E HEALTH H T LAWYER IN THIS ISSUE UNLAWFUL, UNFAIR AND UNWISE: CONSTITUTIONAL AND RULEMAKING Unlawful, Unfair and Unwise: Constitutional and Rulemaking INFIRMITIES IN CMS’s ENROLLMENT Infirmities in CMS’s Enrollment Revocation Regulations and REVOCATION REGULATIONS AND HOW How to Challenge Them .......... 1 TO CHALLENGE THEM Chair’s Column ........................ 2 Donald H. Romano, Esq. a proposed revocation for which you Section News ......................... 22 Foley & Lardner LLP would be offered the opportunity to Washington DC respond, or any other warning from Supreme Dilemma: Handling your Medicare contractor, you receive Conflicts Between State Medical a notice stating your billing privileges Privacy Laws and Federal Welcome to the Medicare are revoked for a period of three years. Investigative Subpoenas ......... 24 Program – Now Get Out To make matters worse, the contractor Imagine you are a physician who notifies you that it is recouping Medi- Lessons Learned From a New has been convicted of a minor felony, care payment for all of the services Medical-Legal Partnership: from the date of your conviction Patient Screening, Information such as one count of possession of a through the date of the notice, which and Communication ............... 34 controlled substance, which was not a crime of dishonesty or had anything to amounts to several hundreds of thou- Section Calendar .......Back Cover do with Medicare or any other health- sands of dollars. care program. You report the felony Or imagine that you are a physi- conviction to your Medicare contrac- cian practice that employs someone tor within 30 days, as required. You who is listed as a managing employee also report the conviction to the state on the practice’s enrollment form. The licensing board, which decides to take employee does not tell you that he has no action against your license. You been excluded from participation in wait to see what happens with Medi- the federal healthcare programs by the care, because, after all, revocation of Department of Health and Human billing privileges for a felony convic- Services’ Office of Inspector General tion is not automatic. Revocation due (“OIG”) and despite your routine to a felony conviction is supposed to searches of OIG’s listing of excluded be based on a determination that a individuals and entities (“LEIE”) you provider’s or supplier’s continued par- fail to find that he has been excluded.2 ticipation in the Medicare program is You discover he has been excluded “detrimental to the best interests of when you receive a notice from the the Medicare program and its Centers for Medicare & Medicaid beneficiaries”1 (whatever that means). Services (“CMS”) informing you that Two years later, without any notice of your billing privileges have been Volume 31, Number 6, continued on page 3 August 2019 Chair’s Corner E HEALTH H T LAWYER THE ABA HEALTH LAW SECTION The Health Lawyer (ISSN: 0736-3443) is published by the American Bar Association Health Law Section, 321 N. Clark Street, Chicago, IL 60654-7598. Address corrections should be sent to the American Bar Association, c/o Member Records. Requests for permission to reproduce any material from The Health Lawyer should be addressed in writing to the editor. The opinions expressed are those of the authors and shall not be construed to represent the policies or positions of the American Bar Association and the ABA Health Law Section. Copyright © 2019 American Bar Association. 2019-2020 Officers and Council of the ABA Health Law Section are as follows: Chair Vice Chair Budget Officer Alexandria Hien McCombs Hal Katz Adrienne Dresevic Signify Health Husch Blackwell LLP The Health Law Partners Dallas, TX Austin, TX Farmington Hills, MI Chair-Elect Secretary Immediate Past Chair John H. McEniry IV Clay Countryman Hilary H. Young Fagron North America Breazeale Sachse & Joy & Young, LLP Fairhope, AL Wilson LLP Austin, TX Baton Rouge, LA Section Delegates to the House of Delegates William W. Horton Robyn S. Shapiro Jones Walker, LLP Health Sciences Law Group LLC Birmingham, AL Fox Point, WI Council Christi J. Braun W. Andrew H. Gantt III Kathy L. Poppitt Vanderbilt University Gantt Law LLC King & Spalding LLP Medical Center Baltimore, MD Austin, TX Nashville, TN Kathleen DeBruhl Denise Hanna Julian Rivera Kathleen L DeBruhl & Locke Lord LLP Husch Blackwell LLP Associates LLC Washington, DC Austin, TX New Orleans, LA Matthew Fisher William Hopkins Donald H. Romano Mirick O’Connell DeMallie Shackelford Bowen Foley & Lardner & Lougee LLP McKinley & Norton, LLP Washington, DC Worcester, MA Austin, TX Board of Governors Liaison Government Attorney-at-Large Howard T. Wall Alec Alexander Franklin, TN Centers for Medicare & Medicaid Services Washington, DC Young