Revive Spine and Pain Center, DAB CR6980 (2026)

DECISION

Petitioner’s Medicare enrollment and billing privileges are revoked pursuant to 42 C.F.R. § 424.535(a)(8)(ii),1 effective September 5, 2024.  There is a basis for listing Petitioner on the Centers for Medicare & Medicaid Services (CMS) preclusion list beginning March 20, 2025, the date of the first reconsidered determination, for the remainder of its ten-year reenrollment bar.

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I.  Procedural History

On August 6, 2024, Novitas Solutions, a CMS Medicare administrative contractor (MAC), notified Petitioner, that its Medicare enrollment and billing privileges were revoked2 effective September 5, 2024.  The MAC cited 42 C.F.R. § 424.535(a)(8)(ii) as the authority to revoke based on alleged abuse of billing privileges.  The MAC imposed a 10-year reenrollment bar effective 30 days after the postmark of the notice which would also be September 5, 2024.  There is no dispute that date of the notice was also the date it was postmarked.  The MAC also advised Petitioner that its name would be added to the CMS preclusion list.  Petitioner was advised of its right to request a reconsidered determination.  This revocation related to Petitioner’s billing privileges as a supplier.  CMS Exhibit (Ex.) 1 at 504-08.

On August 9, 2024, the MAC sent Petitioner another notice advising Petitioner that its billing privileges as a supplier of Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) were revoked.  The notice advised that the effective date of the revocation was 30 days after the postmark of the letter which would be September 9, 2024.3  The specific authority cited for the revocation was 42 C.F.R. §§ 424.57(e)

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and 424.535(a)(8)(ii) based on alleged abuse of billing privileges.  The MAC again imposed a 10-year bar to reenrollment effective 30 days after the date of the notice.  The MAC also advised Petitioner that its name would be added to the CMS preclusion list.  The MAC advised Petitioner of its right to request a reconsidered determination.  CMS Ex. 1 at 496-503.

On October 10, 2024, Petitioner requested reconsideration of the August 6, 2024 MAC initial determination to revoke Petitioner’s billing privileges as a supplier.  CMS Ex. 1 at 342-495.

On October 11, 2024, Petitioner requested reconsideration of the August 9, 2024 MAC initial determination to revoke its billing privileges as a DMEPOS supplier.  CMS Ex. 1 at 188-341.

In its March 20, 2025 reconsidered determination, CMS addressed both Petitioner’s October 10 and 11, 2024 reconsideration requests.  CMS Ex. 1 at 720-732.

The March 20, 2025 CMS reconsidered determination was not favorable.  Petitioner then requested a hearing before an ALJ of the Departmental Appeals Board.  The case was docketed and assigned to an ALJ, but CMS moved to remand the case.  On July 23, 2025, the ALJ to whom that case was assigned granted the remand over the objection of Petitioner, ostensibly to permit CMS to issue a revised reconsidered determination.4  CMS Ex. 1 at 733-35.

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On August 28, 2025, CMS issued a second reconsidered determination.  But on August 28, 2025, CMS no longer had authority to reopen and revise its March 20, 2025 reconsidered determination.  Therefore, the August 28, 2025 CMS second reconsidered determination is ultra vires and of no effect.  My conclusion is based on the plain language of the regulations.  The regulations provide that CMS will issue an initial determination followed by a reconsidered determination, if necessary.  42 C.F.R. §§ 498.20, 498.22-.25.  Appeal rights related to provider and supplier enrollment are established by 42 C.F.R. § 498.5(l).  A supplier, such as Petitioner, who is dissatisfied with an initial determination or a revised initial determination may request a reconsidered determination.  A supplier dissatisfied with a reconsidered or revised reconsidered determination is entitled to a hearing before an ALJ.  A supplier dissatisfied with an ALJ decision may request review by the Appellate Division of the Departmental Appeals Board (the Board).  42 C.F.R. § 498.5(l)(1)-(3).  CMS authority to reopen and revise a reconsidered determination is limited under 42 C.F.R. § 498.30.

An initial or reconsidered determination that a prospective provider is a provider or that a hospital qualifies to elect to claim payment for all emergency services furnished in a calendar year may not be reopened.  CMS or the OIG, as appropriate, may on its own initiative, reopen any other initial

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or reconsidered determination, within 12 months after the date of notice of the initial determination.

42 C.F.R. § 498.30 (emphasis added).  The first sentence of the regulation has no application in this case.  But the plain language of the second sentence does apply, and it limits CMS’ authority to reopen and revise an initial or reconsidered determination to the 12 months after the date of the notice of the initial determination.  In this case, the notices of the initial determinations were issued by CMS on August 6 and 9, 2024.  CMS Ex. 1 at 496, 504.  Therefore, CMS authority to reopen and revise its March 20, 2025 reconsidered determination lapsed no later than August 9, 2025.  Therefore, CMS had no authority to issue a reopened and revised determination in this case on August 28, 2025, and that purported determination must be without any legal effect and it is not considered.  The fact that the untimely second reconsidered determination is not considered causes no prejudice to either party.  Comparing the first and second reconsidered determinations it is apparent why CMS wanted to correct the record.  The hearing officer made some changes in the assertions of law and characterization of the facts in the second reconsideration.  But the result of the second reconsideration provided no substantive relief for Petitioner.  The general issues before me are whether there was a basis for revocation and a basis to place Petitioner’s name on the CMS preclusion list.  I conduct de novo review of the evidence, and I am not bound by either the hearing officer’s findings of fact or conclusions of law in either reconsidered determination.  Moreover, in this case I must consider evidence of a September 10, 2025 Office of Medicare Hearings and Appeals (OMHA) administrative law judge (ALJ) decision that was not available to CMS when the ultra vires August 28, 2025 reconsidered determination was issued.

On October 27, 2025, Petitioner filed a second request for hearing (RFH).  Petitioner challenges the August 28, 2025 reconsidered determination.  On October 29, 2025, the case was assigned to me for hearing and decision, and my Standing Order was issued.5 

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On January 27, 2026, CMS filed a combined prehearing brief and motion for summary judgment (CMS Br.).  CMS also filed CMS Ex. 1.  On March 30, 2026, Petitioner filed its combined prehearing brief and response in opposition to CMS’ motion for summary judgment (P. Br.).  Petitioner also filed Petitioner’s Exhibit (P. Ex.) 1.  CMS waived filing a reply brief on April 13, 2026.

No objections have been made to my consideration of CMS Ex. 1 or P. Ex. 1, and both are admitted and considered as evidence.

II.  Discussion

1. Medicare Enrollment and Billing Privileges and Preclusion List

Sections 1811 through 1821 of the Social Security Act (the Act) (42 U.S.C. §§ 1395c-1395i-5) establish the hospital insurance benefits program for the aged and disabled known as Medicare Part A.  Section 1831 of the Act (42 U.S.C. § 1395j) establishes the supplementary medical insurance benefits program for the aged and disabled known as Medicare Part B.  Administration of both the Part A and B programs is through the MACs.  Act §§ 1816(a), 1842(a) (42 U.S.C. §§ 1395h(a), 1395u(a)).  Payment under the programs for services rendered to Medicare-eligible beneficiaries may only be made to eligible providers of services and suppliers. 6  Act §§ 1815, 1817, 1834(j)(1), 1835(a), 1842(h)(1) (42 U.S.C. §§ 1395g, 1395i, 1395m(j)(1), 1395n(a), 1395u(h)(1)).  Petitioner was enrolled in Medicare as a physician and nonphysician practice group and as a DMEPOS supplier.  CMS Ex. 1 at 737-53.

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The Act requires that the Secretary of Health and Human Services (Secretary) issue regulations that establish a process for the enrollment in Medicare of providers and suppliers, including the right to a hearing and judicial review of certain enrollment determinations, such as revocation of enrollment and billing privileges.  Act § 1866(j) (42 U.S.C. § 1395cc(j)).  Pursuant to 42 C.F.R. § 424.505, a supplier must be enrolled in the Medicare program and be issued a billing number to have billing privileges and to be eligible to receive payment for services rendered to a Medicare-eligible beneficiary.

Pursuant to 42 C.F.R. §§ 424.57(b) and 424.505, a DMEPOS supplier such as Petitioner must be enrolled in the Medicare program to be reimbursed for durable medical equipment, prosthetics, orthotics, or supplies sold or rented to Medicare beneficiaries.  The regulations establish detailed requirements that suppliers must meet and maintain to enroll in Medicare and to receive and maintain Medicare billing privileges.  42 C.F.R. pt. 424, subpt. P.  DMEPOS suppliers have additional requirements imposed by 42 C.F.R. § 424.57(b) and (c).  To receive direct-billing privileges, a DMEPOS supplier must meet and maintain the Medicare application certification standards set forth in 42 C.F.R. § 424.57(c), the Supplier Standards.  A DMEPOS supplier must operate and furnish Medicare-covered items in compliance with all applicable federal and state licensure and regulatory requirements.  42 C.F.R. § 424.57(c)(1).

The Secretary has delegated the authority to revoke enrollment and billing privileges to CMS.  42 C.F.R. § 424.535.  CMS or its Medicare contractor may revoke an enrolled provider’s or supplier’s Medicare enrollment and billing privileges and terminate any corresponding provider or supplier agreement for any of the reasons listed in 42 C.F.R. § 424.535. The Medicare enrollment and billing privileges of a DMEPOS supplier may also be revoked pursuant to 42 C.F.R. § 424.57(e)(1) for violation of the conditions or standards established by 42 C.F.R. § 424.57(b) and (c).  If CMS revokes a provider’s or supplier’s Medicare billing privileges, the revocation generally 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. § 424.535(g).7  After a provider’s or supplier’s Medicare enrollment and billing privileges are revoked, the supplier is barred from reenrolling in the Medicare program for a minimum of one year, but no more than 10 years, depending upon the seriousness of the basis for revocation, with exceptions not applicable in this case.  42 C.F.R. § 424.535(c)(1)(i).

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Effective June 15, 2018, CMS was required to establish a preclusion list as defined by 42 C.F.R. §§ 422.2 and 423.100.  There is only one preclusion list which is referred to as the CMS preclusion list.  83 Fed. Reg. 16,440, 16,641-67 (April 16, 2018).  CMS adds to the preclusion list the names of individuals or entities whose Medicare enrollment and billing privileges are revoked pursuant to 42 C.F.R. § 424.535; who are currently subject to a reenrollment bar under 42 C.F.R. § 424.535(c); and if CMS determines that the conduct that is the basis for revocation is detrimental to the best interests of the Medicare program.  In deciding whether conduct is detrimental to Medicare, CMS considers the seriousness of the conduct; the degree to which the conduct could affect the integrity of the Medicare program; and other evidence CMS considers relevant.  Individuals or entities that were not enrolled in Medicare may be added to the preclusion list if CMS determines that their conduct would have provided a basis for revocation of Medicare enrollment and after consideration of the other factors listed above.  42 C.F.R. §§ 422.2, 423.100.  No payment under Medicare Parts C and D may be made to anyone on the CMS preclusion list.  42 C.F.R. §§ 422.222-.224, 422.504(i)(2)(v), 423.120(c)(6).  CMS must notify an individual or entity in writing that its name is being added to the preclusion list, the basis for the action, and inform the individual or entity of the right to ALJ review and appeal pursuant to 42 C.F.R. pt. 498.  42 C.F.R. §§ 422.222(a)(2), 423.120(c)(6)(v).

A provider or supplier whose enrollment and billing privileges have been revoked or who has been placed on the preclusion list may request reconsideration and review as provided by 42 C.F.R. pt. 498.  42 C.F.R. §§ 424.545(a), 422.222(a)(2), 423.120(c)(6)(v).  A provider or supplier submits a written request for reconsideration to CMS or its contractor.  42 C.F.R. § 498.22(a).  CMS or its contractor must give notice of its reconsidered determination to the provider or supplier, giving the reasons for its determination and specifying the conditions or requirements the provider or supplier failed to meet, and the right to an ALJ hearing.  42 C.F.R. § 498.25.  If the decision on reconsideration is unfavorable to the provider or supplier, it has the right to request a hearing by an ALJ and further review by the Board.  Act § 1866(j)(8) (42 U.S.C. § 1395cc(j)(8)); 42 C.F.R. §§ 424.545, 498.3(b)(17), (20), 498.5.  A hearing on the record, also known as an oral hearing, is required under the Act, unless waived.  Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743, 748-51 (6th Cir. 2004).  CMS is also granted the right to request ALJ review of a reconsidered determination with which it is dissatisfied.  42 C.F.R. § 498.5(l)(2).  The provider or supplier bears the burden to demonstrate that it meets enrollment requirements with documents and records.  42 C.F.R. § 424.545(c).  Preclusion list review is strictly limited to whether there is a basis for adding the individual or entity to the preclusion list.  83 Fed. Reg. at 16,642.

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2. Issues

Whether there was a basis for the revocation of Petitioner’s billing privileges and enrollment in Medicare; and

Whether there is a basis to list Petitioner on the CMS preclusion list.

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

My numbered conclusions of law are set forth in bold followed by the undisputed facts and analysis.

1.  Summary judgment is appropriate.

The parties were advised by the Standing Order that summary judgment following the principles of Fed. R. Civ. Pro. 56 was an available procedural device in this case.  Standing Order ¶¶ D, G.  The Civil Remedies Division Procedures (CRDP) also provide for the availability of summary judgment akin to the procedure described by Fed. R. Civ. Pro. 56 and decisions of the federal courts applying that rule or as provided by ALJ order.  CRDP § 19a.

