Masters Ambulance Service, LLC, DAB CR5402 (2019)

DECISION

Petitioner’s Medicare billing privileges were deactivated on January 19, 2018, as a result of its failure to timely comply with a request that it revalidate its Medicare enrollment. For the reasons discussed below, I conclude that the effective date of Petitioner’s reactivated Medicare billing privileges remains February 5, 2018.

I. Background and Procedural History

On August 9, 2017, Novitas Solutions (Novitas), a Medicare administrative contractor, sent a letter to Petitioner, an ambulance service supplier, requesting that it revalidate its Medicare enrollment no later than October 31, 2017.  See Centers for Medicare & Medicaid Services (CMS) Exhibit (Ex.) 2 at 1; see CMS Ex. 3 at 6.  Novitas instructed Petitioner to “update or confirm all the information in [its] record . . . .”  CMS Ex. 2 at 1.  Novitas 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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In October 2017, Petitioner timely filed a Form CMS-855B enrollment application for purposes of revalidation.  CMS Ex. 3.  On November 15, 2017, Novitas sent Petitioner a letter in which it acknowledged receipt of Petitioner’s enrollment application and informed it that the application was incomplete.  CMS Ex. 4 at 1.  Specifically, Novitas explained that an application fee was required to process the application and that “[f]ailure to pay the required application fee will result in the rejection of [its] application or revocation of [its] Medicare billing privileges.”  CMS Ex. 4 at 1.

Petitioner did not submit the application fee within the 30-day time period allowed by Novitas.  CMS Exs. 4, 5.  Because Petitioner had not “revalidated [its] enrollment record with [Novitas], or [it] didn’t respond to [Novitas’s] requests for more information,” Novitas informed Petitioner in a letter dated January 19, 2018, that it had deactivated Petitioner’s billing privileges that same day.  CMS Ex. 5 at 1.  Novitas explained that as a result of Petitioner’s deactivation, it “will not pay any claims after this date.”  CMS Ex. 5 at 1.  Novitas sent this letter to Petitioner at the same address to which it mailed the previous revalidation request, which is the contact person address that Petitioner listed in its October 2017 enrollment application.  CMS Ex. 5 at 1; see CMS Ex. 3 at 28.

Petitioner submitted a revalidation application that Novitas received on February 5, 2018.  CMS Ex. 7; see CMS Ex. 11 at 2.  Prior to submitting the new application, Petitioner submitted the application fee on January 24, 2018.  CMS Ex. 11 at 2.

In a letter dated February 9, 2018, Novitas informed Petitioner that it had approved its revalidation application and reactivated its billing privileges, but that Petitioner had a “gap in billing privileges from 01/19/2018 through 02/04/2018 for failing to respond to a development request related to a revalidation application.”  CMS Ex. 8 at 1.

Petitioner submitted a request for reconsideration, dated February 9, 2018, in which it sought removal of the gap in its reactivated billing privileges.  CMS Ex. 9.  Petitioner provided the following discussion in its reconsideration request:

We, at the time had outsourced our billing, and the individual in charge of our billing stated that they would process our entire revalidation and would notify us if and when things were needed on our end.  We were unaware of the payment being needed to finalize the revalidation process and stay in good standing.

It was not until it was too late that we realized and were communicated by the organization handling our revalidation that our payment was needed.  Once we realized, we made the payment immediately.  Unfortunately, the payment was made late, causing us to be DEACTIVATED.

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We were unaware of this until we had claims kicked back indicating we were not authorized through Medicare to submit these claims.

We submitted a new application which has an effective date of 2/4/18.  There is a gap in our billing from 1/19/18 – 2/4/18 in which we continued to provide services to our patients.

Please reconsider our effective date, as everything was in good standing, except for the payment due to a miscommunication on our end, but we continued to provide these services for our patients, as they required the treatments and our service is the only way for them to get there.

CMS Ex. 9 at 7.

Novitas issued a reconsidered determination on May 4, 2018, in which it maintained the February 5, 2018 effective date of Petitioner’s reactivated billing privileges. CMS Ex. 11 at 2.  Novitas explained the following in its reconsidered determination:

On January 25, 2018, Novitas Solutions received a fax with the application fee payment confirmation.  The application fee was paid on January 24, 2018, after the deactivation.  A CMS‑855B revalidation application was received by Novitas Solutions on February 5, 2018.  The application was approved February 9, 2018 reinstating your billing privileges effective February 5, 2018, leaving a gap in billing privileges from January 19, 2018 through February 4, 2018.

