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                              Medinn Corp., DAB CR5116 (2018)
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Medinn Corp., DAB CR5116 (2018)








  
  
    

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





Medinn Corp.,
	(NPI: 1710215058),
	(PTAN: AMB949),
	Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-17-628Decision No. CR5116June 13, 2018

        
              
    

      DECISION
The Centers for Medicare & Medicaid Services (CMS), through its Medicare Administrative Contractor, Novitas Solutions (Novitas), revoked the Medicare enrollment and billing privileges of Medinn Corp. (Petitioner or Medinn).  Novitas cited two grounds for revocation:  1) Petitioner was not in compliance with Medicare enrollment requirements; and 2) Petitioner was no longer operational to furnish Medicare covered items or services at its reported practice location.  As explained more fully below, CMS properly concluded that Petitioner was not operational at its reported practice location.  I therefore affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges.
I.  Background
Petitioner is an ambulance supplier operating in Houston, Texas.  *See, e.g.*, Petitioner’s Exhibit (P. Ex.) 7 at 1.  Prior to July 1, 2016, Petitioner operated its business from 7331 Harwin Drive, Suite 201, Houston, Texas 77036-2050 (Harwin Drive Address).  *Id.*Effective July 1, 2016, Petitioner relocated its office to 6201 Bonhomme Rd., Suite
Page 2
187N, Houston, Texas 77036 (Bonhomme Road Address).1
  *Id.*Despite having relocated its office from the Harwin Drive Address to the Bonhomme Road Address, Petitioner did not notify Novitas of its change of location.  *See, e.g.*, CMS Ex. 10.  To the contrary, from on or about July 28, 2014, until on or about January 31, 2017, the Provider Enrollment Chain and Ownership System (PECOS) listed Petitioner’s practice location as the Harwin Drive Address.  *Id.*; *see also* CMS Ex. 5.
On August 18, 2016, a CMS-contracted site investigator visited the Harwin Drive Address to verify that Petitioner was operational.  CMS Ex. 6.  The site investigator observed a sign identifying the suite with Petitioner’s d/b/a name, “Dalia Ambulance Service.”  *Id.*at 1, 3; *see also*CMS Brief (Br.) at 2.  The investigator found the door to the suite locked and the office vacant.  CMS Ex. 6 at 1, 4.  The site investigator contacted the property manager for the Harwin Drive Address, who reported that Petitioner had moved out of the suite two months before.  CMS Ex. 7 at 1.  The site investigator returned to the Harwin Drive Address on November 18, 2016.  CMS Ex. 8.  The site investigator noted the signage identifying the suite as Petitioner’s had been removed, the door was locked, and the office was vacant.  *Id.*
By letter dated December 12, 2016, Novitas notified Petitioner that its Medicare enrollment and billing privileges were being revoked effective August 18, 2016, pursuant to 42 C.F.R. § 424.535(a)(5) and 424.535(a)(1).  CMS Ex. 1.  Petitioner sought reconsideration of the December 12, 2016 revocation determination and also submitted a corrective action plan (CAP).  CMS Ex. 2.  By letter dated January 31, 2017, Novitas accepted Petitioner’s CAP, but only as to the grounds for revocation under 42 C.F.R. § 424.535(a)(1).  CMS Ex. 4.
Novitas issued an April 10, 2017 reconsidered determination which erroneously cited only 42 C.F.R. § 424.535(a)(1) as a revocation reason, failing to take into account the fact that Petitioner’s CAP had been accepted in regards to 42 C.F.R. § 424.535(a)(1), and that Petitioner had also been found to be in violation of 42 C.F.R. § 424.535(a)(5).  P. Ex. 5; *see also*CMS Ex. 1.  To correct this error, Novitas issued a revised reconsidered determination on April 19, 2017.  CMS Ex. 3; P. Ex. 6.  The revised reconsidered determination cited only 42 C.F.R. § 424.535(a)(5) as the revocation reason.  CMS Ex. 3 at 1.  The revised reconsidered determination stated the following:
The reconsideration request and all the documents on file have been reviewed.  The enrollment record in the Provider Enrollment, Chain and Ownership System (PECOS) for Medinn Corp. reflects a practice location of 7331 Harwin Drive, Suite 201, Houston, Texas 77036-2050.  On August 18,
Page 3
2016, there was a site visit performed at 7331 Harwin Drive, Suite 201, Houston, Texas 77036-2050 which revealed a vacant suite.  A second site visit conducted on November 18, 2016 at 7331 Harwin Drive, Suite 201, Houston, Texas 77036-2050 revealed a vacant suite and all signage for Medinn Corp. had been removed from the facility.  The reconsideration states Medinn Corp. was out growing the small office at the previous location and was able to find a larger, more suitable station at 6204 Bonhomme Rd, Ste 187N, Houston, TX 77036-4374.  The reconsideration goes on to state that updating the address with Medicare was overlooked mostly due to the billing and correspondence address not changing.
