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                              Richard Melville, PT, DPT, ATC, DAB CR5898 (2021)
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Richard Melville, PT, DPT, ATC, DAB CR5898 (2021)








  
  
    

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





Richard Melville, PT, DPT, ATC
(NPI: 1912330705)
Petitioner,

v.

Centers for Medicare & Medicaid Services,
Respondent.
Docket No. C-19-1021Decision No. CR5898July 7, 2021

        
              
    

      DECISION

National Government Services (NGS), an administrative contractor for the Centers for Medicare & Medicaid Services (CMS), reactivated the Medicare enrollment and billing privileges of Petitioner, Richard Melville, PT, DPT, ATC, effective March 14, 2019.  Petitioner requested a hearing before an administrative law judge to dispute this effective date.  Because NGS approved Petitioner’s revalidation enrollment application that it received on March 14, 2019, it correctly determined that the effective date for Petitioner’s reactivated billing privileges is March 14, 2019.  Therefore, I affirm the effective date determination.

I. Background

By letter dated June 1, 2018, NGS informed Petitioner that he must revalidate his Medicare enrollment by August 31, 2018.  CMS Exhibit (Ex.) 3.  The letter warned Petitioner that his billing privileges might be deactivated, resulting in a gap in reimbursement, if he failed to revalidate.  *Id.*at 1.  NGS mailed copies of the letter to Petitioner at 31 New Dorp Lane, Staten Island, NY 10306-2351 (New Dorp Lane address) and at 1351 Forest Avenue, Staten Island, NY 10302-2049 (Forest Avenue

**Page 2**

address).  *Id.*at 1, 3. The New Dorp Lane address was listed on Petitioner’s enrollment record as his correspondence address.  CMS Ex. 1 at 2.  The Forest Avenue address was listed as the practice address for one of the groups to which Petitioner reassigned his right to receive Medicare payments, One on One Physical Therapy of Forest Avenue.  *Id.*at 5.  Petitioner’s enrollment record shows that the New Dorp Lane address was effective through March 20, 2019; the reassignment to One on One Physical Therapy was effective through November 2, 2018.  *Id.*at 2, 5.  The June 1 letter mailed to the New Dorp Lane address was returned to NGS as undeliverable.  CMS Ex. 8 at 1.  However, the June 1 letter to the Forest Avenue address was not returned.  *Id.*

In a letter dated September 4, 2018, NGS notified Petitioner that it had not received a revalidation application by August 31, 2018.  CMS Ex. 4.  NGS mailed copies of the letter to the New Dorp Lane and Forest Avenue addresses.  *Id.*at 1, 3.  Neither letter was returned as undeliverable.  CMS Ex. 8 at 1.  Finally, by letter dated November 7, 2018, NGS notified Petitioner that his Medicare enrollment and billing privileges were stopped (i.e., deactivated) effective November 2, 2018, because he had not revalidated his enrollment information.  CMS Ex. 5.  NGS again mailed copies of this letter to the New Dorp Lane and Forest Avenue addresses.  *Id.*at 1, 3.  Neither of these letters was returned as undeliverable.  CMS Ex. 8 at 1.

On December 5, 2018, Petitioner submitted an online application to revalidate his Medicare enrollment using the Provider Enrollment, Chain and Ownership System (PECOS).  *See*CMS Ex. 6 at 1.  Via email on December 11, 2018, NGS requested further information regarding the application.  CMS Ex. 7.  NGS sent the email to one of the contact persons listed on Petitioner’s December 5 PECOS application.  *Compare*CMS Ex. 6 at 5 *with*CMS Ex. 7 at 1.  Petitioner responded to the email via PECOS on December 18, 2018.  CMS Ex. 10 at 1.  By letter dated January 28, 2019, NGS rejected the December 5 application because NGS did not receive a sufficient response to the December 11 email.  CMS Ex. 9.

On March 14, 2019, Petitioner submitted another enrollment application via PECOS.  CMS Ex. 11 at 1.  As part of the March 14 application, Petitioner requested to reassign his right to receive Medicare payments to Refuah Physical Therapy, PC.  *Id.*at 4.  NGS ultimately approved the application.  *See*CMS Ex. 12.  In its approval letter, NGS stated that, while the effective date of Petitioner’s enrollment would “remain the same,” Petitioner would “have a gap in billing privileges from November 2, 2018 through February 11, 2019[,] for failing to timely submit [his] revalidation application.”  CMS Ex. 12 at 1.

