Aiken Neurosciences and Pain Management, LLC, DAB CR5944 (2021)

DECISION

The Centers for Medicare & Medicaid Services (CMS), through its National Supplier Clearinghouse (NSC) Medicare Administrative Contractor, revoked the Medicare enrollment and billing privileges of Aiken Neurosciences and Pain Management, LLC. (Petitioner) pursuant to 42 C.F.R §§ 424.535(a)(5) and 424.57(e) based on a site inspection that revealed Petitioner was not operational to furnish Medicare covered items or services.  Because I find that Petitioner was not operational at its business location address on file, I affirm that CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges.

I. Background

Petitioner is a supplier of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) in South Carolina that began operating in 2014.  CMS Exhibit (Ex.) 1 at 3, 6.  In July of 2015, Petitioner filed form CMS-855S (enrollment application) requesting to be enrolled as a Medicare DMEPOS supplier.  See, e.g., id. at 22. On its enrollment application, Petitioner listed 410 University Parkway, Suite 2360, Aiken, South Carolina, 29801-6837 (University Parkway address) as its business location.  Id. at 3.  

On July 9, 2019, a CMS-contracted inspector conducted a site visit at the University Parkway address to verify Petitioner’s compliance with Medicare enrollment 

Page 2

requirements.  CMS Ex. 3.  The inspection revealed the facility was closed; no employees, staff, or inventory were present; nor were there any signs of customer activity. Id.

In an initial determination dated October 22, 2019, NSC revoked Petitioner’s Medicare privileges effective July 9, 2019 and barred Petitioner from re-enrolling in Medicare for a period of two (2) years. CMS Exs. 4, 5.

On October 29, 2019, Petitioner electronically filed an application to NSC using the online Provider Enrollment Chain and Ownership System (PECOS).  CMS Ex. 7 at 1.  Petitioner stated that the reason for the submission was that it was reactivating a deactivated Medicare enrollment record.  Id.  The application requested a change of address to 5110 Woodside Executive Court, Aiken, SC 29803-3814, effective March 1, 2019.  Id. at 2.  

By letter dated October 30, 2019, Petitioner requested reconsideration.  CMS Ex. 6.  In the reconsideration request, Petitioner explained that it underwent a major transition and a complete practice restructuring, including relocation to a new facility.  Id.  By letter dated November 11, 2019, NSC issued an unfavorable reconsidered determination, concluding that no error was made in revoking Petitioner’s Medicare enrollment and billing privileges.  CMS Ex. 8.

Petitioner timely requested a hearing before an administrative law judge and the case was assigned to me.  At my direction, my office acknowledged Petitioner’s hearing request and provided a copy of my Standing Prehearing Order (Prehearing Order).  The Prehearing Order directed each party to file a prehearing exchange consisting of a brief and any supporting documents, and also set forth the deadlines for those filings.  Prehearing Order ¶ 4.  In response to the Prehearing Order, CMS filed a brief (CMS Br.), including a motion for summary judgment and eight exhibits (CMS Exs. 1-8).  Petitioner filed a letter on April 13, 2020, which I treat as Petitioner’s brief in response (P. Br.).  Petitioner did not object to my consideration of CMS’s proposed exhibits.  Therefore, in the absence of objection, I admit CMS Exs. 1-8.

The Prehearing Order explained that “[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.”  Prehearing Order ¶ 10; see Vandalia Park, DAB No. 1940 (2004); Pacific Regency Arvin, DAB No. 1823 at 7-8 (2002) (holding that the use of written direct testimony for witnesses is permissible so long as the opposing party has the opportunity to cross-examine those witnesses).  The Prehearing Order additionally informed the parties that, if neither party requested cross-examination of a witness, I would close the record and issue my decision once the parties completed their pre-hearing exchanges.  Order ¶ 12.  Because neither party offered the written direct testimony of any witness, I decide this case based on the parties’ written submissions, 

Page 3

without regard to whether the standards for summary judgment are satisfied.  That is, even if there are disputed issues of material fact, I resolve them based on the evidence of record.  I deny CMS’s motion for summary judgment as moot.

II. Issue

The issue in this case is whether CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges.