*  *  *

Masters Ambulance Service LLC has not provided evidence to support an earlier effective date.  Therefore, Novitas Solutions is not granting you access to the Medicare Trust Fund (by way or issuance) of a new Medicare effective date. The gap in coverage is applied when a provider/supplier is non-responsive to a revalidation request or this case, a development request. The gap is between the deactivation and reactivation of billing privileges, with the reactivation effective date being based on the receipt date of the application.

CMS Ex. 11 at 2-3.

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Petitioner submitted a request for an administrative law judge (ALJ) hearing that was received on May 30, 2018. ALJ Leslie A. Weyn issued an Acknowledgment and Pre‑Hearing Order (Pre-Hearing Order) on June 6, 2018, at which time she directed the parties to file their respective pre-hearing exchanges.1 CMS filed a pre-hearing brief with an incorporated memorandum of law in support of a motion for summary judgment, along with 11 proposed exhibits (CMS Exs. 1-11). Petitioner filed a letter that I construe as a brief and response to CMS’s motion for summary judgment (P. Br.).  In the absence of any objections, I admit CMS Exs. 1-11 into the evidentiary record.

A hearing for the purpose of cross-examination is unnecessary because neither party has submitted written direct testimony.2 Pre-Hearing Order §§ 8-10. I consider the record in this case to be closed, and the matter is ready for a decision on the merits.3

II. Issue

Whether CMS had a legitimate basis to assign Petitioner a February 5, 2018 effective date for its reactivated Medicare billing privileges.

III. Jurisdiction

I have jurisdiction to decide this case. 42 C.F.R. §§ 498.3(b)(15), 498.5(l)(2).

IV. Findings of Fact, Conclusions of Law, and Analysis4

1. On August 9, 2017, Novitas requested that Petitioner revalidate its Medicare enrollment no later than October 31, 2017.

2. In October 2017, Petitioner submitted an incomplete revalidation application that did not include the required application fee.

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3. On November 15, 2017, Novitas sent Petitioner a development letter in which it instructed Petitioner to submit the application fee within 30 days.

4. On January 19, 2018, after Petitioner did not timely submit a complete revalidation application, Novitas sent a letter to Petitioner notifying it that it had deactivated its billing privileges that same day.

5. On February 5, 2018, after submitting the application fee, Petitioner submitted an enrollment application for purposes of revalidation and reactivation of its billing privileges.

6. Novitas approved the revalidation application and assigned a February 5, 2018 effective date for its reactivated Medicare billing privileges.

7. An effective date earlier than February 5, 2018, is not warranted for the reactivation of Petitioner’s Medicare enrollment and billing privileges.

As an ambulance service supplier, Petitioner is a “supplier” for purposes of the Medicare program.  See CMS Ex. 3 at 1-2, 6; 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 that 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 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 who 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.”  42 C.F.R. § 424.510(a)(1); 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 their enrollment outside the routine 5-year revalidation cycle.”  42 C.F.R. § 424.515(e).  When an ambulance service supplier revalidates its enrollment, it must pay an application fee.  See 42 C.F.R. § 424.514(b) (requirement that currently enrolled “institutional providers” must submit an application fee when revalidating enrollment); 42 C.F.R. § 424.502 (definition of institutional provider); see also 76 Fed. Reg. 5862, 5907 (Feb. 2,

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2011) (Final Rule explaining that, for purposes of 42 C.F.R. § 424.502, ambulance service suppliers are considered to be institutional providers).

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 a request for such information.  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).

On August 9, 2017, Novitas mailed a letter to Petitioner directing it to revalidate its Medicare enrollment record no later than October 31, 2017, and Novitas warned that Petitioner’s 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 that included the required application fee, Novitas gave Petitioner an additional 30 days to complete its application.  CMS Ex. 4 at 1.  After Petitioner did not submit the application fee and therefore had not completed the revalidation of its enrollment, Novitas deactivated Petitioner’s billing privileges on January 19, 2018.  