Petitioner requested reconsideration, and NGS issued an unfavorable reconsidered determination, dated June 11, 2019.  CMS Ex. 14 at 1.  The reconsidered determination explained that, because the approved enrollment application was received March 14,

**Page 3**

2019, the “gap in coverage” from November 2, 2018, to February 11, 2019, was correct.  CMS Ex. 14 at 3.1

Petitioner requested a hearing before an administrative law judge and the case was assigned to me.  At my direction, my office acknowledged Petitioner’s hearing request and provided a copy of my Standing Prehearing Order (Prehearing Order).  The Prehearing Order directed each party to file a prehearing exchange consisting of a brief and any supporting documents, including the written direct testimony of any proposed witnesses, and set forth the deadlines for those filings.  Prehearing Order ¶¶ 4-5.  In response to the Prehearing Order, CMS filed a motion for summary judgment and brief (CMS Br.) and fourteen proposed exhibits (CMS Exs. 1-14).  CMS did not list any proposed witnesses.  Petitioner filed a written argument (P. Br.), along with proposed exhibits labeled 20 through 22 (P. Exs. 20-22).2
 Petitioner did not propose to call any witnesses.  Neither party objected to the exhibits proposed by the opposing party.  Therefore, in the absence of objection, I admit CMS Exs. 1-14 and P. Exs. 20-22.

My Prehearing Order advised the parties that an in-person hearing would only be necessary if a party offered the written direct testimony of a witness and the opposing party requested cross-examination.  Prehearing Order ¶¶ 8-10; Civil Remedies Division Procedures (CRDP) §§ 16(b), 19(b); *see 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).  Because neither party offered the written direct testimony of any witness, an in‐person hearing is

**Page 4**

not required, and I issue this decision based on the written record, without regard to whether the standards for summary judgment are met.  Prehearing Order ¶¶ 8-10, 12; CRDP § 19(d).  I deny CMS’s motion for summary judgment as moot.  To the extent Petitioner intended to move for summary judgment, that motion is moot, as well.

II. Issue

The issue in this case is whether NGS, acting on behalf of CMS, properly established March 14, 2019, as the effective date of reactivation of Petitioner’s Medicare enrollment and reassignment of billing privileges.

III. Jurisdiction

I have jurisdiction to decide this case.  42 C.F.R. §§ 498.3(b)(15), 498.5(*l*)(2); *see also*Social Security Act (Act) § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).

IV. Dicussion

**Applicable Legal Authority**The Act authorizes the Secretary of Health and Human Services to promulgate regulations governing the enrollment process for providers and suppliers.  Act §§ 1102, 1866(j) (42 U.S.C. §§ 1302, 1395cc(j)).  A “supplier” is “a physician or other practitioner, a facility, or other entity (other than a provider of services) that furnishes items or services” under the Medicare provisions of the Act.  Act § 1861(d) (42 U.S.C. § 1395x(d)); *see also*Act § 1861(u) (42 U.S.C. § 1395x(u)).

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 define “*Enroll/Enrollment*” as “the process that Medicare uses to establish eligibility to submit claims for Medicare-covered items and services.”  42 C.F.R. § 424.502.  A provider or supplier seeking billing privileges under the Medicare program must “submit enrollment information on the applicable enrollment application.  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).  CMS then establishes an effective date for billing privileges under the requirements stated in 42 C.F.R. § 424.520(d) and may permit limited retrospective billing under 42 C.F.R. § 424.521.

To maintain Medicare billing privileges, providers and suppliers must revalidate their enrollment information at least every five years.  42 C.F.R. § 424.515.  However, CMS reserves the right to perform revalidations at any time.  42 C.F.R. § 424.515(d), (e).  When CMS notifies providers and suppliers that it is time to revalidate, the providers or suppliers must submit the appropriate enrollment application, accurate information, and

**Page 5**

supporting documentation within 60 calendar days of CMS’s notification.  42 C.F.R. § 424.515(a)(2).  CMS can deactivate an enrolled provider’s or supplier’s Medicare billing privileges if the enrollee fails to comply with revalidation requirements.  42 C.F.R. § 424.540(a)(3).  When CMS deactivates providers’ or suppliers’ 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).  If CMS deactivates a provider’s or supplier’s billing privileges due to an untimely response to a revalidation request, the enrolled provider or supplier may apply for CMS to reactivate its Medicare billing privileges by completing a new enrollment application or, if deemed appropriate, recertifying its enrollment information that is on file.  42 C.F.R. § 424.540(b)(1).