DECISION:
Medinn Corp. does not dispute the practice location of 7331 Harwin Drive, Suite 201, Houston, Texas 77036-2050 is non-operational since they have relocated to a larger, more suitable station.  Medinn Corp. has not provided evidence to show full compliance with the standards for which you were revoked.  Therefore Novitas Solutions is not granting you access to the Medicare Trust Fund (by way or issuance) of a Medicare number.  The reconsideration is denied and the revocation is upheld.
*Id.* at 1-2.
Petitioner requested a hearing before an administrative law judge by letter dated April 26, 2017.  The case was assigned to me, and I issued an Acknowledgement and Prehearing Order dated May 8, 2017 (Order).  My 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.  Order ¶ 4.  In response to the May 8, 2017 Order, CMS filed a combined prehearing brief and motion for summary judgment (CMS Br.) and ten proposed exhibits (CMS Exs. 1-10), including the declaration of a Novitas employee (CMS Ex. 10).  Petitioner, through counsel, filed a brief and cross-motion for summary judgment (P. Br.) and seven proposed exhibits (P. Exs. 1-7), including the declaration of Petitioner’s owner (P. Ex. 7).  CMS did not object to any of Petitioner’s proposed exhibits.  Therefore, in the absence of objection, I admit P. Exs. 1-7 into the record.
Petitioner objected to all ten of CMS’s Exhibits,2
 on the basis that “the visit was conducted on the 49th day following relocation, and within the 90-day period for
Page 4
reporting the relocation.  Thus, no violation could yet have been conclusively found under 42 C.F.R. § 424.535(a)(1) or 424.535(a)(5).”  Petitioner Objections (P. Obj.) at 1-9.  Petitioner’s objections reiterate Petitioner’s interpretation of 42 C.F.R. § 424.535(a)(1) and (a)(5), as contained in Petitioner’s brief.  As such, Petitioner’s objections interpose a legal argument about the significance of CMS’s proposed exhibits rather than offering a basis to conclude that the exhibits are inadmissible.  Petitioner made an additional objection to CMS Ex. 3 (CMS’s revised reconsideration letter dated April 19, 2017) on the grounds that:
While the new decision purports to change the revocation reason to On Site Review citing 42 C.F.R. § 424.535(a)(5), this issue is barred by 42 C.F.R. § 498.56(b)(1).  This regulation explicitly states that the ALJ will not consider any issue that arose on or after the effective date of the termination.  The April 10th notice letter established August 18, 2016 as the termination date.  See 42 C.F.R. § 424.535(b).
P. Obj. at 4.  This objection, too, represents a legal argument and does not demonstrate that CMS Ex. 3 is inadmissible.3
  I therefore overrule Petitioner’s objections and admit CMS Exs. 1-10 into the record.  Petitioner also moved to strike CMS’s motion for summary judgment based on Petitioner’s disagreement with CMS’s legal theory.  P. Obj. at 9-10.  As with Petitioner’s evidentiary objection, this is not a basis to strike CMS’s motion.  I therefore deny Petitioner’s motion to strike CMS’s motion for summary judgment.
Petitioner filed a cross-motion for summary judgment.  CMS did not file a request to cross-examine Petitioner’s witnesses.  CMS identified one witness.  In its exhibit and witness list, Petitioner reserved the right to call any witness identified by CMS.  As stated in my May 8, 2017 Order, “[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.”  Order ¶ 10.  However, for the reasons explained below, I grant CMS’s motion for summary judgment.  Therefore, an in-person hearing to cross-examine CMS’s witness is not necessary.
