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                              National Seating & Mobility, Inc., DAB CR5345 (2019)
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National Seating & Mobility, Inc., DAB CR5345 (2019)








  
  
    

  
      
Department of Health and Human Services 
    DEPARTMENTAL APPEALS BOARD
          Civil Remedies Division





National Seating & Mobility, Inc.
	(NPI: 1720565898),
	Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-19-493Decision No. CR5345June 17, 2019

        
              
    

      DECISION
The Centers for Medicare & Medicaid Services (CMS), through an administrative contractor, National Supplier Clearinghouse (NSC), denied the enrollment of a new practice location for National Seating & Mobility, Inc. (Petitioner), a supplier of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) in the Medicare program.  NSC denied enrollment because Petitioner shared its practice location with Medicare enrolled suppliers.  Petitioner requested a hearing to dispute the denial, asserting that, while it shared a building with two Medicare-enrolled suppliers, it did not share its own office space within the building and had its own entrance to the building.  Because Petitioner has not met its burden of proving that it met the enrollment requirement/supplier standard at 42 C.F.R. § 424.57(c)(29), I affirm CMS’s denial of enrollment.
I. Background and Procedural History
On August 8, 2018, Petitioner electronically filed an enrollment application seeking to add a new physical location from which Petitioner would do business as a DMEPOS supplier.  CMS Exhibit (Ex.) 8.  On September 5, 2018, NSC sent an inspector to Petitioner’s new location.  CMS Ex. 3.  On September 27, 2018, NSC issued an initial
Page 2
determination in which it denied enrollment based on failing to meet enrollment requirements (i.e., noncompliance with two DMEPOS supplier standards, found at 42 C.F.R. § 424.57(c)(7) and (29)).  CMS Ex. 1; *see* 42 C.F.R. § 424.530(a)(1).  In regard to the supplier standard at § 424.57(c)(7), NSC stated the following as the reason for non-compliance:
**WE CONDUCTED AN ON-SITE INSPECTION ON SEPTEMBER 5, 2018.  DURING THE INSPECTION IT WAS NOTED THAT THE LOCATION DID NOT HAVE ANY SIGNAGE POSTED SHOWING THE BUSINESS NAME OR HOURS OF OPERATION.******
CMS Ex. 1 at 2 (emphasis in original).
As to the supplier standard at § 424.57(c)(29), NSC gave the following as the reason for the noncompliance finding:
**AFTER CAREFUL REVIEW OF THE SITE INSPECTION CONDUCTED ON SEPTEMBER 5, 2018, WE HAVE FOUND THAT YOUR FACILITY IS NOT IN COMPLIANCE WITH STANDARD . . . 29 AS THE FACILITY IS SHARING SPACE WITH OTHER MEDICARE PROVIDERS OR SUPPLIERS.  ALL SAINTS HOME MEDICAL LLC AND CUDD COMPANY LLC ARE BOTH ALREADY ENROLLED AT THIS LOCATION.  WE WERE UNABLE TO VERIFY WITH THE US POSTAL SERVICE [THAT IT] HAS DESIGNATED INDIVIDUAL SUITES AT THIS LOCATION.  ALSO, IT APPEARS THAT THE BUSINESSES ARE NOT SEPERATED WITHIN THE BUILDING SPACE.  WE THEREFORE HAVE NOT FOUND [PETITIONER] TO BE IN COMPLIANCE WITH THIS STANDARD.******
CMS Ex. 1 at 3 (emphasis in original).
In response to the initial determination denying enrollment, Petitioner submitted a corrective action plan (CAP) to NSC.  CMS Ex. 5.  On November 1, 2018, an NSC site inspector completed another site visit of Petitioner’s location.  CMS Ex. 4.  However, NSC denied Petitioner’s CAP based on the second site visit.  CMS Ex. 6 at 3.
NSC also interpreted Petitioner’s CAP as a reconsideration request.  In the reconsidered determination, the NSC hearing officer upheld the denial of enrollment based on
Page 3
Petitioner’s failure to be in compliance with the supplier standards at § 424.57(c)(7), (29).  CMS Ex. 7.  The hearing officer concluded that the November 1, 2018 site inspection showed that Petitioner:
shares a practice location with All Saints Home Medical LLC and Cudd Company LLC as it appears the businesses are not separated within the building space.  Also, [Petitioner] does not maintain a permanent visible sign in plain view showing the business name and hours of operation.  The facility was in the process of building out a separate entrance, however at the times and dates of the site visits, the entrance was still shared.  This does not reflect compliance at the time of the site visit.
CMS Ex. 7 at 4.
Petitioner timely requested administrative law judge (ALJ) review.  Petitioner asserted that “[d]espite clear evidence that the [Petitioner’s] space was separate from the two other building occupants, that the appropriate signage showing the business name and hours of operation was displayed and that a separate entryway was identified for access directly to [Petitioner’s] space, the Medicare Hearing Officer found” Petitioner noncompliant with § 424.57(c)(7), (29).  Hearing Request at 3.
