other things, the claims were denied as billing for services not rendered or that were not reasonable and necessary.  Id.  Despite Petitioner being targeted for review and specific education given with each denial letter, Petitioner’s claim denials remained high, and in fact increased, as it continued to submit noncompliant claims.  Id.  Petitioner’s error rate in billing rose from 58% to 93% after the second audit and was at 86% following the third audit.  Id.  CMS found this to be a clear demonstration of systemic, noncompliant behavior, especially because Petitioner was given multiple opportunities to correct this pattern of abusive billing through education.  Id.

Further, CMS took note of the fact that Petitioner had been enrolled in the Medicare program for 16 years and would have had more than enough time to familiarize itself with the relevant Medicare requirements.  CMS Ex. 1.  CMS also found it particularly relevant that Petitioner was offered multiple opportunities to receive education regarding proper billing and submission of claims for documenting the medical necessity for services billed after each review round was completed.  Each of the letters regarding the

Page 7

medical reviews explained the basis for the denials and strongly encouraged Petitioner to schedule one-on-one telephonic education.  Id. 

Analysis of Petitioner’s Arguments

Petitioner does not deny that from the period of 2020 to 2023, CMS sent it correspondence initiating approximately three (3) audits for claims billed by Petitioner to the Medicare program.  Additionally, Petitioner does not deny that audits were conducted or that the contractors made findings regarding each audit as CMS alleges.  In its brief, Petitioner reasserts its arguments raised in its request for reconsideration.  Namely, Petitioner asserts that CMS failed to establish the targeted audit rates do not establish systemic abusive billing and that CMS failed to provide proper education on correcting billing errors.  

Karen Huddleston, Petitioner’s owner and primary provider, asserted, in her written direct that Petitioner provides medical care in a rural community with only one other healthcare provider.  P. Ex. 3 at 1.  She explained that Petitioner treated thousands of patients each year and that the number audited represents a very small percentage of the total patient encounters.  Id. at 2.  Ms. Huddleston estimated that the real percentage of payment errors was .17%.  Id.  She also testified that the letters from CMS provided little to no information on training and correcting the errors identified.  Id. at 4-5.  Lastly, she asserts that if Petitioner cannot bill for Medicare or Medicaid, the facility will likely be forced to close and leave thousands of residents without access to healthcare.  Id.

The overall evidence demonstrates that Petitioner repeatedly received notice of CMS’s denials of payment for improper billing.  Petitioner’s noncompliant billings continued over a period of approximately three years, and Petitioner has offered no evidence that it tried to correct this pattern of improper billing.  Accordingly, Petitioner’s conduct demonstrates disregard for the regulatory requirements for Medicare participation.

Once CMS establishes a legal basis on which to proceed with a revocation, the determination to revoke becomes a permissible exercise of discretion, which I am not permitted to review.  Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 19 (2009), aff’d., Ahmed v. Sebelius, 710 F. Supp. 2d 167 (D. Mass. 2010).  Additionally, Petitioner’s assertions that the number of claims audited represents a small portion of its total patient encounters does not negate CMS’s determination of improper billing.  See John Shimko, D.P.M., DAB 2689 (2016).  Petitioner claims that CMS’s rate of error was based on too small a sample size.  It argues that it treated 22,000 patients during the period of review and it calculates an alleged billing error rate of .17%.  However, this argument was addressed in Shimko and incorrectly assumes that the remainder of the claims not

Page 8

reviewed are without error.  Additionally, there is not a minimum error rate or dollar amount required before CMS is permitted to revoke billing privileges under 42 C.F.R. § 424.535(a).

Furthermore, despite Petitioner’s statements that it services a rural area that may suffer or that the education CMS provides in its letters is confusing and insufficient, CMS’s discretionary act to revoke a provider or supplier is not subject to review based on equity or mitigating circumstances.  Letantia Bussell, M.D., DAB No. 2196 at 12-13 (2008).  I am not authorized to overturn a legally valid agency action based on equitable grounds or otherwise grant equitable relief.  Wendell Foo, M.D., DAB No. 2904 at 25 (2018) (citing Foot Specialists of Northridge, DAB No. 2773 at 18 (2017)).

I find that CMS had a legal basis to revoke Petitioner’s Medicare billing privileges under 42 C.F.R. § 424.535(a)(8)(ii) as Petitioner continued to submit claims for payment over a period of time from 2020 through 2023 even though, among other things, the documentation did not support the medical necessity of the services.

2. I have no authority to review the 10-year re-enrollment bar imposed by CMS.

Petitioner also argues that the revocation is disproportionate to the conduct alleged by CMS.  However, when a supplier’s billing privileges are revoked, the supplier may not participate in the Medicare program until the end of the imposed re-enrollment bar.  42 C.F.R. § 424.535(c)(1).  Here, CMS imposed a 10-year re-enrollment bar.  I have no authority to review the re-enrollment bar.  See 42 C.F.R. § 498.3(b); Linda Silva, P.A., DAB No. 2966 at 11 (2019); Vijendra Dave, M.D., DAB No. 2672 at 9-12 (2016).