Lawyer Division Liaison Law Student Division Liaison Muthuramanan Rameswaran Michael C. Nolan Katten Muchin Rosenman, LLP University of Houston Law Center Washington, DC Houston, TX Section Director The Health Lawyer Editor Simeon Carson Marla Durben Hirsch American Bar Association Potomac, MD 321 N. Clark Street 301/299-6155 Chicago, IL 60654-7598 [email protected] 312/988-5824 [email protected] continued on page 2 2 The Health Lawyer Volume 31, Number 6, August 2019 Unlawful, Unfair and Unwise: Constitutional and Rulemaking Infirmities continued from page 1 revoked for three years for having an judicial review as other Medicare squarely on the side of providers and excluded individual as a managing appeals processes do and by prohib- suppliers as to whether a protected employee.3 Although CMS’s regula- iting providers and suppliers from liberty interest can exist. tions allow it to rescind a revocation appealing the length of the reen- Is there a protected property where the provider or supplier fires rollment bar? interest? the managing employee (or if is an • Does CMS’s reinterpretation of the owner who is the subject of the In Board of Regents of State Col- regulations to provide for a reenroll- 5 adverse action terminates the owner’s leges et. al v. Roth, the Supreme Court ment bar for certain deactivations ownership interest) within 30 days of clarified that determining whether (while still denying appeal rights the revocation,4 and although you do someone has a property interest for the deactivation determination) so within a matter of days, CMS depends on whether there is a reason- violate the rulemaking provisions refuses to rescind the revocation. able expectation of a continued of the Medicare Statute and the Instead, the revocation of billing receipt of a benefit. Such expectation Administrative Procedure Act? privileges is made retroactive to the must be “more than [] unilateral” and date of the employee’s exclusion and • Does CMS’s delegation to contrac- “more than an abstract need or an overpayment is created in the tors to make the revocation deter- desire” and, instead, must be “a legiti- 6 amount of $500,000. minations a violation of the mate claim of entitlement to it.” The revocation regulations, and is CMS Court explained that property inter- Revocation actions like those in providing appropriate oversight of ests are not created by the Constitu- the above hypotheticals (which are the contractors and providing ade- tion, but rather, “they are created and based on actual revocations) are hap- their dimensions are defined by exist- pening under the enrollment revoca- quate guidance to them and to pro- viders and suppliers? ing rules or understandings that stem tion regulations. This article looks at from an independent source such as due process and other serious issues • Apart from the question of legal state law – rules or understandings with how CMS’s regulations are writ- deficiencies, is CMS’s revocation that secure certain benefits and that ten and applied. It addresses the fol- process unfair and create bad feel- support claims of entitlement to lowing questions: ings among physicians and other those benefits.”7 Under this test, • Do the regulations violate due pro- suppliers, and is it unwise in light of wherever there are standards that cess by not providing for a pre- the continuing physician shortage? bind a state or federal agency that must be followed before entitlement revocation right to respond? In addition to addressing the or benefits can be taken away, there questions posed above, this article • Do the regulations violate due pro- is a protected property interest. also provides some guidance for chal- cess by not providing fair notice Because providers and suppliers can lenging revocation determinations that a provider or supplier may have their billing privileges revoked prior to exhausting the administrative have its billing privileges revoked? only for the reasons specified under appeals process. • Are the regulations arbitrary and the revocation regulations, proper capricious by not providing any application of Roth leads to the con- guidance as to the length of the Constitutional Infirmities clusion that they have a protected reenrollment bar that will apply in property interest in maintaining their Do the regulations violate due ability to bill Medicare. individual cases, and why does it process by not providing for at seem that almost every revocation least a pre-revocation right to However, there is an apparent results in the maximum three-year respond? split of authority as to whether there reenrollment bar? is a protected property interest in the In order to address this question, continued participation in Medicare • Are the regulations unconstitu- one must