ENT Surgical Group, PC, DAB CR5356 (2019)

DECISION

The Centers for Medicare & Medicaid Services (CMS), through a CMS contractor, determined that the effective date for reactivation of the Medicare billing privileges for ENT Surgical Group, PC (ENT Surgical or Petitioner) was September 8, 2017.  Petitioner requested an administrative law judge (ALJ) hearing to dispute this effective date.  Because the CMS contractor concluded in its reconsidered determination that Petitioner’s revalidation enrollment application would have been received on September 8, 2017, but for a state of emergency that closed the contractor’s office, the CMS contractor correctly determined that the effective date for the reactivation of billing privileges was September 8, 2017.  Therefore, I affirm CMS’s determination.

I. Background and Procedural History

ENT Surgical, a physician group practice, was enrolled in the Medicare program as a supplier by no later than 1991.  CMS Exhibit (Ex.) 2 at 11; CMS Ex. 8 at 1; CMS Ex. 10 at 2.  In a March 10, 2017 notice sent to ENT Surgical, a CMS contractor stated that ENT Surgical needed to revalidate its Medicare enrollment record by May 31, 2017.  CMS Ex. 1 at 1.  This notice also stated that failure to respond to the notice could result in

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deactivation of ENT Surgical’s enrollment, causing a “gap in [its] reimbursement” during the period of deactivation.  CMS Ex. 1 at 1.

In response to this notice, ENT Surgical submitted a revalidation enrollment application (CMS-855B) that the CMS contractor received on May 30, 2017.  CMS Ex. 2 at 57.

In a July 13, 2017 letter delivered via fax, the CMS contractor informed ENT Surgical Group that it had received ENT Surgical’s revalidation enrollment application; however, the CMS contractor stated that ENT Surgical provided incomplete information, and requested revisions and supporting documentation. CMS Ex. 3 at 1.  The CMS contractor informed ENT Surgical that it might reject the revalidation enrollment application if ENT Surgical failed to provide the requested information within 30 days.

In an August 16, 2017 notice, the CMS contractor deactivated ENT Surgical’s Medicare billing privileges as of August 16, 2017, because ENT Surgical did not respond to the request for additional information.  The notice said that CMS “will not pay any claims after [August 16, 2017].”  CMS Ex. 4 at 1.

On September 7, 2017, ENT Surgical sent a corrected revalidation enrollment application (CMS-855B) via overnight postal mail to the CMS contractor in Jacksonville, Florida.  CMS Ex. 5; CMS Ex. 9 at 5-6. The application arrived at the local post office on September 8, 2017, but due to hurricane flooding, the contractor’s office was closed and the application was not delivered until September 13, 2017.  CMS Ex. 9 at 3, 7; CMS Ex. 10 at 3.

In an October 9, 2017 development request letter, the CMS contractor requested further information and revisions of ENT Surgical’s revalidation application.  CMS Ex. 6 at 1.  The letter stated that if ENT Surgical failed to provide the requested information within 30 days CMS might reject ENT Surgical’s revalidation application.  CMS Ex. 6 at 1.

In response to the development request, ENT Surgical faxed a corrected application to the CMS contractor on October 10, 2017.  CMS Ex. 7 at 1.  In an October 13, 2017 initial determination, the CMS contractor reactivated ENT Surgical’s Medicare billing privileges for its practice location associated with PTAN 637302 effective September 13, 2017.  CMS Ex. 8 at 2; see also CMS Ex. 9 at 3; CMS Ex. 10 at 2.