I was assigned to hear and decide this case, and on March 6, 2019, I issued an Acknowledgement and Prehearing Order (Order).  In compliance with the Order, CMS filed a prehearing brief (CMS Br.) along with 18 exhibits (CMS Exs. 1-18), one of which was written direct testimony from the site inspector.  CMS Ex. 2.  In its brief, CMS stated that it was limiting its basis for denial to § 424.57(c)(29); therefore, the alleged noncompliance with § 424.57(c)(7) is no longer at issue in this case.  CMS Br. at 8 n.2.  Petitioner filed a prehearing brief (P. Br.) and 11 exhibits (P. Exs. 1-11), one of which was written direct testimony for Petitioner’s General Manager.  P. Ex. 5.
II. Decision on the Record
Because neither party objected to the proposed exhibits, I admit CMS Exs. 1-18 and P. Exs. 3-5, 8, 11 into the record.  Order ¶ 7; Civil Remedies Division Procedures (CRDP) § 14(e).  However, I exclude P. Exs. 1-2, 6-7, 9-10 because they are duplicates of CMS Exs. 1, 3, 5, 7, 10, 12.  5 U.S.C. § 556(d) (“[T]he agency as a matter policy shall provide for the exclusion of . . . unduly repetitious evidence.”); CRDP § 14(a) (“Parties . . . should not file as an exhibit a document already filed as an exhibit by the opposing party.”).
The Order advised the parties that an in-person hearing would only be necessary if a party submitted the written direct testimony of a proposed witness and the opposing party
Page 4
requested an opportunity to cross-examine a witness.  Order ¶¶ 8-10; CRDP § 16(b); *see* *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).  Each party submitted the written direct testimony for a witness; however, neither party requested to cross-examine either witness.  Therefore, I do not need to hold a hearing in this case, and I decide this case based on the written record.  Order ¶ 11; CRDP § 19(b), (d).
III. Issue
Whether CMS had a legitimate basis for denying Petitioner’s enrollment in the Medicare
	program as a DMEPOS supplier due to noncompliance with 42 C.F.R. § 424.57(c)(29).
IV. Jurisdiction
I have jurisdiction to decide this case.  42 C.F.R. §§ 498.3(b)(17), 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 appear in bold and italics.
***1. In September 2018, Petitioner shared a building with two Medicare enrolled suppliers.***
In its enrollment application, received by NSC in August 2018, Petitioner indicated that its physical location was 3401 North May Avenue, Suite 3401C, Oklahoma City, Oklahoma 73112-6904.  CMS Ex. 8 at 2.
In 2015, Cudd Company, LLC, doing business under the name Asbury Pharmacy (Cudd or Asbury Pharmacy), enrolled in the Medicare program as a DMEPOS supplier.  CMS Ex. 9.  Cudd listed as its business location 3401 North May, Oklahoma City, Oklahoma 73112.  CMS Ex. 9 at 7.  In late 2018, Cudd filed a CMS-855S enrollment application to change its address, indicating the same North May address as in its 2015 enrolment application, but adding “Suite B.”  CMS Ex. 10 at 12.  Cudd asserted this address was effective in 2015.  CMS Ex. 10 at 12.
In July 2018, All Saints Home Medical, LLC, doing business under Asbury Medical Supply (All Saints or Asbury Medical Supply), electronically filed an update to its DMEPOS enrollment information with NSC.  CMS Ex. 11.  In doing so, All Saints indicated that its physical location address was 3401 North May Avenue, Oklahoma City, Oklahoma 73112-6904.  CMS Ex. 11 at 2.  All Saints said this address had been effective
Page 5
since 2014.  CMS Ex. 11 at 2.  All Saints was enrolled as a Medicare supplier until February 2019, when it voluntarily terminated its enrollment.  CMS Ex. 12.
Therefore, I find that Petitioner shared the same building as two Medicare enrolled suppliers.
***2. At the time of the September 2018 site inspection, only the front door to the building at 3401 North May Avenue had signs and appeared to be for public use, and once inside the front door, the public would need to walk through the space used by All Saints in order to get to Petitioner’s offices.***
An NSC site inspector went to Petitioner’s address to conduct a site inspection on September 5, 2018.  The inspector noted that there were no signs posted inside or outside with Petitioner’s name on it.  Further, the site inspector said that Petitioner’s manager stated that “they will be sharing an entrance with Ashbury [sic] Medical and are in the process of getting signage up and showing the Ste C on the door for this supplier.”  CMS Ex. 3 at 1.
