Ronald Vargo, D.O., & R.G. Vargo D.O., Inc., DAB CR5574 (2020)

DECISION

Petitioners, Ronald Vargo, D.O. and R.G. Vargo D.O., Inc., Dr. Vargo's practice, appealed the determination establishing the effective date of their enrollment and billing privileges as Medicare suppliers.  For the reasons explained below, I find that CGS Administrators, LLC (CGS), an administrative contractor for the Centers for Medicare & Medicaid Services (CMS), properly determined that the effective date of Petitioners' enrollment was September 15, 2017, with retrospective billing permitted as of August 16, 2017.1   See CMS Exhibit (Ex.) 11 at 1.  I therefore affirm the effective date set by CMS.

Page 2

I.  Background and Procedural History

Dr. Vargo is a Doctor of Osteopathic Medicine licensed to practice in Ohio.  CMS Ex. 7 at 6.  On May 31, 2017, he left his former group practice.  P. Ex. 1 at ¶ 1.  On July 3, 2017, CGS received Petitioners' application for Medicare enrollment and billing privileges (Form CMS-855I).  CMS Ex. 15 at 2; see also CMS Ex. 1.2   CGS sent Petitioners' credentialing specialist requests for additional information regarding the application by letter dated July 19, 2017, and by email dated August 1, 2017.  CMS Exs. 2, 4.  The July 19 letter warned that CGS might reject Petitioners' application if Petitioners failed to provide complete information "within 30 calendar days from the postmarked date of this letter."  CMS Ex. 2 at 1.  CGS received partial information from Petitioners on August 1, 2017 and August 21, 2017.  CMS Ex. 15 at 2.  See also CMS Exs. 3, 5.

By letter dated August 23, 2017, CGS notified Petitioners that it had rejected their application because it was incomplete and because Petitioners had not submitted a complete application in response to the requests for additional information.  CMS Ex. 6.  The August 23 letter further explained that, in order to reapply for Medicare enrollment, Petitioners must submit a new application.  Id at 1.

Petitioners submitted a new application for enrollment (Form CMS-855I) that CGS received on September 15, 2017.  CMS Ex. 15 at 2; see also CMS Ex. 7.  On October 4, 2017, CGS sent a request for additional information and received a response from Petitioners on the same day.  CMS Exs. 8, 9.  CGS approved the application and granted Petitioners retrospective billing privileges effective August 16, 2017.  See CMS Ex. 11.  Petitioners requested reconsideration of the effective date.  CMS Ex. 14.  CGS issued an unfavorable reconsidered determination in which it reaffirmed the effective date of Petitioners' enrollment.  CMS Ex. 15.

Petitioners timely requested a hearing before an administrative law judge to challenge CGS's unfavorable reconsidered determination.  I was designated to hear and decide this case.  On May 4, 2018, I issued an Acknowledgment and Pre-Hearing Order (Pre-Hearing Order) that required the parties to file a pre-hearing exchange consisting of a

Page 3

brief and any supporting documents.  Pre-Hearing Order ¶ 4.  CMS filed a combined Motion for Summary Judgment and Pre-Hearing Brief (CMS Br.) and 15 proposed exhibits (CMS Exs. 1-15).  Petitioners filed a Response to Respondent CMS'[s] Motion for Summary Judgment and Pre-Hearing Brief (P. Br.) and one proposed exhibit (P. Ex. 1).

Neither party objected to the exhibits proposed by the opposing party.  Therefore, in the absence of objection, I admit CMS Exs. 1-15 and P. Ex. 1.  CMS did not propose to call any witnesses.  Petitioners offered the written declaration of Dr. Vargo.  However, CMS did not request to cross-examine Dr. Vargo.  As I informed the parties in my Pre-Hearing Order, "[a]n in-person hearing to cross-examine witnesses will be necessary only if a party files admissible, written direct testimony, and the opposing party asks to cross-examine."  Pre-Hearing Order ¶ 10.  Therefore, an in-person hearing is not necessary, and I decide this case based on the written record, without regard to whether the standards for summary judgment are satisfied.

II.  Issue

The issue in this case is whether CGS, acting on behalf of CMS, properly established September 15, 2017 as Petitioners' effective date for enrollment in Medicare, with retrospective billing privileges authorized from August 16, 2017.