On October 30, 2017, ENT Surgical timely submitted a reconsideration request stating that it was unaware of the CMS contractor’s July 13, 2017 application development request until it received the August 16, 2017 deactivation letter.  CMS Ex. 9 at 3.  Further, it argued that in response to the August 16, 2017 notice, it contacted the CMS contractor and spoke with a representative, who informed ENT Surgical that it should have received the request for information via email.  ENT Surgical argued that it had checked its email, fax, and postal mail records and could not locate the July 13, 2017

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letter requesting additional information.  CMS Ex. 9 at 3.  ENT Surgical Group also said that when it asked the CMS representative “what [it] should do about all [its] Medicare patients,” the representative told ENT Surgical it could back bill once revalidation was complete.  CMS Ex. 9 at 3.  Additionally, ENT Surgical stated that the revalidation application that was mailed September 7, 2017, and ultimately approved, would have been received by the contractor on September 8, 2017, had extreme weather not closed the contractor’s office.  CMS Ex. 9 at 3.  As a result of the initial effective date determination, ENT Surgical was left with a gap in billing from August 16 to September 12, 2017, which put “a significant financial strain on [its] medical practice.”  CMS Ex. 9 at 3.  ENT Surgical requested an August 16, 2017 revalidation effective date.  CMS Ex. 9 at 3.

On November 13, 2017, the CMS contractor issued a partially favorable reconsidered determination, changing the revalidation effective date from September 13, 2017 to September 8, 2017, due to the state of emergency that caused the CMS contractor’s office to close.  CMS Ex. 10.  The CMS contractor reasoned that the closure of the contractor’s office was by “no fault of ENT Surgical Group.”  CMS Ex. 10 at 3.  However, the CMS contractor did not entirely remove the gap in billing privileges because ENT Surgical was “unresponsive to the July 13, 2017 development request and [the CMS contractor] maintains record of the successful fax transmission of this development request.”  CMS Ex. 10 at 3.

Petitioner timely requested an ALJ hearing (Hearing Request) to dispute the reconsidered determination, maintaining that the effective date should be changed to August 16, 2017.  This case was originally assigned to Judge Leslie Weyn for hearing and decision.  On January 26, 2018, Judge Weyn issued an Acknowledgement and Pre-Hearing Order (Pre‑Hearing Order), which established a schedule for prehearing exchanges.  In response, CMS filed a motion for summary judgment with a brief in support of the motion (CMS Br.) and ten exhibits.

ENT Surgical did not submit its required pre-hearing exchange by the April 6, 2018 deadline in the Pre-Hearing Order.  In response, Judge Weyn issued an Order to Show Cause (Order).  The Order explained ENT Surgical’s failure to file documents in accordance with the Pre-Hearing Order indicates that it may have abandoned its case, which would result in the dismissal of the hearing request.  Order at 1; 42 C.F.R.  § 498.69.  The Order gave ENT Surgical 10 days to show good cause for the failure to meet deadlines.  Order at 1; see also 42 C.F.R. § 498.69(b)(2).  ENT Surgical responded, and indicated that it had not seen CMS’s pre-hearing exchange due to a lack of familiarity with the electronic filing system and that it wished to have the case decided on the basis of its request for hearing.  ENT Surgical did not submit any exhibits.

On November 20, 2018, this case was transferred to me.

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II. Decision on the Written Record

I admit all of CMS’s proposed exhibits into the record because Petitioner did not object to any of them. Civil Remedies Division Procedures (CRDP) § 14(e).

The Pre-Hearing Order advised the parties to submit written direct testimony for each witness and that an in-person hearing would only be held if a party requested to cross-examine a witness.  Pre-Hearing Order ¶¶ 8-10; CRDP §§ 16(b), 19(b).  Neither party has offered any written direct testimony. Therefore, I issue this decision based on the written record.  Pre-Hearing Order ¶¶ 10-11; CRDP § 19(d).

III. Issue

Whether CMS had a legitimate basis to assign September 8, 2017, as the effective date for the reactivation of Petitioner’s Medicare billing privileges.

IV. Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R §§ 498.3(b)(15), 498.5(l)(2); see also 42 U.S.C. § 1395cc(j)(8).

V. Findings of Fact, Conclusions of Law, and Analysis

My findings of fact and conclusions of law are set forth in italics and bold font.