The site inspector testified in this proceeding that Petitioner “is located in a building that has two entrances at the front of the building” and “[t]he large sign in front of [the] building . . . reads ‘Asbury Pharmacy & Medical Supply 3401.’”  CMS Ex. 2 at 2 ¶ 9.  Further, the site inspector described Petitioner’s location as follows:
When I arrived at [Petitioner’s] location on September 5, 2018, there were no signs posted with [Petitioner’s] name or hours, either inside or outside of the building.
I walked in to the building from the left-side front entrance for Asbury Pharmacy and then walked through the double doors to Ashbury [sic] Medical Supply.  I walked to the counter for Ashbury [sic] Medical Supply and asked to speak with someone for [Petitioner].  I then spoke with Tori Whitehead, who identified herself as the general manager for [Petitioner].
Ms. Whitehead told me that [Petitioner’s] office space was located behind a door near the counter for Ashbury Medical supply [sic].  Ms. Whitehead told me that they were thinking about revamping a set of doors at the side of the building to be the entrance to [Petitioner].  Ms. Whitehead showed me the office, warehouse space and side doors that would be the entrance for [Petitioner] . . . .  The doors are two metal grey
Page 6
doors leading to a side parking lot.  There was no signage for [Petitioner] on the doors at the time of the inspection.
CMS Ex. 2 at 2-3 ¶¶ 11-13.
I accord the site inspector’s testimony significant weight. The site inspector signed her site inspection report on September 5, 2018, the same day she conducted the inspection, and indicated that the report was made under penalty of perjury.  CMS Ex. 3 at 1.  In addition, the site inspector took photographs during the site visit that show only signage for Asbury Medical Supply on the building.  CMS Ex. 3 at 2.  Finally, the site inspector provided written direct testimony under penalty of perjury that confirmed that CMS Ex. 3 contains her report and photographs of Petitioner’s location.  CMS Ex. 2 at 2 ¶ 7.
Ms. Whitehead submitted written direct testimony to refute the site inspector.  She asserted that Petitioner is located in suite C of the building and that the door to suite C can only be unlocked by Petitioner’s employees.  P. Ex. 5 at 1 ¶ 7.  Although Ms. Whitehead recalls meeting the site inspector, she did “not recall informing [the site inspector] that [Petitioner] shared an entrance with Asbury Medical.”  P. Ex. 5 at 2 ¶¶ 11-12.  Ms. Whitehead said that she told the inspector that the entrance to suite C was located on the side of the building and that she “may have indicated that the gray double doors would be replaced at some point in the future.”  P. Ex. 5 at 2 ¶ 13.
I afford Ms. Whitehead’s testimony limited weight.  She did not deny that she told the site inspector that Petitioner would be sharing an entrance with Asbury Medical Supply.  Instead, Ms. Whitehead evasively stated that she “do[es] not recall informing [the site inspector] that [Petitioner] shared an entrance with Asbury Medical.”  P. Ex. 5 at 2 ¶ 12.  Further, in her testimony, Ms. Whitehead did not discuss Petitioner’s undated photographs showing signs with Petitioner’s name on an internal door and an external door.  P. Exs. 3-4, 8.  Therefore, those photographs do not prove that the signs were present during the September site visit.  Finally, while Ms. Whitehead testified that she told the site inspector that Petitioner’s offices were accessible through the side doors in the building, she did not say that the public used those doors or how the public would know to use those doors.
I find that Petitioner’s building had two entrances that the public would access, both of which were in the front of the building.  The side entrance appears from the pictures to be windowless metal doors used for receipt of inventory or for moving large items in and out of the building.  Without signage indicating that it was an entrance for Petitioner, I cannot conclude that those doors were being used by the public to access Petitioner’s offices in September 2018.  Therefore, I find that Petitioner was sharing an entrance to the building, and sharing space with All Saints (i.e., Asbury Medical Supply) because members of the public would need to transit All Saints’ space in order to enter Petitioner’s space.
Page 7
***3. In September 2018, USPS records did not show that Petitioner’s offices were located in a separate suite at the building Petitioner shared with the Medicare enrolled suppliers.***
NSC indicated in its initial determination that NSC could not confirm with the USPS that the USPS designated individual suites at the building where Petitioner’s offices were located.  CMS Ex. 1 at 3.
