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                              Darre Holdings, LTD, DAB CR5415 (2019)
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Darre Holdings, LTD, DAB CR5415 (2019)








  
  
    

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





Darre Holdings, LTD
	(NPI: 1376728675; PTAN: Z105446),
	Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-18-1244Decision No. CR5415September 6, 2019

        
              
    

      DECISION
Petitioner’s Medicare billing privileges were deactivated on August 28, 2017, as a result of its failure to timely comply with a request that it revalidate its Medicare enrollment record.  For the reasons discussed below, I conclude that the effective date of Petitioner’s reactivated Medicare billing privileges remains November 20, 2017.
I.  Background and Procedural History
On April 5, 2017, Noridian Healthcare Solutions (Noridian), a Medicare administrative contractor, sent a written request that Petitioner, Darre Holdings, LTD, a clinic/group practice that does business under the name DC Canyon Health &Wellness, revalidate its Medicare enrollment record no later than June 30, 2017.  *See*Centers for Medicare & Medicaid Services (CMS) Exhibit (Ex.) 1 at 1, 3; *see also*CMS Ex. 4 at 1.  Noridian instructed Petitioner to “update or confirm all the information in [its enrollment] record, including [its] practice locations and reassignments.”  CMS Ex. 1 at 1, 3.  Noridian cautioned Petitioner that, if “[its] enrollment is deactivated,” it “will not be paid for
**Page 2**
services rendered during the period of deactivation” which “will cause a gap in [its] reimbursement.”  CMS Ex. 1 at 1, 3.
On June 12, 2017, in an apparent response to Noridian’s request, Petitioner submitted Form CMS-855B certification statements via facsimile.  CMS Ex. 2.  On July 5, 2017, a Noridian employee sent Petitioner a development request via email that explained the following: “This email is in regard to the Certification Statement we received on June 12, 2017 for Tracking ID T051820170002235.  I am unable to view your online PECOS[1
] web application as it has not been submitted.”  CMS Ex. 3 at 1.  Noridian instructed Petitioner to “log into PECOS . . . and go all the way through the application to do the FINAL SUBMISSION at the very end.”  CMS Ex. 3 at 1.  The letter explained that Petitioner would receive a submission receipt after it submitted its application through PECOS, and Noridian requested that Petitioner reply to the email message after it had submitted the application through PECOS.  CMS Ex. 3 at 1.  Noridian cautioned that it “may reject” Petitioner’s application if Petitioner did not “furnish complete information within 30 days of the initial request.”  CMS Ex. 3 at 1.
On July 13, 2017, in response to Noridian’s email request, Petitioner submitted an enrollment application through PECOS.  CMS Ex. 4; *see*CMS Ex. 7.  On August 9, 2017, Noridian sent Petitioner an email message in which it again requested development.  CMS Ex. 5.  Noridian directed Petitioner to, *inter alia,*complete the electronic funds transfer (EFT) section of the application and upload a voided check or bank verification letter.  CMS Ex. 5 at 1.  Noridian cautioned that “[c]onsistent with regulations found at 42 [C.F.R. § ]  424.525, we may reject your application(s) if you do not furnish complete information within 30 calendar days of the initial request,” and advised that Petitioner’s application “will be rejected if all corrections are not received in full by . . . . 08/16/2017.”  CMS Ex. 5 at 1.
In response to Noridian’s email request, Petitioner submitted a voided check on August 10, 2017.  CMS Ex. 6.  However, Petitioner did not comply with the request that it submit a completed EFT section of the application.  CMS Ex. 7; *see*CMS Ex. 5 at 1.
On August 28, 2017, Noridian notified Petitioner via email that its billing privileges had been deactivated based on its failure to revalidate its enrollment record or respond to Noridian’s request for more information.  CMS Ex. 8 at 1.  Noridian informed Petitioner that it “will not pay any claims after this date.”  CMS Ex. 8 at 1.  Noridian advised Petitioner that it could reinstate its billing privileges by revalidating its enrollment record, and Noridian explained that the fastest way to do so was by using PECOS.  CMS Ex. 8 at 1.
**Page 3**
On November 17, 2017, Petitioner submitted an enrollment application and supporting documents to revalidate its enrollment record.  CMS Ex. 9 (copies of documents Petitioner mailed to Noridian); *see*CMS Ex. 10 at 2 (email correspondence referring to an application submitted through PECOS).
Following additional development (CMS Ex. 10), Noridian informed Petitioner via email on December 4, 2017, that it had approved Petitioner’s revalidation application.  CMS Ex. 11 at 1.  Noridian explained that Petitioner had “lapse in coverage dates” from August 28 through November 19, 2017.  CMS Ex. 11 at 3.  Petitioner submitted a request for reconsideration on February 9, 2018,2