Petitioner also filed a Motion for Leave to File a Reply to CMS’s response to Petitioner’s motion for summary judgment; CMS did not oppose Petitioner’s motion for leave.  Accordingly, in the absence of objection, I grant Petitioner’s motion and receive its Reply (P. Reply).  Petitioner offered three supporting exhibits with its Motion for Leave to File a Reply.  The proposed exhibits consist of copies of *Adora Healthcare Services, Inc.*, DAB CR4229 (2015); *Adora Healthcare Services, Inc.*, DAB No. 2714 (2016); and a Ruling on Request for Reconsideration of decision DAB No. 2714 (2016).  While I
Page 5
acknowledge Petitioner’s extensive citation to the *Adora* decisions, there is no need to admit copies of the decisions as exhibits.  Decisions are materials of which I may take administrative notice.  I therefore decline to admit the exhibits.  Petitioner’s three exhibits to its Reply to CMS’s Response are identical to the three exhibits it filed with its Motion for Leave, and I do not admit them for the same reason.
II.   Issues
The issues in this case are:
1. Whether summary judgment is appropriate; and
2. Whether CMS had a legal basis to revoke Medinn’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**
Petitioner is a “supplier” of ambulance services for purposes of the Medicare program.  *See* Act § 1861(d) (42 U.S.C. § 1395x(d)); 42 C.F.R. § 400.202 (definition of supplier).  In order to participate in the Medicare program as a supplier, an entity must meet certain criteria to enroll and receive billing privileges.  42 C.F.R. §§ 424.505, 424.510.  CMS may revoke the enrollment and billing privileges of a supplier for any reason stated in 42 C.F.R. § 424.535.  When CMS revokes a supplier’s Medicare billing privileges, CMS establishes a reenrollment bar for a period ranging from one to three years.  42 C.F.R. § 424.535(c).  Generally, a revocation becomes effective 30 days after CMS mails the initial determination revoking Medicare billing privileges, but if CMS finds a supplier to be non-operational, as it did here, the revocation is effective from the date that CMS determines that the supplier was not operational.  42 C.F.R. § 424.535(g).
On-site review is addressed in 42 C.F.R. § 424.535(a)(5).  Pursuant to subsections 424.535(a)(5)(i) and (ii), CMS may revoke a supplier’s Medicare enrollment and billing privileges if CMS determines upon on-site review that the supplier is “[n]o longer operational to furnish Medicare-covered items or services” or that the supplier “fails to satisfy any Medicare enrollment requirement.”
Page 6
**B. Findings of Fact, Conclusions of Law and Analysis**
***1. Summary judgment is appropriate.4***
An administrative law judge may decide a case arising under 42 C.F.R. part 498 by summary judgment.  *Livingston Care Ctr. v. U.S. Dep’t of Health & Human Servs.*, 388 F.3d 168, 172 (6th Cir. 2004) (citing *Crestview Parke Care Ctr. v. Thompson*, 373 F.3d 743 (6th Cir. 2004)).  “Matters presented to the administrative law judge for summary judgment will follow Rule 56 of the Federal Rules of Civil Procedure and federal case law . . . .”  Civil Remedies Division Procedures § 19(a)(iii).
Summary judgment is appropriate when there is no genuine dispute as to any issue of material fact for adjudication and/or the moving party is entitled to judgment as a matter of law.  *Anderson v. Liberty Lobby, Inc.*, 477 U.S. 242, 247-48 (1986).  In determining whether there are genuine issues of material fact for trial, the reviewer must view the evidence in the light most favorable to the non-moving party, drawing all reasonable inferences in that party’s favor.  The party requesting summary judgment bears the burden of showing that there are no genuine issues of material fact for trial and/or that it is entitled to judgment as a matter of law.  Generally, the non-movant may not defeat an adequately supported summary judgment motion by relying upon the denials in its pleadings or briefs but must furnish evidence of a dispute concerning a material fact, i.e., a fact that would affect the outcome of the case if proven.  *Senior Rehab. & Skilled Nursing Ctr*., DAB No. 2300 at 3 (2010) (and cases cited therein); *See Liberty Lobby, Inc*., 477 U.S. at 248.
