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                              Howard M. Sokoloff, DPM, MS, Inc., DAB CR5083 (2018)
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Howard M. Sokoloff, DPM, MS, Inc., DAB CR5083 (2018)








  
  
    

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





Howard M. Sokoloff, DPM, MS, Inc.
	(PTAN: DM037A),
	Petitioner,
	v.
	Centers for Medicare & Medicaid Services
Docket No. C-17-1197Decision No. CR5083April 30, 2018

        
              
    

      DECISION
Petitioner’s Medicare billing privileges were deactivated on April 30, 2017, as a result of its failure to timely comply with a request that it revalidate its Medicare enrollment. For the reasons discussed below, I conclude that the effective date of Petitioner’s reactivated Medicare billing privileges remains May 10, 2017.
I. Background and Procedural History
On February 8, 2017, Noridian Healthcare Solutions (Noridian), a Medicare administrative contractor, sent a letter to Petitioner, a podiatry practice, informing it that it needed to revalidate its Medicare enrollment no later than April 30, 2017. *See* Centers for Medicare & Medicaid Services (CMS) Exhibit (Ex.) 1 at 1. Noridian directed Petitioner to “update or confirm all the information in [its] record, including [its] practice locations and reassignments.” CMS Ex. 1 at 1. Noridian cautioned Petitioner that a “[f]ailure to respond to this notice will result in a hold on [its] payments, and possible deactivation of [its] Medicare enrollment,” and further warned that in the event of deactivation, “[Petitioner] will not be paid for services rendered during the period of
Page 2
deactivation” which “will cause a gap in [its] reimbursement.” CMS Ex. 1 at 1. Noridian provided two telephone numbers that Petitioner could call if it needed assistance, and also provided various public websites that it could reference.
Petitioner submitted a revalidation application via the internet-based Provider, Enrollment, Chain, and Ownership System (PECOS) that Noridian received on February 23, 2017. CMS Ex. 2. In Section 13 of the application, Petitioner listed an enrollment application contact person, Jessica Munoz, who it identified as a manager. CMS Ex. 2 at 3. Petitioner provided Ms. Munoz’s contact information, to include her mailing address, telephone number, facsimile number, and email address. CMS Ex. 2 at 3.
On March 10, 2017, Noridian sent an email message, entitled “Request for Corrections for Medicare Enrollment Application,” to the email address Petitioner provided for its contact person in its February 2017 application. CMS Ex. 2 at 5. Noridian instructed Petitioner to provide via PECOS, no later than March 17, 2017, electronic funds transfer (EFT) information and a copy of a voided check or bank verification letter. CMS Ex. 2 at 5-6. The letter cautioned that, pursuant to 42 C.F.R. § 424.525, Noridian may reject the revalidation application if Petitioner did not provide the requested information within 30 days. CMS Ex. 2 at 5. Petitioner did not submit a response to Noridian’s request for additional information.
Because Petitioner did not comply with the development request and did not submit a complete enrollment application, Noridian rejected Petitioner’s February 23, 2017 enrollment application on April 12, 2017. CMS Ex. 3 at 1. Based on its failure to comply with the revalidation request, Noridian deactivated Petitioner’s enrollment, effective April 30, 2017.1
  *See*CMS Ex. 7 at 2.
Noridian received Petitioner’s Medicare enrollment application for purposes of revalidation and reactivation on May 10, 2017. CMS Ex. 4. On June 9, 2017, Noridian reactivated Petitioner’s Medicare billing privileges, effective May 10, 2017. CMS Ex. 5. Petitioner submitted a request for reconsideration, dated July 5, 2017, in which it disputed the effective date assigned for its reactivated billing privileges. CMS Ex. 6. Petitioner explained that “[m]y office manager is new to Medicare and the online process with Noridian, and she did not know that a voided check was needed to complete the revalidation process.” CMS Ex. 6 at 1.
Noridian issued a reconsidered determination on August 14, 2017, in which it maintained the May 10, 2017 effective date of Petitioner’s reactivated billing privileges. CMS Ex. 7.
Page 3
The letter explained that Noridian had deactivated Petitioner’s billing privileges because Petitioner did not respond to the request for additional information regarding its revalidation application. CMS Ex. 7 at 2. Noridian further explained that it received a new application on May 10, 2017, and that Petitioner had a “lapse of billing from the time of deactivation until the day prior to receipt date of the application.” CMS Ex. 7 at 2.
Petitioner submitted a request for an administrative law judge (ALJ) hearing on September 22, 2017. I issued an Acknowledgment and Pre-Hearing Order (Pre-Hearing Order) on October 2, 2017. CMS filed a Pre-Hearing Brief and Motion for Summary Judgment (CMS Br.), along with eight proposed exhibits (CMS Exs. 1-8), and Petitioner submitted a brief (P. Br.). In the absence of any objections, I admit CMS Exs. 1-7. However, I do not admit CMS Ex. 8 because that document is password-protected and CMS has not provided a password. Further, CMS did not cite to CMS Ex. 8 in its motion for summary judgment and pre-hearing brief, and therefore, CMS has not demonstrated that CMS Ex. 8, even if it could be accessed, is relevant or supportive of its arguments.
Because neither party has submitted the written direct testimony of any witnesses, a hearing for the purpose of cross examination is unnecessary. *See*Pre-Hearing Order, §§ 8, 9, and 10. I consider the record in this case to be closed, and the matter is ready for a decision on the merits.2
II. Issue
Whether CMS had a legitimate basis to assign Petitioner a May 10, 2017, effective date for its reactivated billing privileges.
III. Jurisdiction
I have jurisdiction to decide this case. 42 C.F.R. §§ 498.3(b)(15), 498.5(l)(2).
IV. Findings of Fact, Conclusions of Law, and Analysis
**1. On February 8, 2017, Noridian requested that Petitioner revalidate its Medicare enrollment no later than April 30, 2017.**
**2. On February 23, 2017, Noridian received an enrollment application that listed a designated point of contact and email address for that point of contact.**
Page 4