III. Jurisdiction

I have jurisdiction to decide this case. 42 C.F.R. §§ 498.3(b)(17), 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. Statutory and Regulatory Background

For a DMEPOS supplier to receive Medicare payments for items furnished to a Medicare-eligible beneficiary, the Secretary of Health and Human Services must issue the supplier a billing number. Act § 1834(j)(1)(A) (42 U.S.C. § 1395m(j)(1)(A)).  To receive such direct billing privileges, a DMEPOS supplier must initially comply and maintain compliance with the supplier enrollment standards set forth in 42 C.F.R. § 424.57(c).  Among other things, a DMEPOS supplier must maintain a physical facility on an appropriate site, which is in a location that is accessible to the public, staffed during posted hours of operation, with a visible sign and posted hours of operation.  42 C.F.R. § 424.57(c)(7).  Also, a DMEPOS supplier must permit CMS or its agent to conduct on-site inspection to ascertain supplier compliance with each enrollment standard.  42 C.F.R § 424.57(c)(8).  A provider or supplier is operational if it “has a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit Medicare claims, and is properly staffed, equipped, and stocked…to furnish these items or services.”  42 C.F.R. § 424.502.  CMS will revoke a currently-enrolled Medicare supplier’s billing privileges if CMS or its agent determines that the supplier is not in compliance with any supplier enrollment standard.  See 42 C.F.R. § 424.57(e); A to Z DME, LLC, DAB No. 2303 at 3 (2010); see also 1866ICPayday.com, DAB No. 2289 at 13 (2009) ([F]ailure to comply with even one supplier standard is a sufficient basis for revoking a supplier’s billing privileges.”).

If an on-site visit reveals that a supplier is no longer operational, or otherwise fails to meet any enrollment requirement, CMS may revoke the supplier’s Medicare billing privileges.  42 C.F.R. § 424.535(a)(5).  The effective date of revocation is the date CMS determines the supplier was no longer operational.  42 C.F.R. § 42.535(g).  Suppliers that have had their billing privileges revoked “are barred from participating in the Medicare

Page 4

program from the effective date of the revocation until the end of the re-enrollment bar,” which is “a minimum of 1 year, but not greater than 3 years depending on the severity of the basis for revocation.” 42 C.F.R. § 424.535(c).

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

1.  A CMS-contracted inspector attempted to conduct a site visit of Petitioner’s business location on July 9, 2019, at the address on file with CMS (410 University Pkwy 2360, Aiken, South Carolina 29801); but the inspector found the location locked and vacant. 

On or about July 27, 2015, Petitioner’s owner signed a Medicare enrollment application (Form CMS-855S).  CMS Ex. 1 at 15, 22.  Section 2.A of the enrollment application reported Petitioner’s business location address as 410 University Parkway, Suite 2360, Aiken, South Carolina 29801-6837.  Id. at 3. In signing the enrollment application, Petitioner’s owner certified that he had read the contents of the application and that it was “true, correct, and complete.”  Id. at 21.

On July 9, 2019, a CMS-contracted inspector visited Petitioner’s reported business location at the University Parkway address to conduct an on-site review.  CMS Ex. 3.  The inspector documented that the location was not open for business, did not have employees or staff present, and did not have any inventory present.  Id. Petitioner admits that the University Parkway address was closed and that the business had moved to a new address.  P. Br.1

2. CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5) because Petitioner was not operational at the practice location on file with CMS.

CMS may revoke a currently enrolled provider’s Medicare billing privileges when, upon on-site review or other reliable evidence, CMS determines that the provider is no longer operational to furnish Medicare-covered items or services.  42 C.F.R § 424.535(a)(5).  A provider is “operational” when it:

[H]as a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims, and is properly staffed, equipped, and stocked (as

Page 5

applicable based on the type of facility or organization, provider or supplier specialty, or the services or items being rendered) to furnish these items or services.

42 C.F.R. § 424.502.  As an appellate decision of the Departmental Appeals Board (DAB) has explained, to determine whether CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5), I must answer two questions:  (1) What was the business location address on file with the Medicare Administrative Contractor on the date of the on-site visit? and (2) Was Petitioner operational at that address on the date of the on-site visit?  Care Pro Home Health, Inc., DAB No. 2723 at 15 (2016).  

Here, Petitioner’s address on file at the time of the July 9, 2019 on-site visit was the University Parkway address. The Site Verification Survey Form documenting the inspector’s visit to that address, described above and not disputed by Petitioner, supports the finding that Petitioner was not operational and not “open to the public for the purpose of providing health care related services” on the date of the on-site visit.  Therefore, I conclude that CMS had a legal basis to revoke Petitioner’s enrollment and billing privileges under 42 C.F.R. § 424.535(a)(5). 