The Social Security Act (Act) authorizes the Secretary of Health and Human Services (Secretary) to promulgate regulations governing the enrollment process for providers and suppliers.  42 U.S.C. §§ 1302, 1395cc(j).  A “supplier” is “a physician or other practitioner, a facility, or other entity (other than a provider of services) that furnishes items or services” under the Medicare provisions of the Act.  42 U.S.C. § 1395x(d); see also 42 U.S.C. § 1395x(u).

A supplier must enroll in the Medicare program to receive payment for covered Medicare items or services.  42 C.F.R. § 424.505.  The terms “Enroll/Enrollment means the process that Medicare uses to establish eligibility to submit claims for Medicare covered items and services.”  42 C.F.R. § 424.502.  A supplier seeking billing privileges under the Medicare program must “submit enrollment information on the applicable enrollment application.  Once the . . . supplier successfully completes the enrollment process . . . CMS enrolls the . . . supplier into the Medicare program.”  42 C.F.R. § 424.510(a).  CMS then establishes an effective date for billing privileges under the requirements stated in 42 C.F.R. § 424.520(d) and may permit limited retrospective billing under 42 C.F.R. § 424.521.

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To maintain Medicare billing privileges, suppliers must revalidate their enrollment information at least every five years; however, CMS reserves the right to require revalidation at any time. 42 C.F.R. § 424.515. When CMS notifies suppliers that it is time to revalidate, the suppliers must submit the appropriate enrollment application, accurate information, and supporting documents within 60 calendar days of CMS’s notification. 42 C.F.R. § 424.515(a)(2).

CMS can deactivate an enrolled supplier’s Medicare billing privileges if the enrollee fails to comply with revalidation requirements.  42 C.F.R. § 424.540(a)(3).  When 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).  If CMS deactivates a supplier’s billing privileges due to an untimely response to a revalidation request, the enrolled supplier may apply for CMS to reactivate its Medicare billing privileges by completing a new enrollment application or, if deemed appropriate, recertifying its enrollment information that is on file.  42 C.F.R. § 424.540(b)(1).

1. Petitioner submitted a revalidation enrollment application (CMS-855B) via overnight mail on September 7, 2017, which reached the local post office for the CMS contractor on September 8, 2017.  Due to a state of emergency in that locality, the enrollment application was not delivered to the CMS contractor until September 13, 2017.  The CMS contractor ultimately approved that enrollment application.

ENT Surgical submitted to the CMS contractor in Jacksonville, Florida, a revalidation Medicare enrollment application (CMS-855B) via overnight mail on September 7, 2018.  CMS Ex. 9.  This enrollment application was scheduled for delivery on September 8, 2017, and arrived at the post office in Jacksonville, Florida, on that date.  CMS Ex. 9 at 7.  However, due to a state of emergency in Florida, the CMS contractor’s office was closed from noon on September 8, 2017, until it reopened on September 13, 2017.  CMS Ex. 10 at 3.  As a result of the office closure, ENT Surgical’s application was not actually received by the CMS contractor until September 13, 2017.  CMS Br. at 7.  The CMS contractor approved ENT Surgical’s application and revalidated its Medicare billing privileges effective September 13, 2017.  CMS Ex. 8 at 2.

2. The effective date for Petitioner’s Medicare billing privileges is September 8, 2017.

The effective date for Medicare billing privileges for physicians, non-physician practitioners, and physician or non-physician practitioner organizations is the later of the “date of filing” or the date the supplier first began furnishing services at a new practice location.  42 C.F.R. § 424.520(d).  The “date of filing” is the date that the Medicare contractor “receives” a signed enrollment application that the Medicare contractor is able

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to process to approval.  73 Fed. Reg. 69,726, 69,769 (Nov. 19, 2008); Donald Dolce, M.D., DAB No. 2685 at 8 (2016).  CMS’s published guidance for its contractors states that the effective date for the reactivation of Medicare billing privileges is the date on which the contractor received the enrollment application.  Medicare Program Integrity Manual (MPIM) § 15.27.1.2.  That guidance is consistent with the effective date for Medicare billing privileges in § 424.520(d) and with § 424.555(b)’s prohibition on reimbursing services performed by deactivated suppliers.

