Mccambridge v. Burwell

MOTION for Summary Judgment

E.D. Pa.July 8, 2016

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA PETER S. McCAMBRIDGE, : : CIVIL ACTION Plaintiff, : : NO. 16-cv-1148 v. : : HHS SECRETARY, : : Defendant. : ORDER AND NOW, this day of , 2016, upon consideration of the parties’ cross-motions for summary judgment, and the supporting and opposing memoranda and statements of undisputed and disputed material facts, IT IS HEREBY ORDERED that: 1. Defendant’s motion is GRANTED, and plaintiff’s motion is denied. 2. Under Federal Rule of Civil Procedure 56(a), 42 U.S.C. § § 1395ff(b), and 42 U.S.C. § 405(g), and based on the pleadings and the filed administrative record, JUDGMENT affirming the HHS Secretary’s final agency decision (upholding an assessed Medicare Part B overpayment against plaintiff) is hereby ENTERED in favor of defendant and against plaintiff. 3. The January 6, 2016 final agency decision in this matter is modified to reflect that the at-issue overpayment is sustained based not only on the reasons stated in that decision but also because McCambridge was not enrolled in -- and, therefore, was not legally entitled to any payment from -- the Medicare program. BY THE COURT: HONORABLE EDWARD G. SMITH Judge, United States District Court Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 1 of 25 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA : PETER S. McCAMBRIDGE, : : CIVIL ACTION Plaintiff, : : NO. 16-cv-1148 v. : : SYLVIA M. BURWELL, Secretary, : U.S. Department of Health and : Human Services, : : Defendant. : DEFENDANT HHS SECRETARY’S MOTION FOR SUMMARY JUDGMENT Under Federal Rule of Civil Procedure 56(a), 42 U.S.C. § 1395ff(b), and 42 U.S.C. § 405(g), and based on the pleadings and filed administrative record, defendant Sylvia Mathews Burwell, Secretary of the U.S. Department of Health and Human Services, moves for summary judgment, as reflected in the attached proposed Order, all as set forth in the accompanying brief and statement of undisputed material facts. Respectfully, ZANE DAVID MEMEGER UNITED STATES ATTORNEY /s/ Joan K. Garner, for MARGARET L. HUTCHINSON Assistant United States Attorney Chief, Civil Division /s/ Gerald B. Sullivan GBS3408 GERALD B. SULLIVAN (PA I.D. #57300) Assistant United States Attorney 615 Chestnut Street, Suite 1250 Philadelphia, PA 19106-4476 (215) 861-8786/(215) 861-8618 (fax) Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 2 of 25 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA : PETER S. McCAMBRIDGE, : : CIVIL ACTION Plaintiff, : : NO. 16-cv-1148 v. : : HHS SECRETARY, : : Defendant. : MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT HHS SECRETARY’S MOTION FOR SUMMARY JUDGMENT Plaintiff Peter McCambridge asks the Court to overturn a January 2016 final agency decision of the Secretary of the United States Department of Health and Human Services (“HHS”). The Secretary’s decision affirmed that the Medicare program overpaid McCambridge when he improperly billed Medicare Part B for surgical assistant services in calendar year 2012. Under the governing review standards in 42 U.S.C. § 405(g), the decision should be upheld because it is legally correct and is supported by substantial evidence. Although McCambridge is a surgical assistant rather than a licensed health care provider, he has doggedly tried to secure Medicare payment to which he is not entitled for surgeries on which he has assisted. As the Secretary correctly concluded, the Medicare statute and regulations authorize payment for surgical assistant services only under different circumstances, where the individual providing the services (unlike McCambridge) is a qualified, licensed health care provider -- that is, a physician’s assistant, a nurse practitioner, or a clinical nurse specialist. As the Secretary further correctly concluded: (1) the services for which McCambridge billed Medicare are not covered as services that were “incident to” a surgeon’s services; and Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 3 of 25 2 (2) McCambridge is not entitled to a waiver of the HHS-assessed overpayment because, when he billed and received payment for his at-issue services, he knew that Medicare did not cover them. Even if the Court were to determine that the overpayment could not be sustained on the well-grounded bases articulated in the Secretary’s final decision, the overpayment should be sustained for the independent reason that McCambridge has not been and is not enrolled in the Medicare program and, therefore, was not and is not legally authorized to receive Medicare payment. I. STANDARD OF REVIEW This Court's review of the Secretary’s final decision in this case is governed by 42 U.S.C. § 1395ff(b), which incorporates 42 U.S.C. § 405(g), under which the Court has the power only to “affirm[], modify[], or reverse[] the [Secretary’s] decision[.]”1 42 U.S.C. § 405(g). Review is “highly deferential,” Raglin v. Massinari, 39 Fed. Appx. 777, 778 (3d Cir. July 10, 2002), and requires that the Secretary be affirmed so long as: (1) the record as a whole contains substantial evidence to support her findings of fact; and (2) she applied the correct legal standard. 42 U.S.C. § 405(g) (“The findings of the [Secretary] as to any fact, if supported by substantial evidence, shall be conclusive”). “Substantial evidence” is: (1) “more than a mere scintilla of evidence but may be somewhat less than a preponderance” of evidence, Rutherford v. Barnhart, 399 F.3d 546, 552 (3d Cir. 2005); and (2) is such "relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Reefer v. Barnhart, 326 F.3d 376, 379 (3d Cir. 2003). When reviewing 1 Under 42 U.S.C. § 1395ii, which makes Section 405(g) applicable to the Medicare program, any reference in Section 405(g) to the Commissioner of Social Security or the Social Security Administration is considered a corresponding reference to the HHS Secretary or to HHS. Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 4 of 25 3 the record as a whole, the Court must not substitute “its own judgment for that of the fact finder.” Rutherford, 399 F.3d at 552. Because the Court's jurisdiction arises solely under 42 U.S.C. § 405(g), review is limited to the administrative record, and summary judgment is an appropriate procedural vehicle to resolve this case.2 Summary judgment must be granted where, on the administrative record, "there is no genuine dispute as to any material fact," and the Secretary is "entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). As the moving party, the Secretary need show only that there is an absence of legally sufficient administrative record evidence to support any claim by McCambridge that the Secretary’s material findings were not supported by substantial evidence; the Secretary thus needs only to point to substantial evidence in the record supporting those findings, and need not herself have administratively produced evidence to "negate" McCambridge’s claims. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 325 (1986). The Secretary having carried her summary judgment burden, it is McCambridge’s procedural burden to "designate" specific facts in the administrative record establishing that the Secretary’s relevant findings were not supported by substantial evidence. Id. at 322, 324; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 252, 254 (1986). McCambridge cannot avert summary judgment with speculation or by resting on the allegations of his pleadings. Anderson, 477 U.S. at 248. 2 See Hummel v. Heckler, 736 F.2d 91, 93 (3d Cir. 1984) (“Because the district courts have no factfinding role, in Social Security cases [arising under Section 405(g)], those cases are ordinarily disposed of on cross motions for summary judgment made presumably under Fed. R. Civ. P. 56 (a), (b).”); see also Mathews v. Weber, 423 U.S. 261, 270 (1976) (judicial review under Section 405(g) involves “a closed administrative record,” and “neither party may put any additional evidence before the district court”); Grant v. Shalala, 989 F.2d 1332, 1338 (3d Cir. 1993) (describing judicial review under 42 U.S.C. § 405(g) as “circumscribed”). Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 5 of 25 4 Because McCambridge does not designate probative, specific facts in the administrative record that satisfy his burden of showing that the Secretary’s relevant findings were not supported by substantial evidence or were not based on application of correct legal standards, he cannot carry his summary judgment burden, and summary judgment should be entered in the Secretary’s favor as a matter of law. II. PROCEDURAL HISTORY On August 13, 2008, McCambridge applied to the Centers for Medicare & Medicaid Services (“CMS”) -- which is the HHS operating division that administers and supervises the Medicare program -- for Medicare Part B enrollment. See In re: Peter McCambridge, DAB No. 2290 at 3, 2009 WL 5227273 (HHS Departmental Appeals Board Dec. 17, 2009) (“2009 Final Agency Decision”), attached hereto as Exhibit “A,” at 1, 3-4.3 Specifically, based on his completion of a course entitled “First Assistant Course for Surgical Technologists,” he sought Medicare enrollment as a non-physician practitioner -- a “surgical first assistant” -- even though the Medicare program does not recognize that category of provider/supplier. Id. He grounded his application on a mistaken belief that the definition of “health care provider” in the Health Portability and Accountability Act of 1996 (“HIPAA”), Pub. L. No. 104-191, 110 Stat. 1936, rather than the Medicare statute and regulations, governed his eligibility for Medicare enrollment. See Exhibit “A,” at 1, 9-11 (HHS Departmental Appeals Board stating that: “HIPAA’s regulations have nothing . . . to say about what services a health insurer, such as 3 This December 2009 final agency decision of the HHS Secretary (denying McCambridge Medicare enrollment) was not included in the administrative record (other than by reference in the Secretary’s 2016 final agency decision) but is nevertheless: (1) a matter of public record that the Court may judicially notice; (2) related to McCambridge’s eligibility to receive payment directly from Medicare; and (3) properly before the Court on the parties’ cross-motions for summary judgment. Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 6 of 25 5 Medicare, must pay for or who it must pay for covered services. Rather, the HIPAA regulations establish industry-wide standards . . . to facilitate electronic health transactions and to protect the security and privacy of information exchanged in those transactions”). CMS denied the enrollment application because McCambridge did not meet the Medicare enrollment and related Part B coverage requirements. Exhibit “A,” at 1, 3-4. McCambridge then pursued multiple levels of administrative appeals,4 ultimately unsuccessfully appealing the denial to HHS’s Departmental Appeals Board (“DAB”). A.R. at 4-5;5 see also Exhibit “A,” at 1, 3-4 (DAB, in 2009 final decision, holding that “the [Administrative Law Judge] correctly determined that the Medicare statute and regulations do not authorize CMS to enroll [McCambridge] in the Medicare program as a surgical first