In its CAP request, Petitioner asserted that it contacted the USPS regarding the designation of a separate suite for Petitioner, distinct from the two Medicare enrolled suppliers at the building they shared.  CMS Ex. 5 at 1-2.  Ms. Whitehead also testified that a representative for Petitioner called the USPS to make certain that the USPS knew that Petitioner’s address included reference to Suite C and not just 3401 North May Avenue.  P. Ex. 5 at 1 ¶ 9.  Both the CAP request and Ms. Whitehead’s testimony indicated that the “Suite C designation” would be updated in USPS records within ten days.  CMS Ex. 5 at 1-2; P. Ex. 5 at 1 ¶ 10.  Petitioner submitted evidence of the change with the USPS.  P. Ex. 11 at 1.
I find that, while Petitioner took action to have the USPS change its records, at the time of the September site inspection, the USPS did not consider Petitioner to be located in a suite separate from the Medicare enrolled suppliers at the shared building.  It appears that the USPS made the change based on a telephone call, after the September 2018 site visit.  P. Br. at 5.  Therefore, I find that NSC was correct that the USPS did not recognize separate suites at Petitioner’s shared building in September 2018.
***4. There is a legitimate basis to deny Petitioner Medicare enrollment and billing privileges under 42 C.F.R. § 424.530(a)(1) because Petitioner did not meet the supplier standard at 42 C.F.R. § 424.57(c)(29).***
The Social Security Act (Act) authorizes the Secretary of Health and Human Services (Secretary) to establish regulations for enrolling providers and suppliers in the Medicare program, and for establishing requirements for DMEPOS suppliers to obtain a supplier number.  42 U.S.C. §§ 1395m(j)(1)(B), 1395cc(j)(1)(A).  DMEPOS suppliers must enroll in the Medicare program and receive a billing/supplier number in order to obtain payment for services rendered to Medicare beneficiaries.  42 U.S.C. § 1395m(j)(1)(A); 42 C.F.R. §§ 424.57(b)-(c), 424.505.  CMS or a contractor may deny enrollment if a prospective supplier fails to meet enrollment requirements.  42 C.F.R. § 424.530(a)(1).
One such requirement under the Act is that DMEPOS suppliers “maintain a physical facility on an appropriate site.”  42 U.S.C. § 1395m(j)(1)(B)(ii)(II).  In furtherance of this requirement and under authority to specify “other requirements,” the Secretary promulgated 42 C.F.R. § 424.57(c)(29) to prohibit DMEPOS suppliers from “sharing a
Page 8
practice location with any other Medicare supplier or provider,” with certain exceptions not applicable to this case.  As the Secretary explained in the preamble to the final rule:
DMEPOS suppliers list the practice location in Section 4 of the Medicare enrollment application (CMS-855S).  For the purposes of this standard, sharing a practice location refers to sharing of the physical location as described on the CMS-855S.  In general, the practice location is the physical space where a DMEPOS supplier operates his or her business and meets with customers and potential customers.
75 Fed. Reg. 52,629, 52,641 (Aug. 27, 2010).
In regard to denials of enrollment, it is important to note that ALJ review is limited to whether, at the time of the denial, the denial was legitimate, and subsequent changes made in relation to a CAP do not form a basis for reversing the denial.  *See Kearney Regional Medical Center, L.L.C*., DAB No. 2639 at 6 (2015) (“We view both the plain language of the statute and the undisputed facts here as supporting the conclusion that Kearney was not eligible to participate as a hospital at the time that CMS denied its certification.”); *see also* *DSM Imagine, Inc.*, DAB No. 2313 at 8 (2010) (“Thus, the ALJ correctly found that . . . the sole issue before him was ‘whether a basis existed to terminate [DMS’s] enrollment as of the point in time when [WPS] determined it to be deficient.’”).
Equally important, the regulations place on a supplier the burden of proving compliance with enrollment requirements.  42 C.F.R. § 424.545(c) (“The provider or supplier must be able to demonstrate that it meets the enrollment requirements . . . .”).  Therefore, this case turns on Petitioner’s ability to show that it had a separate practice location in September 2018.
Finally, “failure to comply with one supplier standard is a sufficient basis for denying the enrollment application.”  *Experts Are Us, Inc.*, DAB No. 2452 at 5 (2012).
In the present case, Petitioner argued the following in support of its case:
There is a parking lot for the building that wraps around the side of the building where the separate entrance for [Petitioner] is located.  (P. Ex. 3).  The double door gray doors are the main entrance into [Petitioner’s] May Ave Location and are easily accessible to the public directly from the parking lot.  In fact, given that the majority of [Petitioner’s] customers are confined to a wheelchair it is imperative to limit the distance required to travel from a
Page 9
customer’s car to the [Petitioner’s] main entrance.  An entryway on the side of the building is the most efficient means of access for [Petitioner’s] customers.
Although there is an interior door between Asbury Medical’s practice location and [Petitioner’s] May Avenue Location, this door is locked during business hours (P. Ex. 5 at pg. 1).  A member of the general public can enter [Petitioner’s] May Avenue Location through the gray double doors on the side of the building, and entry through Asbury Medical is not required or usually permitted to the general public.
P. Br. at 6.
CMS made the following argument:
Petitioner is not in compliance with supplier standard #29 because it shared an internal entrance with another enrolled supplier, All Saints Medical, LLC dba Asbury Medical, at the time of the NSC’s inspections.  In order to visit Petitioner’s practice location, you must go through the exterior entrance for Asbury Medical, walk through Asbury Medical, and enter the door to Petitioner’s office. *CMS Ex. 4 at 7.*  There is no direct access to Petitioner’s office from the parking lot.  Any customers and potential customers would be required to walk through another supplier to reach Petitioner’s office.  Thus, Petitioner shares the “physical space where a DMEPOS supplier operates his or her business and meets with customers and potential customers,” in violation of supplier standard #29.
CMS Br. at 9-10.
I agree with CMS’s argument.  This record supports that, as of September 2018, Petitioner was sharing a practice location with another Medicare supplier, All Saints (i.e., Asbury Medical Supply) contrary to 42 C.F.R. § 424.57(c)(29)(i).
There is no dispute that Petitioner had external doors that led into Petitioner’s offices.  However, there is a dispute as to whether Petitioner was using those doors as its public entrance at the time of the September 2018 site visit, as opposed to having customers enter through the space used by All Saints.  Petitioner admits, and the evidence shows, that, in September 2018, its side doors did not have signs on them indicating that they were Petitioner’s entrance; rather, Petitioner added the signs following the denial of
Page 10
enrollment.  P. Br. at 7.  The clear lack of signage on the exterior doors, coupled with the site inspector’s statement that Ms. Whitehead told her Petitioner “will be sharing an entrance with Ashbury [sic] Medical [Supply],” shows it is more likely than not that Petitioner was *not* using the exterior door as a public entrance at the time of the September 5, 2018 survey.  CMS Ex. 3 at 1.  As mentioned above, the site inspector’s statement on this point, which was contemporaneous with the survey, is more credible than and not truly rebutted by Ms. Whitehead’s more recent testimony that she “do[es] not recall informing [the site inspector] that [Petitioner] shared an entrance with Asbury Medical.”  P. Ex. 5 at 2 ¶ 12.
Therefore, it is more likely than not that Petitioner was sharing an entrance to its practice location with All Saints because it had no signage on its external doors to indicate that members of the public could enter Petitioner’s practice location through those doors.  Further, Ms. Whitehead admitted as much to the site inspector.  Moreover, Petitioner’s portion of the shared building was not officially differentiated with the USPS until sometime after October 23, 2018—well after the survey—when Petitioner asked the USPS to add a new suite number for Petitioner’s portion of the building.  P. Ex. 5 at 1 ¶ 9; P. Ex. 11 at 1.  Based on these facts, I conclude that, as of September 2018, Petitioner was sharing a practice location with another Medicare supplier in violation of 42 C.F.R. § 424.57(c)(29).  Because Petitioner was not in compliance with 42 C.F.R. § 424.57(c)(29), a supplier standard and enrollment requirement, in September 2018, Petitioner’s enrollment application was subject to denial.  42 C.F.R. § 424.530(a)(1); *Experts Are Us, Inc.*, DAB No. 2452 at 5.
VI. Conclusion
I affirm CMS’s denial of Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.530(a)(1) due to noncompliance with the enrollment requirement/supplier standard at 42 C.F.R. § 424.57(c)(29).
  
          /s/
        Scott Anderson

                      Administrative Law Judge Back to top
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