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                              Tricare Medical & Health Supplies, LLC, DAB CR5777 (2020)
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Tricare Medical & Health Supplies, LLC, DAB CR5777 (2020)








  
  
    

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





Tricare Medical & Health Supplies, LLC
(NPI: 1669892923; PTAN: 7558870001),
Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-20-562Decision No. CR5777December 11, 2020

        
              
    

      DECISION

The Centers for Medicare & Medicaid Services (CMS), through its National Supplier Clearinghouse (NSC), revoked the supplier number and Medicare billing privileges of Petitioner, Tricare Medical & Health Supplies, LLC.  Petitioner requested a hearing to challenge the revocation.  The NSC had a legitimate basis for its determination, and I affirm the revocation of Petitioner’s Medicare supplier number and billing privileges.

I.  Background

Petitioner was enrolled in the Medicare program as a supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), and it listed “medical supply company with respiratory therapist” as its “supplier type,” effective July 21, 2016.  CMS Ex. 9 at 1-2.

On January 7, 2020, the NSC, through Palmetto GBA, a Medicare administrative contractor, issued an initial determination revoking Petitioner’s Medicare supplier number, effective February 6, 2020.  CMS Ex. 6 at 1.  The NSC determined that Petitioner was not in compliance with, *inter alia*, 42 C.F.R. § 424.535(a)(1)

**Page 2**

(noncompliance with enrollment requirements) and 42 C.F.R. § 424.57(c)(1)(ii) (supplier standard # 1 regarding maintenance of state licensure).1
  Specifically, the NSC explained that Petitioner’s “Maryland Residential Service Agency License and Respiratory Care Practitioner License [had] expired; therefore, [it is] not in compliance with this standard.”  CMS Ex. 6 at 1 (emphasis omitted).  The NSC informed Petitioner that if it “believe[s] [it is] able to correct the deficiencies and establish [its] eligibility to participate in the Medicare program, and if this revocation is based in whole or in part on § 424.535(a)(1), [it] may submit a corrective action plan (CAP) within 30 calendar days after the postmark date of this letter.”  CMS Ex. 6 at 2.  The NSC also explained that Petitioner could request reconsideration of the revocation determination.  CMS Ex. 6 at 3.  The NSC informed Petitioner that if it had “additional information that [it] would like a hearing officer to consider during the reconsideration or, if necessary, an administrative law judge to consider during a hearing, [it] must submit that information with [its] request for reconsideration.”  CMS Ex. 6 at 3.  The letter cautioned that Petitioner would not have another opportunity to submit additional evidence “unless an administrative law judge specifically allows [it] to do so under 42 [C.F.R.] § 498.56(e).”  CMS Ex. 6 at 3.
Ms. Gail Edwards, who identified herself as Petitioner’s CEO, submitted a “Request for Reconsideration,” along with three supporting documents that the NSC received on January 21, 2020.  CMS Ex. 5.  On January 27, 2020, Palmetto rejected Petitioner’s submission because it had not been signed by an authorized or delegated official.  CMS Ex. 4 at 1.  Palmetto again informed Petitioner that it could file a corrective action plan or a request for reconsideration within the prescribed time limits.  CMS Ex. 4 at 1.

In a letter dated February 3, 2020, Petitioner’s president, Mr. Vaughn Jordon, submitted a request for reconsideration that was nearly identical to the previous submission by Ms. Edwards.  CMS Ex. 3; *see*CMS Ex. 5.  None of the three supporting documents pertained to Petitioner’s expired respiratory care practitioner license.  *See*CMS Ex. 3 at 2 (letter explaining that accreditation process was in progress); 3 (certificate of liability insurance); 4 (Maryland “Residential Service Agency” license to provide “Durable Medical Equipment only”).  With respect to the basis for revocation pertaining to the expired respiratory care practitioner’s license, Mr. Jordon stated:

I disagree with your findings regarding 42 [C.F.R.] § 424.57(c)[1] because our resident license is in effect and will not expire until October 3rd, 2020.

**Page 3**

We also no longer provide equipment that requires the service of a licensed respirator [sic] care practitioner.

CMS Ex. 3 at 1.

On February 21, 2020, the NSC acknowledged receipt of Petitioner’s request for reconsideration and explained that a decision would be issued within 90 days from the date of Petitioner’s request.  CMS Ex. 2 at 1.  The letter informed Petitioner that it “may submit corrected, new or previously omitted documentation or other facts in support of the reconsideration request,” and provided telephone, facsimile, and email contact information to facilitate the submission of additional information.  CMS Ex. 2 at 1.