The Act and regulations limit who may receive Medicare payments due to a supplier of services and also provide for reassignment of the right to receive those payments.  Act §§ 1815(c) and 1842(b)(6) (42 U.S.C. §§ 1395g(c) and 1395u(b)(6)); 42 C.F.R. § 424.70(a).  For Medicare Part B claims, a beneficiary may assign his or her benefits to an enrolled physician or non‐physician supplier providing services to that beneficiary.  Act § 1842(b)(3)(B)(ii) (42 U.S.C. § 1395u(b)(3)(B)(ii)).  In certain circumstances, a supplier who has received an assignment of benefits may reassign those benefits to an employer, or to an individual or entity with which the supplier has a contractual arrangement.  Act § 1842(b)(3) (42 U.S.C. § 1395u(b)(3)); 42 C.F.R. § 424.80(b)(1)-(2).

For a supplier, such as a physical therapist in private practice, to reassign benefits to an eligible entity, a supplier must complete and submit an application using Form CMS‐855R.  Medicare Program Integrity Manual (MPIM), CMS Pub. 100‐08, Ch. 15, § 15.5.20.A.3
 The MPIM provides that reassignment of benefits may only occur between enrolled suppliers.  *Id.*Further, the MPIM instructs contractors that when a Form CMS‐855R is submitted as a “stand alone” form (i.e., where an enrolled physician joins a new group practice), “the effective date of the enrollment and the reassignment shall be consistent with the 30‐day rule.”  MPIM § 15.5.20.E.3.4
 Under the “30‐day rule,” CMS contractors calculate the effective date based on “the later of the date of filing or the date

**Page 6**

the reassignor first began furnishing services at the new location.”  *Id.; see also*42 C.F.R. § 424.520(d)*.*  Suppliers have the right to appeal an initial determination regarding the effective date.  42 C.F.R. § 498.5(*l*)(1); *see also*42 C.F.R. § 498.22(a).

**Findings of Fact and Conclusions of Law5**

	***NGS received Petitioner’s application to revalidate his Medicare billing privileges on March 14, 2019, and approved that application.***
		***The effective date of reactivation for Petitioner’s Medicare billing privileges is March 14, 2019.***The effective date for Medicare billing privileges for physicians, non-physician practitioners, and physician or non-physician practitioner organizations is the later of the “date of filing” or the date the supplier first began furnishing services at a new practice location.  42 C.F.R. § 424.520(d).  The “date of filing” is the date that the Medicare contractor “receives” a signed enrollment application that the Medicare contractor is able to process to approval.  73 Fed. Reg. 69,726, 69,769 (Nov. 19, 2008); *Donald Dolce, M.D.*, DAB No. 2685 at 8 (2016).

NGS received a revalidation application from Petitioner via PECOS on March 14, 2019.  *See*CMS Ex. 11 at 1.  NGS approved that application.  CMS Ex. 12.  Accordingly, as required by regulation, the effective date of reactivation of Petitioner’s Medicare enrollment is March 14, 2019.

***I have no authority to review the deactivation of Petitioner’s Medicare billing privileges on November 2, 2018.***Petitioner argues that his Medicare enrollment should not have been deactivated because he did not receive the notice NGS sent advising him of the need to revalidate his enrollment information.  Petitioner asserts that he did not receive the notice because he had changed jobs in 2017 and mistakenly believed that his prior employer would file a change of information notifying NGS that he was no longer employed there.  P. Br. at 2.6
 Because his prior employer did not do so, their address (the New Dorp Lane address) remained active in Petitioner’s enrollment record.  *Id.* For this reason, NGS mailed the revalidation notice to the New Dorp Lane address.  Petitioner further argues that, because one of the letters sent to that address was returned as undeliverable, NGS should have

**Page 7**

investigated and re-sent the letter to Petitioner in care of his new employer’s address, which had been updated more recently.  *Id.* at 4.  In Petitioner’s view, had NGS taken these steps, Petitioner would have completed revalidation as required and “there would never have been a deactivation of billing privileges.”  *Id.*at 7.  I am not persuaded by Petitioner’s arguments.