assistant” “because Part B does not authorize payment for his services”). In 2010, the DAB denied McCambridge’s request to reopen the final agency decision, and McCambridge did not seek further review. See In re: Peter McCambridge, DAB Ruling No. 2010-01, 2010 WL 744489 (Departmental Appeals Board Feb. 2, 2010), attached hereto as Exhibit “B” (in denying request to reopen, explaining why arguments for reopening were unavailing). As a result, CMS’ decision to deny his enrollment in the Medicare program became administratively final, and remains binding on him. Although the reasons for the enrollment denial had been explained to him in detail, McCambridge (using the business name “Surgical Billing Specialist” instead of his own name) 4 On administrative appeal, a hearing officer upheld a Medicare contractor’s initial denial of McCambridge’s enrollment application. See Exhibit “A,” at 3. On further appeal, and following a hearing, an Administrative Law Judge upheld the denial. Id. McCambridge then appealed the ALJ’s decision to the DAB, which the DAB affirmed. Id. 5 “A.R.” refers to the two-volume Certified Copy of the Administrative Record that was filed with the Court on June 7, 2016 at Docket Entry No. 14. Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 7 of 25 6 nonetheless -- and contrary to the HHS denial -- proceeded on February 9, 2010 to obtain a National Provider Identifier (“NPI”) for “Surgical Billing Specialist” from the National Plan & Provider Enumeration System (“NPPES”). See A.R. at 6. He did so: (1) despite his not being a provider who was eligible to obtain an NPI; and (2) in order to submit unauthorized and incorrect claims to Medicare, by creating the false impression that he was a licensed health care provider who was entitled to bill for “surgical assistant” services.6 Id. at 13-14. McCambridge then billed Medicare for services he provided in 2012 that were “the same kind of ‘surgical assistant services’ that the Departmental Appeals Board [in 2009 and 2010] had explained [to him] were not covered by Medicare.” A.R. at 6. He did so by improperly using both: (1) the NPI he had obtained for “Surgical Billing Specialist”; and (2) the NPIs of two Medicare-enrolled physicians, whom he listed on his billing forms as the “rendering providers.” Id. at 6-7.7 He thus “billed as though the surgeon was also the assistant at surgery.” See id. at 7, 14-15 (“Had Mr. McCambridge [instead] listed his own name and NPI as the rendering provider, he would not have been paid. So he listed the NPI for the physician who had performed the surgery, but sought payment for his own services, which he knew or should have known would not be covered. . . . [H]e also listed a modified code . . . for each of the services, which is used to represent that a physician served as the surgical assistant.”). 6 Individuals who merely provide billing services are not eligible to obtain an NPI. See 69 Fed. Reg. 3434, 3437 (Jan. 23, 2004) (“HIPAA Administrative Simplification: Standard Unique Health Identifier for Health Care Providers; Final Rule”). “Assistants-at-surgery” are similarly not eligible to obtain an NPI because they do not qualify as a “health care provider.” Id.; see also 42 C.F.R. § 160.103 (defining “Health care provider” as meaning “a provider of services as defined in . . . 42 U.S.C. § 1395x(u), a provider of medical or health services as defined in . . . 42 U.S.C. § 1395x(s), and any other person or organization who furnishes, bills, or is paid for health care in the normal course of business.”). 7 Although obtaining an NPI is required to establish billing privileges with the Medicare program, the NPPES, not Medicare/HHS/CMS, issues NPIs. Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 8 of 25 7 Unaware of McCambridge’s billing scheme, CMS paid him for those “surgical assistant” billings during calendar year 2012, which involved surgeries for 16 Medicare beneficiaries. A.R. at 96. But, in 2013, a Medicare contractor audited McCambridge’s Medicare billings and determined that: (1) the billings had been improperly paid; (2) “the physicians who . . . performed the surger[ies]” had “also [themselves] billed for and received payment for the surgeries”; and (3) McCambridge should not have received any Medicare payment. A.R. at 7, 96. The contractor then assessed an overpayment and sought recoupment from McCambridge. Id. In unsuccessfully administratively appealing the assessment, McCambridge escalated his appeal to the Medicare Appeals Council (“MAC”) of HHS’s DAB after the ALJ’s adjudication period expired. Id. at 8, 68-70, 79. In its final agency decision, the MAC upheld the overpayment determination. See A.R. at 4.8 In its January 2016 decision, the MAC recognized and found that: 1. In administrative proceedings, McCambridge did not “contend that he is a physician assistant, nurse practitioner, or clinical nurse specialist” within the definitions of the Medicare statute and regulations. 2. McCambridge is not a physician assistant, nurse practitioner, or clinical nurse specialist” within the definitions of the Medicare statute and regulations.9 3. McCambridge was not legally authorized or qualified under Florida state law to perform “surgical assistant” services, and administratively he did not contend to the contrary. 8 See also A.R. at 4 n.2 (explaining that the DAB includes three adjudicatory divisions, each with its own set of judges and staff and its own areas of jurisdiction: (1) the Departmental Appeals Board itself, which reviews the actions of ALJs on Medicare enrollment applications and other matters; (2) ALJs; and (3) the Medicare Appeals Council). 