Iowa Cancer Specialists, PC, DAB CR5434 (2019)

DECISION

Petitioner’s Medicare billing privileges were deactivated on July 31, 2018, as a result of its failure to timely comply with a request that it revalidate its Medicare enrollment record.  For the reasons discussed below, I conclude that the effective date of Petitioner’s reactivated Medicare billing privileges remains August 8, 2018.

I. Background and Procedural History

On April 30, 2018, Wisconsin Physicians Service Insurance Corporation (WPS), a Medicare administrative contractor, sent a written request that Petitioner, Iowa Cancer Specialists, PC, a clinic/group practice, revalidate its Medicare enrollment record no later than July 31, 2018.  See Centers for Medicare & Medicaid Services (CMS) Exhibit (Ex.) 2 at 1; see also CMS Ex. 3 at 1.  WPS instructed Petitioner to “update or confirm all the information in [its enrollment] record, including [its] practice locations and reassignments.”  CMS Ex. 2 at 1.  WPS cautioned Petitioner that, if “[its] enrollment is deactivated,” it “will not be paid for services rendered during the period of deactivation” which “will cause a gap in [its] reimbursement.”  CMS Ex. 2 at 1.

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On May 23, 2018, Petitioner submitted an enrollment application through the Provider, Enrollment, Chain and Ownership System (PECOS).1  CMS Ex. 3.  Petitioner listed Ms. Carol L. Kovach as the contact person for its application and listed Ms. Kovach’s telephone number and email address.  CMS Ex. 3 at 6-7.  On June 4, 2018, WPS requested that Petitioner submit additional information,2 to include verifying each new practice location and telephone number, providing a copy of its business occupancy license/permit or a statement that such a license is not needed, and providing oral or written confirmation that it had added Ms. Amber Rankin as an authorized official and managing employee.  CMS Ex. 4 at 1; see CMS Ex. 3 at 6.  In addition, WPS informed Petitioner that it must submit a new certification statement when it submitted the requested information.  CMS Ex. 4 at 1.  That same day, on June 4, 2018, WPS also called Ms. Kovach and left a voicemail message with the following information:  “Requested callback to verify practice location & bus[iness]/occ[upancy] license, and to confirm Amber Rankin is being added as [authorized official] & managing Employee.”  CMS Ex. 5 at 1; see CMS Ex. 3 at 6.

Petitioner did not respond to the development requests, and on July 6, 2018, WPS notified Petitioner that it had rejected Petitioner’s revalidation application pursuant to 42 C.F.R. § 424.515 because it had not timely complied with the requests for additional information.  CMS Ex. 6 at 1.  WPS advised Petitioner to submit a new application with all required documentation.  CMS Ex. 6 at 1.  Also on July 6, 2018, WPS issued a separate letter in which it informed Petitioner that it had “stopped [its] Medicare billing privileges on July 31, 2018,[3] because [it hadn’t] revalidated [its] enrollment record . . . or [it] didn’t respond to [WPS’s] requests for more information.”  CMS Ex. 7 at 1 (emphasis omitted).  WPS explained that it “will not pay any claims after this date” and that Petitioner could reactivate its billing privileges by submitting its enrollment information through PECOS or submitting hard copy Form CMS-855 applications.  CMS Ex. 7 at 1.

On August 8, 2018, Petitioner submitted a new enrollment application for purposes of revalidation and reactivation.  CMS Ex. 8.  WPS informed Petitioner on September 20, 2018, that it had approved Petitioner’s revalidation application.  CMS Ex. 9 at 1.  WPS

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explained that Petitioner “will have a gap in billing privileges from July 31, 2018 through August 08, 2018 for failing to respond to a development request related to a revalidation application.”  CMS Ex. 9 at 1.  WPS also explained that Petitioner “will not be reimbursed for services provided to Medicare beneficiaries during this time period since [it was] not in compliance with Medicare requirements.”  CMS Ex. 9 at 1.

Petitioner mailed a request for reconsideration on October 9, 2018.  CMS Ex. 10.  Although Petitioner raised a number of complaints, it did not assert that it complied with the June 4, 2018 development request.  CMS Ex. 10 at 3.  Rather, Petitioner appears to have focused on its interactions with WPS following its filing of the August 8, 2018 revalidation application.  CMS Ex. 10 at 3.  Further, Petitioner did not argue that it had submitted an application for purposes of revalidation and reactivation that was processed to approval prior to August 8, 2018.  CMS Ex. 10 at 3.  Additionally, Petitioner argued that WPS should not have contacted Ms. Kovach “because [she] has not worked for us for 3 years . . . . ”  CMS Ex. 10 at 3.

