Zille Shah v. Alex Azar, Secretary, HHS, 920 F.3d 987

Background

Mohammad Nawaz (cardiologist) and Zille Shah (primary care physician), married and Texas-based, submitted Medicare Part B claims using their own NPIs for dates when they concede they were outside the United States.
Novitas (CMS contractor) revoked each physician’s Medicare billing privileges under 42 C.F.R. § 424.535(a)(8) for submitting claims for services that could not have been furnished on the reported dates, and imposed a 3-year re‑enrollment bar.
Both physicians submitted Corrective Action Plans (CAPs) conceding billing errors and asserting they had arranged coverage or relied on nurse practitioners; CMS/Novitas denied reinstatement for lack of verifiable compliance at time of revocation.
ALJ granted summary judgment for CMS based on the physicians’ admissions that they were abroad when billing under their own NPIs; DAB and the district court affirmed.
Central regulatory issue: Medicare’s "incident to" rules required direct supervision (physician physically present in the office suite and immediately available) for billing services under a physician’s NPI at the physician rate; absent that, services must be billed under the auxiliary provider’s NPI at a reduced rate.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether CMS lawfully revoked billing privileges under § 424.535(a)(8) for claims billed while physicians were abroad	Nawaz/Shah: billing was lawful because services were actually provided by nurse practitioners under orders and with covering physicians available; "incident to" billing does not always require physician's on‑site presence	Secretary: regulation required direct supervision (physician present in office suite) when billing under physician's NPI; plaintiffs billed under their NPIs while abroad, so revocation fits regulation	Affirmed: revocation supported—physicians conceded absence and billed under own NPIs without required direct supervision
Whether ALJ properly granted summary judgment without an oral hearing	Plaintiffs: denial of hearing deprived them of chance to present evidence of covering physicians and to rebut CMS evidence	Secretary: ALJ may decide on summary judgment; CMS met its burden based on admissions; Kirk affidavit not relied upon	Affirmed: no due process violation; summary judgment appropriate because plaintiffs offered no competent evidence creating material dispute
Admissibility/weight of CMS evidence (Kirk declaration) and sufficiency of plaintiffs’ affidavits	Plaintiffs: Kirk declaration unreliable/hearsay; their affidavits show coverage arrangements creating factual disputes	Secretary: ALJ disclaimed reliance on Kirk; plaintiffs’ affidavits were vague/unsubstantiated and insufficient to create a genuine issue	Affirmed: ALJ did not rely on Kirk; plaintiffs failed to produce specific admissible evidence of required direct supervision
Constitutional claims: property (taking) and due process challenges to revocation and CAP denial	Plaintiffs: had property interest in Medicare provider number; CAP denial and summary disposition violated due process; revocation constituted uncompensated taking	Secretary: no protected property interest in continued Medicare participation; regulations allow CAP review discretion and non‑appealability; procedures afforded were adequate	Affirmed: no property interest in program participation; CAP denial not actionable as an initial determination; no due process violation

Key Cases Cited

Glaser v. Wound Care Consultants, Inc., 570 F.3d 907 (7th Cir. 2009) (explaining physician’s NPI may be used for "incident to" billing only where direct supervision exists)
United States v. R&F Props. of Lake Cty., Inc., 433 F.3d 1349 (11th Cir. 2005) (discussing billing under auxiliary provider NPIs and reduced reimbursement)
Cedar Lake Nursing Home v. U.S. Dep’t of Health & Human Servs., 619 F.3d 453 (5th Cir. 2010) (ALJ summary‑judgment authority and deference to agency expertise)
Maxmed Healthcare, Inc. v. Price, 860 F.3d 335 (5th Cir. 2017) (Medicare Act incorporates § 405(g) substantial‑evidence review)
Parrino v. Price, 869 F.3d 392 (6th Cir. 2017) (providers lack a protected property interest in continued Medicare participation)
Koerpel v. Heckler, 797 F.2d 858 (10th Cir. 1986) (same—no property interest in federal health program participation)
Butz v. Glover Livestock Comm’n Co., 411 U.S. 182 (1973) (deference to agency in selecting remedies tied to statutory policy)
Perez v. Mortgage Bankers Ass’n, 135 S. Ct. 1199 (2015) (courts enforce regulations according to ordinary meaning of their language)