On March 3, 2020, an NSC hearing officer issued an unfavorable reconsidered determination upholding the revocation of Petitioner’s Medicare billing privileges on the basis that Petitioner was noncompliant with, *inter alia*, 42 C.F.R. §§ 424.535(a)(1) and 424.57(c)(1).  CMS Ex. 1.  The reconsidered determination stated, in pertinent part:

The NSC was able to verify an active Residential Service Agency License on the Maryland licensee directory at [a state website]; however, the supplier did not submit changes to their enrollment information to reflect the argument in their appeal.  The “supplier type” section lists the supplier as a Medical Supply Company with Respiratory Therapist, but the supplier did not provide a Respiratory Care Practitioner License to support this.  The supplier has not proven compliance with [§] 424.57(c)(1).

CMS Ex. 1 at 3.  The reconsidered determination further summarized that Petitioner “did not include proof of an active Respiratory Care Practitioner License as required by their supplier type,” and that its “billing number has been revoked, as stated in the revocation letter, for failing to comply with the supplier standards.”  CMS Ex. 1 at 3-4.

On March 24, 2020, Mr. Jordon submitted a request for hearing on behalf of Petitioner.2
  The Civil Remedies Division issued my standing pre-hearing order (Pre-Hearing Order) on June 19, 2020, which directed the parties to file their respective pre-hearing exchanges.  CMS filed a pre‐hearing brief and motion for summary judgment, along with ten proposed exhibits (CMS Exs. 1-10).  Petitioner, through counsel, filed a combined brief and response to the motion for summary judgment (P. Br.), and six proposed exhibits.  Petitioner also submitted a witness list in which it identified Mr. Jordon and Ms. Edwards as witnesses.

**Page 4**

CMS objects to P. Ex. 1, which is Mr. Jordon’s written direct testimony, on the basis of relevance.  While the majority of Mr. Jordon’s testimony is irrelevant, CMS has not demonstrated that the testimony must be excluded in its entirety.  I overrule CMS’s objection, and I admit P. Ex. 1 into the evidentiary record.

CMS objects to Petitioner’s listing of Ms. Edwards as a witness, based on Petitioner’s failure to submit her written direct testimony.  *See*Pre-Hearing Order § 12 (“If a party seeks to present witness testimony, it must submit as a proposed exhibit with its pre-hearing exchange the complete, written direct testimony of any proposed witness.”).  Because Petitioner has not submitted written testimony for Ms. Edwards, I will not allow Petitioner to present Ms. Edwards as a witness.

CMS objects to P. Ex. 2 on the basis of relevance.  P. Ex. 2 is a compliance plan that Petitioner developed on August 22, 2020.  Petitioner’s subsequent efforts to return to compliance are immaterial to whether the NSC had a legitimate basis to revoke its supplier number and billing privileges.  Because P. Ex. 2 is irrelevant, I sustain CMS’s objection.

CMS objects to P. Exs. 3 through 6 on the bases of relevance and the failure of Petitioner to establish good cause for the late submission of these documents.  *See*42 C.F.R. § 498.56(e).  If a petitioner submits evidence for the first time at the hearing stage that could have been submitted during the reconsideration stage, I must examine whether good cause exists for it to submit this evidence for the first time at the ALJ hearing level.  42 C.F.R. § 498.56(e)(1).  I must exclude any new documentary evidence if I do not find good cause for its submission.  42 C.F.R. § 498.56(e)(2)(ii); *Care Pro Home Health, Inc.*, DAB No. 2723 at 11 (2016) (“In enrollment revocation cases, an ALJ must exclude ‘new documentary evidence’ – that is, documentary evidence that a provider did not previously submit to CMS at the reconsideration stage (or earlier) – unless the ALJ determines that ‘the provider or supplier has good cause for submitting the evidence for the first time at the ALJ level.’  42 C.F.R. § 498.56(e)(1).”); *see*Pre-Hearing Order § 10 (directing Petitioner to contemporaneously file with its pre-hearing exchange a statement of good cause regarding the submission of any new documentary evidence); CMS Ex. 6 at 3 (explaining that, pursuant to section 498.56(e), Petitioner’s only opportunity to submit evidence would be at the reconsideration stage unless an ALJ allows new evidence based on a showing of good cause).  While “good cause” is not defined in the regulations, the Departmental Appeals Board (DAB) has explained that, in showing good cause in such a situation, a party must explain its “failure to submit [evidence] at the reconsideration stage (or earlier).”  *Care Pro,*DAB No. 2723 at 14.