CMS moved for summary judgment.  Petitioner opposes summary judgment for CMS.

Petitioner’s Medicare enrollment and billing privileges have been revoked, and its name has been placed on the CMS preclusion list.  Therefore, Petitioner has a right to a hearing and a hearing on the record is required under the Act.  Act §§ 205(b), 1866(h)(1), (j); 42 C.F.R. §§ 498.3(b)(17)(i), (20), 498.5(l), (n); Crestview, 373 F.3d at 748-51.  A party may waive appearance at an oral hearing but must do so affirmatively in writing.  42 C.F.R. § 498.66.  In this case, Petitioner has not waived the right to oral hearing or otherwise consented to a decision based only upon the documentary evidence or pleadings.  P. Br. at 3.  Accordingly, disposition on the written record alone is not permissible, unless summary judgment is appropriate as I conclude it is in this case.

Summary judgment is not automatic upon request but is limited to certain specific conditions.  The Secretary’s regulations at 42 C.F.R. pt. 498 that establish the procedures to be followed in adjudicating Petitioner’s case do not establish a summary judgment procedure or recognize such a procedure.  However, the Board has long accepted that summary judgment is an acceptable procedural device in cases adjudicated pursuant to 42 C.F.R. pt. 498.  See, e.g., Ill. Knights Templar Home, DAB No. 2274 at 3-4 (2009); Garden City Med. Clinic, DAB No. 1763 (2001); Everett Rehab. & Med. Ctr., DAB No. 1628 at 3 (1997).  The Board also has recognized that the Federal Rules of Civil Procedure do not apply in administrative adjudications such as this, but the Board has

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accepted that Fed. R. Civ. Pro. 56 and related cases provide useful guidance for determining whether summary judgment is appropriate.

Summary judgment is appropriate and no hearing is required where either: there are no disputed issues of material fact8 and the only questions that must be decided involve application of law to the undisputed facts; or, the moving party must prevail as a matter of law even if all disputed facts are resolved in favor of the party against whom the motion is made.  The Board follows the general approach of the federal courts in evaluating whether summary judgment in lieu of a hearing is appropriate.  The movant bears the initial burden of demonstrating that there are no genuine issues of material fact for trial and that the movant is entitled to judgment as a matter of law.  When confronted with a properly supported motion for summary judgment, the nonmoving party “may not rest upon the mere allegations or denials of his pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial.”  Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (quoting First Nat’l Bank of Az. v. Cities Serv. Co., 391 U.S. 253, 249 (1968)); see also, Fed. R. Civ. P. 56(c); Ill. Knights Templar Home, DAB No. 2274, at 3-4 (2009); Garden City Med. Clinic, DAB No. 1763 (2001), Everett Rehab. & Med. Ctr., DAB No. 1628 at 3 (1997) (in-person hearing required where nonmovant shows there are material facts in dispute that require testimony); Big Bend Hosp. Corp., DAB No. 1814 at 13 (2002) (in some cases, any factual issue is resolved on the face of the written record because the proffered testimony, even if accepted as true, would not make a difference).  In opposing the motion for summary judgment, the nonmovant bears the burden of showing that there are material facts that are disputed either affecting the movant’s prima facie case or that might establish a defense.  It is insufficient for the nonmovant to rely upon mere allegations or denials to defeat the motion and proceed to hearing.  The nonmovant must show that there is a genuine dispute as to a material fact that requires a trial by affidavits or other evidence that sets forth specific facts.  If the nonmovant cannot show by some credible evidence that there exists some genuine issue for trial, then summary judgment is appropriate and the movant prevails as a matter of law.  Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986).  A test for whether an issue is regarded as genuine is if “the evidence [as to that issue] is such that a reasonable jury could return a verdict for the nonmoving party.”  Id. at 248.  In evaluating whether there is a genuine issue as to a material fact, an ALJ must view the facts and the

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inferences to be drawn from the facts in the light most favorable to the nonmoving party.  Pollock v. Am. Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3rd Cir. 1986).

The Board has explained that the ALJ’s role in deciding summary judgment is different from deciding a case on the merits after a hearing.  On summary judgment, credibility determinations are not made, the evidence is not weighed, and the ALJ does not decide which inferences to draw from the facts.  Rather, the evidence of record is construed in a light most favorable to the nonmovant without determining which version of the facts is more likely true.  Venetian Gardens, DAB No. 2286 at 10-11 (2009); Ill. Knights Templar Home, DAB No. 2274 at 8 (2009).

The Secretary has not provided in 42 C.F.R. pt. 498 for the allocation of the burden of persuasion or the quantum of evidence required to satisfy the burden of persuasion.  However, the Board has provided some persuasive analysis regarding the allocation of the burden of persuasion in cases subject to 42 C.F.R. pt. 498.  Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff’d, Batavia Nursing & Convalescent Ctr. v. Thompson, 129 F. App’x 181 (6th Cir. 2005).

Petitioner opposes summary judgment.  Petitioner argues that there are genuine disputes of material fact related to basis for the revocation of Petitioner’s Medicare enrollment and billing privileges.  Petitioner notes that CMS relies on “denial rates from small, non-representative samples where critical factual predicates – representativeness, regulatory applicability, and finality of denials – are materially disputed.”  P. Br. at 1.  Petitioner raises arguments regarding the scope of review.  Petitioner argues CMS failed to verify the findings of its contractors but accepted four claim audits, some of which were not final.  Petitioner asserts that CMS relied on flawed and uncorroborated factual inferences based on uncorroborated audit findings, contractor document reviews, and contractor interpretation of clinical records conflicting with Petitioner’s expert’s analysis.  Petitioner concludes that there are factual issues that require adjudication.  P. Br. at 1-3.  Petitioner asserts that there are factual disputes related to audit methodology, medical necessity, expert findings, pending and successful appeals, and the correct regulatory standards.  Petitioner asserts summary judgment is not appropriate because the audit findings require weighing competing inferences related to medical necessity, proportionality, context, and applying disputed regulatory standards.  P. Br. at 11-13.  Pending and successful appeals of claims underlying the revocation determinations may be relevant and material facts.  But Petitioner’s arguments do not defeat summary judgment.  At this time, the evidence shows no dispute as to which claims were subject to appeal and their disposition on appeal.  All underlying denied claims that are the bases for revocation of Petitioner’s Medicare enrollment and billing privileges are now final and binding on both CMS and Petitioner.  The facts Petitioner alleges are in dispute related to the underlying individual claims are not subject to my review as explained later in this decision.  Petitioner’s

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arguments of law related to the appropriate regulations to be applied, and the scope of review must be resolved against Petitioner as matters of law.

Viewing the evidence before me in a light most favorable to Petitioner and drawing all reasonable inferences in Petitioner’s favor, I conclude that there are no genuine disputes as to any material facts pertinent to revocation under 42 C.F.R. § 424.535(a)(8)(ii) or the addition of Petitioner name to the preclusion list that require an oral hearing and receipt of oral testimony in this case.  The undisputed material facts in this case establish as a matter of law a basis for the revocation of Petitioner’s Medicare enrollment and billing privileges.  Petitioner’s asserted defenses must also be resolved against Petitioner as matters of law.  There is a basis for revocation which is a basis for adding Petitioner’s name to the CMS preclusion list.  CMS is entitled to judgment as a matter of law.  Accordingly, summary judgment is appropriate.

2.  Billing privileges are abused within the meaning of 42 C.F.R. § 424.535(a)(8)(ii) when a provider or supplier engages in a pattern or practice of submitting claims that do not meet Medicare requirements.

3.  The results of three post-payment audits and a post-payment random sample of Petitioner’s Medicare claims are final and binding on the parties and not subject to dispute before me.

4.  The results of three post-payment audits and a post-payment random sample of Petitioner’s Medicare claims are a prima facie showing that it is more likely true than not that Petitioner engaged in a pattern or practice of submitting claims to Medicare that did not meet Medicare requirements.

5.  Petitioner has not shown that there is a genuine dispute of material fact that the denied claims from the three post-payment audits and the random sample were sporadic and did not constitute a pattern or practice.

6.  There is a basis for revocation of Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii).

7.  The effective date of revocation in this case was September 5, 2024, 30 days after August 6, 2024, the date the first notice of the initial determination was mailed to Petitioner.  42 C.F.R. § 424.535(g).

8.  The duration of the 10-year bar to reenrollment is not subject to my review.

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9.  There is a basis for adding Petitioner’s name to the CMS preclusion list effective March 20, 2025, the date of the first reconsidered determination, for the duration of Petitioner’s 10-year bar to reenrollment.

a.  Undisputed Facts

I advised the parties in my Standing Order that a fact alleged that is not specifically denied may be accepted as true for purposes of summary judgment and that on summary judgment evidence is considered admissible and true unless specific objection is made to the admissibility or accuracy of the evidence.  Standing Order ¶ G.  The material facts are undisputed, or for purposes of summary judgment, Petitioner’s averred facts are accepted as true, and all favorable inferences are drawn in favor of Petitioner.

Finding facts in this case requires an understanding of the claims process established under the Medicare statutes and the implementing regulations versus the process for the enrollment of providers and suppliers in Medicare so that they may file claims with Medicare to receive payment for care and services provided to Medicare beneficiaries.  It is a fact that the Secretary has established two separate systems for the processes consistent with the requirements of the Medicare statutes.  The following discussion includes findings of fact as to how the two processes work based on interpretation of the cited regulations and statutory provisions.

Providers and Suppliers Agree to Comply with Medicare Requirements

The requirements for a provider or supplier to establish and maintain the right to file claims with Medicare, known as Medicare billing privileges, are established by 42 C.F.R. pt. 424 subpt. P.  Pursuant to 42 C.F.R. §§ 424.500 and 424.505, a provider or supplier must be enrolled in the Medicare program and be issued a billing number to have billing privileges and to be eligible to receive payment from Medicare for Medicare covered services or supplies provided to a Medicare beneficiary.

A prospective provider or supplier must file the appropriate enrollment application.  42 C.F.R. § 424.510(a).  The enrollment application must be signed by an individual who has authority to bind a provider or supplier legally and financially to comply with Medicare program requirements.  The signature “attests that the information submitted [in the enrollment application] is accurate and that the provider or supplier is aware of,

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and abides by, all applicable statutes, regulations, and program instructions.”9  42 C.F.R. § 424.510(d)(3).  An enrolled provider or supplier must periodically certify to CMS that it continues to comply with Title XVIII of the Act and Medicare regulations.  42 C.F.R. § 424.516(a)(1).  The federal courts and the Board have indicated that providers and suppliers participating in Medicare have a duty to be familiar with Medicare requirements.  E.g., Heckler v. Cmty. Health Servs. of Crawford County, Inc., 467 U.S. 51 at 64 (1984); Waterfront Terrace Inc., DAB No. 2320 (2010).  In fact, 42 C.F.R. §§ 424.510(d)(3) and 424.516(a)(1) require that prospective and enrolled providers and suppliers agree as a condition for enrolling and maintaining enrollment in Medicare that they know and abide by all applicable statutes, regulations, and program instructions, which is more than mere familiarity.

Medicare Claims

A claim is the transmission of a request for payment for the provision of health care with necessary information from a health care provider to a health plan.  45 C.F.R. § 162.1101(a).  The requirements for all claims are established by 42 C.F.R. pt. 424, subpt. C.  The claim forms to be used by various types of providers and suppliers are specified in 42 C.F.R. § 424.32(b).  Claims for items or services provided to Medicare beneficiaries must be filed with the correct fiscal intermediary or carrier electronically.  42 C.F.R. § 424.32(a), (d)(2).  Generally, Medicare pays a provider for services furnished by the provider.  42 C.F.R. § 424.51(a).  Medicare pays a supplier on claims for covered services when the Medicare beneficiary assigns the claim to the supplier and the supplier accepts assignment.  42 C.F.R. § 424.55(a).  The Medicare beneficiary is reimbursed for costs incurred for covered services of specific types and when there is no assignment of the claim.  42 C.F.R. § 424.53.  DMEPOS claims are paid to the supplier if the requirements of 42 C.F.R. § 424.57 are met by the supplier.

Claim Appeal Process

My authority or jurisdiction, i.e., the scope of review, is limited by Congress and the Secretary.  An important limitation in this case is that claim denials and the recovery of overpayments by Medicare are subject to an entirely different administrative appeals procedure before different adjudicators under different regulations than those applicable in proceedings before me.

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The regulations applicable to the claim appeals process provide that each determination in that process are final and binding upon the parties, unless further appealed.  Devine Sols. Grp. LLC, DAB No. 3159 at 3 (2024).  Denial of individual Medicare claims are not subject to my review or Board review but are subject to the review procedures established by 42 C.F.R. pt. 405 subpt. I.  Id. at 17 (citing Ronald J. Grason, M.D., DAB No. 2592 at 8 (2014), aff’d sub nom. Grason v. Burwell, No. 14-2267 (C.D. Ill. Feb. 23, 2016), aff’d, 659 F. App’x. 899 (7th Cir. 2016), cert. denied, 583 U.S. 842 (2017)).

In section 1869(a)(1) of the Act, Congress required the Secretary to issue regulations and make initial determinations regarding benefits under Medicare Parts A and B, including entitlement to benefits and claims for benefits.  Section 1870(b) of the Act requires the Secretary recover or otherwise resolve overpayments by Medicare to any provider or supplier for items or services furnished to an individual under the Act.  Congress established deadlines for initial determinations and redeterminations for claims and provided that no initial determination was subject to reconsideration or appeal until there was a redetermination by the fiscal intermediary or MAC.  Act § 1869(a)(2)-(3).  Congress provided for reconsideration of the redetermined initial determination by a Qualified Independent Contractor (QIC), a hearing before an OMHA ALJ or attorney adjudicator, and the Medicare Appeals Council, and subsequent judicial review.  Act § 1869(b)(1), (c), (d)(1)-(2).