Viewing the evidence before me in a light most favorable to Petitioner and drawing all inferences in Petitioner’s favor, I conclude that there is no genuine dispute as to any material fact pertinent to revocation under 42 C.F.R. § 424.535(a)(5) that would require a hearing in this case.  Petitioner’s contentions that CMS improperly revoked its Medicare enrollment and billing privileges must be resolved against it as a matter of law.  The undisputed evidence shows that there is a basis for revocation of Petitioner’s Medicare enrollment and billing privileges.  Accordingly, summary judgment is appropriate.
Page 7
***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 it was not operational at the practice location on file with CMS.***
***a. A CMS-contracted inspector attempted to conduct site visits at Petitioner’s practice location on August 18, 2016, and November 18, 2016, at the address on file with CMS (7331 Harwin Drive, Suite 201, Houston, Texas 77036); however, the inspector found the site to be vacant on both occasions.***
Petitioner reported the Harwin Drive Address as its practice location.  CMS Ex. 10.  On August 18, 2016, and again on November 18, 2016, a site investigator attempted site visits at the Harwin Drive Address.  CMS Exs. 6, 8.  On both occasions, the office suite was vacant.  *Id.*Petitioner admits that the Harwin Drive Address was not its practice location in August or November 2016, because Petitioner had relocated its offices to the Bonhomme Road Address on July 1, 2016.  P. Ex. 7 at 1; P. Br. at 3.
***b. CMS properly determined that Petitioner was not in compliance with 42 C.F.R. § 424.535(a)(5).***
A supplier 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 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.  CMS may revoke a currently enrolled supplier’s Medicare billing privileges in the following circumstance:
Upon on-site review or other reliable evidence, CMS determines that the provider or supplier is . . .
(i) No longer operational to furnish Medicare-covered items or services.
42 C.F.R. § 424.535(a)(5)(i).  The reconsidered determination in this case cites 42 C.F.R. § 424.535(a)(5) as the basis for revoking Petitioner’s Medicare enrollment and billing privileges.  CMS Ex. 3.  It does not specify either subsection (i) or (ii).  However, because the reconsidered determination concluded that Petitioner was “nonoperational,” I infer that the revocation was pursuant to 42 C.F.R. § 424.535(a)(5)(i).
Page 8
The regulatory definition of the term “operational” refers to the “qualified physical practice location” of a supplier.  42 C.F.R. § 424.502.  CMS may perform on-site inspections to verify that the enrollment information submitted by a supplier is accurate and to determine compliance with Medicare requirements.  42 C.F.R. § 424.517(a).  CMS has explained, “[T]he 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).
Petitioner admits that the Harwin Drive Address listed with CMS was no longer a practice location at the time of the August 18 and November 18, 2016 site visits.  Petitioner nonetheless argues that it was operational at the Bonhomme Road Address.  P. Br. at 11.  For purposes of ruling on CMS’s motion for summary judgment, I accept that Petitioner was “operational” at the Bonhomme Road Address.  However, that fact is not material to the outcome of this case because there is no dispute that Petitioner was not “operational” at the practice location on file with Novitas.
As an appellate panel 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), I must answer two questions:  1) What was the practice 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?  *See Care Pro Home Health, Inc.*, DAB No. 2723 at 15 (2016).  Here, CMS provided undisputed evidence that Petitioner was not operational at the Harwin Drive Address, which was the only practice address Petitioner had on file with Novitas on August 18, and November 18, 2016, when the site visits were attempted.  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)(i).  Moreover, as I explain in the following section, Petitioner’s arguments that CMS may not revoke Petitioner’s Medicare enrollment and billing privileges because of procedural irregularities are without merit.