9 See also Exhibit “A,” at 7 (rejecting McCambridge’s position that he was eligible for Medicare enrollment, and emphasizing that the Medicare program is “defined and limited,” and “federal and state regulations are silent about any licensure, credentialing, or certification requirements applicable to surgical first assistants”). Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 9 of 25 8 4. McCambridge billed for services that are not “covered” under the Medicare statute and regulations, and thus he was not authorized to receive payment for those services under the Medicare program. 5. The at-issue services for which McCambridge billed Medicare were not “incident to” a physician’s professional services within the meaning of the Medicare statute and regulations. 6. At the heart of McCambridge’s legal challenge to the overpayment assessment was merely his dissatisfaction “with the current legal structure for Medicare coverage and payment” – dissatisfaction that was properly directed to Congress, which “has not chosen to make the kinds of changes that [McCambridge] advocates[.]” And 7. McCambridge is not eligible for a waiver of the overpayment under Section 1870(b) of the Social Security Act [42 U.S.C. § 1395gg] because he was “not without fault,” having failed to exercise reasonable care in billing the Medicare program and in accepting Medicare payment. See A.R. at 8-15.10 On March 11, 2016, McCambridge appealed to this Court from the MAC’s decision. His three-page pro se Complaint describes the HHS administrative appeal process that he pursued to challenge the agency’s determination that it had improperly paid him under Medicare for “assistant at surgery” services. Complaint (Dkt. Entry No. 1), at pp. 1-2. He then filed a 2-page document that he styled as a motion for summary judgment. See Dkt. Entry No. 6. The Secretary then moved to dismiss. See Dkt. Entry No. 7. McCambridge responded with a “Motion to Amend Relief,” seeking an additional $500,000. See Dkt. Entry No. 10. Following a conference call with the parties, the Court issued an order scheduling cross-motions 10 See also Exhibit “A,” at 7-8 (“At oral argument, [McCambridge] asserted that Medicare ought to pay him for his services because although he is not a licensed physician assistant, nurse practitioner, or other licensed practitioner, he is as well-trained and experienced as those practitioners to provide assistant-at-surgery services. While it might arguably be a wise and economical policy for Medicare to pay properly trained and credentialed surgical first assistants for their services . . . [t]he authority to create coverage and payment policy, as embodied in the Medicare statute and regulations, rests with Congress and CMS”). Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 10 of 25 9 for summary judgment on the administrative record, and denying all three pending motions without prejudice, as moot. See Dkt. Entry No. 12. The Secretary then filed a Certified Copy of the Administrative Record, on June 7, 2016. See Dkt. Entry No. 14. The Secretary also filed an Answer to McCambridge’s Complaint. See Dkt. Entry No. 15. III. STATUTORY AND REGULATORY FRAMEWORK A. Eligibility for Medicare Part B Payment The Medicare program provides health insurance benefits to persons age 65 and older, certain disabled persons, and individuals with end-stage renal disease. See 42 U.S.C. § 1395c; Exhibit “A” (2009 Final Agency Decision), at 2. Congress established Medicare in Title XVIII (sections 1801-1898) of the Social Security Act (“Act” or “the Medicare statute”). Exhibit “A,” at 2. HHS regulations implementing the Act are found in Title 42 of the Code of Federal Regulations. Id. Medicare pays for health care items or services that fall within the benefit categories specified in the Medicare statute. Medicare has two main parts: Part A, which pays for hospital stays and other institutional services; and Part B, which primarily pays for outpatient services provided by physicians and other practitioners. Id. Only Part B, which was established in Section 1831 of the Medicare statute, is relevant here. See 42 U.S.C. § 1395j. The Medicare statute and regulations create a program of “defined and limited benefits” that are tethered to “specific practitioner qualification requirements that aim to ensure that program beneficiaries receive high quality health care.” Exhibit “A,” at 7. This case turns on the following two legal preconditions to Medicare Part B payment for a health care service: First, an individual or entity seeking payment must be enrolled in the Medicare program as a qualified provider or supplier of health care services. 42 C.F.R. § 424.505; 42 C.F.R. Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 11 of 25 10 § 424.5(a)(2). Second, the at-issue, billed-for service must be one that the Medicare statute covers. 42 C.F.R. § 424.5(a)(1)(i). See generally Exhibit “A,” at 2. 1. The enrollment requirement Health care service providers and suppliers must satisfy basic enrollment requirements in order to: (1) be eligible to receive Medicare program payment for covered services; and (2) obtain a Medicare billing number. See 42 C.F.R. § 424.505 (providing that a provider/supplier: (a) “must be enrolled”; and (b) only once enrolled “receives billing privileges and is issued a valid [Medicare] billing number”); see also 42 U.S.C. § 1395cc(j)(1)(A) (statute authorizing such HHS implementing regulations). But only individuals and entities falling within the definitions of “providers” and “suppliers” are qualified to enroll in the Medicare program. 