Petitioner submitted a certificate of DMEPOS accreditation issued by the Accreditation Commission for Health Care, effective February 5, 2020, through February 4, 2023 (P. Ex. 3) and printouts showing that it had applied for accreditation on February 7, 2019 (P.

**Page 5**

Ex. 4).  These documents were available to Petitioner during the reconsideration stage, yet it did not submit these documents at that time.3
  CMS Ex. 6 at 3 (warning that the reconsideration stage is the “only opportunity to submit information during the administrative appeals process”); *see*CMS Ex. 2 at 1 (February 21, 2020 letter acknowledging receipt of Petitioner’s reconsideration request and providing telephone, facsimile, and email information to facilitate Petitioner’s submission of additional information).  Petitioner asserts that good cause exists for the late submission of this evidence based on its “inexperience” and “not having a clear understanding and command of the intricacies and nuances of the Code of Federal Regulations and the applicable Statutes.”  P. Br. at 3.  However, the NSC, in plain language, informed Petitioner of the requirement that it submit any additional information at the reconsideration stage.  CMS Ex. 6 at 3.  In fact, even after Petitioner submitted its second request for reconsideration, the NSC reminded Petitioner that it could submit additional information, and to include providing email and facsimile contact information.  CMS Exs. 2 at 1; 6 at 3.  Petitioner has not shown good cause for its failure to submit P. Exs. 3 and 4 to the NSC during the reconsideration stage, and I therefore exclude these documents from the evidentiary record.4
  42 C.F.R. § 498.56(e).

P. Ex. 5 is a payment schedule reflecting that Petitioner paid for its accreditation in 18 separate installments between February 2019 and August 2020.  The document is undated, and therefore, Petitioner has not demonstrated P. Ex. 5 was not available for submission at the reconsideration stage.  *See*Exhibit list (identifying P. Ex. 5 as “Accreditation Payment Schedule,” without providing a date).  I add that documentation of Petitioner’s payment plan is irrelevant to whether the NSC had a legitimate basis to revoke Petitioner’s supplier number and billing privileges.

Finally, P. Ex. 6 is a copy of a “Respiratory Care Practitioner” license for Ms. T. Caldwell.  Although Petitioner claimed in its request for hearing that “[t]he copy of the Respiratory Therapist license was accidentally not submitted with the reconsideration documents,” it quizzically argued in its brief that it recruited a fully licensed respiratory care practitioner in March 2020.  P. Br. at 12; *but see*CMS Ex. 3 at 1 (Petitioner’s February 2020 statement that it “no longer provide[s] equipment that requires the service of a licensed respirator [sic] care practitioner”).  Petitioner has not established good cause for its failure to timely submit evidence that it had a licensed respiratory care practitioner, and I sustain CMS’s objection to the admission of P. Ex. 6.  *See*42 C.F.R. § 498.56(e).

**Page 6**

I admit CMS Exs. 1-10 and P. Ex. 1 into the evidentiary record.  Because CMS has not requested an opportunity to cross-examine Mr. Jordon, a hearing is unnecessary for the purpose of cross-examination of any witnesses.  Pre-Hearing Order, §§ 13-14.  The matter is ready for a decision on the merits.5

II.  Issue

Whether CMS had a legitimate basis for revoking Petitioner’s Medicare billing privileges based on its noncompliance with 42 C.F.R. §§ 424.535(a)(1) and 424.57(c)(1)(ii).

III.  Jurisdiction

I have jurisdiction to decide this case.  42 C.F.R. §§ 424.545(a), 498.3(b)(17), 498.5(*l*)(2); *see also* 42 U.S.C. § 1395cc(j)(8).

IV.  Findings of Fact, Conclusions of Law, and Analysis6

***1.  Petitioner was enrolled in the Medicare program, with its “supplier type” being “Medical Supply Company with Respiratory Therapist.”***

***2.  The NSC revoked Petitioner’s supplier number and billing privileges pursuant to 42 C.F.R. §§*** ***424.535(a)(1) and 424.57(c)(1)(ii) (Supplier Standard #*** ***1) because, inter alia, its respiratory care practitioner’s license had expired.***

***3.  The NSC offered Petitioner an opportunity to submit a corrective action plan to demonstrate compliance with 42 C.F.R. §§*** ***424.535(a)(1) and 424.57(c)(1)(ii).***

***4.  The NSC offered Petitioner an opportunity to submit additional information or evidence in support of its reconsideration request.***