***3. Petitioner’s procedural challenges to CMS’s revocation determination are without merit.***
***a. Section § 498.56(b) of the regulations does not bar CMS from considering Petitioner’s compliance with 42 C.F.R. § 424.535(a)(5) in the revised reconsideration decision.***
Petitioner argues that Novitas should be prohibited from relying on the revised reconsidered determination of April 19, 2017.  P. Br. at 6 n.3.  Petitioner contends that 42 C.F.R. § 498.56(b)(1) bars CMS from considering new issues arising on or after effective date of termination.  *Id.* According to Petitioner, because “[t]he April 10th
Page 9
notice letter established August 18, 2016 as the termination date . . . the ALJ is barred from hearing evidence to support revocation relying on 42 C.F.R. § 424.535(a)(5) as the reason for its imposition.”5
  *Id*.  Petitioner’s argument appears to be that CMS may not cite a different regulatory basis for revocation once it has issued a reconsidered determination.  Petitioner cites to no legal authority for this proposition.  Moreover, to the extent Petitioner’s argument relies on the plain language of 42 C.F.R. § 498.56(b)(1), its interpretation is strained at best.
As discussed above, Novitas’s April 10, 2017 reconsidered determination erroneously cited only 42 C.F.R. § 424.535(a)(1) as a revocation reason, failing to take into account the fact that Novitas had accepted Petitioner’s CAP in response to the noncompliance with 42 C.F.R. § 424.535(a)(1).  Then, on April 19, 2017, Novitas issued a revised reconsidered determination.  CMS Ex. 3; P. Ex. 6.  The revised reconsidered determination cited only 42 C.F.R. § 424.535(a)(5) as the basis for revocation, and upheld the revocation on the grounds that Petitioner was not operational at the Harwin Drive Address and did not notify CMS of its change of practice location as required under 42 C.F.R. § 424.516.  CMS Ex. 3 at 1.
Whether Petitioner was operational at its reported practice location is not an issue that arose after the revocation date.  The issue arose on August 18, 2016, the date of the site inspection, which is also the effective date of revocation.  Moreover, the revised reconsidered determination does not raise a new issue, as Novitas’s December 12, 2016 initial determination cited 42 C.F.R. § 424.535(a)(5) as a basis for revoking Petitioner’s Medicare enrollment.  CMS Ex. 1.  Furthermore, pursuant to 42 C.F.R. § 498.30, CMS may reopen and revise *any* initial or reconsidered determination within 12 months after the date of the initial or reconsidered determination.  Novitas first issued the reconsidered determination on April 10, 2017, and issued the revised reconsidered determination on April 19, 2017, nine days later.  It is apparent that nine days is well short of the 12-month period within which Novitas was authorized to reopen and revise the reconsidered determination.  Therefore, Novitas’s reopening and revision of its reconsidered determination to include the violation of 42 C.F.R. § 424.535(a)(5) as a basis for revocation basis was proper, and does not represent an issue barred under 42 C.F.R. § 498.56(b)(1).
Page 10
***b. Novitas did not revoke Petitioner’s Medicare enrollment and billing privileges until after it conducted a second site visit on November 18, 2016, which was more than 90 days after Petitioner relocated its office.***
Petitioner argues that the decision in *Adora Healthcare Services, Inc.*, DAB No. 2714 (2016), supports its contention that CMS’s revocation of Petitioner’s billing privileges is void because it was undertaken prematurely.  P. Reply at 3-4.  In *Adora*, an appellate panel of the DAB concluded that CMS could not revoke a supplier’s Medicare enrollment pursuant to 42 C.F.R. § 424.535(a)(5) based on a site inspection that occurred during the 90-day period within which a supplier may report a change of practice location to the Medicare Administrative Contractor:6
[T]he revocation was invalid because CMS’s determination that Petitioner was “no longer operational” rested solely on the inspector’s visit to Petitioner’s duly enrolled . . . location which occurred, as CMS does not dispute, before Petitioner’s 90-day period for reporting its new location had expired. The revocation determination, in effect, was premature.
*Adora*, DAB No. 2714 at 4.  Petitioner contends that, because the initial August 18, 2016 site visit at the Harwin Drive Address was conducted on the 49th day following Petitioner’s relocation to the Bonhomme Road Address, CMS could not conclusively find that Petitioner was no longer operating at the listed location.  P. Reply at 4.  Petitioner describes the revocation as occurring “ . . . *prematurely* and *retroactively . . .*”  P. Br. at 3.  I disagree with Petitioner’s reading of *Adora*.