**3. On March 10, 2017, Noridian sent Petitioner, via the email address it provided in February 2017, a development request in which it directed Petitioner to provide additional information and documentation.**
**4. Petitioner did not submit a response to Noridian’s development request, and Noridian rejected Petitioner’s revalidation application on April 12, 2017.**
**5. Noridian deactivated Petitioner’s billing privileges effective April 30, 2017.**
**6. Noridian received Petitioner’s enrollment application for purposes of revalidation and reactivation on May 10, 2017, and Noridian processed that application to approval.**
**7. An effective date earlier than May 10, 2017, is not warranted for the reactivation of Petitioner’s Medicare enrollment and billing privileges.**
Petitioner is a “supplier” for purposes of the Medicare program. *See* 42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202 (definition of supplier), 410.20(b)(1); *see also*42 C.F.R. § 498.2. A “supplier” furnishes services under Medicare and the term applies to physician organizations that 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.” 42 C.F.R. § 424.510(a)(1); *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.
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 a request for such information. 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 Medicare covered items or services furnished to a Medicare beneficiary.” 42 C.F.R. § 424.555(b). Further,
Page 5
and quite significantly, the 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; *see Urology Group of NJ, LLC*, DAB No. 2860 at 11 (2018) (“Taking these 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.”). 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).
On February 8, 2017, Noridian mailed a letter to Petitioner directing it to revalidate its Medicare enrollment record no later than April 30, 2017, and Noridian warned that Petitioner’s failure to revalidate could result in deactivation of its Medicare enrollment and billing privileges, with a resulting gap in reimbursement. CMS Ex. 1 at 1. After Petitioner submitted an incomplete enrollment application in response to the revalidation request, Noridian, on March 10, 2017, informed Petitioner that it needed to provide additional information.3
  CMS Ex. 2 at 5-7. Petitioner did not provide the requested information, and Noridian deactivated Petitioner’s billing privileges. *See* CMS Ex. 7 at 2. Petitioner submitted a revalidation application that was received on May 10, 2017, and Noridian granted an effective date of reactivated billing privileges of May 10, 2017. CMS Ex. 5 at 1.
The pertinent regulation with respect to the effective date of reactivation is 42 C.F.R. § 424.520(d). *Urology Group*, DAB No. 2860 at 9 (“The governing authority to determine the effective date for reactivation of Petitioner’s Medicare billing privileges is 42 C.F.R. § 424.520(d).”). Section 424.520(d) states that “[t]he effective date for billing privileges for . . . 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
Page 6
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 receive the information it requested on March 10, 2017, which resulted in the rejection of Petitioner’s revalidation enrollment application. See CMS Ex. 7 at 2. Based on the May 10, 2017 receipt date of the enrollment application that was processed to approval, Noridian did not err in assigning a May 10, 2017 effective date for reactivated billing privileges. *See* CMS Ex. 7 at 2; *see Urology Group*, 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.”); *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.”); 42 C.F.R. § 424.520(d).
Petitioner is challenging the assignment of a May 10, 2017 effective date of its reactivated billing privileges, which resulted in a 10-day gap in its billing privileges from the date of its deactivation on April 30, 2017, through its reactivation on May 10, 2017. Petitioner was required to timely respond to the revalidation request to avoid the prospect of deactivation pursuant to 42 C.F.R. § 424.540(a)(3), and Noridian deactivated its billing privileges after it rejected Petitioner’s revalidation application due to its failure to comply with the development request. CMS Ex. 3; *see also*42 C.F.R. § 424.525(d) (CMS “may reject . . . an enrollment application” if the supplier “fails to furnish complete information . . . within 30 calendar days from the date of the contractor request for missing information.”). The DAB has explained that a deactivation action is not reviewable, and “[t]he only action in the reconsidered determination which is appealable is . . . the initial determination of the effective date of the enrollment application reinstating [the petitioner].”4
   *Willie Goffney*, DAB No. 2763 at 3-5. Noridian correctly deactivated Petitioner’s billing privileges because it rejected, pursuant to 42 C.F.R. § 424.525(d), Petitioner’s incomplete application in response to the revalidation request. Because Petitioner did not comply with the revalidation request in accordance with the time period prescribed by 42 C.F.R. § 424.540(a)(3), Noridian had a legitimate basis to assign an
Page 7
effective date of May 10, 2017, for Petitioner’s reactivated billing privileges based on a correct application of 42 C.F.R. § 424.520(d).
As I previously discussed, CMS has not offered evidence that Noridian notified Petitioner that it had deactivated its enrollment on April 30, 2017, even though an internal policy binding on the contractor directs that it should have notified Petitioner of its deactivation. MPIM, § 15.29.3.3. I acknowledge Petitioner’s complaints that it was adversely impacted by a lack of notice of its deactivation. *See* P. Br. at 1 (“It was not until bills were rejected did we know that there was an issue.”). While CMS and Noridian have the discretion and authority to provide relief, and may revise the effective date of deactivation or reactivation of billing privileges, I am not empowered to exercise the same discretion when a Medicare administrative contractor fails to adhere to sub-regulatory policy. Further, and as previously explained in detail, I do not have the authority to review the deactivation of billing privileges. *Willie Goffney*, DAB No. 2763 at 5. To the extent that Petitioner is requesting equitable relief in the form of an earlier effective date of reactivated billing privileges, I am unable to grant equitable relief. P. Br. at 2 (“This loss of revenue could cover all our vendors and outside services for a month, or our office rent (including utilities and cleaning) for a month or most important it would cover payroll for all of our office staff for one pay period.”); *see 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.”). Likewise, I do not have the authority to “[f]ind invalid or refuse to follow Federal statutes or regulations or secretarial delegations of authority.” *See, e.g., 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, even a constitutional one.”).
In the absence of any basis to grant an earlier date for the reactivation of billing privileges, the May 10, 2017 effective date for the reactivation of Petitioner’s billing privileges must stand.
V. Conclusion
For the foregoing reasons, I uphold the May 10, 2017, effective date of Petitioner’s reactivated billing privileges.