WPS issued a reconsidered determination on November 12, 2018, in which it maintained the August 8, 2018 effective date of Petitioner’s reactivated billing privileges.  CMS Ex. 1 at 1-2.  WPS explained the following, in pertinent part:

On May 29, 2018, WPS . . . received a CMS-855B . . . web application.  On June 4, 2018, a development request was emailed to the contact person listed in Section 13, Carol Kovach . . . allowing 30 days to respond or the application would be rejected.  Also, on June 4, 2018, a phone call was made to . . . the phone number listed in the contact person Section 13 of the application and a voice message was left to return the call as there was verification needed in order to process the application.  On July 6, 2018, this application was rejected for not responding to the development request.  On July 6, 2018, a deactivation letter was also sent informing Iowa Cancer Specialists PC that their Medicare billing privileges will be stopped on July 31, 2018, for failure to revalidate their enrollment record.

CMS Ex. 1 at 2.

Petitioner submitted a request for an administrative law judge (ALJ) hearing on November 28, 2018.4  ALJ Bill Thomas issued an Acknowledgment and Pre-Hearing

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Order (Pre‑Hearing Order) on December 6, 2018, at which time he directed the parties to file their respective pre-hearing exchanges.5  CMS filed a motion for summary judgment, and pre-hearing brief (CMS Br.), along with 10 proposed exhibits (CMS Exs. 1-10).  Petitioner did not file a pre-hearing exchange.6

A hearing for the purpose of cross-examination is unnecessary because neither party has submitted written direct testimony.  Pre-Hearing Order §§ 9-11.  I consider the record in this case to be closed, and the matter is ready for a decision on the merits.7

II. Issue

Whether CMS had a legitimate basis to assign Petitioner an August 8, 2018 effective date for its reactivated Medicare billing privileges.

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III. Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R. § 498.3(b)(15); Victor Alvarez, M.D., DAB No. 2325 at 8-12 (2010); see also 42 U.S.C. § 1395cc(j)(8).

IV. Findings of Fact, Conclusions of Law, and Analysis8

1. On April 30, 2018, WPS requested that Petitioner revalidate its Medicare enrollment record no later than July 31, 2018.

2. On June 4, 2018, WPS sent Petitioner a development request to Petitioner’s listed contact person via email.

3. On June 4, 2018, WPS left a voicemail message for Petitioner’s listed contact person regarding its development request.

4. After Petitioner did not submit the requested development, WPS informed Petitioner that it had rejected its revalidation application.

5. On July 6, 2018, WPS informed Petitioner that it would be deactivating its billing privileges, effective July 31, 2018.

6. On August 8, 2018, Petitioner submitted an enrollment application for purposes of revalidation.

7. WPS approved the revalidation application and assigned an August 8, 2018 effective date for Petitioner’s reactivated Medicare billing privileges.

8. An effective date earlier than August 8, 2018, is not warranted for the reactivation of Petitioner’s Medicare enrollment and billing privileges.

As a clinic/group practice, Petitioner is a “supplier” for purposes of the Medicare program.  See CMS Ex. 4 at 1; see also 42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202 (definition of supplier); 498.2.  A “supplier” furnishes items or services under Medicare and the term applies to physicians or other practitioners who are not included within the definition of the phrase “provider of services.”  42 U.S.C. § 1395x(d).  A supplier must enroll in the Medicare program to receive payment for covered Medicare items or services.  42 C.F.R. § 424.505.  The regulations at 42 C.F.R. Part 424, subpart P, establish the requirements for a supplier to enroll in the Medicare program.  42 C.F.R. §§ 424.510‑424.516; see also 42 U.S.C. § 1395cc(j)(1)(A) (authorizing the Secretary of

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the U.S. Department of Health and Human Services to establish regulations addressing the enrollment of providers and suppliers in the Medicare program).  A supplier that seeks billing privileges under Medicare “must submit enrollment information on the applicable enrollment application.”  42 C.F.R. § 424.510(a)(1).  “Once the provider or supplier successfully completes the enrollment process . . . CMS enrolls the provider or supplier into the Medicare program.”  Id.; see also 42 C.F.R. § 424.510(d) (listing enrollment requirements).  Thereafter, “[t]o maintain Medicare billing privileges, a . . . supplier . . . must resubmit and recertify the accuracy of its enrollment information every 5 years.”  42 C.F.R. § 424.515.  Further, a supplier “may be required to revalidate [its] enrollment outside the routine 5-year revalidation cycle . . . .”  42 C.F.R. § 424.515(e).

