Aston Township Fire Department f/k/a Aston Beechwood Vol. Fire Company, DAB CR5407 (2019)

DECISION

The Centers for Medicare & Medicaid Services (CMS), through a contractor, revoked Petitioner’s Medicare enrollment and billing privileges because Petitioner’s practice location, on file with CMS, was not operational.  42 C.F.R. § 424.535(a)(5).  Petitioner requested a hearing to dispute the revocation.  I conclude that the evidence of record shows that Petitioner moved to a new address without informing CMS; therefore, when a CMS contractor’s inspector attempted to conduct a site visit of Petitioner’s practice location on file with CMS, Petitioner was no longer operational at that location.  Therefore, I affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges.

I. Background and Procedural History

Petitioner is a volunteer fire department that provides emergency services for Aston Township, Pennsylvania.  See Petitioner Exhibit (P. Ex.) 6 ¶ 4; P. Ex. 7 ¶ 4.  Petitioner has a Pennsylvania license to provide ambulance services.  P. Ex. 2; P. Ex. 5 ¶ 7; P. Ex. 6 ¶ 3; P. Ex. 7 ¶ 3.  Petitioner was also enrolled as a supplier in the Medicare program to provide ambulance services since 1978.  Hearing Req. Ex. A.

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In a March 14, 2018 initial determination, a CMS contractor revoked Petitioner’s Medicare enrollment and billing privileges effective February 17, 2018.  CMS Ex. 4.  The contractor gave the following reason for revocation: 

42 CFR § 424.535(a)(5) On Site Review

Aston Beechwood Vol Fire Company is no longer operational to furnish Medicare covered items or services.  An on-site review conducted on February 17, 2018, at 793 Mount Road[,] Aston, PA 19014 showed this supplier was not at this location and the location appeared to be vacant.  Additionally, the name on the facility where the site visit occurred was different from the legal business name provided. 

CMS Ex. 4 at 1 (emphasis in original).  The initial determination barred Petitioner from reenrollment in the Medicare program for two years.  CMS Ex. 4 at 2.

Petitioner timely requested reconsideration of the revocation.  CMS Ex. 3.  Petitioner stated that it had submitted a revalidation enrollment application (CMS-855B) prior to the site inspection, which included a copy of Petitioner’s business license showing Petitioner’s new address:  2900 W. Dutton Mill Road, Aston, Pennsylvania.  Petitioner stated that “793 Mount Road Aston PA 19014 is no longer our physical address.  We apologized [sic] for not providing this information on the 855B form in a timely manner . . . .”  CMS Ex. 3 at 5.  Petitioner also submitted a new CMS-855B enrollment application showing its practice location as the 2900 W. Dutton Mill Road address.  CMS Ex. 2 at 8.             

On June 13, 2018, the CMS contractor issued a reconsidered determination in which it upheld the revocation because Petitioner did not dispute that Petitioner’s former location at the 793 Mount Road address was non-operational.  CMS Ex. 1. 

Petitioner requested an administrative law judge (ALJ) hearing to dispute the revocation.  The Civil Remedies Division originally assigned this case to Judge Bill Thomas who, on July 25, 2018, issued an Acknowledgment and Pre-Hearing Order (Order).  In response to the Order, CMS filed a motion for summary judgment and brief in support (CMS Br.), and ten proposed exhibits (CMS Exs. 1-10).  Petitioner filed a response brief (P. Br.) and seven proposed exhibits (P. Exs. 1-7), including the written direct testimony for three witnesses (P. Exs. 5-7). 

On November 20, 2018, this case was transferred to me for hearing and decision.

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II. Decision on the Record

Neither party objected to any of the proposed exhibits; therefore, I admit them into the record.  Order ¶ 7; Civil Remedies Division Procedures (CRDP) § 14(e). 

The Order advised the parties that they must submit written direct testimony for each proposed witness and that an in-person hearing would only be necessary if the opposing party requested an opportunity to cross-examine a witness.  Order ¶¶ 8-11; CRDP §§ 16(b), 19(b), (d); Vandalia Park, DAB No. 1940 (2004); Pac. Regency Arvin, DAB No. 1823 at 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).  CMS did not submit written direct testimony for any witnesses.  Petitioner submitted written direct testimony for three witnesses, but CMS did not request to cross-examine any of those witnesses.  Therefore, I render this decision based on the written record.

III. Issue

Whether CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(5).

IV. Jurisdiction

I have jurisdiction to hear and decide this case.  42 U.S.C. § 1395cc(j)(8); 42 C.F.R. §§ 424.545(a), 498.1(g), 498.3(b)(17), 498.5(l)(2).