42 U.S.C. § 395n(a); 42 U.S.C. § 1395(u)(h)(1); 42 C.F.R. § 424.5(a)(2) (providing that Medicare Part B pays for services only if provided “by a provider or supplier that was, at the time it furnished the services, qualified to have payment made to them”). For Medicare Part B, qualifying “providers” and “suppliers” are circumscribed to two finite lists. 42 C.F.R. § 498.2.11 As a matter of law, because “Medicare Billing Specialist” and “assistant-at-surgery” do not appear in either list, so-described individuals and entities are ineligible to enroll in Medicare and, consequently, are not authorized to bill Medicare for health care services they provide to Part B beneficiaries. Id.; see also A.R. at 9, 10-11. 11 The Act defines “supplier” as a “physician or other practitioner, a facility, or other entity (other than a provider of services) that furnishes items or services under this title.” 42 U.S.C. § 1395x(d) (emphasis added); accord 42 C.F.R. § 400.202. Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 12 of 25 11 2. Billed-for services must be Medicare-covered Even a properly enrolled individual or entity may not receive Medicare Part B payment for services that the Medicare statute does not cover. See 42 U.S.C. § 1395k (listing the services covered for payment); 42 C.F.R. § 424.5(a)(1)(i) (stating that services must be “covered” “as specified in [42 C.F.R.] part 409 or part 410); accord Exhibit “A,” at 2. In relevant part, Medicare Part B covers “medical and other health services.” The Medicare statute and regulations define these to include physician services and services performed by various types of non-physician health practitioners, which do not include services that a “surgical first assistant” provides. See 42 C.F.R. § 410.10; see also Exhibit “A,” at 4-5, 7 (HHS Departmental Appeals Board stating: “Neither Congress nor the Secretary of HHS saw fit to include surgical first assistants among the groups of practitioners eligible to receive payment for assistant-at-surgery services”). In addition to coverage restrictions on who may perform services, there are further statutory and regulatory restrictions on the kinds of services that Part B covers. Although Part B physician fee schedule provisions permit payment for some “assistant-at surgery” services, these are limited to services performed: (1) by a physician; or (2) by a physician assistant, nurse practitioner, or clinical nurse specialist – but only to the extent such an individual is qualified and licensed under state law. 42 U.S.C. §§ 1395l(a)(1)(O)(ii), 1395x(aa)(5); 42 C.F.R. §§ 410.74(c) (physician assistants), 410.75(b) (nurse practitioners), 410.76(b) (clinical nurse specialists). Accord A.R. at 5, 9-10, 11; Exhibit “A,” at 5-6 (referring to these “educational, licensure, and certification requirements as a condition of . . . eligibility to participate in Medicare”; and noting that “[d]uring oral argument [McCambridge] acknowledged that he is not Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 13 of 25 12 licensed as a physician’s assistant and does not fit into any of these other categories of practitioners eligible to receive direct payment from Part B”). IV. ARGUMENT A. The Secretary’s decision should be upheld as legally correct and supported by substantial evidence. 1. The final agency decision is legally correct. The Secretary’s final agency decision reached three principal legal conclusions, all of which are correct. a. Medicare Part B does not cover McCambridge’s services. McCambridge’s at-issue services are not covered under Medicare Part B. In relevant part, the Part B program pays for certain “medical and other health services,” as provided in 42 U.S.C. §§ 1395k(a) and 1395x(s), and as defined to include physician services and services that are performed by specified types of non-physician health practitioners. See 42 C.F.R. §§ 410.10; 410.150(b); 414.52-62. Notably, that regulatory list of permitted practitioners does not include assistants-at-surgery. Moreover, although Part B does cover some assistant-at-surgery services, it does so only when the services are performed by individuals who are qualified, licensed physician assistants, nurse practitioners, or clinical nurse specialists. See 42 C.F.R. §§ 410.74(c) (physician assistants), 410.75(b) (nurse practitioners), and 410.76(b) (clinical nurse specialists); see also 42 C.F.R. §§ 414.52(d); 414.56(c).12 McCambridge’s position as a “surgical first assistant” or “surgical billing specialist” does not fall into any of these practitioner categories and is listed 12 Regulation of “Payment for Part B Medical and Other Health Services” is under 42 C.F.R. Part 414. Another section of the regulations, 42 C.F.R. Part 410, Subpart B, governs coverage issues for Medicare Part B services. Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 14 of 25 13 nowhere in the statutory or regulatory provisions. Thus, the services that he provides cannot be covered under Medicare. b. Payment for the at-issue services is not covered as “incident to” a surgeon’s services. McCambridge argues that, as a matter of law, he is entitled to payment under Medicare Part B because the assistant-at-surgery services he provided were furnished “incident to” a physician’s services within the meaning of 42 C.F.R. § 414.34. See Dkt. Entry No. 6. This is a position he also took during the administrative appeal of his case. See, e.g., A.R. at 69, 71, 83, 85, 87. The regulation he cites, however, Section 414.34, establishes that he is not entitled to payment, because “incident to” services are not separately payable to the individual who furnished the services, but rather are payable only to the physician. This is consistent with the preamble to CMS’ final rule regarding payment for “incident to” services, which explains that “[g]enerally, under the ‘incident to’ rules, practitioners may bill for services furnished incident to their own services if the services meet the requirements specified in our regulations at § 410.26.” See “Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule, Clinical Laboratory Fee Schedule, Access to Identifiable Data for the Center for Medicare and Medicaid Innovation Models & Other Revisions to Part B for CY 2015; Final Rule,” 79 Fed. Reg. 67,547, 67,719 (Nov. 13, 2014) (italics added). Indeed, the at-issue regulation, Section 414.34, is contained within the rules regarding payment to physicians and practitioners (i.e., physicians, physician assistants, nurse practitioners, clinical nurse specialists, nurse midwives, and clinical psychologists) under Part B of the Medicare program. See 42 C.F.R. Part 414 “Payment for Part B Medical and Other Health Services,” Subpart B, “Physicians and Other Practitioners.” Because McCambridge is Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 15 of 25 14 not a “practitioner” whom the Medicare statute authorizes to receive payment for services incident to his own services, the “incident to” payment provision unequivocally does not apply to him. Thus, as a matter of law, he is not entitled to payment under 42 C.F.R. § 414.34. Even if the law were different from what it is and McCambridge could bill for “incident to” services, the Secretary’s factual findings in the MAC’s final administrative decision also preclude a grant of summary judgment in favor of McCambridge. That is, in order for even a physician to bill Medicare under Part B for services provided “incident to” his or her own physician services, the services must meet seven conditions to qualify for payment. 42 C.F.R. § 410.26(b). As the Secretary’s final decision held, McCambridge failed to meet many of the conditions for such payment. See A.R. at 11-13. For example: (1) he billed the at-issue services separately, instead of including them, as required, in the physician bill, see 42 C.F.R. § 410.26(b)(3) (requiring that the services be included in the physician’s bill); and (2) the services at issue were provided in a hospital rather than in a physician’s office, see 42 C.F.R. § 410.26(b)(4) (requiring that the services be of the type that are commonly furnished in a physician’s office). For all of these reasons, McCambridge was legally barred from billing his services as “incident to” physician services under 42 C.F.R. § 414.34. c. Because he was “at fault,” McCambridge is not entitled to an overpayment waiver. The Medicare statute provides that recoupment of an overpayment to a provider or supplier will be waived if the provider or supplier was without fault. 42 U.S.C. § 1395gg(b). As the Medicare Manual explains, Medicare will consider a provider without fault for an overpayment: Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 16 of 25 15 if it exercised reasonable care in billing for, and accepting, the payment; i.e., • It made full disclosure of all material facts; and • On the basis of information available to it, including, but not limited to, the Medicare instructions and regulations, it had a reasonable basis for assuming that the payment was correct[.] Medicare Financial Management Manual (Pub. 100-6), Chapter 3, § 90, available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/fin106c03.pdf. That Manual goes on to provide specific examples of situations in which a provider is liable for an overpayment and is effectively ineligible for a waiver. These include when the provider furnished erroneous information or failed to disclose facts that it knew, or should have known, were relevant to payment of the benefit. See Medicare Financial Management Manual (Pub. 100-6), Chapter 3, § 90.1.A. Under this legal standard, the Secretary’s final decision correctly concluded that, because McCambridge was at fault, he could not be considered for a waiver of the overpayment. Specifically, as the Secretary determined, McCambridge, based on the DAB’s 2009 final agency decision, had actual knowledge that the at-issue services were not covered by Medicare and that he was not entitled to the payments that resulted from his improper Medicare claims. AR at 14. Moreover, as the Secretary found and concluded, McCambridge presented incorrect information to the agency in his claims for Medicare payment. Id. at 14-15. 2. Substantial evidence supports the Secretary’s final decision, and there are no material facts in dispute. Substantial record evidence supported any factual findings that were necessary to these legal conclusions that the Secretary properly reached in her January 2016 final agency decision. Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 17 of 25 16 First, the fact that McCambridge is not a licensed health care provider is not in dispute. In administrative proceedings, he: refer[red] to himself as an ‘assistant-at-surgery’ based on a course he completed with the ‘National Institute of First Assisting.’ In re: Peter McCambridge, C.F.A., Petitioner, DAB No. 2290, 2009 WL 5227273 (Departmental Appeals Board Dec. 17, 2009).3 Significantly, [he] d[id] not contend that he is a physician assistant, nurse practitioner, or clinical nurse specialist, as those terms have been defined in the Medicare statute and regulations. ____________________ 3The record in this case does not contain any information about the National Institute of First Assisting. A.R. at 5 (citations omitted and interpolations added); accord A.R. at 10. In this Court, in his first Motion for Summary Judgment (Dkt. Entry 6, at 1), he likewise admitted that he is a “Certified Surgical First Assistant.” During oral argument in his 2009 administrative appeal, he also conceded that he is not licensed as a physician’s assistant and does not fit into any of the other categories of practitioners who are eligible to receive direct payment from Medicare Part B. See Exhibit A, at 6. Second, the administrative record shows that McCambridge billed Medicare for the at-issue services as assistant-at-surgery services, not as services “incident to” a surgeon’s services. See A.R. at 796. It was only after the second level of administrative appeal (i.e., the QIC Reconsideration Determinations) that McCambridge fashioned an argument that the services should have been covered because they were “incident to” physicians’ services, even though the services were not billed as such. A.R. at 8. Even if, for the sake of argument, those services could have been covered as services “incident to” physicians’ services (which they could not), that would not invalidate the overpayment here, because the services were, in Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 18 of 25 17 fact, billed as assistant-at-surgery services and were properly denied as assistant-at-surgery services. Third, McCambridge presented no evidence (nor is he capable of presenting such evidence) to demonstrate that he met all of the conditions for payment of services “incident to” a physician’s services, in accordance with the requirements at 42 C.F.R. § 410.26(b). See A.R. at 38-56, 83-90, 673-680, 682-687. For example, whereas “incident to” services cannot be considered in an in-hospital setting (42 C.F.R. § 410.26(b)(4) and A.R. at 789), the operative records show that the at-issue services were provided in a hospital. A.R. at 627, 630, 633, 636, 639, 642, 645, 648, 651, 654, 657, 660, 663, 666, 669, 672. Fourth, the record evidence overwhelmingly demonstrates that McCambridge knew that he was billing for and receiving incorrect Medicare Part B payment for his services, as follows: • Based on the applicable statutes, regulations, and public guidance, he knew or should have known that the services were not covered. See 42 U.S.C. §§ 1395l(a)(1)(O)(ii), 1395x(aa)(5); 42 C.F.R. §§ 410.74(c), 410.75(b), 410.76(b); Medicare Claims Processing Manual (Pub. 100-04), Chapter 12 “Physician/Nonphysician Practitioners,” § 20.4.3 “Assistant at Surgery Services.” • As the Secretary’s final decision pointed out, McCambridge had actual knowledge that the surgical assistant services he sought to provide to Medicare beneficiaries were not covered. See A.R. at 14. An HHS tribunal had squarely informed him that those services would not be covered because, as a surgical assistant (rather than a qualified licensed health care provider), as a matter of law he was not entitled to enroll as a provider in the Medicare program, and the services he sought to provide Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 19 of 25 18 would not be covered. See Exhibit “A” hereto, In re: Peter McCambridge, C.F.A., Petitioner, DAB No. 2290, at 9-10, 2009 WL 5227273 (Departmental Appeals Board Dec. 17, 2009) (explaining to McCambridge why his “surgical assistant” services are not covered under the Medicare statute and regulations); see also Exhibit “B” hereto, at 2-3 (further explaining why McCambridge’s arguments for coverage of assistant-at surgery-services were unavailing). Because McCambridge did not challenge that final agency decision, it was and continues to be binding on him. • As if the 2009 final agency decision were not clear enough, McCambridge later wrote to HHS requesting that it issue a National Coverage Determination to permit him to do precisely what he was told in the 2009 Administrative Decision he could not do (i.e., bill for surgical assistant services, even though he is not a qualified licensed health care provider). On July 30, 3012, the Chief Medical Officer for the agency, Dr. Patrick Conway, responded to McCambridge and explained to him that Medicare permits coverage of assistant-at-surgery services only for physicians, physician’s assistants, nurse practitioners, and clinical nurse specialists. A.R. at 85. In sum, there was substantial record evidence supporting the Secretary’s findings that McCambridge is at fault for the at-issue overpayment, because he had abundant notice and knowledge (constructive and actual) that the services at issue were not covered under the Medicare program. Fifth and finally, the record supports the Secretary’s finding that McCambridge is also at fault for the overpayment because he furnished incorrect information to the agency when submitting his bills to Medicare for reimbursement. A.R. at 14. Specifically, he listed the NPI Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 20 of 25 19 of a physician as the “rendering provider number” and sought payment on that basis, thus creating the false impression that the surgeon was the assistant at surgery. See A.R. at 14-15 (decision); A.R. at 78 (audit finding). McCambridge also listed a modifying code (“80”) for each of the services for which he claimed Medicare reimbursement, which is used to represent that a physician served as the surgical assistant. A.R. at 15 and 238-246. B. Even if the Court were to determine that the overpayment assessment cannot be sustained on the grounds the Secretary articulated, it