 in which it complained that it was not notified that its application had been rejected and that its billing privileges had been deactivated.  CMS Ex. 12 at 1.  Petitioner also argued that Noridian’s representatives “kept telling us different versions and it took 3 months to speak to a representative that knew what she was talking about.”  CMS Ex. 12 at 2.  Although Petitioner contended that it had submitted a voided check, it did not assert that it had submitted the requested EFT section of the enrollment application as Noridian had instructed it to do.  CMS Ex. 12 at 1-2.
Noridian issued a reconsidered determination on July 11, 2018, in which it maintained the November 20, 2017 effective date of Petitioner’s reactivated billing privileges.  CMS Ex. 13 at 5.  Noridian discussed that it had “emailed [Petitioner] the first request for additional information [on] July 5, 2017, and a second request [on] August 9, 2017,” and that it “did not receive all the required information within the 30-day timeframe.”  CMS Ex. 13 at 5.  Noridian explained that Petitioner “did not revalidate [its] enrollment by June 30, 2017 and a stop in billing was placed on [its] enrollment effective August 28, 2017 pursuant to 42 [C.F.R. § ]424.515.”  CMS Ex. 13 at 5.
Petitioner submitted a request for an administrative law judge (ALJ) hearing on August 22, 2018.3
  ALJ Leslie A. Weyn issued an Acknowledgment and Pre-Hearing Order (Pre‐Hearing Order) on August 27, 2018, at which time she directed the parties to file
**Page 4**
their respective pre-hearing exchanges.4
  CMS filed a combined motion to dismiss, motion for summary judgment, and pre-hearing brief (CMS Br.), along with 14 proposed exhibits (CMS Exs. 1-14).  Petitioner filed a brief and five exhibits (P. Exs. 1-5).
I overrule CMS’s objections to Petitioner’s submission of P. Exs. 1 through 5.  Petitioner is not represented by counsel, and I will give Petitioner some latitude with its evidentiary submissions.  Further, CMS is not prejudiced by the inclusion of these exhibits in the evidentiary record.  To the extent that several of these submissions amount to unsworn witness testimony that is not subject to cross-examination (P. Exs. 1, 2, 5), I take the unsworn nature of the evidence into account as necessary when assessing the probative value of this evidence.
A hearing for the purpose of cross-examination is unnecessary because neither party has submitted written direct testimony.  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.5
II.  Issue
Whether CMS had a legitimate basis to assign Petitioner a November 20, 2017 effective date for its reactivated Medicare billing privileges.
III.  Jurisdiction
I have jurisdiction to hear and decide this case.  42 C.F.R § 498.3(b)(15); *Victor Alvarez, M.D.*, DAB No. 2325 at 8-12 (2010); *see also* 42 U.S.C. § 1395cc(j)(8).
IV.  Findings of Fact, Conclusions of Law, and Analysis6
***1. On April 5, 2017, Noridian requested that Petitioner revalidate its Medicare enrollment record no later than June 30, 2017.***
***2. On July 5, 2017, Noridian sent Petitioner a development request via email.***
***3. On July 13, 2017, Petitioner submitted an enrollment application in response to the development request it received via email.***
**Page 5**
***4. On August 9, 2017, Noridian submitted another development request via email in which it, inter alia, asked Petitioner to complete the EFT section of the enrollment application no later than August 16, 2017.***
***5. After Petitioner did not submit the requested development, Noridian deactivated Petitioner’s billing privileges on August 28, 2017.***
***6. On November 20, 2017, Petitioner submitted an enrollment application for purposes of revalidation.***
***7. Noridian approved the revalidation application and assigned a November 20, 2017 effective date for Petitioner’s reactivated Medicare billing privileges.***
***8. An effective date earlier than November 20, 2017, is not warranted for the reactivation of Petitioner’s Medicare enrollment and billing privileges.***
As a clinic/group practice, Petitioner is a “supplier” for purposes of the Medicare program.  *See*CMS Ex. 4 at 1; *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 who 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 that 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.”  *Id.*; *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 [its] enrollment outside the routine 5-year revalidation cycle.”  42 C.F.R. § 424.515(e).
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 “receipt of notification” to revalidate enrollment.  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
**Page 6**
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).
In April 2017, Noridian mailed a letter to Petitioner directing it to revalidate its Medicare enrollment record no later than June 30, 2017, and Noridian warned that Petitioner’s failure to revalidate could result in deactivation of its Medicare billing privileges, with a resulting gap in reimbursement.  CMS Ex. 1 at 1, 3.  After Petitioner did not submit a complete enrollment application, despite being given additional opportunities to do so, Noridian deactivated Petitioner’s billing privileges on August 28, 2017.  CMS Exs. 3, 5, 8.