3. The undisputed evidence establishes that CMS had a legitimate basis to include Petitioner on the preclusion list, pursuant to the provisions of 42 C.F.R. §§ 422.2 and 423.100.

As discussed above, CMS determined to include Petitioner on the CMS preclusion list, effective December 26, 2024.  Preclusion list is defined in 42 C.F.R. § 422.2 as follows: 

• [A] CMS compiled list of individuals and entities that –
• (1) Meet all the following requirements:
• (i) The individual or entity is currently revoked from Medicare for a reason other than that stated in [42 C.F.R.] § 424.535(a)(3) of this chapter.

Page 9

• (ii) The individual or entity 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 (1)(iii), CMS considers the following factors:
• (A)  The seriousness of the conduct underlying the individual’s or entity’s revocation.  
  (B)  The degree to which the individual’s or entity’s conduct could affect the integrity of the Medicare program.  
  (C) Any other evidence that CMS deems relevant to its determination.

In considering the regulatory criteria for placement on the preclusion list, I find that CMS has met the three factors for the inclusion of Petitioner on the preclusion list:  Petitioner’s enrollment is revoked under the provision of 42 C.F.R. § 424.535(a)(8) for abuse of billing privileges; Petitioner is currently subject to a 10-year re-enrollment bar; and CMS determined that the underlying conduct that led to the revocation is detrimental to the best interests of the Medicare program.  As for the third factor, CMS found the underlying conduct that led to the revocation to be detrimental to the best interests of the Medicare program.  CMS considered the subfactors listed in the regulation.  See 42 C.F.R. § 422.2.  CMS found Petitioner’s underlying conduct to be serious because, at least, it calls into question its ability and willingness to be a trustworthy Medicare partner.  CMS Ex. 1 at 10.  CMS also considered that its conduct could pose a serious threat to the integrity of the Medicare program because the Medicare program depends on the integrity of its partners.  Id.  Therefore, CMS had a legitimate basis to include Petitioner on the preclusion list.

Analysis of Petitioner’s Arguments

Petitioner asserts that its inclusion on the preclusion list is not justified and argues that the preclusion is disproportionate to the alleged billing deficiencies.  Petitioner further argues its placement on the preclusion list effectively eliminates care for a large percentage of an entire community.  Petitioner also asserts that the educational opportunities referenced in the CMS’s letters were inadequate or unhelpful.

Page 10

Petitioner cites Dhulmar Health Care Services, LLC, DAB CR6357 (2023)2 in support of its assertion that it is within an ALJ’s authority to review CMS’s discretion in revoking a supplier’s billing privileges and placing the supplier on the preclusion list.  However, ALJ decisions are not precedential and do not bind other ALJs or the Board.  Robert Hadley Gross, DAB No. 2807 (2017).  Here, I find that the record supports CMS’s decision to revoke Petitioner’s billing privileges and place it on the preclusion list.

Although CMS has discretion pursuant to 42 C.F.R. §§ 422.222(a)(6) and 423.102(c)(6)(vi) not to include Petitioner on the preclusion list or to remove its name from the list, CMS has not exercised its discretion to do so.  I find no authority to conduct review of the following CMS exercises of discretion:  the determination that Petitioner’s underlying conduct that led to the revocation was detrimental to the best interests of the Medicare program; and the determination that Petitioner should be listed on the preclusion list.  My review is limited to determining whether there is a basis for placing Petitioner’s name on the preclusion list.  83 Fed. Reg. 16,440, 16,642-43 (Apr. 16, 2018); 42 C.F.R. §§ 498.3(b)(20), 498.5(n); cf. Saeed A. Bajwa, MD, DAB No. 2799 at 14-16 (2017).

Additionally, CMS’s discretionary act to place Petitioner on the preclusion list is not subject to review based on equity or mitigating circumstances.  Letantia Bussell, M.D., DAB No. 2196 at 12-13 (2008).  I am not authorized to overturn a legally valid agency action based on equitable grounds or otherwise grant equitable relief.  See Wendell Foo, M.D., DAB No. 2904 at 25 (2018) (citing Foot Specialists of Northridge, DAB No. 2773 at 18 (2017)).  Furthermore, CMS is only required to consider the factors listed in the regulation, not the factors Petitioner considers CMS should consider when making its determination.  See 42 C.F.R. § 422.2.

My review here is limited to whether CMS had a legitimate basis to include Petitioner on the preclusion list.  83 Fed. Reg. at 16,642-43 (“Any appeal under this proposed provision, however, would be limited strictly to the individual’s inclusion on the preclusion list.  The proposed appeals process would neither include nor affect appeals of payment denials or enrollment revocations, for there are separate appeals processes for these actions.”).

I find that the record supports a conclusion that Petitioner’s conduct underlying the basis for its revocation is detrimental to the best interests of the Medicare program.  Therefore, I uphold Petitioner’s inclusion on the preclusion list.

Page 11

VII.   Conclusion

For the foregoing reasons, I affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii) and uphold Petitioner’s inclusion on CMS’s preclusion list.