Even if CMS’s initial August 18, 2016 site visit to the Harwin Drive Address was premature under the rationale of *Adora*, the panel’s reasoning in *Adora*is inapplicable here.  In the present case, CMS performed a second, follow-up visit on November 18, 2016, a full 140 days after Petitioner had moved.7
  That follow-up visit, completed well after the 90-day reporting period expired, also revealed a vacant office suite at Petitioner’s reported practice location.
Page 11
In accordance with 42 C.F.R. § 424.516(e)(2), Petitioner had 90 days from July 1, 2016, the date it moved, to notify Novitas of Petitioner’s new address.  This Petitioner failed to do.  Had Petitioner done so by September 29, 2016, the 90th day following its move, the result here might be different.  Novitas did not issue its initial determination revoking Petitioner’s Medicare enrollment until December 12, 2016.  As is true of the follow-up site inspection, the initial determination occurred well after Petitioner’s 90-day reporting window had closed.  Had Petitioner fulfilled its reporting obligation, there was ample time for Novitas to determine that revocation pursuant to 42 C.F.R. § 424.535(a)(5) was not warranted.  However, far from establishing that it was operational (at the Harwin Drive Address), Petitioner’s own admissions establish that it was not operational at that address at any time between August 18, 2016 and December 12, 2016.
In its December 15, 2016 CAP, Petitioner admitted that that it had not previously submitted the required documentation (Form CMS‐855A), and it included with its CAP a copy of the form listing the Bonhomme Road Address as its new practice location.  P. Ex. 2; P. Ex. 7.  Petitioner produced no evidence, nor has it claimed, that it sent an updated Form CMS‐855A, or any other notification of its address change, to the contractor at any time before December 15, 2016.8
  Thus, there was a legal basis to revoke Petitioner’s Medicare enrollment because Petitioner was not operational at its reported practice location at any time between August 18, 2016, and Novitas’s December 12, 2016 initial determination.
***c. Novitas’s approval of Petitioner’s CAP has no bearing on the revocation pursuant to 42 C.F.R. § 424.535(a)(5).***
By letter dated January 31, 2017, Novitas informed Petitioner that it had reviewed Petitioner’s December 15, 2016 CAP and determined that Petitioner was in compliance with 42 C.F.R. § 424.535(a)(1).  CMS Ex. 4.  Petitioner argues that CMS had no basis under either 42 C.F.R. § 424.535(a)(1) or 42 C.F.R. § 424.535(a)(5) to revoke Petitioner’s Medicare enrollment because both violations were premised on the August 18, 2016 site inspection, which Petitioner contends was invalid.  P. Br. at 13-14.
Page 12
However, for the reasons explained in the previous section of this decision, the failed August 18, 2016 site visit is not foreclosed as a basis for revocation.  Moreover, as CMS points out, the regulations only authorize a supplier to submit a CAP in response to revocation based on 42 C.F.R. § 424.535(a)(1).  CMS Br. at 4 n.2.  As such, even assuming that Novitas was authorized to offer the opportunity for a CAP in the present case, any such CAP could not apply to revocation based on 42 C.F.R. § 424.535(a)(5).9
Indeed, as discussed above, the basis for revocation under 42 C.F.R. § 424.535(a)(5) is that Petitioner was no longer operational at the location on file with CMS (Harwin Drive).  The earliest Petitioner’s Bonhomme Road location could have been on file with CMS was the date Petitioner submitted its CAP to Novitas – December 15, 2016.  Similarly, the fact that, on January 13, 2017, a site investigator was able to confirm that Petitioner was operational at the Bonhomme Road location does not alter the conclusion that Petitioner was not operational at its location of record (Harwin Drive) on August 18, or November 18, 2016.  Thus, even as a factual matter, the CAP submitted by Petitioner does not demonstrate that Petitioner was in compliance with 42 C.F.R. § 424.535(a)(5) on the dates of the August and November site visits.
In summary, the undisputed facts demonstrate that Petitioner failed to comply with 42 C.F.R. § 424.535(a)(5).