III.  Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R. §§ 498.3(b)(15), 498.5(l)(2); see also Social Security Act (Act) § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).

IV.  Discussion

A.  Applicable Authority

A provider or supplier that seeks billing privileges under Medicare must "submit enrollment information on the applicable enrollment application."  42 C.F.R. § 424.510(a).  A "provider or supplier must submit a complete enrollment application and supporting documentation to the designated Medicare fee-for-service contractor," and the application must include "complete, accurate, and truthful responses to all information requested within each section as applicable to the provider or supplier type."  42 C.F.R. § 424.510(d)(1)-(2).  "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).

CMS "may reject" an enrollment application if a supplier "fails to furnish complete information on the provider/supplier enrollment application within 30 calendar days from

Page 4

the date of the contractor request for the missing information."  42 C.F.R. § 424.525(a)(1); see also 42 C.F.R. § 424.502 (definition of Reject/Rejected).  CMS may "at its discretion, choose to extend the 30-day period [for submitting additional information] if CMS determines that the . . . supplier is actively working with CMS to resolve any outstanding issues."  42 C.F.R. § 424.525(b) (emphasis added).  If CMS or its contractor rejects an enrollment application, the supplier must submit a new enrollment application.  42 C.F.R. § 424.525(c).  However, CMS's (or the contractor's) decision to reject an enrollment application is not subject to appeal.  42 C.F.R. § 424.525(d).

The effective date of Medicare enrollment and 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 to process to approval.  73 Fed. Reg. 69,726, 69,769 (Nov. 19, 2008); see also Donald Dolce, M.D., DAB No. 2685 at 6, 8 (2016).  When a contractor approves an enrollment application, it may allow retrospective billing for up to 30 days prior to the effective date established under 42 C.F.R. § 424.520 for a physician supplier who meets all program requirements and is providing Medicare-covered services.  42 C.F.R. § 424.521(a)(1).

B.  Findings of Fact and Conclusions of Law3

1.  Petitioners' effective date of Medicare enrollment is September 15, 2017, with retrospective billing privileges as of August 16, 2017.

CGS received an enrollment application from Petitioners on September 15, 2017.  CMS Ex. 15 at 2.  This was the earliest enrollment application CGS received from Petitioners that was processed to approval.  CGS subsequently approved that application and granted Petitioner retrospective billing privileges beginning August 16, 2017.  See CMS Ex. 11.  Accordingly, as required by regulation, the effective date of Petitioners' Medicare enrollment is September 15, 2017.

Petitioners argue that I should grant them an earlier effective date of enrollment because CGS could have processed their earlier application to approval and should have done so, based on Dr. Vargo's 30-year history of participating in Medicare without any prior issues.  P. Br. at 4, 6.  However, as I explain in the following sections of this decision, Petitioners' arguments are not a basis to change their effective date.

Page 5

2.  I have no authority to review CGS's rejection of Petitioners' July 2017 enrollment application.

Petitioners do not dispute the facts, but instead argue that Petitioners should be assigned an earlier effective date based on their initial, rejected application.  P. Br. at 4-6.  For the reasons explained below, I find Petitioners' arguments unconvincing.

Petitioners argue that an administrative law judge should be permitted to consider an initial application that "could have" been processed to approval in establishing the effective date of enrollment.  P. Br. at 4.  Petitioners cite a dissenting opinion in Karthik Ramaswamy, M.D., DAB No. 2563 at 10-34 (2014), in support of this argument.  Id.  However, the majority of the appellate panel in Ramaswamy rejected the contention Petitioners make here, and instead held that section 424.520(d)'s "plain language" required the effective date to be based on an application that was "subsequently approved" by the Medicare contractor.  DAB No. 2563 at 6, aff'd, Ramaswamy v. Burwell, 83 F. Supp. 3d 846 (E.D. Mo. 2015).  Furthermore, the regulations explicitly state that a rejected application may not be appealed.  42 C.F.R. § 424.525(d); see James Shepard, M.D., DAB No. 2793 at 8 (2017) (holding that 42 C.F.R. § 424.525(d) "plainly prohibits" an administrative law judge from reviewing a rejected application because there are no appeal rights for such a determination).