The Secretary promulgated the regulations at 42 C.F.R. pt. 405, subpt. I to satisfy the requirements imposed by Congress in section 1869 of the Act related to processing claims and in sections 1870(b) and (c) and 1893(f)(2) (which incorporates the appeals procedure required by section 1869(b)(1)) of the Act for the waiver or adjustment or recovery of overpayments of Medicare benefits to providers and suppliers for claims on behalf of Medicare beneficiaries.

Pursuant to 42 C.F.R. §§ 405.904(a)(2) and (b), 424.906, and 405.920-.924, a MAC makes an initial determination regarding claims for benefits under Medicare Parts A and B made by or on behalf of Medicare beneficiaries or the overpayment of such benefits.  Pursuant to 42 C.F.R. § 405.928, an initial determination is binding upon all parties to the initial determination, unless there is a redetermination or reopening.  Under 42 C.F.R. § 405.958, a redetermination is binding on all parties, unless a reconsideration is completed or the redetermination is revised on reopening.  Under 42 C.F.R. § 405.978, a reconsideration determination is final and binding on all parties, unless there is an ALJ or attorney adjudicator decision issued, there is a request for expediated judicial review, or the reconsidered determination is reopened and revised.  Pursuant to 42 C.F.R. § 405.984, revised determinations or initial determinations, redeterminations, reconsiderations, the OMHA ALJ/attorney adjudicator decisions, or Medicare Appeals Council decisions become final and binding on the parties unless there is higher level appeal or reopening.  Pursuant to 42 C.F.R. § 405.1048(a), an ALJ or attorney adjudicator’s decision becomes

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final and binding on the parties, unless there is an appeal to the Medicare Appeals Council or there is a request for expedited judicial review, or the decision is only a recommended decision.  A Medicare Appeals Council decision is final and binding on the parties, unless a federal district court issues a decision modifying the Medicare Appeals Council decision or the decision is reopened.  42 C.F.R. § 405.1130.10 

Provider and Supplier Enrollment

The process for enrollment of providers and suppliers is different from the process for handling claims they file to recover from Medicare for items or services they provide to Medicare beneficiaries.  Congress required that the Secretary establish by regulation the process for enrollment of providers and suppliers.  Act § 1866(j).  The Secretary was required by Congress to provide a right to hearing in cases of denial or non-renewal of Medicare enrollment.  Act § 1866(j)(8).  The Secretary promulgated regulations at 42 C.F.R. pt. 424 for enrolling providers and suppliers who can file claims and be paid by Medicare for care or services delivered to Medicare beneficiaries.  42 C.F.R. § 424.1(b).  Medicare enrollment requirements and enrollment procedures are specified in 42 C.F.R. pt. 424, subpt. P.

The rules for revocation of enrollment are established by 42 C.F.R. § 424.535.  Under 42 C.F.R. §§ 405.803 and 424.545(a), a provider or supplier denied Medicare enrollment or whose enrollment is revoked is granted the right to appeal under the procedures established by 42 C.F.R. pt. 498.  Hearings under 42 C.F.R. pt. 498 are provided by ALJs of the Board, not OMHA, and appeals of those decisions are to the Board not the Medicare Appeals Council.  42 C.F.R. §§ 498.1, 498.5, 498.44(c), 498.80-.83.  In the case of revocation of Medicare enrollment and billing privileges, the issue for appeal and review is whether CMS had one or more of the reasons to revoke authorized in 42 C.F.R. § 424.535.  The Board has consistently held that ALJ and Board review of a revocation determination is limited to determining whether the elements of one of the bases for

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revocation authorized by 42 C.F.R. § 424.535(a) are satisfied.  Letantia Bussell, M.D., DAB No. 2196 at 13 (2008); John Hartman, D.O., DAB No. 2564 at 6 (2014); Stanley Beekman, D.P.M., DAB No. 2650 at 10 (2015).

Petitioner Used the Claim Appeal Process and Received Relief

Based on the Medicare statutes and regulations, I find as fact that the process available for Petitioner to challenge the basis for denial of its claims was the procedural process provided by 42 C.F.R. pt. 405, subpt. I.  It is undisputed that Petitioner understood the claims appeal process under 42 C.F.R. pt. 405, subpt. I and received relief as to some claims cited as bases for overpayments by requesting review through OMHA ALJs.  P. Ex. 1; CMS Ex. 1 at 69, 706.

Petitioner states its basis for requesting review as follows:

To be clear, [Petitioner] does not seek to relitigate individual payment determinations.  Rather, it challenges whether CMS may lawfully rely on non-final, pending, or overturned claim denials as undisputed facts to establish a “pattern or practice” of abusive billing under 42 C.F.R. § 424.535(a)(8)(ii).

P. Br. at 16.  Petitioner is correct that individual payment determinations are not subject to review in this forum.  But Petitioner errors in suggesting that review in this forum is less than a complete de novo review of whether there is a basis for revocation of Petitioner’s Medicare enrollment and billing privileges.

Petitioner’s Medicare Enrollments

Petitioner enrolled in Medicare in 2017.  Petitioner was enrolled as a physician and/or nonphysician practice group.  Petitioner characterized its practice as a pain management and sports medicine practice that provided diagnosis, treatment, and management of acute and chronic pain conditions, which I accept as true for summary judgment.  P. Br. at 3, 7; CMS Ex. 1 at 743, 745, 753.  Petitioner represents and I accept as true for purposes of summary judgment that 31 percent of its patients were Medicare beneficiaries and 24 percent were Medicaid recipients before its enrollment and billing privileges were revoked.  P. Br. at 3.  I accept as true for purposes of summary judgment that due to the nature of its patients and their high risk for drug abuse, Petitioner used monthly urine drug testing (UDT) to verify medication compliance and the absence of dangerous nonprescription substances.  Originally all drug testing was outsourced but in 2020 Petitioner began in-house testing with no change in testing frequency.  P. Br. at 3-4, 7.

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Petitioner was also enrolled in Medicare with billing privileges as a DMEPOS supplier.  DMEPOS supplies Petitioner was authorized to supply were neuromuscular electrical stimulators and supplies, neurostimulators and supplies, orthoses (custom fabricated, prefabricated custom fitted, and off-the-shelf), transcutaneous electrical nerve stimulators and supplies, and walkers.  CMS Ex. 1 at 737-39, 742.

I accept as true for purposes of summary judgment that prior to the 2024 revocation Petitioner’s Medicare enrollment records were unblemished.  P. Br. at 7; CMS Ex. 1 at 737-53.  Petitioner’s DMEPOS supplier enrollment record lists a deactivation in 2021, due to infrequent billing.  CMS Ex. 1 at 737.  But deactivation of billing privileges is not a final adverse action within the meaning of 42 C.F.R. § 424.502.

There is no dispute that the MAC revoked Petitioner’s Medicare enrollment and billing privileges as a physician/nonphysician practice organization on August 6, 2024.  CMS Ex. 1 at 504-08.  There is no dispute that the MAC revoked Petitioner’s DMEPOS supplier enrollment on August 9, 2024.  CMS Ex. 1 at 496-503.

Three Post-Payment Audits and the Post-Payment Random Sample

Petitioner does not dispute that Safeguard Services (SGS), the Unified Program Integrity Contractor, conducted three post-payment audits of Petitioner and a post-payment review of a random sample of claims.

Post-Payment Audit 1

Audit 1 was a post-payment review of 33 claims with dates of service from August 4 through December 28, 2020.  SGS determined that 33 of the 33 claims should be denied because documentation submitted did not support the services for which Medicare claims were filed.  The claims were denied for insufficient documentation and there was no allegation of fraud.  I accept as true for purposes of summary judgment that the 33 claims were a fraction of the total claims filed with Medicare by Petitioner during the period.  P. Br. at 5, 7.

It is not disputed that SGS notified Petitioner by letter dated August 24, 2021, that Petitioner was targeted for post-payment review because SGS identified questionable billing by Petitioner of presumptive and definitive drug test codes11 for the same

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beneficiary on the same dates of service.  SGS requested billing history from Petitioner for seven Medicare beneficiaries with dates of service from August 4 to December 28, 2020, that resulted in total payments to Petitioner of $10,198.98.  CMS Ex. 1 at 510, 675-79.  SGS reported to Petitioner that SGS reviewed 33 claims related to the seven beneficiaries for 66 services, all of which were denied.  CMS Ex. 1 at 511.  SGS reminded Petitioner that Medicare billing privileges could be revoked under 42 C.F.R. § 424.535(a)(8)(ii) if CMS determines that a provider or supplier engaged in a pattern or practice of submitting claims that fail to meet Medicare requirements.  CMS Ex. 1 at 514.  Spreadsheets listing the 33 claims were provided with the SGS notice.  CMS Ex. 1 at 514.  The spreadsheets list the individual claims denied and the reason for denial.  All 33 listed claims state as the reason for the denial that the services were not considered medically necessary based on the documents submitted or the absence of documents.  CMS Ex. 1 at 521-533.  The MAC sent Petitioner a September 17, 2021 demand for payment of the overpayment and advised Petitioner of the right to submit a rebuttal under 42 C.F.R. § 405.374 and the right to appeal the overpayment decision by requesting a redetermination.  CMS Ex. 1 at 516, 518.

Petitioner concedes that it did not appeal the overpayment determinations based on Audit 1 and 2.  Petitioner asserts and I accept as true for purposes of summary judgment that

At no point did CMS or its contractors advise [Petitioner] that by failing to appeal the overpayment amounts and submit reconsiderations to the QIC, it would subject itself to a potential revocation of Medicare privileges.

P. Br. at 34.  But failure to appeal an alleged overpayment is not a basis for revocation authorized under 42 C.F.R. § 424.535.  The reason for revocation in this case is abuse of billing privileges based on a pattern or practice of submitting noncompliant claims, for which revocation is authorized by 42 C.F.R. § 424.535(a)(8)(ii).

Post-Payment Audit 2

Audit 2 involved post-payment review of 69 claims with dates of service from December 1, 2021 through July 22, 2022.  The audit resulted in 68 of 69 claims being denied as the

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documentation submitted did not support the medical necessity of the services for which Medicare claims were submitted.  I accept as true for purposes of summary judgment that Petitioner submitted 20,331 claims for UDT to Medicare and all other payers during the same period.  P. Br. at 5, 7-8, 25.  I also accept as true for purposes of summary judgment that between 2020 and 2023, Petitioner filed with CMS 20,282 claims for UDT only.  P. Br. at 25.

On August 23 and September 27, 2022, SGS notified Petitioner of the second post-payment audit.  SGS requested billing history for ten beneficiaries with dates of service from December 1, 2021 to July 22, 2022, claims for which Petitioner was paid $21,216.99.  CMS Ex. 1 at 681-87.  On November 21, 2022, SGS notified Petitioner that the second post-payment audit reviewed the billing of both presumptive and definitive UDTs for a single Medicare beneficiary on the same date of service.  Based on SGS review of the medical records provided, SGS determined that 78 of 138 services (56.5 percent) claimed should have been denied and 60 services (43.5 percent) were properly allowed.  SGS determined that documentation for the denied claims did not support the medical necessity of the service billed.  CMS Ex. 1 at 535-36.  The total overpayment SGS alleged was $14,936.92.  SGS provided Petitioner spreadsheets listing the individual claims.  CMS Ex. 1 at 539.  SGS advised Petitioner that CMS is authorized by 42 C.F.R. § 424.535(a)(8)(ii) to revoke Medicare billing privileges if CMS determines a provider or supplier has a pattern or practice of submitting claims that do not meet Medicare requirements.  CMS Ex. 1 at 541.  The spreadsheets for the denied claims indicate that medical necessity was not established by the records submitted or information that was not submitted.  CMS Ex. 1 at 548-80.  The MAC demanded payment of the overpayment amount of $14,936.92 by letter dated January 9, 2023.  The MAC advised Petitioner of the right to submit a rebuttal under 42 C.F.R. § 405.374 and the right to appeal the overpayment decision by requesting a redetermination.  CMS Ex. 1 at 542-47.

As already noted under the discussion of Audit 1, Petitioner concedes that it did not appeal the overpayment determinations based on Audit 1 and 2.  P. Br. at 34.

Post-Payment Audit 3

Audit 3 was a post-payment review of 34 claims with dates of service from, according to Petitioner from March 27 through June 7, 2023,12 and 34 of 34 claims were denied

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because documentation submitted did not support medical necessity of the services for which claims were submitted to CMS.  The initial determinations to revoke on August 6 and 9, 2024, were issued before an OMHA ALJ issued a March 12, 2025 decision overturning the denial of six claims.  CMS Ex. 1 at 701-16; P. Br. at 5, 8.  But, the March 12, 2025 ALJ decision is listed as an exhibit considered by the CMS hearing officer in making the March 20, 2025 first reconsidered determination.  CMS Ex. 1 at 723.