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 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).  Noridian deactivated Petitioner’s billing privileges because it did not submit a revalidation application in response to the revalidation request, and it was not until November 20, 2017, that Noridian received Petitioner’s application for purposes of revalidation that it processed to
**Page 7**
approval.  CMS Exs. 8, 9 (showing expected delivery date of “11/20/2017”), 13.  Based on the November 20, 2017 receipt date of the enrollment application that was processed to approval, Noridian did not err in assigning a November 20, 2017 effective date for reactivated billing privileges.  42 C.F.R. § 424.520(d); *see 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.”); *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.”); *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 his billing privileges were deactivated.”).
Petitioner is challenging the nearly three-month gap in its Medicare billing privileges.  Petitioner argues that it was “earnest in accommodating [Noridian’s] requests and [was] in constant communications with [Noridian] during this period,” and that it was “not rude or acted in any way that was disrespectful.”  P. Br. at 5.  Petitioner further acknowledged that it “understand[s] the need for deadlines but also feel[s] if one is working in good faith and having an open dialogue during the allotted time then a deadline should not be the deciding factor in a request for reimbursement.”7
  P. Br. at 5.  Petitioner acknowledged that it had been notified by email on August 28, 2017, that its Medicare
**Page 8**
billing privileges had been stopped because it had not revalidated its enrollment record or responded to requests for more information.  P. Br. at 3.  In addition to asking for removal of the gap in its billing privileges, Petitioner alternatively requests retrospective billing privileges for 30 days prior to November 20, 2017.  P. Br. at 5; *see* 42 C.F.R. § 424.521(a)(1).
I reiterate that the deactivation of Petitioner’s billing privileges is not reviewable.  *Frederick Brodeur*, DAB No. 2857 at 12 (“A contractor’s deactivation decision is not an initial determination subject to ALJ or [DAB] review.”); *Willie Goffney*, DAB No. 2763 at 5 (stating no regulation provides appeal rights with respect to the contractor’s deactivation determination).  I can only review the effective date assigned for Petitioner’s reactivated billing privileges.  Petitioner does not dispute the appropriateness of the November 20, 2017 effective date of its reactivation, nor does it dispute that it submitted the application that Noridian processed to approval on November 20, 2017.  Petitioner also does not dispute that it received the email requesting that it submit the EFT section of the application, and it does not claim that it submitted the EFT section of the  application prior to the August 16, 2017 deadline.  P. Br. at 2; *see*P. Ex. 2 at 1.  Likewise, Petitioner concedes that it received notification on August 28, 2017, that its billing privileges had been deactivated, yet it nonetheless still did not revalidate its enrollment record for nearly another three months.  P. Br. at 3; *see*CMS Ex. 9.
Petitioner’s arguments focus on its gap in billing privileges that followed the deactivation of its billing privileges on August 28, 2017.  P. Br. at 3-4.  The scope of my review is limited to whether Noridian assigned the correct effective date when it reactivated Petitioner’s billing privileges.  *See Frederick Brodeur*, DAB No. 2857 at 12.  Petitioner has not argued that there is a factual or legal basis to establish reactivated billing privileges earlier than November 20, 2017.  42 C.F.R. § 424.520(d).  Noridian had a legitimate basis to deactivate Petitioner’s billing privileges when Petitioner failed to timely complete the requested development of its revalidation application, and Noridian had a legitimate basis to assign an effective date for Petitioner’s reactivated billing privileges based on the date Noridian received the enrollment application from Petitioner that Noridian was able to process to approval.  42 C.F.R. § 424.520(d).  Unfortunately for Petitioner, the nearly three-month gap in its billing privileges is largely due to its failure to follow the instructions in the August 28, 2017 letter that encouraged it to revalidate its enrollment record by submitting a new enrollment application or using PECOS so that its billing privileges could be reinstated.  CMS Ex. 8 at 1.
Petitioner alternatively requests that it be granted retrospective billing privileges 30 days earlier than November 20, 2017.  P. Br. at 5.  Such a matter is within the discretion of CMS and its contractors, and not an ALJ, and I therefore do not have the authority to grant such a request.  *Decatur Health Imaging, LLC*, DAB No. 2805 at 8-9 (2017) (“The [DAB] has held that it does not review CMS’s exercise of discretion to take other actions the regulations authorize relating to the enrollment of suppliers and providers.”).
**Page 9**
Petitioner argues that it has incurred a significant financial loss of $21,345.  P. Br. at 5.  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 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 November 20, 2017 effective date of Petitioner’s reactivated Medicare billing privileges.