3.  Petitioner’s argument that a third-party billing company failed to update Petitioner’s Medicare records does not provide a basis to overturn the revocation of its Medicare enrollment and billing privileges.

Petitioner challenges CMS’s revocation by claiming a third-party billing company tasked with billing and credentialing failed to update Petitioner’s Medicare address timely.  RFH, P. Br., CMS Ex. 6 at 1.  While I accept that Petitioner’s third-party biller may have neglected to update the address of Petitioner’s business location, Petitioner is ultimately responsible for the actions (or inactions) of its agent.  It was at all times within Petitioner’s control whether or not to employ a third party biller to handle its contacts with Medicare.  Having chosen to employ a third-party biller, Petitioner cannot now disavow that choice. Cf. Jackson Manor Health Care, DAB CR545 at 7 (1998) (corporation may not avoid the consequences of the avoidable failure of one of its employees to discharge a duty).

Petitioner’s attempt to blame its billing contractor for failing to update its enrollment record is analogous to cases in which suppliers have attempted to evade the consequences of improper billing by blaming the company that submitted claims on the suppliers’ behalf.  In such cases, appellate decisions of the DAB have stated unequivocally that the supplier is ultimately responsible for the claims submitted. See, e.g., Louis J. Gaefke, D.P.M., DAB No. 2554 at 5-6 (2013).  I see no reason why that analysis should not apply equally to Medicare enrollment. See Mark Koch, M.D., DAB No. 2610 at 4 (2014).

Page 6

Just as suppliers are responsible for the accuracy of claims submitted by third parties on their behalf, so too, suppliers are responsible for the accuracy of information submitted as part of the enrollment process, even if submitted by employees or contractors.  Indeed, each time a supplier submits a Medicare enrollment application, an authorized official2 of the supplier ‒ not a contractor ‒ must sign a certification statement attesting that the contents of the application are “true, correct, and complete.” See CMS Ex. 1 at 22; see also 42 C.F.R. § 424.510(d)(3); Sandra E. Johnson, CRNA, DAB No. 2708 at 14-15 (2016).  Further, by his or her signature, the authorized official agrees “to notify the NSC . . . of any current or future changes to the information contained in this application in accordance with the timeframes established in 42 CFR § 424.57.” See CMS Ex. 1 at 21.  This underscores the fact that suppliers themselves are responsible for updating the information in their Medicare enrollment applications, even if filled out by an employee or contractor hired to assist with credentialing.

5.  Petitioner’s arguments in equity are not a basis to overturn the revocation of Petitioner’s Medicare enrollment and billing privileges.

Petitioner explains that it neglected to notify NSC that its business location had changed due to “a complete practice restructure.”  CMS Ex. 6 at 1.  Although conceding that its Medicare enrollment information was not updated timely, Petitioner argues that it provides exceptional care to Medicare beneficiaries and that it would be a disservice to such beneficiaries if Petitioner is unable to “dispense necessary durables.”  Id.  I construe these arguments as an appeal to equity.  In other words, Petitioner is arguing that revocation of its Medicare enrollment is unfair under the circumstances.  However, an administrative law judge is not authorized to provide equitable relief by reimbursing or enrolling a supplier that does not meet statutory or regulatory requirements.  US Ultrasound, DAB No. 2302 at 8 (2010) (citing Regency on the Lake, DAB No. 2205 (2008)).  I therefore find no basis to overturn NSC’s reconsidered determination.

Page 7

V. Conclusion

For the foregoing reasons, I affirm CMS’s determination to revoke Petitioner’s Medicare enrollment and billing privileges.

1. Although Petitioner’s brief states it moved locations on June 10, 2019, its PECOS application stated that its change of address was effective March 1, 2019. Compare P. Br. with CMS Ex. 7 at 2. Because Petitioner also acknowledged that it did not update its address timely, I find it more likely that the move date was in March, rather than June of 2019. See CMS Ex. 6.
• back to note 1
2. An authorized official is defined as “an appointed official (for example, chief executive officer, chief financial officer, general partner, chairman of the board, or 5% or greater direct owner) to whom the organization has granted the authority to enroll it in the Medicare program, to make changes or updates to the organization’s enrollment information in the Medicare program, and to commit the organization to fully abide by the statutes, regulations, and program instructions of the Medicare program.” CMS Ex. 1 at 21.
• back to note 2