Additionally, Petitioners assert that CMS could have exercised its discretion to extend the 30-day period a provider has to submit all requested information to correct a deficient Medicare enrollment application.  P. Br. at 4-5; see also 42 C.F.R. § 424.525(b).  Petitioners contend that CGS could have made additional requests for information since Dr. Vargo and his credentialing specialist made good faith efforts to comply and furnished almost all of the requested data.  P. Br. at 5.  However, Petitioners do not cite any authority establishing their right to administrative review of CMS's exercise of discretion to reject an incomplete application.  My authority to review the effective date of enrollment cannot be expanded to permit review of CGS's determination to reject Petitioners' application.

I cannot grant a June 1, 2017 effective date for Petitioners' Medicare enrollment unless I set aside CGS's rejection of Petitioners' July 3, 2017 enrollment application.4  As summarized above, the governing regulations provide that, once an enrollment application is rejected, a supplier must submit a new enrollment application.  See 42 C.F.R. § 424.525(c).  When a supplier submits a new enrollment application, the supplier's effective date is based on the date the contractor receives the new application.  See 42 C.F.R. § 424.520(d).  Therefore, I cannot grant Petitioners relief without

Page 6

exercising authority over CGS's rejection of Petitioners' July 2017 enrollment application.  The regulations do not permit me to exercise such authority.  42 C.F.R. § 424.525(d).

3.  Petitioners' equitable arguments are not a basis to grant an earlier effective date of Medicare enrollment.

Petitioners argue that I should grant an earlier effective date because Dr. Vargo has provided quality care to Medicare beneficiaries for over 30 years.  P. Br. at 6.  Petitioners contend that permitting a Medicare provider with Dr. Vargo's experience to correct an incomplete application beyond the 30-day period does not contravene the enrollment application process.  Id.  Petitioners further argue that Dr. Vargo, faced with the challenges of opening up a new practice, continued to provide care for his patients in the good faith belief he was satisfying program requirements for enrollment.  Id.  Therefore, Petitioners request an effective date of enrollment of June 1, 2017, the day after Dr. Vargo separated from his prior group practice.  P. Br. at 2, 7.

To the extent Petitioners' argument is that I should grant an earlier effective date based on principles of fairness, such general appeals to equity are not a basis to overturn CGS's determination in this case.  I may not set aside the lawful exercise of discretion by CMS or its contractor based on principles of equity.  See US Ultrasound, DAB No. 2302 at 8 (2010); Cent. Kan. Cancer Inst., DAB No. 2749 at 10 (2016).  Therefore, I find no basis to overturn CGS's effective date determination.

V.  Conclusion

I affirm CMS's decision that the effective date of Petitioners' Medicare enrollment and billing privileges is September 15, 2017, with retrospective billing permitted as of August 16, 2017.

1. CGS identified August 16, 2017, as the "effective date" of Petitioners' enrollment.  CMS Ex. 11 at 1.  However, by regulation, the "effective date" of enrollment is the date CGS received an enrollment application from Petitioners that it eventually approved.  See 42 C.F.R. § 424.520(d).  In this case, CGS received Petitioners' enrollment application on September 15, 2017.  CMS Ex. 15 at 2.  CMS may permit a supplier to "retrospectively bill" for services for up to 30 days prior to that effective date.  42 C.F.R. § 424.521(a).  Because August 16, 2017 is 30 days prior to the date CGS received Petitioners' application, it appears that CGS used the term "effective date" to refer to the date from which Petitioners are authorized to retrospectively bill for Medicare services.  For clarity, I use the term "effective date" in this decision to refer to the effective date of enrollment that is established by regulation (September 15, 2017), not the date from which retrospective billing is authorized (August 16, 2017).
• back to note 1
2. CMS explains that the computer-generated number at the bottom of the application (CMS Ex. 1) starts with "17184" which represents the ordinal date of receipt.  CMS Brief at 3.  The numerals "17" represent the year (2017) and the numerals "184" represent the 184^th day of the year (July 3^rd).  Id.
• back to note 2
3. My findings of fact and conclusions of law appear as numbered headings in bold italic type.
• back to note 3
4. I could not grant a June 1, 2017 effective date in any event, since Petitioners do not even argue, much less offer any evidence, that they submitted an enrollment application earlier than July 3, 2017.
• back to note 4