          /s/
        Leslie C. Rogall

                      Administrative Law Judge
      1. PECOS is the Provider, Enrollment, Chain and Ownership System which is an internet-based application that enables Medicare providers and suppliers to electronically submit enrollment applications. back to note 1
                      2. Petitioner filed its request for reconsideration more than 60 days after Noridian issued the reconsidered determination. CMS “determined that there was good cause for [Petitioner] to miss the deadline” and accepted the request for reconsideration. CMS Exs. 13, 14; see 42 C.F.R. § 498.22(b)(3), (d)(2). back to note 2
                      3. Petitioner’s request for hearing lacks even a single sentence, and CMS, in its October 1, 2018 motion to dismiss, addressed the insufficiency of the request for hearing. See 42 C.F.R. § 498.40(b)(1) (requirement that a request for hearing identify the specific issues, and the findings of fact and conclusions of law with which the affected party disagrees). Because this motion was not ruled on prior to the reassignment of this case to me on March 8, 2019, and the parties have already filed their respective pre-hearing exchanges, I issue this decision on the merits and deny CMS’s motion to dismiss as moot. back to note 3
                      4. This case was reassigned to me on March 8, 2019. back to note 4
                      5. Because a hearing is unnecessary, I need not address whether summary judgment is appropriate. back to note 5
                      6. Findings of fact and conclusions of law are in italics and bold font. back to note 6
                      7. Petitioner submitted a list of “Names of phone contacts for Noridian & CMS” as P. Ex. 2. Petitioner’s timeline indicates that it had telephone contact with “Nani” and “Jeanne” on April 5, 2017, which is the date of the initial revalidation request. P. Ex. 2 at 1. The same timeline indicates Petitioner did not have any further telephone contact with Noridian until October 2, 2017, which was well after its billing privileges had been deactivated on August 28, 2017. P. Ex. 2 at 1. Petitioner also submitted a separate list (“Document Dates and time line”) that indicates that it submitted a voided check on August 9, 2017, and had no further contact regarding its enrollment revalidation prior to the deactivation of its billing privileges on August 28, 2017; to the extent the submission reflects that Petitioner submitted documents on August 18, 2017, I note that this submission pertained to the individual enrollment of one of Petitioner’s practitioners. Petitioner’s own submissions contradict its claim that it had “constant communications” and “an open dialogue during the allotted time” for it to submit a complete enrollment application for purposes of revalidation. P. Br. at 5; see P. Exs. 1 at 1; 2 at 1; see also, e.g, Wishon Radiological Med. Grp., Inc., DAB No. 2941 at 9 (2019) (“The regulation thus contemplates communication between the prospective provider or supplier and CMS (or its contractor), and a mutual understanding between them that there remain unresolved issues concerning a pending enrollment application that could be and are in the process of being resolved.”). back to note 7 Back to top
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