***5.  Petitioner did not submit a corrective action plan or otherwise submit evidence that it complied with Supplier Standard #*** ***1; to the contrary, Petitioner informed the NSC that it “no longer provide[s] equipment that requires the services of a licensed respirator [sic] care practitioner.”***

**Page 7**

***6.  CMS had a legitimate basis to revoke Petitioner’s Medicare supplier number and billing privileges because Petitioner did not submit evidence of compliance with 42 C.F.R. §§*** ***424.535(a)(1) and 424.57(c)(1)(ii).***

To receive Medicare payments for items furnished to a Medicare beneficiary, a supplier of medical equipment and supplies must have a supplier number issued by the Secretary of Health and Human Services.  Social Security Act (Act) § 1834(j)(1)(A); 42 C.F.R. § 424.505.  To obtain and retain its supplier number, a DMEPOS supplier must meet the standards set forth in 42 C.F.R. § 424.57(c), and CMS may revoke its billing privileges if it fails to do so.  42 C.F.R. §§ 424.57(c)(1), (e), 424.535(a)(1).  To receive direct-billing privileges, a DMEPOS supplier must operate in compliance with, *inter alia*, state licensure and regulatory requirements.  42 C.F.R. § 424.57(c)(1)(ii).  CMS may revoke a currently enrolled DMEPOS supplier’s Medicare enrollment and billing privileges if the supplier fails to satisfy any of the Medicare enrollment requirements, or has failed to furnish Medicare covered items or services as required by the statute or regulations.  42 C.F.R. § 424.535(a)(5)(ii).  After a DMEPOS supplier’s Medicare enrollment and billing privileges are revoked, it is barred from re-enrolling in the Medicare program for a period of between one and ten years.  42 C.F.R. § 424.535(c).  Ordinarily, but with exceptions, a revocation is effective 30 days from the date the supplier is sent the notice of revocation.  42 C.F.R. §§ 424.57(e)(1), 424.535(g).

Because Petitioner was enrolled in the Medicare program as a medical supply company with respiratory therapist, it was required to have a licensed respiratory care practitioner.  CMS Ex. 9 at 2; *see*42 C.F.R. § 424.57(c)(1)(ii).  Although Petitioner argued in its request for reconsideration that it no longer provided equipment that required the services of a licensed respiratory care practitioner, it nonetheless maintained its enrollment with a “supplier type” of “medical supply company with respiratory therapist.”  *See*CMS Ex. 9 at 2.  Even when offered the opportunity to submit a corrective action plan to show that it had corrected the deficiencies, Petitioner neither updated its supplier type in its enrollment record nor submitted evidence that it had a licensed respiratory care practitioner.  *See*CMS Ex. 6 at 2.  Likewise, Petitioner, in support of its reconsideration request, did not submit any evidence establishing that the NSC did not have a legitimate basis to revoke its supplier number and billing privileges based on the expiration of its respiratory care practitioner’s license.  CMS Ex. 3.  Petitioner has not demonstrated that the NSC erred when it revoked its supplier number and billing privileges.  42 C.F.R. §§ 424.535(a)(1), 424.57(c)(1)(ii).

Petitioner has not argued that the NSC lacked a basis to revoke its supplier number and billing privileges pursuant to 42 C.F.R. §§ 424.535(a)(1) and 424.57(c)(1)(ii).  In fact, Petitioner initially argued that it no longer provided respiratory care services, thereby implying that it did not need to maintain an affiliation with a licensed respiratory care

**Page 8**

practitioner.  CMS Ex. 3 at 1.  Thereafter, in its request for hearing, Petitioner changed its approach, arguing that it simply overlooked submitting a copy of its respiratory care practitioner’s license, even though its supplier number and billing privileges had been revoked based on a lack of such documentation.  And finally, Petitioner explained in its brief that it did not recruit a new respiratory care practitioner until March 2020, seemingly undermining its previous claims that it either “accidentally” did not submit a copy of the license or no longer required a license because it did not supply equipment requiring those services.7
  P. Br. at 12; *see*Request for Hearing; CMS Ex. 3 at 1.  Petitioner further acknowledged that it lacked a licensed respiratory care practitioner for a significant period of time, stating:

Tricare could only afford a Respiratory Therapist on a part-time or “on call” basis, because of infrequent requests for respiratory supplies and therapeutic assistance.  Since 2016, the Respiratory Therapist affiliated with Tricare was employed on a part-time basis, but in 2018 she unexpectedly decided to retire.  After her retirement, it was very difficult for Tricare to recruit a replacement therapist who would agree to work on a part time basis.  However, in March 2020 Tricare recruited Ms. [T.] Caldwell, a fully licensed Respiratory Care Practitioner, who is still affiliated with the business on an “as needed” basis. ****

P. Br. at 12.  Petitioner reported that its “management recognizes and understands the serious nature of the errors giving rise to the cause for revocation and has implemented the necessary measures on an ongoing basis to prevent recurrence.”  P. Br. at 14.