On December 21, 2023, SGS advised Petitioner of the third post-payment review.  SGS requested billing history for six Medicare beneficiaries with dates of service of March 2 to July 27, 2023, for which Petitioner received payment of $8,480.64.  SGS requested the records due to questionable billing of presumptive and definitive UDTs on the same date of service for the same beneficiary.  CMS Ex. 1 at 689-92.  On March 1, 2024, SGS advised Petitioner that all 34 claims for 56 services were denied because the documentation submitted by Petitioner was insufficient to show medical necessity of the services billed by Petitioner.  SGS also alleged that there were no laboratory reports for three Medicare beneficiaries for six billed dates of service.  SGS advised Petitioner it had determined an overpayment of $8,480.64 occurred.  CMS Ex. 1 at 582-85.  SGS advised Petitioner that CMS may revoke Medicare billing privileges under 42 C.F.R. § 424.535(a)(8)(ii) if CMS determines a provider or supplier engages in a pattern or practice of submitting claims that failed to meet Medicare requirements.  CMS Ex. 1 at 586-87.  The MAC demanded payment of the overpayment of $8,480.64 by letter dated March 30, 2024.  The MAC advised Petitioner of the right to submit a rebuttal and request an appeal.  CMS Ex. 1 at 588-593.  Spreadsheets listing the denied claims from the third audit indicate that medical necessity was not established by the records submitted or that information was not submitted.  CMS Ex. 1 at 594-606.

There is no dispute on March 12, 2025, eight days before the CMS March 20, 2025 reconsidered determination, an OMHA ALJ overturned the denial of six claims13 related

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to one Medicare beneficiary, leaving 28 claims denied.  CMS Ex. 1 at 701-16; P. Br. at 5, 8.

Random Sample14

The random sample involved post-payment review of 389 claims related to 31 beneficiaries with dates of service between November 20, 2020 and June 30, 2023, all of which were denied on review by SGS.  SGS and CMS then applied the 100 percent denial rate to all claims filed by Petitioner during a specific period,15 resulting in an alleged overpayment of $1,616,301.88.  Petitioner requested review by an OMHA ALJ who reviewed claims for services for presumptive and definitive UDT.  On September 10, 2025, the ALJ issued a partially favorable decision for Petitioner concluding that 56 percent of the sample claims were subject to being paid.  Petitioner correctly points out that the results of the sample were still pending administrative review when the MAC issued the initial determinations on August 6 and 9, 2024, and when the first reconsidered determination was issued on March 12, 2025.  P. Br. at 5-6, 8.  The September 10, 2025 partially favorable ALJ decision was also not considered by the August 28, 2025 attempted reopening and revision of the first reconsidered determination because it had not yet been issued.  CMS Ex. 1 at 1, 62.

It is not disputed that on January 2, 2024, SGS requested records for Medicare beneficiaries in the sample.  CMS Ex. 1 at 694-99.  SGS notified Petitioner by letter

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dated April 15, 2024, of the results for the random sample.  SGS advised Petitioner that the sample was drawn due to questionable billing of presumptive and definitive drug tests on the same date of service for the same Medicare beneficiary.  The sample was drawn from the universe of Petitioner’s Medicare claims from November 20, 2020 to June 30, 2023, for which Petitioner was paid $1,654,646.49 from September 1, 2021 to August 31, 2023.  Petitioner was asked to provide medical records for 31 Medicare beneficiaries for which 389 Medicare claims were filed for services provided during the dates of service.  SGS advised Petitioner that all 389 claims for the 77816 services were denied because the documentation provided did not support the medical necessity of the services, specifically presumptive and definitive UDTs.  SGS calculated an overpayment of $118,731.87 based on the claims analyzed and a projected overpayment of $1,616,301.88.  CMS Ex. 1 at 608-11, 622-25.  SGS reminded Petitioner that Medicare billing privileges could be revoked under 42 C.F.R. § 424.535(a)(8)(ii) for a pattern of practice of submitting claims that fail to meet Medicare requirements.  CMS Ex. 1 at 613, 627.  On May 30, 2024, CMS demanded payment of the overpayment amount of $1,616,301.88.  CMS Ex. 1 at 614.  CMS advised Petitioner of the right to submit a rebuttal or request an appeal.  CMS Ex. 1 at 616, 618.

Petitioner appealed the overpayment.  On September 10, 2025, roughly six months after the March 20, 2025 CMS reconsidered determination (CMS Ex. 1 at 720-32), an OMHA ALJ issued a decision partially favorable to Petitioner.  CMS Ex. 1 at 62-187; P. Ex. 1.  The OMHA ALJ concluded that Petitioner was entitled to coverage for some presumptive and some definitive UDT services with dates of service from June 9, 2021 through June 27, 2023, for some of the 31 Medicare beneficiaries for whom 389 claims were filed that included 774 specific claim lines but the ALJ upheld all other denials because the claims were not shown to be medically reasonable and necessary.  CMS Ex. 1 at 69, 71, 132-50; P. Ex. 1 at 8, 132.  The only services considered by the ALJ were presumptive and definitive drug tests for 31 Medicare beneficiaries for whom 389 claims for 774 services were submitted from June 9, 2021 through June 27, 2023.  The ALJ noted that all claims had been denied for not meeting Medicare documentation requirements to show the claims were medically reasonable and necessary.  P. Ex. 1 at 20-21, 63-64; CMS Ex. 1 at 81-82, 124-25.  The ALJ’s conclusions as to each claim are found in tables at the end of his decision.  The tables show the ALJ reviewed 774 service for which claims were filed.

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The ALJ decided 437 claims for specific services17 (56.46 percent) in favor of Petitioner, i.e., OMHA ALJ concluded the claims were properly paid to Petitioner.  The ALJ decided 337 claims for specific services (43.54 percent) against Petitioner, i.e., the claims were properly denied on post-payment review and subject to recovery as overpayments for lack of documents showing that the claims were for services that were medically reasonable and necessary.  P. Ex. 1 at 72-89; CMS Ex. 1 at 133-50.

MAC Initial Determinations

There were two initial determinations issued by the MAC in this case.  The August 6, 2024 MAC initial determination revoked Petitioner’s Medicare enrollment and billing privileges as a physician/nonphysician practice organization (42 C.F.R. § 424.502).  CMS Ex. 1 at 504-08.  The August 9, 2024, MAC initial determination revoked Petitioner’s Medicare enrollment and billing privileges as a DMEPOS supplier.  CMS Ex. 1 at 496-503.  Both initial determinations cited 42 C.F.R. § 424.535(a)(8)(ii) as the authority for revocation; imposed a 10-year reenrollment bar; and directed that Petitioner’s name be placed on the CMS preclusion list.  Both determinations state that the MAC determined Petitioner engaged in a pattern or practice of submitting noncompliant claims because documentation was insufficient to support that the services were reasonable or necessary.  Both initial determinations cite the three post-payment audits as the factual basis for the revocation.  The initial determinations do not recognize that some of the claim denials from Audit 3 were overturned by an OMHA ALJ.  CMS Ex. 1 at 496-97, 504-05.

I do not review the findings and conclusions of the initial determinations.  Neb Grp. of Ariz. LLC, DAB No. 2573 at 7 (42 C.F.R. § 498.5(l) grants providers or suppliers right to review of the reconsidered determination not the initial determination).

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CMS Reconsidered Determination

Petitioner timely requested reconsideration of each of the initial determinations.  CMS Ex. 1 at 188-495.

The first reconsidered determination was issued by CMS on March 20, 2025.  CMS Ex. 1 at 720-32.  Petitioner requested a hearing before an ALJ.  But the CMS request to remand to reopen and revise the March 20, 2025 reconsidered determination was granted by the Board ALJ to whom the case was assigned.  CMS Ex. 1 at 733-36.  On August 28, 2025, CMS attempted to issue a reopened and revised reconsideration.  But the reopening and revision of the March 20, 2025 reconsidered determination was more than a year after the initial determinations were issued on August 6 and 9, 2024.  CMS Ex. 1 at 496, 504.  Under 42 C.F.R. § 498.30, CMS may only reopen and revise an initial or reconsidered determination within 12 months after the date of notice of the initial determination.  Therefore, I have concluded that the August 28, 2025 second reconsidered determination is void and of no effect.

Because the August 28, 2025 second reconsidered determination is void and of no effect it is the March 20, 2025 CMS reconsidered determination that triggers Petitioner’s right to my review.  Neb Grp. of Ariz. LLC, DAB No. 2573 at 7.  When CMS revokes, Petitioner is granted the right to request ALJ review of the CMS reconsidered determination.  Act § 1866(j)(8) (42 U.S.C. § 1395cc(j)(8)); 42 C.F.R. §§ 424.545, 498.3(b)(17), (20), 498.5; Neb Grp. of Ariz., DAB No. 2573 at 7.  But ALJ review of the reconsidered determination is not limited to reviewing whether CMS acted within the authority of the Medicare statutes and regulations or whether CMS abused its discretion.  Rather, ALJ review of the CMS decision necessarily involves de novo review of the evidence and consideration of the factors or elements established by the regulation to determine if there is a basis for revocation.  Congress provided in section 1866(h)(1) and (j)(8) of the Act that a provider or supplier dissatisfied with a decision of the Secretary to deny or not renew Medicare enrollment, is entitled to a hearing to the same extent as provided by section 205(b) of the Act and to judicial review of the Secretary’s final decision after the hearing as provided in section 205(g) of the Act.  Section 205(b) of the Act requires reasonable notice and a hearing and a decision on the evidence adduced at the hearing which makes de novo findings of fact and affirms, modifies, or reverses the Secretary’s decision.  Prior Board decisions in cases adjudicated under 42 C.F.R. pt. 498 are consistent with my interpretation.  Britthaven of Chapel Hill, DAB No. 2284 at 5-6 (2009); Norman Johnson, MD, DAB No. 2779 at 9 (2017).  My review in this case is a fresh look at the evidence.  I am not bound by any findings of fact or conclusions of law of CMS on reconsideration.  Rather, I am required to make new findings of fact and conclusions of law related to the general issue of whether CMS had a basis to revoke Petitioner’s Medicare enrollment and billing privileges under the authority granted to CMS by the Secretary under 42 C.F.R. § 424.535(a)(8)(ii).  42 C.F.R. § 498.74(a); see

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Black’s Law Dictionary at 738, 1544 (8th ed. 2004) (hearing de novo means a reviewing court decides a matter anew giving no deference to lower court findings and a trial de novo means there is a new trial and decision on findings of fact and conclusions of law just as if there was no prior trial).

In summary, in this case I review the reconsidered determination of CMS that there was a basis for revocation of Petitioner’s Medicare enrollment and billing privileges and a basis for adding Petitioner’s name to the CMS preclusion list.  I do not review whether the CMS hearing officer’s determinations were correct.  I am not bound by the findings of fact or the conclusions of law of the CMS hearing officer.  Rather, I conduct a de novo review of the evidence and make new findings of fact based on all the evidence presented to me and new the conclusions of law.  The fact that initial determinations of the MAC and reconsidered determinations of CMS were made with less than all the relevant evidence is rectified by my de novo review because both parties have had a new opportunity to present all evidence relevant to the issues before me for my consideration.  Because I do not review the March 20, 2025 CMS reconsidered determination for error, it warrants no further discussion.  As discussed later, if after review of the evidence I conclude that there is a basis for revocation of Petitioner’s Medicare enrollment and billing privileges and adding Petitioner’s name to the CMS preclusion list, I do not review if CMS erred in exercising its discretion to revoke and add Petitioner’s name to the preclusion list.

b.  Analysis

Revocation Under 42 C.F.R. § 424.535(a)(8)(ii)

CMS may revoke a provider’s or supplier’s Medicare enrollment and billing privileges and any corresponding provider or supplier agreement for any of the 23 reasons authorized by 42 C.F.R. § 424.535(a).  Revocation for abuse of billing privileges is authorized by 42 C.F.R. § 424.535(a)(8).  In this case, CMS revoked pursuant to the authority of 42 C.F.R. § 424.535(a)(8)(ii).  Petitioner argues that CMS applied the wrong version of 42 C.F.R. § 424.535(a)(8)(ii) when it determined to revoke.  P. Br. at 18-22.  Therefore, it is necessary to examine how the regulation changed from its February 3, 2015 version to its January 1, 2022 revision.

Effective August 26, 2008, CMS added by notice and comment rulemaking 42 C.F.R. § 424.535(a)(8) that authorized a MAC or CMS to revoke Medicare enrollment and billing privileges of a provider or supplier who submitted one of more claims for services that could not have been furnished to a Medicare beneficiary.  73 Fed. Reg. 36,448, 36,450, 36,455, 36,458 (June 27, 2008).

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Effective February 3, 2015, CMS revised 42 C.F.R. § 424.535(a)(8).  CMS designated the provision that authorized revocation for filing one or more claims for services that could not have been furnished as 42 C.F.R. § 424.535(a)(8)(i) and added some examples.  CMS added 42 C.F.R. § 424.535(a)(8)(ii) which authorized revocation of Medicare enrollment and billing privileges for abuse of billing privileges.  79 Fed. Reg. 72,500, 72,513-520, 72,532 (Dec. 5, 2014).  CMS stated that 42 C.F.R. § 424.535(a)(8)(ii) (2015) is intended to permit revocation of Medicare enrollment and billing privileges if a “provider or supplier has a pattern or practice of billing for services that do not meet Medicare requirements such as, but not limited to, the requirement that the service be reasonable and necessary.”  79 Fed. Reg. at 72,513.  CMS stated in proposing the new regulation that:

We explained that a provider or supplier should be responsible for submitting valid claims at all times and that the provider or supplier’s repeated failure to do so poses a risk to the Medicare Trust Funds.  We note that the responsibility for submitting valid claims exists irrespective of whether the provider or supplier itself submits the claims or hires a billing agency to perform this function; in either case, the claims are submitted on behalf of the provider or supplier.

Id. 