should be sustained because McCambridge was not enrolled in the Medicare program and was not authorized to bill for, or receive, Medicare payment. In the final agency decision, the Medicare Appeals Council took the position that it could not formally consider McCambridge’s non-enrollment in the Medicare program as a basis for sustaining the overpayment, because “that issue [was] not before the Council,” since McCambridge failed to raise it in his administrative appeal. A.R. at 8, n. 6. The fact that the MAC did not reach that issue does not change, however, that the Medicare program is not legally authorized to make Part B payments to an individual like McCambridge who is not enrolled as a Medicare provider. Therefore, even if this Court were to determine that the assessed overpayment cannot be sustained on the bases articulated in the final agency decision, McCambridge is legally barred from receiving Medicare payment, and the assessment of the overpayment must stand. One must be a “provider” or “supplier,” as defined by Medicare law, in order to bill to Medicare for covered services. In 2009, HHS’ Departmental Appeals Board found that McCambridge was not legally entitled to receive Medicare payment, because any services he provided in his role as a “surgical first assistant” could not be covered under Part B. Exhibit “A,” at 5. Non-physician practitioners that may receive payment for services under Part B are Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 21 of 25 20 limited to those listed within 42 C.F.R. § 410.1 et seq. See id. Those regulations do not provide for services furnished by “surgical first assistants” as eligible covered services. Id. The 2009 final agency decision affirmed CMS’ decision to deny McCambridge Medicare enrollment based on his being a “surgical first assistant” who was not qualified to enroll in Medicare. Exhibit “A.” That decision was not reversed or reopened, and remains binding on him. The Secretary therefore respectfully requests that the 2016 final agency decision be modified to reflect that the at-issue overpayment is sustained based not only on the reasons stated in that decision but also because McCambridge was not enrolled in -- and, as a result, is not legally entitled to any payment from -- the Medicare program. V. CONCLUSION As the Secretary stated in both her 2009 and 2016 final agency decisions, the core of McCambridge’s grievance is not with how HHS has applied existing law, but rather, is a “dissatis[faction] with the current legal structure for Medicare coverage and payment[.]” A.R. at 6.13 See also Exhibit “A,” at 7-8. “However . . . the responsibility for changing that structure lies with Congress, and Congress has not chosen to make the kinds of changes that [McCambridge] advocates.” A.R. at 6. For all of the foregoing reasons, the HHS Secretary requests that the Court grant summary judgment in her favor and affirm her January 6, 2016 final agency decision, as 13 In his Complaint, McCambridge cites a 1997 Government Accounting Office report entitled “Payment Changes are Needed for the Assistant at Surgery” and suggests, without explanation, that the GAO Report provides support for his Complaint. Docket Entry No. 1, § III, ¶ 5. In Docket Entry No. 6, he asserts that this report provided recommendations to Congress on needed policy changes. There is no evidence that Congress has acted on the GAO Report to change eligibility requirements or coverage for Part B payments. Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 22 of 25 21 modified to reflect that HHS’ assessment of the at-issue overpayment against McCambridge was correct not only for the reasons stated in the final agency decision but also because McCambridge was not legally entitled to Medicare payment because he was not enrolled in the Medicare program. Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 23 of 25 22 Respectfully submitted, ZANE DAVID MEMEGER United States Attorney /s/ Joan K. Garner, for MARGARET L. HUTCHINSON Assistant United States Attorney Chief, Civil Division /s/ Gerald B. Sullivan GBS3408 GERALD B. SULLIVAN Assistant United States Attorney Attorney I.D. No. 57300 615 Chestnut Street, Suite 1250 Philadelphia, PA 19106-4476 (215) 861-8786 (215) 861-8618 (fax) Attorneys for Defendant Sylvia Mathews Burwell, Sec’y of the U.S. Dept. of Health and Human Servs. Dated: July 8, 2016 OF COUNSEL: MARGARET M. DOTZEL Acting General Counsel JAN M. LUNDELIUS Chief Counsel, Region III SUZANNE K. YURK (On The Brief) Assistant Regional Counsel FREDERICK H. WU (On The Brief) Assistant Regional Counsel Office of the General Counsel, Region III Department of Health and Human Services The Public Ledger Building, Suite 418 150 S. Independence Mall West Philadelphia, PA 19106-3499 Case 5:16-cv-01148-EGS Document 17 Filed 07/08/16 Page 24 of 25 CERTIFICATE OF SERVICE I hereby certify that today, July 8, 2016, I served a true and correct copy of the foregoing Motion for Summary Judgment, with supporting memorandum of law and statement of undisputed facts: 1. by placing these documents in my office’s mailroom for delivery on Monday, July 11, 2016, by First-class mail, postage prepaid, upon: Peter S. McCambridge, pro se 1145 Bell Avenue Allentown, PA 18103 2. by emailing PDF copies of these documents to pro se plaintiff McCambridge at: peter.mccambridge@rcn.com These documents have been filed electronically and are available for viewing and downloading from the Court’s Electronic Case Filing (“ECF”) System. /s/ Gerald B. Sullivan GBS3408 Gerald B. 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