V. Findings of Fact, Conclusions of Law, and Analysis1

The Secretary of Health and Human Services (Secretary) has the authority to create regulations that establish enrollment standards for suppliers.  42 U.S.C. § 1395cc(j).  The Secretary promulgated regulations that require prospective suppliers to file an enrollment application with CMS and meet certain requirements in order to receive Medicare billing privileges.  42 C.F.R. §§ 424.500, 424.505, 424.510, 424.530.  Further, enrolled suppliers must periodically revalidate their enrollment information with CMS and report to CMS changes in information provided on their enrollment application.  42 C.F.R. §§ 424.515, 424.516.

The Secretary’s regulations provide that if an enrolled supplier is not in compliance with enrollment requirements or other rules related to suppliers, then CMS may revoke that supplier’s Medicare billing privileges.  42 C.F.R. § 424.535.  The Secretary promulgated

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a regulation that requires suppliers to be operational.  42 C.F.R. § 424.535(a)(5).  In its discretion, CMS or its contractors may conduct a site visit to determine whether a supplier is in compliance with Medicare enrollment requirements.  42 C.F.R. § 424.517. 

1. Petitioner submitted a revalidation enrollment application (CMS-855B) to CMS on or about January 31, 2018, in which Petitioner listed 793 Mount Road, Aston, Pennsylvania as its practice location, even though Petitioner had sold its property at that address in or about July 2017. 

Aston Township previously had two fire companies called the Aston Beechwood Volunteer Fire Company and the Green Ridge Fire Company.  The Aston Beechwood Volunteer Fire Company had a fire station at 793 Mount Road, Aston, Pennsylvania, and the Green Ridge Fire Company had a station at 2900 W. Dutton Mill Road, Aston, Pennsylvania.  By 2016, these fire companies merged into the Aston Beechwood Volunteer Fire Company, but later took the name Aston Township Fire Department.  In or about July 2017, the Aston Township Fire Department sold the fire station that originally belonged to the Aston Beechwood Volunteer Fire Company, located at the 793 Mount Road address, and consolidated its operations at the former Green Ridge Fire Company’s station located at the 2900 W. Dutton Mill Road address.  P. Exs. 1, 3; P. Ex. 5 ¶¶ 3-6; P. Ex. 6 ¶¶ 5-8; P. Ex. 7 ¶¶ 5-8. 

Petitioner was a supplier with the Medicare program providing ambulance services, and the 793 Mount Road address was its official practice location on file with CMS since at least May 2013.  Hearing Req., Ex. A.  In a December 12, 2017 letter, a CMS contractor informed Petitioner that it needed to revalidate its Medicare enrollment by February 28, 2018.  The CMS contractor sent a copy of this letter to addresses in Media, Pennsylvania and Newark, Delaware.  CMS Ex. 10.  The U.S. Postal Service returned the letter sent to Media, Pennsylvania as “Unable to Forward.”  CMS Ex. 9 at 4.  The CMS contractor mailed another letter to Petitioner on January 24, 2018, but this time to the 793 Mount Road address.  CMS Ex. 8.  However, the U.S. Postal Service returned the letter indicating there was “No Such Number” and “Unable to Forward.”  CMS Ex. 7 at 2.

Despite these difficulties, Petitioner timely filed a CMS-855B enrollment application to revalidate its Medicare enrollment.  CMS Ex. 6.  In the revalidation enrollment application, Petitioner’s “Practice Location” is listed as the 793 Mount Road address.  CMS Ex. 6 at 8. 

2. On February 17, 2018, a CMS contractor’s site inspector attempted a site visit at Petitioner’s 793 Mount Road practice location, but observed that Petitioner was not operational at that location.

The CMS contractor sent an inspector to conduct a site visit at the 793 Mount Road address.  The inspector arrived at 3:36 p.m. on February 17, 2018, but observed that the

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location was not open for business, did not have staff present, did not have customer activity, and did not appear to be operational.  CMS Ex. 5 at 1.  The inspector photographed the exterior of the building, which showed a sign for a plumbing and heating company.  CMS Ex. 5 at 1-2.

3. CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(5) because Petitioner was not operational at its practice location on file with CMS, which was also the practice location identified in Petitioner’s revalidation enrollment application. 

CMS may revoke a supplier’s billing privileges if, upon an on-site review, CMS determines that the supplier is no longer operational to furnish Medicare-covered items or services.  42 C.F.R. § 424.535(a)(5)(i).  The term “operational” means:

the provider or supplier has 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 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 (definition of Operational).  In order “[t]o be ‘operational’ in accordance with the definition in section 424.502, a provider [or supplier], among other things, must have a ‘qualified physical practice location’ that is ‘open to the public for the purpose of providing health care related services.’”  Viora Home Health, Inc., DAB No. 2690 at 7 (2016).  A qualified physical practice location is the supplier’s address that is on file with CMS at the time of a site visit.  Foot Specialists of Northridge, DAB No. 2773 at 8-10 (2017).  Further, “the primary purpose of an unannounced and unscheduled site visit is to ensure that a provider or supplier is operational at the practice location found on the Medicare enrollment application.”  76 Fed. Reg. 5862, 5870 (Feb. 2, 2011) (emphasis added).