CMS is authorized to deactivate an enrolled supplier’s Medicare billing privileges if the enrollee does not provide complete and accurate information within 90 days of “receipt of notification” to revalidate enrollment.  42 C.F.R. § 424.540(a)(3).  If CMS deactivates a supplier’s Medicare billing privileges, “[n]o payment may be made for otherwise Medicare covered items or services furnished to a Medicare beneficiary . . . .”  42 C.F.R. § 424.555(b); Urology Grp. of NJ, LLC, DAB No. 2860 at 10 (2018) (“The regulations, taken together, clearly establish that a deactivated provider or supplier was not intended to be entitled to Medicare reimbursement for services rendered during the period of deactivation.”).  Further, and quite significantly, the Departmental Appeals Board (DAB) has unambiguously stated that “[i]t is certainly true that [the petitioner] may not receive payment for claims for services during any period when his billing privileges were deactivated.”  Willie Goffney, Jr., M.D., DAB No. 2763 at 6 (2017); see Urology Grp., DAB No. 2860 at 11 (“Taking [the] unique effects of revocation into consideration, it is reasonable to conclude that CMS intended for revocations and deactivations to share the feature of precluding a provider or supplier from collecting reimbursement for services rendered during the period of inactive Medicare billing privileges, while simultaneously intending for revocations to have more severe consequences on a provider’s or supplier’s ability to participate.”); Frederick Brodeur, M.D., DAB No. 2857 at 16 (2018) (“Allowing a deactivated supplier to bill for services furnished during a period of deactivation would conflict with section 424.555(b) of the regulations . . . .”).  The regulation authorizing deactivation explains that “[d]eactivation of Medicare billing privileges is considered an action to protect the provider or supplier from misuse of its billing number and to protect the Medicare Trust Funds from unnecessary overpayments.”  42 C.F.R. § 424.540(c).

In April 2018, WPS directed Petitioner to revalidate its Medicare enrollment record no later than July 31, 2018, and WPS warned Petitioner that its failure to revalidate could result in deactivation of its Medicare billing privileges, with a resulting gap in reimbursement.  CMS Ex. 2 at 1.  After Petitioner did not submit a complete enrollment application following this request, WPS deactivated Petitioner’s billing privileges effective July 31, 2018.  CMS Exs. 4, 5, 6, 7.

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The pertinent regulation with respect to the effective date of reactivation is 42 C.F.R. § 424.520(d).  Urology Grp., DAB No. 2860 at 7 (“The governing authority to determine the effective date for reactivation of Petitioner’s Medicare billing privileges is 42 C.F.R. § 424.520(d)” (italics omitted).).  Section 424.520(d) states that “[t]he effective date for billing privileges for physicians, non-physician practitioners, physician and non-physician practitioner organizations . . . is the later of – (1) [t]he date of filing of a Medicare enrollment application that was subsequently approved by a Medicare contractor; or (2) [t]he date that the supplier first began furnishing services at a new practice location.”  The DAB has explained that the “date of filing” is the date “that an application, however sent to a contractor, is actually received.”  Alexander C. Gatzimos, MD, JD, LLC, DAB No. 2730 at 5 (2016) (emphasis omitted).  WPS deactivated Petitioner’s billing privileges because it did not comply with a development request following its submission of an enrollment application to revalidate its enrollment, and it was not until August 8, 2018, that WPS received Petitioner’s application for purposes of revalidation that it could process to approval.  CMS Exs. 6, 7, 8.  Based on the August 8, 2018 receipt date of the enrollment application that was processed to approval, WPS did not err in assigning an August 8, 2018 effective date for reactivated billing privileges.  42 C.F.R. § 424.520(d); see Urology Grp., DAB No. 2860 at 9 (“Moreover, the fact that a supplier must file a new enrollment application in order to reactivate its billing privileges is consistent with the language of section 424.520(d) and compelling evidence that the provision should apply to reactivations.”); Frederick Brodeur, DAB No. 2857 at 16 (“Petitioner remained enrolled in Medicare, but his deactivated status made [him] ineligible for payment for any covered services he furnished to otherwise eligible Medicare beneficiaries, pursuant to section 424.555(b), until he provided the information necessary to reactivate his billing privileges.”); Willie Goffney, DAB No. 2763 at 6 (“It is certainly true that [the petitioner] may not receive payment for claims for services during any period when his billing privileges were deactivated.”).