Page 13
V.  Conclusion
For the reasons explained above, I grant CMS’s motion for summary judgment, deny Petitioner’s cross-motion for summary judgment, and affirm the revocation of Petitioner’s Medicare enrollment and billing privileges.


          /s/
        Leslie A. Weyn

                      Administrative Law Judge
      1. Both Petitioner’s Brief and P. Ex. 7 identify the street name as “Bonhome” Road. P. Ex. 7 at 1; P. Br. at 3. In this decision, I refer to the address as “Bonhomme” Road, consistent with the spelling on the U.S. Postal Service website. back to note 1
                      2. While arguing that I should exclude CMS’s proposed exhibits, Petitioner has offered some of the same documents as its own exhibits. Compare CMS Exs. 1-5 with P. Exs. 1 4, and 6. This logical inconsistency certainly undercuts Petitioner’s argument that the documents are inadmissible and instead suggests that Petitioner acknowledges that the documents are relevant, at a minimum, to understanding the procedural posture of the case. back to note 2
                      3. In the Discussion section of this decision, below, I explain why I disagree with Petitioner’s legal arguments on these points. back to note 3
                      4. My findings of fact/conclusions of law appear as headings in bold italic type. back to note 4
                      5. This argument is also the basis for Petitioner’s objections to CMS’s exhibits. P. Obj. at 1-9. Accordingly, the discussion in this section serves also to explain my reasons for overruling Petitioner’s objections. back to note 5
                      6. A change in practice location is a “reportable event” that must be reported to the Medicare Administrative Contractor within 90 days. 42 C.F.R. § 424.516(e). back to note 6
                      7. Petitioner cites to the administrative law judge’s ruling in Accuread Quality Mobile X Rays, LLC, ALJ Ruling 2016-7 (2015), in support of its position that the revocation here is invalid. P. Br. at 7. In Accuread, the administrative law judge found the revocation invalid, even though CMS conducted a follow-up site visit. However, the Accuread ruling does not aid Petitioner’s case because both the initial and follow-up site visits at issue in Accuread occurred within the 90-day reporting window described in 42 C.F.R. § 424.516(e). back to note 7
                      8. In contrast, the petitioner in Adora offered evidence that it timely reported its change of address to its contractor. Adora Healthcare Servs., Inc., DAB No. 2714 at 4. Moreover, in Adora Healthcare Services, Inc., DAB Ruling No. 2017-4 (May 18, 2017) (Ruling on Request for Reconsideration), the appellate panel clarified that “CMS does not need to wait 90 days or any period of time” before initiating a revocation action pursuant to 42 C.F.R. § 424.535(a)(5). DAB Ruling No. 2017-4 at 5. Rather, the panel observed, if a supplier presents evidence that it timely notified CMS of its change of location or would do so within the required time, CMS could not revoke based solely on a failed site inspection at the former address. Id. As I have explained, Petitioner in the present case has made no such showing. back to note 8
                      9. In light of the limited grounds for which a CAP may be submitted, it is puzzling that Novitas would cite 42 C.F.R. § 424.535(a)(1) as a basis for revocation and invite Petitioner to submit a CAP in this case. I find it remarkable that Novitas found that Petitioner violated both section 424.535(a)(1) and section 424.535(a)(5) based on the identical set of facts. See CMS Ex. 1 at 1. This determination is all the more baffling because Novitas did not revoke Petitioner’s Medicare enrollment based on 42 C.F.R. § 424.535(a)(9) for failing to report its change of practice location. As CMS itself has observed, “If a supplier is revoked . . . for failing to report a change in practice location, the provider should not be able [to] escape revocation merely by furnishing the truthful or updated information through a CAP, as it was the [supplier’s] responsibility to provide this information earlier.” Proposed Rule, Medicare Program; Requirements for the Medicare Incentive Reward Program and Provider Enrollment, 78 Fed. Reg. 25013, 25025 (April 29, 2013). If the quoted preamble language accurately reflects CMS’s interpretation of the CAP rule, then Novitas’s actions in permitting Petitioner to submit a CAP and accepting that CAP purportedly to correct Petitioner’s failure to be operational at its reported practice address and its failure to report timely its change of practice location would appear to run counter to CMS’s intent. back to note 9 Back to top
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