In the present case, Petitioner admits that the 793 Mount Road address had been its practice location in the past, but was no longer its practice location after the sale of that property in July 2017.  However, Petitioner argues that it was operational at all times, noting that ambulances do not provide services at their station but respond to the location of the victim.  Therefore, the regulatory definition of a practice location is not applicable to ambulance services.  P. Br. at 6-7. 

Entities providing ambulance services are not unique in providing services at places other than the practice location they identify on a CMS-855 enrollment application.  For example, home health agencies provide home health services in the homes of

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beneficiaries.  42 U.S.C. § 1395x(m).  However, CMS still requires home health agencies to have a qualified physical practice location.  In a case that has some similarities to the present one, involving a home health agency, the Departmental Appeals Board (DAB) indicated that the focus of its inquiry was whether the home health agency’s practice location on file with CMS was operational, and not whether the home health agency was operational generally.

In our view, by arguing only that it had already notified Palmetto of its changed location, Viora effectively concedes that it had stopped operating, or being operational, at the W. Airport Boulevard location before July 8, 2014.  Since we have found that Viora has not established that it changed its location of record at any point prior to December 2014, Viora’s arguments do nothing to establish operational status at the only practice location CMS had “on file” for Viora, i.e., W. Airport Boulevard, on July 8, 2014.

Viora, DAB No. 2690 at 12. 

Petitioner also asserts that the site inspector ought to have attempted to locate Petitioner’s new practice location when it became clear that Petitioner was no longer at the 793 Mount Road address.  P. Br. at 8-9.  However, the site inspector’s role was to inspect the practice location that Petitioner had on file with CMS and not to investigate where Petitioner’s practice location might be after determining that Petitioner was not operational at its practice location on file.

Finally, Petitioner argues that it was the victim of malfeasance by its billing company.   P. Br. at 8.  Petitioner stated that it completely relies on the professional billing services of that company to keep its Medicare billing privileges updated, and that company failed to provide the proper practice location to CMS.  Petitioner even asserts that its billing company submitted the 2018 revalidation enrollment application without Petitioner’s knowledge and simply copied an earlier revalidation application.  P. Br. at 3-4; P. Ex. 5 ¶¶ 8-11; P. Ex. 6 ¶¶ 9-14; P. Ex. 7 ¶ 9-14. 

Petitioner’s argument is not availing because the DAB has generally not accepted as a defense to revocation that a third party made a mistake when acting on behalf of the supplier.  See Mark Koch, D.O., DAB No. 2610 at 4 (2014); Louis J. Gaefke, D.P.M., DAB No. 2554 at 9-10 (2013).  In the present matter, Petitioner has made it clear that it relied on the billing company to handle its Medicare enrollment matters.  However, Petitioner needed to provide some oversight to the billing company.  Ultimately, Petitioner is responsible for properly keeping CMS updated as to its practice location, something that Petitioner did not do. 

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I agree with Petitioner that the CMS contractor ought to have considered more broadly whether it should have revoked a volunteer organization that provides emergency medical services for a municipality.  As Petitioner indicated, the CMS contractor’s actions have likely imperiled Aston Township’s ability to provide emergency ambulance services, thus potentially endangering that community.  For this reason alone, a more searching reconsidered determination was in order.  However, CMS has delegated its extremely broad discretion to impose revocations to CMS contractors.  42 C.F.R. § 405.800(b); Fayad v. Sebelius, F. Supp. 2d 699, 704-705 (E.D. Mich. 2011).  My ability to review revocations imposed by CMS or its contractors is very limited.  According to the DAB: 

The ALJ’s review of CMS’s revocation . . . is thus limited to whether CMS had established a legal basis for its actions. . . .  In other words, the right to review of CMS’s determination by an ALJ serves to determine whether CMS had the authority to revoke . . . Medicare billing privileges, not to substitute the ALJ’s discretion about whether to revoke.  Once the ALJ found that both elements required for revocation were present . . . , the ALJ was obliged to uphold the revocation . . . .

Letantia Bussell, M.D., DAB No. 2196 at 13 (2008) (citations omitted) (emphasis in original).  Because I conclude that the facts and law permit CMS to revoke Petitioner’s Medicare enrollment and billing privileges, I must affirm that action.    

VI. Conclusion

I affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges effective February 17, 2018.

• 1. My numbered findings of fact and conclusions of law are set forth below in italics and bold.