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From Health Law Daily, January 11, 2019

Reenrollment bar justified, start date not subject to DAB review

By George Basharis, J.D.

A Medicare contractor had the authority to revoke a medical practice’s participation in Medicare and other federally funded health care programs and impose a three-year reenrollment bar because the physician owner of the practice was convicted of a felony and failed to report the felony conviction to CMS. The Departmental Appeals Board (DAB) rejected the medical practice’s request to stay the case pending the outcome of a separate case against the practice regarding the overpayment of Medicare benefits and its argument that the three-year reenrollment bar should have become effective on the same date that its billing privileges were revoked (Gorovits v. CMS, Docket No. C-18-379, Decision No. CR5076, April 20, 2018).

On March 11, 2016, the physician-owner pleaded guilty to falsely denying being offered and receiving money from a hospice to refer Medicare beneficiaries and Medicaid recipients to the hospice. She was sentenced to ten months of home confinement, given three years of probation, and fined.

On September 30, 2016, the Inspector General made a determination excluding the medical practice from participating in Medicare and other federally funded health care programs based on the physician’s felony conviction. A Medicare contractor, acting on behalf of CMS, then revoked the practice’s Medicare enrollment effective March 11, 2016, and imposed a three-year reenrollment bar effective July 6, 2017.

The contractor’s actions were based on three grounds: (1) the practice’s physician-owner was excluded from Medicare participation; (2) the physician was convicted of a felony that was considered detrimental to Medicare beneficiaries; and (3) the practice did not report the physician-owner’s felony conviction or exclusion from Medicare participation to CMS. The DAB concluded that any one of these bases would justify the contractor’s action.

Request for stay. The practice requested that the DAB stay the case regarding the contractor’s exclusion determination pending the outcome of a separate proceeding on the overpayment of Medicare benefits. However, the DAB did not have the jurisdiction to consider the overpayment issue, and a determination of the contractor’s authority to revoke and bar reenrollment was not contingent on a finding of an overpayment.

Reenrollment date. The practice argued that the reenrollment bar exceeded the three-year maximum permitted by law. According to the practice, the contractor should have made the start of the reenrollment date the same as the retroactive date on which its billing privileges had been revoked, March 11, 2016, rather than July 6, 2017. However, the DAB did not have the authority to consider the argument because the start date of an enrollment bar and its duration are not appealable. The DAB also did not have the authority to consider the constitutionality of the regulatory framework that authorized the contractor to revoke the practice’s Medicare participation.

DAB authority. The DAB also rejected the practice’s argument that the contractor did not have the authority to reopen and revise its initial determination to revoke the practice’s Medicare participation. Determining whether to revoke a supplier’s Medicare participation is one of the functions that CMS may delegate to a contractor. The authority to reopen and revise a determination is implicit in the authority to delegate.

Felony conviction. Finally, the DAB rejected the practice’s argument that the felony for which its owner had been convicted did not justify revocation of participation. The offenses enumerated in the regulation are not inclusive, the DAB found. They are only examples of the kinds of crimes that CMS may determine are detrimental to Medicare beneficiaries. The physician-owner of the practice was convicted of lying to federal investigators about being offered and receiving unlawful kickbacks for referring business. The substance of her crime was "financial" in nature, and the unlawful referrals directly affected Medicare beneficiaries. Although there may have been mitigating factors, the remedies imposed by the contractor were justified.

MainStory: TopStory DABDecisions CMSNews BillingNews CoPNews FraudNews MedicareContractorNews ProgramIntegrityNews

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