Title 42 C.F.R. § 424.535(a)(8)(ii) (2015), provided CMS may revoke if: 

(ii) CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.  In making this determination, CMS considers, as appropriate or applicable, the following:

(A) The percentage of submitted claims that were denied.

(B) The reason(s) for the claim denials.

(C) Whether the provider or supplier has any history of final adverse actions (as that term is defined under § 424.502) and the nature of any such actions.

(D) The length of time over which the pattern has continued.

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(E) How long the provider or supplier has been enrolled in Medicare.

(F) Any other information regarding the provider or supplier's specific 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 described in this paragraph.

79 Fed. Reg. at 72,532.  It is important to note that the regulation does not require CMS to consider all six factors in determining whether there is a pattern or practice of submitting noncompliant claims.  In responding to comments to the proposed new regulatory provision CMS stated it would not consider claim denials fully overturned that are finally and fully adjudicated, i.e., the appeals process has been exhausted or the time for filing has run out.  CMS declined to commit not to consider claims currently on appeal because that could encourage meritless appeals to circumvent the new regulation and the fact a claim is being appealed does not mean it will be overturned.  79 Fed. Reg. at 72,513.  CMS stated that sporadic billing errors would not trigger revocation – identifying one possible defense to revocation pursuant to 42 C.F.R. § 424.535(a)(8)(ii).  CMS stated that it did not define “pattern or practice” to maintain flexibility for the variety of possible factual scenarios, but it adopted the six factors to identify a pattern or practice.  CMS stated that

[Section] 424.535(a)(8)(ii) will be applied only: (1) In situations where the behavior could not be considered sporadic; and (2) after the most careful and thorough consideration of the relevant factors. These points cannot be stressed enough.

79 Fed. Reg. at 72,514.  CMS refused to set a numeric threshold for the number of claims that had to be denied to trigger 42 C.F.R. § 424.535(a)(8)(ii).  Id.  CMS rejected a suggestion that there be no revocation under the new regulation without a finding of fraud.  CMS stated it is enough that repeated claims denials over time raise questions of a provider’s or supplier’s ability or willingness to comply with Medicare requirements.  79 Fed. Reg. at 72,514-515.  CMS rejected a comment that claim denials based on insufficient documentation should not be considered.  CMS stated:

We believe it is the responsibility of the provider submitting the claim to ensure that all requirements—including, as necessary, proper and compliant supporting documentation—have been met prior to the claim’s submission.  Repeated denials due to improper documentation are an indication to a

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provider or supplier that its billing behavior must change in order to become compliant with Medicare requirements—including documentation requirements.

79 Fed. Reg. at 72,516, 72,520.  CMS rejected adding a knowledge element to 42 C.F.R. § 424.535(a)(8)(ii) due to the burden on CMS of determining provider or supplier intent for each claim and, if a provider submits a claim with specific or actual knowledge the claim is not compliant with Medicare requirements or in reckless disregard of such requirements, there are other means of addressing that conduct such as prosecution.  Id.  CMS stated that the number of denied claims would not be a factor under 42 C.F.R. § 424.535(a)(8)(ii).  But CMS state that it would consider the percentage of denied claims without a threshold or minimum percentage.  79 Fed. Reg. at 72,517-518.  Regarding educating providers and suppliers prior to revocation CMS stated:

We believe that frequent claim denials should alert the provider that there may be an issue with its claim submissions and that remedial action may be required.  We do not believe that an interim notification from CMS (for example, a “warning letter”) should be a prerequisite for taking action under § 424.535(a)(8)(ii).  Further, if the provider has questions regarding CMS’s billing and coding requirements, it should review CMS’s manuals, educational articles, and other informational documents at CMS’s Web site (www.cms.hhs.gov); the provider may also contact its local MAC if it has additional questions.

79 Fed. Reg. at 72,518.  CMS commented that education includes claim denial notices and CMS instructional materials including manuals and articles publicly available on the CMS website.  79 Fed. Reg. at 72,519.

Effective January 1, 2022, CMS modified by notice and comment rulemaking the factors it considers when revoking pursuant to 42 C.F.R. § 424.535(a)(8)(ii) (2022).  CMS reduced the factors from the original six to four.  CMS stated the reason for the change was to make it easier for CMS to deal with periods of abusive billing regardless of their duration.  The following table compares the factors from the old and new version of 42 C.F.R. § 424.535(a)(8)(ii).

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86 Fed. Reg. 64,996, 65,334 (Nov. 19, 2021).  CMS explained that change to the first factor was necessary because it had been interpreted to require that the percentage of claims denied be calculated based on all claims filed by the provider or supplier during the provider’s or supplier’s enrollment rather than just those claims from the period under examination.  CMS eliminated the factors that considered the period over which the pattern or practice continued and how long a provider or supplier was enrolled in Medicare for the same reason.  CMS eliminated consideration of the reason for claims denials stating the reason a particular claim was denied was not germane – the purpose of 42 C.F.R. § 424.535(a)(8)(ii) is to deter all noncompliant billing.  CMS added the factor considering the type of noncompliance and the specific facts to the extent it could be determined to permit consideration of the unique facts of each case including any aggravating or mitigating circumstance.  86 Fed. Reg. at 65,334-335.

CMS rejected the suggestion that it should consider a provider’s or supplier’s complete billing history because it would hamper CMS’ ability to address shorter periods of noncompliant billing.  CMS commented that the core consideration is the submission of an incorrect claim rather than the reason it is incorrect or whether there was any deceit by the provider or supplier and considering the reason for a claim denial would relieve a provider or supplier of the requirement to remain compliant with billing policies.  86 Fed. Reg. at 65,335-336.  The preamble language related to the 2022 revision of 42 C.F.R. § 424.535(a)(8)(ii) makes clear that CMS wanted to maximize its discretion to revoke for even short periods of noncompliant billing and avoid situations such as those where ALJs have calculated the percentage of claim denials based on the universe of claims filed by a provider or supplier during its entire enrollment and/or added a requirement to consider the intent of the provider or supplier.  See e.g., Justin LaMonda, MD and Justin G.

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LaMonda, MD LLC, DAB CR5887 at 10 (2021); Michelle Alexandre, DAB CR5422 at 7-8 (2019).

Section 424.535(a)(8)(ii) of 42 C.F.R. as amended effective January 1, 2022, provides

(8)  Abuse of billing privileges.  Abuse of billing privileges includes either of the following:

* * * *

(ii) CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet Medicare requirements.  In making this determination, CMS considers, as appropriate or applicable, 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).  I note that the amended regulation as the original does not require that CMS consider all four of the factors or indicate that the determination of a pattern or practice must be based on more than one factor.  A fair reading of both the original and amended regulations is that CMS will consider at least one of the factors.  Both the original regulation and the revised regulation gave CMS broad discretion to consider any fact CMS deems relevant to the determination.  Factor D under the 2022 revision and Factor F under the 2015 version are catch-all factors that authorize consideration of any information regarding the specific circumstances CMS believes relevant.  Therefore, even if none of the other factors apply, I conclude that the catch-all factor could be employed by CMS to consider relevant information not considered to fall within any of the other factors.

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Petitioner argues that CMS incorrectly applied the revision of 42 C.F.R. § 424.535(a)(8)(ii) (2022), rather than the original version of 42 C.F.R. § 424.535(a)(8)(ii) (2015) which was in effect during the dates of service for some of the claims subject to post-payment review and denial.  Petitioner’s theory is that all the claims denied in Audit 1, some of the claims denied in Audit 2, and some of the claims denied from the random sample had dates of service before the change of 42 C.F.R. § 424.535(a)(8)(ii) effective January 1, 2022.  Petitioner argues that the claims with dates of service before January 1, 2022 must be judged applying the six factors of the original regulation rather than the four factors of the amended regulation.  Petitioner legal argument is that to do otherwise would violate a rule against applying regulations retroactively absent express authority to do so.  P. Br. at 18-22.  Petitioner obtains no relief based on its argument that the original six factors of 42 C.F.R. § 424.535(a)(8)(ii) must be considered rather than just the four factors under the amended 42 C.F.R. § 424.535(a)(8)(ii).  Petitioner’s argument is defeated by both the law and the facts.

Petitioner argues that the change to 42 C.F.R. § 424.535(a)(8)(ii) (2022) was substantive because the change eliminated the requirement for CMS to consider the provider or suppliers intent when deciding to revoke.  P. Br. at 18-19, 29-30.  But it is clear from the foregoing discussion of the original regulation that CMS never intended to consider a provider’s or supplier’s intent when filing noncompliant claims for purposes of revocation under 42 C.F.R. § 424.535(a)(8)(ii) (2015).  CMS specifically rejected adding a knowledge element to 42 C.F.R. § 424.535(a)(8)(ii) (2015) due to the burden that would impose on CMS to determine provider or supplier intent for each claim.  CMS specifically noted that if a provider or supplier submitted a claim with specific or actual knowledge the claim was not compliant with Medicare requirements or submitted a claim in reckless disregard of such requirements, there were other means of addressing that conduct such as prosecution.  79 Fed. Reg. at 72,516, 72,520.  CMS rejected a suggestion that there be no revocation under 42 C.F.R. § 424.535(a)(8)(ii) without a finding of fraud.  CMS responded that it is enough that repeated claims denials over time raise questions of a provider’s or supplier’s ability or willingness to comply with Medicare requirements.  79 Fed. Reg. at 72,514-515.

Petitioner misquotes the 42 C.F.R. § 424.535(a)(8)(ii) (2015) stating that it required CMS to consider the six factors.  P. Br. at 19.  The plain language of the regulation defeats Petitioner’s assertion.  The regulation provided “[i]n making this determination, CMS considers, as appropriate or applicable, the following.”  42 C.F.R. § 424.535(a)(8)(ii) (2015).  Not only did the regulation not require consideration of all six factors.  Arguably, the regulation did not require CMS to consider any of the factors unless “appropriate or applicable.”  And the sixth factor in the 2015 version, like the fourth factor in the 2022 revised regulation placed no limitation on CMS discretion to consider facts so long as CMS deems the facts relevant.  42 C.F.R. § 424.535(a)(8)(ii)(F) (2015); 42 C.F.R. § 424.535(a)(8)(ii)(D) (2022).

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Petitioner’s retroactive argument also fails because the application of the amended 42 C.F.R. § 424.535(a)(8)(ii) to all the denied claims even for dates of service before the effective date of the new regulation is not a retroactive application of 42 C.F.R. § 424.535(a)(8)(ii) (2022) as a matter of fact.  Petitioner overlooks the fact that none of the individual claim denials, including those before the 2022 revision of 42 C.F.R. § 424.535(a)(8)(ii), are not the determinations that are subject to challenge in this forum.  The claims were presumably denied applying the law applicable at the time of the claim denials.

The decision subject to challenge before me is the March 20, 2025 reconsidered determination upholding the August 6 and 9, 2024 initial determinations to revoke.  The revision of 42 C.F.R. § 424.535(a)(8)(ii) (2022) was already in effect and controlling law during the August 6 and 9, 2024 initial determinations and the March 20, 2025 reconsidered determination.  Petitioner cites no persuasive authority (P. Br. at 18-22) to support its position that an executive branch agency can simply choose to follow an old regulation that is no longer in effect rather than the regulation in effect at the time of the agency action when the new regulation was duly promulgated through notice and comment rule making.  Generally, federal administrative agencies are required to obey their own legislative rules absent a sound reason for not doing so.  1 Charles H. Koch, Jr. & Richard Murphy, Admin. L. & Prac § 4.22 (3d ed. 2026).  A legislative rule is a rule or regulation made by an agency under its delegated quasi-legislative power and has the force and effect of law.  Black’s Law Dictionary 919 (8th ed. 2004).  Congress granted the executive agencies rulemaking authority through the Administrative Procedure Act (APA) 5 U.S.C. § 553.  Congress granted the Secretary rulemaking authority in section 1871 of the Act (42 U.S.C. § 1395hh) for administration of the insurance programs established by the Social Security Act.  Azar v. Allina Health Services, 587 U.S. 566, 569 (2019)18 (Congress did not choose to apply the APA to Medicare but created a new process under section 1871 of the Act).  Under 1871(a)(2) of the Act the Secretary must give public notice and a 60-day period for public comment before implementing a “rule, requirement, or other statement of policy (other than a national coverage determination) that establishes or changes a substantive legal standard governing the scope of benefits,

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the payment for services, or the eligibility of individuals, entities, or organizations to furnish or receive services or benefits under [Medicare].”  Allina, 587 U.S. at 570 (citing 42 U.S.C. § 1395hh(a)(2)).  The Court noted that a substantive standard is one that “creates duties, rights and obligations” and a substantive rule is one that has the force and effect of law.  Allina, 587 U.S. at 573.  But the Court declined to define “substantive legal standard” because it was not necessary in the context of the case.  Allina, 587 U.S. at 579-84.  The Supreme Court’s discussion of the Secretary’s rulemaking authority under section 1871 of the Act is the only real analysis of that authority.  Even though the analysis did not result in a definition of substantive legal standard, the Supreme Court noted that a substantive standard related to rulemaking under 5 U.S.C. § 553 is one that creates duties, rights, and obligations, and for purposes of this decision that definition can be used as at least a framework for analysis of 42 C.F.R. § 424.535(a)(8)(ii) (2015) and (2022).  It is important to note that under both versions of the regulation the Secretary granted CMS the authority to revoke Medicare enrollment and billing privileges for abuse of billing privileges and provided some discretionary factors CMS could consider to make that determination.  Neither version of 42 C.F.R. § 424.535(a)(8)(ii) imposed on providers and suppliers any duties, rights, or obligations.  Therefore, at least for purposes of rulemaking under the APA, the regulations imposed no substantive requirements upon providers and suppliers.  The same conclusion seems reasonable in the context of rulemaking under section 1871 of the Act, even though no definition of substantive legal standard exists yet.  Recognizing that there is no substantive requirement imposed on providers and suppliers, the regulated entities, under 42 C.F.R. § 424.535(a)(8)(ii) is important because section 1871(d)(1)(A) prohibits the retroactive application of a change in regulations, manual instructions, interpretive rules, statements of policy or guidelines of general applicability to items and services provided before the effective date of the change.  Section 1871(d)(1)(A) does not preclude applying retroactively a regulation that delegates Secretarial authority to CMS to act or directs CMS action in the administration of the Medicare program.  But there was no retroactive application of a regulation in this case because CMS applied the regulation in effect when it made the revocation determination.  The fact that some claims were considered that were denied before the revision of 42 C.F.R. § 424.535(a)(8)(ii) (2022) is not a retroactive application of that regulation which has nothing to do with claim denials.