It is the supplier’s duty to submit accurate enrollment information and keep it up to date.  CMS is not required to make additional efforts to correct inaccurate or outdated enrollment information.  *See Foo v. Azar*, 420 F. Supp. 3d 1100, 1112 (D. Haw. 2019) (requiring CMS (or its contractor) to investigate each time an enrollment application is unclear or inaccurate “would undermine the regulation’s requirement that suppliers certify the accuracy of the information in enrollment applications and would undercut CMS’s ability to rely on that information in performing its auditing duties.”).  Yet, even if NGS had failed in a duty to verify that Petitioner’s mailing address was correct, this would not change the outcome in this case.  That is because Petitioner’s failure to receive the notice to revalidate is only relevant, if at all, to whether NGS acted properly in deactivating Petitioner’s billing privileges.

However, I do not have jurisdiction to review CMS’s deactivation of Petitioner’s Medicare billing privileges because deactivation is not an “initial determination” and deactivation decisions have a separate review process.  *See* 42 C.F.R. §§ 424.545(b), 498.3(b); *see also Willie Goffney, Jr., M.D.*, DAB No. 2763 at 4-5 (2017).  Thus, even if Petitioner never received the notice to revalidate, this would not be a basis to grant him an earlier effective date.  As the appellate decision in the case of *James Shepard, M.D.* explained, providers and suppliers may not challenge indirectly an action for which the regulations prohibit direct administrative review.  DAB No. 2793 at 8 (2017).  The *Shepard* decision held that the supplier could not obtain review of a CMS contractor’s rejection of a previous enrollment application by challenging the effective date of enrollment based on a later approved application. For the same reasons articulated in *Shepard*, Petitioner’s arguments in the present case amount to a backdoor challenge to a contractor determination – here, deactivation – for which there are no administrative appeal rights.  *See id.*Similarly, I may not review NGS’s rejection of Petitioner’s December 2018 enrollment application.

***I have no authority to review NGS’s decision to reject Petitioner’s December 2018 enrollment application.***After NGS deactivated Petitioner’s Medicare billing privileges, Petitioner attempted to revalidate and reinstate his billing privileges by submitting a new enrollment application on December 5, 2018, via PECOS.  CMS Ex. 6 at 1.  NGS requested additional information from Petitioner but ultimately rejected the application after Petitioner failed to provide the requested information.  CMS Exs. 7, 9.  The regulations define a rejected application as follows:

**Page 8**

*Reject/Rejected* means that the provider or supplier’s enrollment application was not processed due to incomplete information, or that additional information or corrected information was not received from the provider or supplier in a timely manner.

42 C.F.R § 424.502.  Petitioner does not dispute that NGS rejected the application that Petitioner submitted on December 5, 2018.  *See, e.g.*,P. Br. at 6-7 (NGS should have made a second request for information, rather than rejecting the application).

Petitioner represents that he did not complete the response to NGS’s request for additional information himself, but relied on his employer to handle his credentialing.  P. Br. at 5.  His employer, in turn, relied on a staff member who did not perform her duties properly, although the employer was “not aware of the problems.”  *Id.* at 5-6. It appears Petitioner is contending that he (and his employer) should not be penalized for the errors of an incompetent employee.  However, the responsibility for reviewing the content of an application lies with the supplier; by signing the application, the supplier certifies that he or she reviewed the application for inaccuracies.  *Sandra E. Johnson, CRNA*, DAB No. 2708 at 14-15 (2016).  Thus, Petitioner is ultimately responsible for applications submitted on his behalf.

Furthermore, even if errors by an employee caused NGS to reject Petitioner’s December 5, 2018 application, this amounts to an argument that NGS should not have rejected the application.  As is true of a contractor’s deactivation of a supplier’s billing privileges, an administrative law judge may not review a contractor’s decision to reject an enrollment application.  42 C.F.R. § 424.525(d); *Shepard*, DAB No. 2793 at 3.  Therefore, for the same reasons explained in the previous section of this decision, even an improper rejection decision is not a basis to change the effective date of Petitioner’s revalidation.  Finally, Petitioner’s arguments that it is unfair or inequitable to deprive him or his employer of Medicare reimbursement under the circumstances also are not a basis to grant him an earlier effective date.

***Petitioner’s equitable arguments are not a basis to change the effective date of his reactivated Medicare enrollment.***Petitioner argues that the instructions provided by NGS and CMS regarding revalidation are confusing and contributed to the delay in Petitioner submitting an approvable revalidation application.  *See, e.g.*, P. Br. at 2-3, 6-7.  These contentions suggest that Petitioner may be arguing that he is entitled to an earlier effective date based on the doctrine of equitable estoppel ‒ i.e., he relied to his detriment on false or misleading information provided by NGS.