The simple fact is that Petitioner, which was enrolled as a supplier type of medical supply company with respiratory therapist, did not offer documentation that it had a licensed respiratory care practitioner until after the NSC had revoked its supplier number and billing privileges.  *See*CMS Exs. 1, 6.  And when given an opportunity to submit either a corrective action plan or a reconsideration request to demonstrate compliance with 42 C.F.R. §§ 424.535(a)(1) and 424.57(c)(1), Petitioner did not report it had a licensed respiratory care practitioner, nor did it update its supplier type in its enrollment record.  *See*CMS Ex. 9 at 2.  To the contrary, Petitioner implied that it did not need such a license because it did not currently supply equipment “that requires the service of a licensed respirator [sic] care practitioner.”  CMS Ex. 3 at 1.  Petitioner admits that it did not have a licensed respiratory care practitioner from sometime in 2018 through March 2020, even though it was enrolled as a medical supply company with respiratory therapist.  P. Br. at 12; *see*CMS Ex. 9 at 2.  As a result, the NSC had a legitimate basis to revoke Petitioner’s supplier number and billing privileges.  42 C.F.R. §§ 424.535(a)(1), 424.57(c)(1).

**Page 9**

Without any legal basis, Petitioner argues the revocation of its supplier number and billing privileges should be “terminated” or “rescinded” based on the presence of “mitigating factors” and its implementation of remedial measures.  P. Br. at 12-14.  My review is limited to whether the NSC had a legitimate basis to revoke Petitioner’s supplier number and billing privileges, and I have no authority to overturn the NSC’s exercise of discretion to revoke Petitioner’s supplier number and billing privileges so long as NSC had a legitimate basis for its determination.  To the extent Petitioner has raised a plea for equitable relief, I cannot grant such relief.  *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.”); *see Donna Maneice, M.D.*,DAB No. 2826 at 7 (2017) (“On appeal of CMS’s revocation, neither the ALJ nor the [DAB] has authority to reverse an authorized revocation for reasons of equity.”) (citations omitted).  I cannot grant Petitioner relief on this basis because I do not have the authority to find invalid or refuse to follow federal statutes or regulations.  *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.”).

V.  Conclusion

For the reasons stated above, I affirm the revocation of Petitioner’s DMEPOS supplier number and Medicare billing privileges, pursuant to 42 C.F.R. §§ 424.535(a)(1) and 424.57(c)(1)(ii).


          /s/
        Leslie C. Rogall

                      Administrative Law Judge
      1. The NSC also revoked Petitioner’s supplier number and billing privileges pursuant to 42 C.F.R. §§ 424.57(c)(10) (requirement to maintain a general liability insurance policy) and 424.57(c)(22) (requirement to maintain accreditation).  Because the duration of the revocation is for the minimum one-year duration authorized by 42 C.F.R. § 424.535(c), it is unnecessary to address the other two bases for revocation.  See CMS Ex. 6 at 1. back to note 1
                      2. Petitioner submitted its request for hearing by mail.  As a result of the COVID-19 pandemic, the Civil Remedies Division experienced significant disruptions in its ability to process incoming and outgoing mail, which delayed the docketing of this case. back to note 2
                      3. Petitioner also declined the opportunity to submit a corrective action plan to demonstrate that it had corrected the deficiencies.  See CMS Ex. 6 at 2. back to note 3
                      4. Because I do not address the basis for revocation involving Petitioner’s failure to maintain accreditation, P. Exs. 3 and 4 are irrelevant to this decision.  Nonetheless, I have addressed whether these documents are admissible pursuant to 42 C.F.R. § 498.56(e) because they pertain to a basis for revocation.  See 42 C.F.R. § 424.57(c)(22). back to note 4
                      5. As an in-person hearing to cross-examine witnesses is not necessary, it is unnecessary to further address CMS’s motion for summary judgment. back to note 5
                      6. My findings of fact and conclusions of law are set forth in italics and bold font. back to note 6
                      7. In its brief, Petitioner argued that its “failure to adequately address the issue of its respiratory therapist should not contribute to the cause of revoking its billing privileges.”  P. Br. at 12 (bold, italics, and capitalization omitted). back to note 7 Back to top
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