Based on its request for reconsideration, Petitioner is challenging the eight-day gap in its Medicare billing privileges.  I reiterate that the deactivation of Petitioner’s billing privileges is not reviewable.  Frederick Brodeur, DAB No. 2857 at 12 (“A contractor’s deactivation decision is not an initial determination subject to ALJ or [DAB] review.”); Willie Goffney, DAB No. 2763 at 5 (stating no regulation provides appeal rights with respect to the contractor’s deactivation determination).  I can only review the effective date assigned for Petitioner’s reactivated billing privileges.  Petitioner does not provide any factual or legal basis to dispute the August 8, 2018 effective date of its reactivation, nor does it dispute that it submitted the application that WPS processed to approval on August 8, 2018.

Petitioner’s sole relevant argument presented in its request for reconsideration is that it was unaware of the development request because WPS contacted Ms. Kovach, who had not worked for the practice for three years.  CMS Ex. 10 at 3.  This argument is utterly unpersuasive because Petitioner continued to list this individual, as well her contact

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information, in its May 2018 revalidation enrollment information.  CMS Ex. 3 at 6-7.  Petitioner has not identified any error on the part of WPS, but rather, has highlighted its own failure to provide up-to-date enrollment information.

The scope of my review is limited to whether WPS assigned the correct effective date when it reactivated Petitioner’s billing privileges.  See Frederick Brodeur, DAB No. 2857 at 12.  Petitioner has not argued that there is a factual or legal basis to establish reactivated billing privileges earlier than August 8, 2018.  42 C.F.R. § 424.520(d).  WPS had a legitimate basis to deactivate Petitioner’s billing privileges when Petitioner failed to timely complete the requested development of its revalidation application, and WPS had a legitimate basis to assign an effective date for Petitioner’s reactivated billing privileges based on the date WPS received the enrollment application that it was able to process to approval.  Id.  Unfortunately for Petitioner, it appears that the eight-day gap in its billing privileges is largely due to its failure to provide up-to-date contact information.  And, even though Petitioner received notice, well in advance of its deactivation, that it could submit a new enrollment application prior to its deactivation, it did not do so.  CMS Ex. 7.

To the extent that Petitioner’s request for relief is based on principles of equitable relief, I cannot grant such relief.  US Ultrasound, DAB No. 2302 at 8 (2010) (“Neither the ALJ nor the [DAB] is authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements.”).  Petitioner points to no authority by which I may grant it relief from the applicable regulatory requirements, 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) (“An ALJ is bound by applicable laws and regulations and may not invalidate either a law or regulation on any ground . . . .”).

V. Conclusion

For the foregoing reasons, I uphold the August 8, 2018 effective date of Petitioner’s reactivated Medicare billing privileges.

• 1. PECOS is the Provider, Enrollment, Chain and Ownership System, which is an internet-based application that enables Medicare providers and suppliers to electronically submit enrollment applications.
• 2. WPS sent this letter to Petitioner’s listed contact person, Ms. Kovach, via email.  CMS Ex. 1 at 2.
• 3. Based on the July 6, 2018 date of this letter, WPS afforded Petitioner more than three weeks advance notice of the pending deactivation of its billing privileges.
• 4. Petitioner’s request for hearing consists of the following request:  “We, Iowa Cancer Specialists, are requesting a hearing for the unfavorable decision regarding the effective date of our Medicare billing privileges.”  See 42 C.F.R. § 498.40(b)(1) (requirement that a request for hearing identify the specific issues, and the findings of fact and conclusions of law with which the affected party disagrees).
• 5. This case was reassigned to me on March 8, 2019.
• 6. In his Pre-Hearing Order, Judge Thomas directed each party to submit a “brief addressing all issues of law and fact.”  Pre-Hearing Order § 5(c)(i).  After Petitioner failed to submit a pre-hearing exchange, to include a brief, Judge Thomas ordered Petitioner to file, inter alia, its pre-hearing exchange and show cause why its request for hearing should not be dismissed for abandonment.  In response, Petitioner stated the following, as relevant here:  “As far as the pre-hearing exchange, we do not have any additional records to submit.  The initial letter we submitted when submitting the redetermination is all we have to present.”  In a subsequent order, Judge Thomas noted that Petitioner “wishes [him] to treat its reconsideration request as its pre-hearing brief and exchange.”  Judge Thomas “accepted them as such” and determined that “Petitioner’s response . . . demonstrates that it has not abandoned the case.”  I have admitted Petitioner’s request for reconsideration (CMS Ex. 10) as an evidentiary exhibit.  I observe that Petitioner had an opportunity to submit a pre-hearing exchange in which it could have responded to CMS’s arguments for summary judgment, and it did not do so.  Likewise, Petitioner could have identified any disagreements it had with WPS’s reconsidered determination when it filed its request for hearing, and it failed to do so.
• 7. Because a hearing is unnecessary, I need not address whether summary judgment is appropriate.
• 8. Findings of fact and conclusions of law are in italics and bold font.