I conclude that Petitioner is in error in its argument about the retroactive application of 42 C.F.R. § 424.535(a)(8)(ii) (2022).  However, within the scope of 42 C.F.R. § 482.535(a)(8)(ii)(D), I will consider the two factors that did not survive the revision of the regulation to ensure no possible prejudice to Petitioner.

There is a Prima Facie Case for Revocation Under 42 C.F.R. § 424.535(a)(8)(ii).

CMS may revoke pursuant to 42 C.F.R. § 424.535(a)(8)(ii) )(2022) if CMS determines that the provider or supplier has a pattern or practice of submitting claims that fail to meet

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Medicare requirements.  The combined factors from the 2015 and 2022 versions of the regulation are:

FACTOR A.  The percentage of submitted claims that were denied during the period under consideration.  No minimum or percentage is specified.  The period under consideration is not further defined.  The old regulation does not include a limit to the period under consideration.

FACTOR B.  Whether the provider or supplier has any history of final adverse actions and the nature of any such actions.  The 2015 version of the regulation incorporated by reference the definition of adverse action from 42 C.F.R. § 424.502.  I see no reason to find or craft a different definition.

FACTOR C.  The type of billing non-compliance and the specific facts surrounding said non-compliance (to the extent this can be determined).  The reason for claim denials under the old regulation.

FACTOR D.  Any other information regarding the provider or supplier’s specific circumstances that CMS deems relevant to its determination.  This factor is broad enough for me to consider the two factors that were deleted by the amendment of the regulation:  the length of time over which the pattern has continued; and how long the provider or supplier has been enrolled in Medicare.

The plain language of the 2015 and the 2022 versions of the regulation only require that CMS consider the factors that are appropriate or applicable.  But I consider all the factors of both regulations as follows.

FACTOR A.  The percentage of submitted claims that were denied during the period under consideration.  No minimum or percentage is specified.  The period under consideration is not further defined.  But CMS was clear in my opinion that it was not required to consider the history of all a provider’s or supplier’s claims during all or even an extended part of the provider’s or supplier’s Medicare enrollment and billing history.  The old regulation does not include reference to the period under consideration.

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Summary of Denied Claims as of This Decision

The general reason stated for the claims denials was the determination that services billed were not medically reasonable and necessary.  I have not reviewed specific claim denials.  The CMS hearing officer concluded in the March 20, 2025 reconsidered determination that the claims denials resulted from insufficient documentation, including missing or

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inadequate orders or requisitions, missing laboratory results, inadequate support for testing frequency, lack of assessments, unsigned requisitions for laboratory work, and failure to incorporate laboratory results into the plan of care. The hearing officer’s summary is consistent with reasons listed in the notices of revocation, and the notices of the audit findings in evidence.  Additional grounds cited in the notices of audit results include routine testing indicated possible standing orders for UDTs without adequate justification to support testing frequency; presumptive UDTs were performed without medical necessity shown by documents Petitioner submitted for review; definitive UDTs were routinely performed on the same day as presumptive UDTs without adequate documentation of the reason; and more than 12 UDTs were ordered for a patient in one year.  CMS Ex. 1 at 82, 127-32, 496-505, 511-512, 521-33, 536-538, 548-80, 583-84, 594-606, 609-10, 623-24, 628-73, 723-25; P. Ex. 1 at 21, 66-70.

Petitioner does not concede that all the denied claims were correctly denied.  But for Audits 1 and 2 Petitioner admits it did not request review of the claim denials through the administrative due process provided under 42 C.F.R. pt. 405, subpt. I.  Petitioner did request review pursuant to the procedures of 42 C.F.R. pt. 405 for claims from Audit 3 and an OMHA ALJ found for Petitioner and overturned six of the 34 claim denials.  Petitioner also requested review under 42 C.F.R. pt. 405, subpt. I for claims denied based on the random sample and again received relief from an OMHA ALJ on September 10, 2025.  Petitioner has not asserted or presented any evidence in responding to the CMS motion for summary judgment showing that any of the claims from the three post-payment audits or the random sampling are pending review by an OMHA ALJ, the Medicare Appeals Counsel, or are under court review.  Accordingly, I conclude that Petitioner is now bound as a matter of law by the determinations under the claims review process provided by 42 C.F.R. pt. 405, subpt. I.  The issue is whether those claims support or permit a CMS determination that Petitioner engaged in a pattern or practice of submitting claims that failed to meet Medicare requirements and are a basis for revocation under 42 C.F.R. § 424.535(a)(8)(ii).

The total period covered by the three audits and the random sample included claims filed by Petitioner with dates of service from August 4, 2020 to July 27, 2023.  SGS, the MAC, and CMS considered 1,034 claims for individual services provided to Medicare beneficiaries (filed in 524 claims) and 510 claims, i.e., 49.3 percent remained denied after Petitioner exhausted its claim appeal rights under 42 C.F.R. pt. 405 or waived the appeal rights by not appealing.  Considering only the random sample, the period under consideration is only minimally shorter from November 20, 2020 to June 30, 2023.  There were claims for 774 individual services provided to Medicare beneficiaries filed as 389 claims.  Claims for individual services denied were 337, i.e., 43.5 percent.  The evidence shows that all these claims were related to UDTs and they were denied because there was a lack of documentation showing the UDTs were medically reasonable and necessary.

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Petitioner argues that between 2020 and 2023 it filed 20,282 claims with CMS for UDTs.22  P. Br. at 25.  Dividing 510, the number of claims for specific service denied by 20,282 yields 2.5 percent.  Petitioner has presented no evidence to support an inference that a 2.5 percent error rate in submitting Medicare claims is acceptable.  CMS places strict responsibility on providers and suppliers for the accuracy of their claims.  Therefore, if one compared Petitioner’s erroneous UDT claims to the universe of UDT claims submitted by Petitioner from 2020 through 2023, a 2.5 percent error rate could be considered to constitute a pattern or practice of submitting erroneous claims.  Moreover, there is nothing in the regulatory history for either the 2015 version or the 2022 revision of 42 C.F.R. § 424.535(a)(8)(ii) that requires that CMS consider a universe or collection of claims filed by a provider or supplier larger than the claims examined by CMS or its contractors.  Petitioner cited a couple of Board ALJ decisions that arguably support consideration of the entire universe of claims filed by a provider or supplier when exercising discretion to revoke under 42 C.F.R. § 424.535(a)(8)(ii).  LaMonda, DAB CR5887 at 10; Alexandre, DAB CR5422 at 7-8.  But neither ALJ cited any legal requirement for CMS to do so.  Rather the ALJs relied upon their sense of fairness to find that it was necessary to consider the universe of all claims and then decided that the number of errors in their cases were sporadic based on the small percentage.  Neither ALJ provided a definition for sporadic, and the term is not defined by the regulation or its regulatory history.  A persuasive argument can be made that a requirement that CMS compare the number of erroneous claims to the universe of all claims filed by a provider or supplier would be an unreasonable limitation on CMS discretion necessary to protect the Medicare program.  A provider or supplier may file claims for years with only sporadic errors and then during a brief period have a high frequency of errors.  If the errors continue to occur despite attempts by CMS or its contractors to educate the provider or supplier, CMS should not be hamstrung by a requirement to consider that for years the provider or supplier had only sporadic errors.

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But the rulemaking for the revision of 42 C.F.R. § 424.535(a)(8)(ii) (2022) resolves any doubt about the intent of the revision of the regulation.  In the 2022 revision of 42 C.F.R. § 424.535(a)(8), CMS explained in response to comments that:

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 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.

86 Fed. Reg. at 65,334.  CMS also deleted as part of that rulemaking 42 C.F.R. § 424.535(a)(8)(ii)(D) and (E) explaining that even short periods of intense improper billing can endanger Medicare and that length of enrollment should have no bearing on application of 42 C.F.R. § 424.535(a)(8)(ii) because it is the behavior and not the period of enrollment that is the main issue.  86 Fed. Reg. at 65,335.  Therefore, the phrase “period under consideration” is not ambiguous.  Rather, CMS intended to create discretion to identify the period under consideration to address the unique facts of each case.

In the case before me, whether the ratio of denied to filed claims is 43.5 percent, the denial rate for the random sample after adjudication, or 2.5 percent as calculated based on all claims Petitioner filed for UDT’s, there is a preponderance of the evidence that Petitioner engaged in a pattern and practice of submitting noncompliant claims for which Petitioner could not establish the UDTs were medically reasonable and necessary when called upon to do so during post-payment review.

Factor A alone is sufficient evidence of a pattern or practice of submitting noncompliant claims to be a basis for revocation under 42 C.F.R. § 424.535(a)(8)(ii).

FACTOR B.  Whether the provider or supplier has any history of final adverse actions and the nature of any such actions.  The 2015 version of the regulation

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incorporated by reference the definition of adverse action from 42 C.F.R. § 424.502.

There is no evidence that Petitioner had a history of final adverse actions within the meaning of 42 C.F.R. §  424.502.

FACTOR C.  The type of billing non-compliance and the specific facts surrounding said non-compliance (to the extent this can be determined).  The reason for claim denials under the old regulation.

I have no authority to review the individual claim denials.  But the reasons the underlying claims were denied are relevant under this factor.  There is evidence that shows that most of the claims were denied because documents submitted by Petitioner upon request by SGS during the post-payment audit did not support that UDTs in the number and for the reasons ordered by Petitioner’s staff were medically reasonable and necessary.

The OMHA ALJ concluded that Petitioner was entitled to coverage for some presumptive and some definitive UDT services with dates of service from June 9, 2021 through June 27, 2023, for some of the 31 Medicare beneficiaries for whom 389 claims were filed that included 774 specific claim lines but the ALJ upheld all other denials because the claims were not shown to be medically reasonable and necessary.  CMS Ex. 1 at 69, 71, 132-50; P. Ex. 1 at 8, 132.  The only services considered by the ALJ were presumptive and definitive drug tests for 31 Medicare beneficiaries for whom 389 claims for 774 services were submitted from June 9, 2021 through June 27, 2023.  The ALJ noted that all claims had been denied for not meeting Medicare documentation requirements to show the claims were medically reasonable and necessary.  P. Ex. 1 at 20-21, 63-64; CMS Ex. 1 at 81-82, 124-25.

SGS notified Petitioner by letter dated August 24, 2021, that it had examined claims for seven Medicare beneficiaries with dates of service from August 4, 2020 to December 28, 2020.  SGS advised Petitioner that all 33 claims for 66 services were denied because documents submitted by Petitioner did not show that presumptive UDTs were medically reasonable or medically necessary under the local coverage determination and Medicare regulations and definitive and presumptive UDTs were performed on the same dates of service without necessary documentation.  SGS included a discussion of documentation requirements, including that post-payment review is based on records the provider supplier submits and if no documents are submitted it is presumed that services were not valid.  SGS remined Petitioner that the letter was intended to be educational, exclusion from Medicare, civil money penalties, and revocation of Medicare billing privileges were listed as possible remedies for continued noncompliance.  CMS Ex. 1 at 510-14.

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Roughly 15 months later, on November 21, 2022, SGS notified Petitioner of the results of the second post-payment audit.  Based on medical review, claims related to 10 Medicare beneficiaries for 78 of 138 services (56.5 percent) were denied.  The dates of service for the claims were December 1, 2021, more than three months after the August 24, 2021 SGS notice, to July 22, 2022.  SGS again denied claims because documents submitted by Petitioner did not show that UDT services were medically reasonable and necessary, including billing for definitive and presumptive UDTs on the same day.  SGS provided the same educational information about documentation requirements and possible sanctions as in the August 24, 2021 notice.  CMS Ex. 1 at 535-41.

On March 1, 2024, roughly 15 months after the November 21, 2022 SGS notice and 30 months after the August 24, 2021 SGS notice, SGS notified Petitioner of the results of the third post-payment audit.  SGS medically reviewed the records provided by Petitioner for six Medicare beneficiaries with Medicare claims for dates of service March 2, 2023, more than three months after the November 21, 2022 SGS notice, to July 27, 2023.  SGS determined after medical review that all 34 claims for 56 individual services were denied because the documentation submitted did not support medical necessity.  SGS advised that Petitioner’s documents did not show that UDTs were medical reasonable and necessary, including performing presumptive and definitive UDTs on the same dates of service and other problems like those identified during the prior audits.  SGS provided the same educational information about documentation requirements and possible sanctions as in the November 21, 2022 and August 24, 2021 notices.  CMS Ex. 1 at 582-887.