          /s/
        Leslie C. Rogall

                      Administrative Law Judge
      1. CMS does not present any evidence that Noridian notified Petitioner of its deactivation, as required by Section 15.29.3.3 of the Medicare Program Integrity Manual (MPIM), CMS Pub. 100-108. back to note 1
                      2. CMS argues that summary disposition is appropriate. It is unnecessary in this instance to address the issue of summary disposition, as neither party has requested an in person hearing. back to note 2
                      3. Petitioner conceded in its request for reconsideration that its office manager was unaware that she needed to submit a voided check with the revalidation application. CMS Ex. 6 at 1. However, Petitioner argues in its brief that Noridian personnel informed it that it was unnecessary to provide a voided check. P. Br. at 1. Regardless of the reason why Petitioner failed to provide the requested EFT information and voided check, the March 10, 2017 development request clearly instructed Petitioner to submit EFT information (i.e., Form CMS-588) and a voided check or bank verification letter via PECOS, and Petitioner did not do so. Petitioner has not argued that it complied with the development request. back to note 3
                      4. The DAB explained: “Moreover, neither [42 C.F.R. §] 424.545(b) nor any other regulation provides appeal rights from the contractor’s deactivation determination or any rebuttal determination.” Willie Goffney, DAB No. 2763 at 5; see also Arkady B. Stern, M.D., DAB No. 2417 at 3 n.4 (2011) (Petitioner argues on appeal that deactivation was improper, but the DAB “does not have the authority to review” deactivation under circumstances of this case, citing 42 C.F.R. §§ 424.545(b) and 498.3(b)); Andrew J. Elliott, M.D., DAB No. 2334 at 4 n.4 (2010) (DAB “does not have authority to review” a deactivation). back to note 4 Back to top
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