**Page 9**

However, equitable estoppel will not lie against a government entity absent some type of affirmative misconduct.  *See, e.g., Richard Weinberger, M.D. & Barbara Vizy, M.D.*, DAB No. 2823 at 19 (2017) (citing *Office of Pers. Mgmt. v. Richmond*, 496 U.S. 414, 419-21 (1990)).  As the decision in *Weinberger & Vizy*emphasized, “affirmative misconduct appears to require something more than failing to provide accurate information or negligently giving wrong advice.”  DAB No. 2823 at 19(internal quotation marks and citations omitted).  The confusion Petitioner describes in interpreting CMS’s instructions for completing Medicare enrollment applications appears to be of Petitioner’s (or his representatives’) own making.  Nothing in the record suggests that any NGS or CMS employee gave Petitioner wrong advice, much less that they committed affirmative misconduct.  Therefore, I find no basis to overturn NGS’s effective date determination based on equitable estoppel.

Petitioner additionally contends that he and his employer continued to treat Medicare beneficiaries in good faith because they were unaware that Petitioner’s billing privileges had been deactivated.  P. Br. at 7.  Petitioner argues that “the effects of this gap in reimbursement [are] severe.”  *Id.*at 9.  The circumstances Petitioner describes sound in equity.  However, an administrative law judge is not authorized to provide equitable relief by reimbursing or enrolling a supplier that does not meet statutory or regulatory requirements.  *US Ultrasound,*DAB No. 2302 at 8 (2010) (citing *Regency on the Lake*, DAB No. 2205 (2008)).  Put another way, I may not set aside CMS’s lawful exercise of its discretion based on principles of equity or fairness.  *See, e.g., Cent. Kan. Cancer Inst.*, DAB No. 2749 at 10 (2016); *see also Shepard*, DAB No. 2793 at 9.  I therefore find no basis to overturn NGS’s effective date determination.

V. Conclusion

For the reasons explained above, I affirm that the effective date of Petitioner’s Medicare enrollment and billing privileges is March 14, 2019, with retrospective billing permitted as of February 12, 2019.


          /s/
        Leslie A. Weyn

                      Administrative Law Judge
      1. Neither the initial nor the reconsidered determination explicitly identified March 14, 2019, as the effective date of Petitioner’s reactivation and reassignment of his billing privileges. I nevertheless infer that NGS treated March 14, 2019, as the effective date and permitted Petitioner to bill retrospectively for 30 days. I draw this inference because February 12, 2019, the date from which NGS permitted Petitioner to resume billing Medicare, was 30 days prior to March 14, 2019. As provided in 42 C.F.R. § 424.520(d), the effective date of enrollment is the date on which the contractor received an enrollment application that it was able to process to completion – here March 14, 2019. Pursuant to 42 C.F.R. § 424.521(a), February 12, 2019, is the date from which retroactive billing is permitted. Thus, the “gap in billing” began on the date of deactivation, November 2, 2018, and ended on February 11, 2019, the day before retrospective billing was approved. back to note 1
                      2. Petitioner does not explain why he identified his three exhibits as P. Exs. 20, 21, and 22, when he did not offer any exhibits labeled 1-19. Petitioner also submitted three documents that he did not mark as exhibits. Docket Entries ## 6, 6a, and 6b in the Departmental Appeals Board (DAB) Electronic Filing System (E-File). Finally, Petitioner styled his brief as “Supporting Summary Judgment.” Thus, Petitioner may have intended to cross-move for summary judgment. However, as I explain below, I need not determine whether either party is entitled to summary judgment. back to note 2
                      3. I cite to the version of the MPIM promulgated by transmittal R676PI, which was effective December 19, 2016. See https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/2016-Transmittals-Items/R676PI.html (last visited July 2, 2021). CMS has since reorganized the enrollment portions of the MPIM. back to note 3
                      4. Thus, as provided in transmittal R676PI, the “30-day rule” was applicable when Petitioner submitted his applications. In light of the Supreme Court’s decision in Azar v. Allina Health Services, 139 S. Ct. 1804 (2019), it is unclear what effect, if any, I should give to guidance promulgated via the MPIM. Nevertheless, in my view, the effective date regulation (42 C.F.R. § 424.520(d)) is clear and the MPIM guidance is consistent with the regulation. back to note 4
                      5. My findings of fact and conclusions of law appear as numbered headings in bold italic type. back to note 5
                      6. Petitioner did not paginate his brief. I cite to the PDF page numbers as the document is displayed in DAB E-File. back to note 6 Back to top
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