There is no dispute on March 12, 2025, eight days before the CMS March 20, 2025 reconsidered determination, an OMHA ALJ overturned the denial of six claims related to one Medicare beneficiary, leaving 28 claims denied.  CMS Ex. 1 at 701-16; P. Br. at 5, 8.  Despite this undisputed fact, the SGS notices show that from the first SGS notice dated August 24, 2021, Petitioner was being educated about submitting noncompliant claims for UDTs that SGS denied after medical review of the records Petitioner submitted.  The second post-payment audit shows that Petitioner did not heed the education and warnings of SGS because more claims for later dates of service were examined and denied for essentially the same reasons.  The third post-payment audit further spotlights the problem with Petitioner’s claims, and the fact Petitioner was not responding to SGS’ attempts to educate Petitioner on the need and method for submitting compliant claims.  The random sample provided additional insight to the magnitude of the problem.

CMS has been clear that it will not attempt to determine the intent of a provider or supplier in filing noncompliant claims as that will be left to more aggressive enforcement mechanisms.  CMS intentionally required no element of intent or knowledge for revocation under 42 C.F.R. § 424.535(a)(8)(ii) (2015).  79 Fed. Reg. at 72,516.  But the

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evidence in this case shows that at a minimum Petitioner was not paying attention to the SGS notices and whether its claims met Medicare requirements.

The reasons for the claim denials of the three audits and the random sample, the repetitive nature for the submission of noncompliant claims despite SGS’ attempts to education, the efforts of CMS to recoup overpayments of denied claims, are sufficient to show Petitioner’s pattern or practice of submitting noncompliant claims.  In fact, the number of noncompliant claims in this case validates the conclusion that Petitioner had a pattern or practice of submitting noncompliant laboratory claims.

Factor C also establishes the pattern or practice of submitting noncompliant Medicare claims that is the basis for revocation under 42 C.F.R. § 424.535(a)(8)(ii).

FACTOR D.  Any other information regarding the provider or supplier’s specific circumstances that CMS deems relevant to its determination.  This factor is broad enough for me to consider the two factors that were deleted by the amendment of the regulation:  the length of time over which the pattern has continued; and how long the provider or supplier has been enrolled in Medicare.

The dates of service for the noncompliant claims as reflected in my table above were August 4, 2020 through July 27, 2023.  Petitioner was on notice that it was subject to post-payment audit when it received a request for documents from SGS that SGS sent by express delivery service on June 17, 2021.  CMS Ex. 1 at 511.  Therefore, the period of non-compliant claims occurred from at least August 4, 2020 through July 27, 2023, with Petitioner being on notice that Medicare was examining its claims as early as about June 17, 2021.  Petitioner states it enrolled in Medicare in 2017.  P. Br. at 3.  In 2020, Petitioner started doing all its UDT’s in-house but without any increase in the frequency of such tests.  P. Br. at 4, 7.  Petitioner was enrolled in Medicare long enough to know its strict responsibility to ensure its claims complied with Medicare requirements and to know what those requirements were.  The Board has consistently found that people and entities that enroll in Medicare are presumed to know Medicare requirements.  John Hartman, D.O., DAB 2564 at 3 (2014) (citing Heckler v. Cmty. Health Servs. of Crawford Cnty., Inc., 467 U.S. 51, 63 (1984) (“the general rule [is] those who deal with the Government are expected to know the law”)).  Moreover, providers and suppliers must, pursuant to 42 C.F.R. §§ 424.510(d)(3) and 424.516(a)(2), attest or certify that they meet all Medicare requirements, which is further evidence supporting the presumption of their knowledge of the requirements.

But for nearly all the time Petitioner was doing its own laboratory testing, the claims examined by SGS, the MAC, and CMS show that Petitioner had a pattern or practice of submitting claims that did not satisfy Medicare documentation requirements.  I need not determine whether the noncompliant claims were intentional, negligent, or accidental.

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I conclude that there is no genuine dispute as to a material fact and that the undisputed facts establish a prima facie case of abuse of billing privileges under 42 C.F.R. § 424.535(a)(8)(ii).  For purposes of 42 C.F.R. § 424.535(a)(8)(ii), an abuse of billing privileged occurs when CMS determines, after consideration of whichever of the four specified factors CMS deems appropriate, that Petitioner engaged in a pattern or practice of submitting claims that fail to meet Medicare requirements.  The filing of noncompliant claims was not sporadic in this case.  The intent of Petitioner is irrelevant.  The period considered is the period under consideration and not a longer period or the entire period of enrollment.  The number of claims involved is also not determinative.

In Devine Solutions, DAB No. 3159, the Board considered and upheld revocation of a supplier’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii).  The Board commented upon the scope of review as follows:

We repeat that by governing regulation, CMS has discretionary authority to revoke or not revoke in a particular case, and the role of the ALJ and the Board “is limited to determining whether CMS’s action is legally authorized and does not extend to second-guessing whether CMS properly exercised its discretion.”  Acute Care Homenursing Servs., Inc., DAB No. 2837, at 9 (2017).  “ALJs and this Board may review only whether CMS had a valid legal basis to revoke billing privileges, and, if it did, may not address whether it properly exercised its discretion to do so.”  Wendell Foo, M.D., DAB No. 2904, at 25 (2018), aff’d, 420 F. Supp. 3d 1100 (D. Haw. 2019); see also George M. Young, M.D., DAB No. 2750, at 11 (2016) (“To the extent CMS exercised its discretion in ultimately deciding to go forward with revocation in Petitioner’s case, it is not for the ALJ and the Board to look behind that exercise of discretion to ask whether [the ALJ], or the Board, standing in CMS’s shoes, would reach the same decision to revoke.”).  In short, we determine whether CMS could revoke, not whether it should revoke, and in this case we conclude that CMS lawfully could revoke and had ample basis to do so.

Devine Sols., DAB No. 3159 at 22.

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Summary of Petitioner’s Arguments

In summary, Petitioner argues that there is no basis for revocation under 42 C.F.R. § 424.535(a)(8)(ii).  Petitioner advances several arguments in support of that position addressed as follows in addition to any prior specific discussion in this decision.

Petitioner argues that this case presents the following issues:

Whether the Centers for Medicare and Medicaid Services (“CMS”) may revoke a long-enrolled provider’s Medicare billing privileges under 42 C.F.R. § 424.535(a)(8)(ii) based solely on contractor audit denial percentages—divorced from claim-universe context, pending and overturned appeals, and disputed medical-necessity judgments—and then insulate that determination from adjudication by labeling all disputes “immaterial.”

P. Br. at 1.  The foregoing discussion covers most of the issues Petitioner identifies.  A brief review may be helpful to Petitioner or the reader.

Petitioner identifies no authority that provides that a CMS decision to revoke for abuse of billing privileges under 42 C.F.R. § 424.535(a)(8)(ii) may not be based on “contractor audit denial percentages.”  I have located no authority that prevents CMS from considering contractor audit denial percentages.  In fact, Congress specifically authorized the Secretary to administer the Medicare program through contractors.  Act § 1874 (42 U.S.C. § 1395kk).  Regarding CMS reliance on percentages, when CMS promulgated 42 C.F.R. § 424.535(a)(8)(ii) (2015), CMS stated in rulemaking that the number of noncompliant claims would not be a factor.  CMS stated that it would consider the percentage of denied claims.  CMS provided no threshold or minimum percentage.  79 Fed. Reg. at 72,517-518.  CMS did not require under 42 C.F.R. § 424.535(a)(8)(ii) that the percentage of denied claims be calculated based on the number of denied claims divided by the universe of all claims ever filed by a provider or supplier or any universe of claims larger than the number of claims actually examined by CMS or its contractors.  In rulemaking for 42 C.F.R. § 424.535(a)(8)(ii) (2022), CMS made clear it never intended to bind itself to determining whether there was a pattern or practice of filing noncompliant claims based on the whole universe of claims ever filed by a provider or supplier.  86 Fed. Reg. at 65,335-336.  In this case, there is no evidence of prepayment review of Petitioner’s claims and the claims involved were paid Petitioner without being audited.  Post-payment audit was ordered and SGS conducted three post-payment audits and a random sample of paid claims.  CMS did not conduct the audits or determine the percentages of denied claims because it had contractors to do that work.  Petitioner was notified of the results of each audit and was advised of its appeal rights to challenge the

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individual claims denials a right Petitioner chose not to exercise after the first two audits.  Petitioner appealed claims denials from the third audit and the random sample and prevailed in having some claim denials overturned by OMHA ALJs.  Obviously, Petitioner knew about the due process provided for obtaining review of claims denials.

Petitioner argues that it is not seeking my review of individual claims determinations.  Rather, Petitioner argues that CMS may not lawfully rely on “non-final, pending, or overturned claim denials” to determine there is a pattern or practice of abusive billing under 42 C.F.R. § 424.535(a)(8)(ii).  P. Br. at 16.  In responding to comments to the proposed 42 C.F.R. § 424.535(a)(8)(ii) (2015), CMS stated it would not consider claim denials fully overturned that are finally and fully adjudicated, i.e., the appeals process has been exhausted or the time for filing has run out.  CMS stated that it would consider claims currently on appeal because to do otherwise could encourage meritless appeals to circumvent the regulation and the fact a claim is being appealed does not mean it will be overturned.  79 Fed. Reg. at 72,513.  There is no dispute that some of Petitioner’s appeals of claims denials were still pending before an OMHA ALJ even when CMS untimely attempted to reopen and revise its reconsidered determination.  I do not intend to suggest that CMS cannot consider claim denials pending an appeal when deciding to revoke under 42 C.F.R. § 424.535(a)(8)(ii) as it advised the public it could during notice and comment rulemaking.  But there is no evidence that any of the denied claims from the three audits and the random sample are still undergoing appellate review.  Therefore, all claims adjudication is now final and binding on Petitioner and CMS.  I do not consider any of the overturned claim denials in the number of claims used to calculate the rate of denials during the periods examined by SGS, the MAC, and CMS.  Whether the claims denials that remain were properly decided on grounds of lack of medical necessity and reasonableness, is not an issue before me in dispute.  Individual claims denials in this case were based generally upon determination by the SGS, the MAC, and CMS that Petitioner’s claims for UDT services were not supported by sufficient documentation that such services were medically reasonable and necessary.  Disputes about medical necessity and reasonableness had to be adjudicated through the appeals process for claim denials established by 42 C.F.R. pt. 405, subpt. I, and not in this forum and those disputes have been resolved.  I do not suggest that the issue of whether a care or service is medically necessary and reasonable will never arise in a case involving revocation of Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(8)(ii), but the issue is not raised for adjudication in this case.

Petitioner argues that “CMS undertook no investigation to corroborate the purported findings of its contractors.”  P. Br. at 2.  The process required by the Act and provided by 42 C.F.R. pt. 405, subpt. I was available to Petitioner to challenge the findings and conclusions of CMS contractors.  Petitioner cites no authority to support its position that CMS must make available or engage in a separate process in addition to that already

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provided by the regulations to corroborate the work of its contractors in auditing Medicare claims.

Petitioner argues that its Auditor James Tudor, determined that all UDT orders were properly documented in progress notes and requisition forms, patient response to medication and side effects were documented, and risk assessments were properly conducted citing CMS Ex. 1 at 196-97 (Petitioner’s October 11, 2024 reconsideration request).  P. Br. at 9, 30-31.  I also reviewed Mr. Tudor’s validation audit of Petitioner from October 2024.  Mr. Tudor’s audit findings focus on whether Petitioner met documentation requirements for drug testing orders.  CMS Ex. 1 at 490.  Mr. Tudor’s findings may have been relevant to the individual claim review process under 42 C.F.R. pt. 405, subpt. I.  Mr. Tudor alleged that his audit results “raise questions about the validity and accuracy of the previous [SGS] audit results.”  CMS Ex. 1 at 490.  But Mr. Tudor’s findings are not relevant in this proceeding because the results of claim appeals are final and binding and not subject to my review.

Petitioner makes five specific arguments for why summary judgment in favor of CMS is not appropriate (P. Br. at 12-13) which I summarize and address as follows:

1.  Whether the claims determinations were final at the time of revocation and whether overturned claims were not considered.  Whether the claims denials were final at the time of revocation is of no consequence to this decision.  All claim denials are now final and binding on Petitioner and CMS and properly subject to my de novo review.  Claim denials overturned by the OMHA ALJs are not considered as a basis for revocation in this decision.

2.  Whether audit percentages can be generalized to the universe of claims.  For reasons already discussed, there is no requirement to consider the universe of Petitioner’s claims.

3.  Whether CMS applied the correct version of 42 C.F.R. § 424.535(a)(8)(ii) to the period under review.  P. Br. at 18-22.  As already explained, I conclude that the MAC and CMS were bound to comply with the regulations in effect when the initial determinations were made, i.e., 42 C.F.R. § 424.535(a)(8)(ii) (2022).

4.  Whether the post-payment audits applied the pertinent Local Coverage Determination (LCD) correctly.  Petitioner concedes that this proceeding under 42 C.F.R. pt. 498 is not the proper forum to re-adjudicate the merits of the underlying claims denials.  P. Br. at 12, 16.  The post-payment audit denials are final and binding and not subject to my review.  If Petitioner wanted to challenge the application of the LCD or other CMS regulations or policies to the individual claim denials, the available procedure was provided by 42 C.F.R. pt. 405, subpt. I.

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5.  Whether Mr. Tudor’s analysis raises factual issues that require resolution.  Mr. Tudor’s analysis does not impact the decision in this forum for reasons already explained.