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

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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).  Novitas deactivated Petitioner’s billing privileges because it did not submit a complete revalidation application in response to the revalidation request, in that it did not submit the application fee despite being given an additional 30 days to do so. CMS Ex. 4 at 1. Based on the February 5, 2018 receipt date of the complete enrollment application that was processed to approval, Novitas did not err in assigning a February 5, 2018 effective date for reactivated billing privileges.  See CMS Ex. 7; 42 C.F.R. § 424.520(d); 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.”); 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 [its] billing privileges were deactivated.”); 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.”).

Petitioner is challenging the assignment of a February 5, 2018 effective date of its reactivated billing privileges, which resulted in a more than two-week gap in its Medicare billing privileges.  The deactivation of Petitioner’s billing privileges on January 19, 2018, based on its failure to comply with a revalidation request, is not reviewable. Willie Goffney, DAB No. 2763 at 5 (stating no regulation provides appeal rights with respect to the contractor’s deactivation determination); Frederick Brodeur, DAB No. 2857 at 12 (“A contractor’s deactivation decision is not an initial determination subject to ALJ or [DAB] review.”).  I can only review the effective date assigned for Petitioner’s reactivated billing privileges, and Petitioner has not presented evidence that the February 5, 2018 effective date of reactivation was inappropriate.  Pursuant to 42 C.F.R. § 424.520(d), Novitas had a legitimate basis to assign an effective date of February 5, 2018, for Petitioner’s reactivated billing privileges.

Petitioner candidly acknowledges in its brief “the fault lay on our end by not revalidating in a timely manner, due to relying on a third party.”  P. Br. at 1.  Petitioner explains that during the period of its deactivation, it “continued to maintain our patients as our utmost priority and continued to provide them with transportation to their lifesaving treatments and continue to do so day in and day out.”  P. Br. at 1.  I reiterate that I lack the authority to review the deactivation of Petitioner’s billing privileges, and the scope of my review is limited to whether Novitas assigned the correct effective date for Petitioner’s reactivated

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billing privileges.  See Frederick Brodeur, DAB No. 2857 at 12.  Nonetheless, I note that Petitioner has not claimed that it submitted a complete revalidation application with the required application fee prior to February 5, 2018, even though Novitas had cautioned that failure to submit the fee would result in deactivation of Petitioner’s billing privileges.  CMS Ex. 4 at 1.  Even if I had authority to review the deactivation of Petitioner’s billing privileges, Petitioner has not shown that Novitas erred when it deactivated its billing privileges.

Accepting Petitioner’s explanation that its billing company failed to submit the application fee or inform Petitioner that it needed to submit the application fee, the failure of a third party to act on Petitioner’s behalf is not a basis upon which I can set aside a deactivation of billing privileges.  A supplier such as Petitioner is bound by the mistakes of the individuals it relies upon to manage its Medicare enrollment.  Although CMS, and its contractors, have a significant amount of authority and discretion under the regulations, 42 C.F.R. part 498 does not afford the same amount of discretion to an ALJ.  While CMS and its contractors may deactivate billing privileges for failure to comply with anenrollment requirement, and CMS and its contractors have the discretion to postpone or waive a deactivation of billing privileges, an ALJ cannot exercise such discretion over a determination deactivating a supplier’s billing privileges.  See, e.g., 42 C.F.R. § 498.3; Frederick Brodeur, DAB No. 2857 at 12.  Thus, there is limited recourse available to a supplier such as Petitioner that has had its billing privileges deactivated due to the submission of an incomplete enrollment application for purposes of revalidation.  I am unable to reverse a deactivation of billing privileges that results from a supplier’s failure to strictly comply with revalidation requirements.  I recognize that Petitioner provided services for more than two weeks during its period of deactivation; however, in the absence of any basis to grant an earlier date for the reactivation of billing privileges, the effective date of February 5, 2018, for the reactivation of Petitioner’s billing privileges must stand.

Novitas had a legitimate basis to deactivate Petitioner’s billing privileges when it failed to respond to the revalidation request, and it had a legitimate basis to assign a February 5, 2018 effective date for its reactivated billing privileges based on the date it submitted the enrollment application that was ultimately processed to approval.  42 C.F.R. § 424.520(d).

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

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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 February 5, 2018 effective date of Petitioner’s reactivated Medicare billing privileges.

1. This case was reassigned to me on March 8, 2019.
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2. I note that, following the submission of their pre-hearing exchanges, the parties submitted separate letters urging that the record be closed.
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3. Because a hearing is unnecessary, I need not address whether summary judgment is appropriate.
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4. Findings of fact and conclusions of law are in italics and bold font.
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