In the present case, the CMS contractor initially determined that Petitioner’s effective date for reactivation of its Medicare billing privileges was September 13, 2017, because that is the date that CMS received Petitioner’s revalidation enrollment application that the CMS contractor ultimately approved.  However, upon reconsideration, the CMS contractor issued an effective date of September 8, 2017, because Petitioner provided evidence that its revalidation enrollment application was submitted via overnight mail on September 7, 2017 and would have been delivered to the contractor on September 8, 2017, had the office not been closed due to a state of emergency in Florida.

A strict application of the rules discussed above would require an effective date of September 13, 2017, i.e., the date that the CMS contractor received Petitioner’s revalidation enrollment application that was processed to approval.  The record indicates that, although Petitioner’s revalidation enrollment application arrived in Jacksonville, Florida on September 8, 2017, the CMS contractor did not receive it until its offices reopened on September 13, 2017.  CMS Ex. 9 at 7; CMS Ex. 10 at 3.

However, in CMS’s reconsidered determination, the CMS contractor considered the extenuating circumstances resulting from the state of emergency in Florida and determined that September 8, 2017, is the effective date for revalidation of Petitioner’s Medicare billing privileges.  CMS Ex. 10 at 3.  In this proceeding, CMS does not contest the September 8, 2017 effective date.  CMS Br. at 7.  I agree with CMS and do not disturb the CMS contractor’s decision to avoid needlessly penalizing Petitioner for extenuating circumstances beyond anyone’s control.  Therefore, September 8, 2017, is the correct effective date.

Although a September 8, 2017 effective date reduces the gap in billing privileges by a few days, Petitioner seeks in this case to remove the gap in Medicare billing privileges entirely.  In its submissions, Petitioner asserts that after receiving the August 16, 2017 deactivation notice it called the CMS contractor and spoke to a representative who “told us that we would be able to back bill for the services we provided during the effective gap in coverage once our revalidation application was corrected, and successfully receive payment.”  Hearing Request at 1.  Petitioner also asserts that it did not receive CMS’s July 13, 2017 request to correct errors in the first revalidation enrollment application that Petitioner submitted.  CMS Ex. 9 at 3.

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With respect to Petitioner’s argument that it did not receive the July 13, 2017 request for information which ultimately led to its deactivation, I do not have the authority to review CMS’s decision to reject Petitioner’s first revalidation enrollment application and deactivate Petitioner’s Medicare billing privileges.  CMS’s rejection of an enrollment application is not subject to administrative review.  42 C.F.R. § 424.525(d).  I also do not have the authority to review CMS’s deactivation of Petitioner’s Medicare billing privileges because deactivation is not an “initial determination” subject to appeal, and deactivation decisions have a separate review process involving the submission of a rebuttal to CMS.  See 42 C.F.R. §§ 424.545(b), 498.3(b); see also Willie Goffney, Jr., M.D.,DAB No. 2763 at 4­-5 (2017).

Further, to the extent that Petitioner requests that I provide an earlier effective date because it “acted in good faith consistent with what [it was] told by the [CMS contractor’s] representative that [it] would be able to back bill for services provided during the gap in coverage once [its] revalidation was corrected,” I am unable to grant such a request.  Hearing Request at 1.  I do not have authority to provide equitable relief based on principles of fairness or equitable estoppel and thus cannot change Petitioner’s effective date for that reason.  US Ultrasound, DAB No. 2302 at 8 (2010) (“[n]either the ALJ or the Board is authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements.”).

IV. Conclusion

I affirm CMS’s determination that Petitioner’s effective date for Medicare billing privileges is September 8, 2017.