Petitioner argues that it has protected liberty and property interests that under the due process clause according to decisions of the United States Court of Appeals for the Sixth Circuit.  P. Br. at 13-16.  Analysis of the Sixth Circuit decisions is unnecessary.  Petitioner is accorded due process under the Social Security Act as implemented through 42 C.F.R. pts. 405, 424, and 498.  Petitioner has received the process due in this case regarding the revocation of its Medicare enrollment and billing privileges and the addition of its name to the CMS preclusion list and in its individual claim appeals.  Petitioner asserts that due process requires a hearing.  In this proceeding Petitioner has had the opportunity for a hearing by presenting its documentary evidence and filing written argument.  An oral hearing to receive testimony is unnecessary and summary judgment is appropriate, a long-standing recognized exception to a requirement for an oral hearing.  Fed. R. Civ. P. 56.  Petitioner’s credibility is not at issue on summary judgment because the evidence is not weighed in that manner on summary judgment and all reasonable favorable inferences are drawn in Petitioner’s favor.

Petitioner argues that 42 C.F.R. § 498.24(b) requires that CMS conduct an independent review of the initial determination, the evidence that is the basis for the initial determination, and any written evidence submitted by the provider or supplier that requested reconsideration.  P. Br. at 32.  Petitioner’s summary of 42 C.F.R. § 498.24 is not in error.  Petitioner asserts CMS did not conduct the required review on reconsideration Petitioner argues that CMS determined Petitioner engaged in a pattern or practice of submitting noncompliant claims without examining the records of the claims denied from the post-payment audits and the random sample.  Petitioner supports its position pointing out that some claim denials were overturned by OMHA ALJs and pointing to the report of Mr. Tudor.  P. Br. at 32.  But Petitioner overlooks that the claim denials were subject to appeal and review under the procedure of 42 C.F.R. pt. 405, subpt. I and the claims denials are final and binding upon both Petitioner and CMS and not subject to further review by CMS.  Petitioner argues that the claim denials from the first and second audit are not administratively final.  P. Br. at 33.  But Petitioner fails to explain the basis for that allegation other than to assert that the claims denials from those audits were “unreviewed agency determinations.”  P. Br. at 34.  Petitioner conceded it requested no review of the claim denials from the first two audits and Petitioner thereby

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waived any right to administrative review.23  P. Br. at 34.  Petitioner’s belated effort to obtain review of the denied claims from Audits 1 and 2 must fail.  Petitioner failed to exercise its rights to review under the procedures provided by 42 C.F.R. pt. 405 subpt. I – that is Petitioner’s fault, not the fault of CMS.  Petitioner also asserts again that the administrative appeals process was not complete when the revocation determination was made.  P. Br. at 35.  But that appeals process is now complete, and the denied claims are final and binding upon Petitioner.

The regulatory history of 42 C.F.R. § 424.535(a)(8)(ii) (2015) suggests one possible defense – the noncompliant claims were sporadic.  CMS stated in rulemaking that

[Section] 424.535(a)(8)(ii) will be applied only:  (1) In situations where the behavior could not be considered sporadic; and (2) after the most careful and thorough consideration of the relevant factors.  These points cannot be stressed enough.

79 Fed. Reg. at 72,514.  CMS also stated that “sporadic claim denials based on a lack of medical necessity generally should not result in revocation under § 424.535(a)(8)(ii).”  79 Fed. Reg. 72,516.  CMS stated

However, we do not believe that medical necessity-based denials should be excluded from the scope of § 424.535(a)(8)(ii).  It is of concern to us when a provider consistently submits claims for services that are not medically necessary, for this raises quality of care issues as well as the possibility that the provider is seeking to defraud the Medicare program.

Id.  In rulemaking, CMS recognized that Medicare has many rules and requirements related to billing and sometimes claims are submitted in error based on honest misunderstanding of CMS policies.  CMS stated that it did not intend to revoke for sporadic misinterpretations.  79 Fed. Reg. 72,516, 72,520.  CMS did not define “sporadic.”  A common meaning for sporadic is “occurring occasionally, singly, or in

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irregular or random instances.”  Merriam-Webster, https://www.merriam-webster.com/ (last visited Sep. 2, 2026).  On this review of the CMS revocation determination, Petitioner is stuck with the results of the review or waived review of the denied claims under the claims procedures of 42 C.F.R. pt. 405, subpt. I.  Given the number of claims denied due to lack of documentation that services were medically reasonable and necessary, I cannot find that the noncompliant claims were only filed sporadically.

CMS does not have complete and unreviewable discretion under 42 C.F.R. § 424.535(a)(8)(ii).  When CMS revokes, Petitioner is granted the right to request ALJ review of the CMS reconsidered determination.  Act § 1866(j)(8) (42 U.S.C. § 1395cc(j)(8)); 42 C.F.R. §§ 424.545, 498.3(b)(17), (20), 498.5; Neb Grp. of Ariz., DAB No. 2573 at 7.  Review of the CMS decision necessarily involves de novo review of the evidence and consideration of the four factors established by the regulation to determine if there is a basis for revocation.  CMS may not be limited in this case as to the period under consideration, the minimum number of claims that were noncompliant with Medicare requirements necessary for revocation, the facts related to the noncompliant claims, or other factors CMS may consider and weigh under the factors of 42 C.F.R. § 424.535(a)(8)(ii).  But the factors are nevertheless subject to review by the ALJ.  If I conclude after de novo review that CMS had a basis to revoke my review ends according to the Board.  I do not determine whether CMS should not have revoked if I conclude that it had a basis to revoke.  I conclude that there is a basis for revocation of Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(8)(ii).  I have no authority to review the exercise of discretion by CMS or its contractor to revoke enrollment (rather than exercise discretion not to revoke) where there is a basis for such action.  Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 19 (2009), aff’d, Ahmed v. Sebelius, 710 F. Supp. 2d 167 (D. Mass. 2010).

To the extent that Petitioner’s argument may be construed to request a decision that the regulations are invalid and should not be enforced, I have no authority to grant any relief on that basis.  I am bound to follow the Act and regulations, and I have no authority to declare statutes or regulations invalid or ultra vires.  1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (2009).  The Board has stated:

It is well established that administrative forums, such as this Board and the Department’s ALJs, do not have the authority to ignore unambiguous statutes or regulations on the basis that they are unconstitutional.  A legislative rule is binding on the agency that issues it.  1 Kenneth Culp Davis and Richard J. Pierce, Jr., Administrative Law Treatise, § 6.5 (3rd ed. 1994), citing U.S. v. Nixon, 418 U.S. 683 (1974) (where the court noted that the executive branch was bound by the terms of a regulation it had issued, even though it was within its

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power to change that regulation).  Federal courts have refused “to recognize in administrative officers any inherent power to nullify legislative [or executive] enactments because of personal belief that they contravene the [C]onstitution.” (citation omitted).  Thus, courts have noted that challenges to the constitutionality of an agency regulation lie outside the cognizance of that agency, and that generally, an ALJ is bound by the regulations promulgated by his administrative agency.  Howard v. FAA, 17 F.3d 1213, 1218 (9th Cir. 1994); Stieberger v. Heckler, 615 F. Supp. 1315, 1386 (S.D.N.Y. 1985), citing D’Amico v. Schweiker, 698 F.2d 903 (7th Cir. 1983).

Sentinel Medical Laboratories, Inc., DAB No. 1762, at 9 (2001), aff’d, Teitelbaum v. Health Care Financing Admin., 32 F. App’x 865 (9th Cir. 2002).

Petitioner’s assertions could be construed to be that CMS and the MAC should be estopped from revoking Petitioner’s enrollment.  But estoppel against the federal government, if available at all, is presumably unavailable absent “affirmative misconduct,” such as fraud.  See, e.g., Pac. Islander Council of Leaders, DAB No. 2091 at 12 (2007); Off. of Pers. Mgmt. v. Richmond, 496 U.S. 414, 421 (1990).  There is no evidence suggesting fraud or other affirmative misconduct on the part of CMS, the MAC, SGS, or a staff member.

Petitioner argues that many of its patients come from medically underserved areas with elevated rates of drug availability and misuse.  Petitioner asserts that 55 percent of its patients were Medicare beneficiaries or Medicaid recipients.  Petitioner asserts it had many high dose opioid patients that other practices declined to treat, and Petitioner was able to reduce or eliminate the dependency of many despite patient resistance.  UDTs were necessary to monitor its patients for adherence to prescription drugs and to identify substance abuse patterns.  P. Br. at 3-4, 9.  Petitioner correctly points out that claims were denied by the post-payment audits based on document insufficiencies rather than any findings of fraud.  P. Br. at 7.  I accept Petitioner’s representations as true for purposes of summary judgment and accept Petitioner provided a valuable service to the community.  But to the extent Petitioner’s arguments may be construed as a request that I grant equitable relief, I have no authority to do so.  US Ultrasound, DAB No. 2302 at 8 (2010).  I am required to follow the Act and regulations and have no authority to declare statutes or regulations invalid.  1866ICPayday.com, L.L.C., DAB No. 2289 at 14.

Reenrollment Bar

CMS imposed a 10-year reenrollment bar in this case.

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The regulation is clear that if a provider’s or supplier’s Medicare enrollment and billing privileges are revoked, they are barred from participating in Medicare from the effective date of the revocation through the end of the reenrollment bar.  42 C.F.R. § 424.535(c)(1).  The bar to reenrollment begins 30 days after CMS or the MAC mail the notice of the initial determination to revoke.  The bar lasts a minimum of one year but may last 10 years depending on the severity of the basis for revocation.  42 C.F.R. § 424.535(c)(1)(i), (g).

The language of 42 C.F.R. § 424.535(c) and (g) is not ambiguous, it is silent as to any right to review the determination of the period of the reenrollment bar.  There is no statutory or regulatory language establishing a right to review of the duration of the reenrollment bar CMS imposes.  Act § 1866(j)(8); 42 C.F.R. §§ 424.535(c), 424.545, 498.3(b); and 498.5.  The Board has held that the duration of a revoked supplier’s reenrollment bar is not an appealable initial determination listed in 42 C.F.R. § 498.3(b) and, thus, is not subject to ALJ review.  Vijendra Dave, M.D., DAB No. 2672 at 11 (2016).

Preclusion List

Petitioner argues that the revocation must be overturned and its name removed from the CMS preclusion list because there is no legal basis for placing its name on the list.  P. Br. at 35.  Petitioner does not argue that its name cannot be added to the CMS preclusion list if there was a basis for revocation of its Medicare enrollment and billing privileges.

Petitioner does not dispute that its Medicare enrollment and billing privileges were revoked and it was subject to a reenrollment bar, the first two criteria for adding an entity or individual to the CMS preclusion list.  Petitioner does not dispute that the CMS hearing officer considered the factors required by the regulations in the March 20, 2025 reconsidered determination.  CMS Ex. 1 at 720, 728-30.  Specifically, the hearing officer considered whether Petitioner’s underlying conduct was detrimental to the Medicare program using the three factors from 42 C.F.R. §§ 422.2 and 423.100 (preclusion list definition).  The hearing officer reviewed the criteria and concluded that Petitioner’s underlying conduct was detrimental to the Medicare program which warranted adding Petitioner’s name to the CMS preclusion list for the duration of Petitioner’s bar to reenrollment.  The hearing officer considered Petitioner’s conduct was serious because Petitioner was notified multiple times regarding its noncompliant claims and the reasons the claims were considered noncompliant.  But Petitioner continued to send noncompliant claims for roughly three years.  The hearing officer considered that because Medicare claims are usually paid without review of the facts underlying the claim, CMS relies on the trustworthiness of suppliers and providers and their good judgment.  Medicare program integrity and the Medicare trust funds are at risk when providers and suppliers

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fail to ensure they only file claims that conform to Medicare requirements.  The hearing officer also considered that the results of the post-payment review of the random sample confirmed the pattern or practice of submitting noncompliant claims.24  CMS Ex. 1 at 720, 728-30.

My assessment of the criteria for determining Petitioner’s underlying conduct is detrimental to the Medicare program is based on the undisputed facts.  Whether Petitioner’s failings are intentional, due to neglect, or simple oversight, is not a question that needs to be addressed.  I draw the most favorable inference for Petitioner in considering summary judgment and I treat the claims as being noncompliant due to oversight and not intent or neglect.

Considering the three criteria for determining Petitioner’s underlying conduct was detrimental to the best interests of the Medicare program (42 C.F.R. §§ 422.2, 423.100 (preclusion list defined), I conclude that Petitioner’s underlying conduct of filing noncompliant claims that amounted to a pattern or practice of filing noncompliant claims is serious and could affect the integrity of the Medicare program because it shows a lack of diligence and attention to detail necessary for a health care provider or supplier participating in the Medicare program and treating or serving Medicare beneficiaries.

Pursuant to 42 C.F.R. §§ 422.222(a)(5)(i) and 423.120(c)(vii)(A), an individual or entity whose Medicare enrollment and billing privileges are revoked will be listed on the CMS preclusion list for the duration of the reenrollment bar.  CMS has discretion not to add the name of an individual or entity if CMS finds exceptional circumstances exit related to beneficiary access.  42 C.F.R. §§ 422.222(a)(6), 423.120(c)(vi).  But Petitioner does not argue the exceptional circumstances recognized by the regulations exist in this case.

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III.  Conclusion

For the foregoing reasons, the Medicare enrollment and billing privileges of Petitioner are revoked pursuant to 42 C.F.R. § 424.535(a)(8)(ii) and Petitioner’s provider agreement is terminated effective September 5, 2024.  There is a basis for listing Petitioner on the CMS preclusion list for the duration of its ten-year bar to reenrollment.