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                              Astoria Pharmacy Inc., DAB CR5998 (2021)
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Astoria Pharmacy Inc., DAB CR5998 (2021)








  
  
    

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





Astoria Pharmacy Inc.
(PTAN:  0773450001 / NPI:  1114942968),
Petitioner,

v.

Centers for Medicare & Medicaid Services.
Docket No. C-19-838Decision No. CR5998December 10, 2021

        
              
    

      DECISION

The Centers for Medicare & Medicaid Services (CMS), through an administrative contractor, revoked the Medicare enrollment and billing privileges of Astoria Pharmacy Inc. (Petitioner) pursuant to 42 C.F.R. § 424.57(e)(1) for noncompliance with 42 C.F.R. § 424.57(c)(22).  Based on the evidence in the record, I conclude that Petitioner was not in compliance with enrollment requirements because its required accreditation expired on July 1, 2018.  Therefore, I affirm CMS’s determination to revoke Petitioner’s Medicare enrollment and billing privileges, effective January 10, 2019.  I also affirm CMS’s determination to impose upon Petitioner a two year re-enrollment bar.

I.  Background and Procedural History

Petitioner was enrolled in the Medicare program as a pharmacy and supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).  42 C.F.R. § 424.57(a).  On December 11, 2018, a CMS administrative contractor retroactively revoked Petitioner’s Medicare enrollment and billing privileges, effective November 7, 2018, and imposed a two year re-enrollment bar beginning January 10, 2019.  The contractor cited 42 C.F.R. §§ 405.800, 424.57(e), and 424.535(a)(1), (a)(5), and (g) as the legal authority for the revocation and noted that Petitioner violated 42 C.F.R.

Page 2

424.57(c)(2) (Supplier Standard 2), (c)(7) (Supplier Standard 7), and (c)(22) (Supplier Standard 22). CMS Ex. 4.  Specifically, the contractor determined that Petitioner was noncompliant with Medicare enrollment requirements because “[a]ll suppliers of DMEPOS and other items and services must be accredited by a CMS-approved accreditation organization” and Petitioner’s accreditation had expired on July 1, 2018.  CMS Ex. 4 at 2.

On February 8, 2019, Petitioner submitted a request for reconsideration.  CMS Ex. 10.  On March 26, 2019, a Medicare Hearing Officer issued a reconsidered determination.  The Hearing Officer upheld the revocation of Petitioner’s Medicare enrollment and billing privileges effective November 7, 2018, and the two year re-enrollment bar, based on Petitioner’s noncompliance with 42 C.F.R. § 424.57(c)(2) (Supplier Standard 2), (c)(7) (Supplier Standard 7), and (c)(22) (Supplier Standard 22).  CMS Ex. 5.

On May 17, 2019, Petitioner timely filed a request for a hearing with the Departmental Appeals Board, Civil Remedies Division.  The case was originally assigned to Administrative Law Judge Bill Thomas.  On June 6, 2019, Judge Thomas issued an Acknowledgment and Pre-hearing Order (Pre-hearing Order).  On October 13, 2021, the case was reassigned to me.  I adopt the June 6, 2019 Pre-hearing Order.  On July 11, 2019, CMS timely filed a combined pre-hearing brief and motion for summary judgment (CMS Br.), along with 11 exhibits (CMS Exs. 1-11).  Petitioner timely filed its pre‐hearing exchange, which included a response brief (P. Br.), and a document entitled Certificate of Accreditation, which I construe as an exhibit (P. Ex. 1).

CMS has elected to defend Petitioner’s revocation of billing privileges only on the violation of 42 C.F.R. § 424.57(c)(22), for failure to maintain active accreditation to sell DMEPOS.  *See* CMS Br. at 2 n.1.  Therefore, for purposes of this decision, I consider only whether Petitioner had a valid accreditation from an acceptable source or whether Petitioner received an exemption from that requirement.

Because neither party objected to any of the proposed exhibits, I admit CMS Exs. 1-11 and P. Ex. 1 into the record.  Pre-hearing Order ¶ 8; Civil Remedies Division Procedures § 14(e).

II.  Issues

As a threshold matter, I consider whether summary judgment is appropriate.  On the merits, the issues are:

Whether summary judgment is appropriate; and
	Whether CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges.Page 3

III.  Discussion

**Applicable Law**Section 1831 of the Social Security Act (Act) (42 U.S.C. § 1395j) establishes the supplementary medical insurance benefits program for the aged and disabled, known as Medicare Part B.  Payment under the program for services rendered to Medicare-eligible beneficiaries may only be made to eligible providers of services and suppliers.  Act §§ 1835(a) (42 U.S.C. § 1395n(a)), 1842(h)(1) (42 U.S.C. § 1395u(h)(1)).  Petitioner is a DMEPOS supplier.

The Act requires the Secretary of Health and Human Services (Secretary) to issue regulations that establish a process for the Medicare enrollment of providers and suppliers, including the right to a hearing and judicial review of certain enrollment determinations, such as revocation of enrollment and billing privileges.  Act § 1866(j) (42 U.S.C. § 1395cc(j)).  Pursuant to 42 C.F.R. § 424.505, a supplier such as Petitioner must be enrolled in the Medicare program and be issued a billing number in order to have billing privileges and be eligible to receive payment for services rendered to Medicare‐eligible beneficiaries.

Pursuant to 42 C.F.R. §§ 424.57 and 424.505, a supplier such as Petitioner must be enrolled in the Medicare program to be reimbursed for DMEPOS sold or rented to Medicare beneficiaries.  The regulations establish detailed requirements that suppliers must meet and maintain in order to enroll in Medicare and receive billing privileges.  42 C.F.R. pt. 424, subpt. P.  DMEPOS suppliers have additional requirements imposed by 42 C.F.R. § 424.57(b) and (c).  To receive direct-billing privileges, a DMEPOS supplier must meet and maintain the Medicare certification standards set forth in 42 C.F.R. § 424.57(c).  A DMEPOS supplier must operate and furnish Medicare-covered items in compliance with all applicable federal and state licensure and regulatory requirements.  42 C.F.R. § 424.57(c)(1).  These requirements include the following:

All suppliers of DMEPOS and other items and services **must be accredited by a****CMS****-approved accreditation organization** in order to receive and retain a supplier billing number.  The accreditation must indicate the specific products and services, for which the supplier is accredited in order for the supplier to receive payment for those specific products and services.

42 C.F.R. § 424.57(c)(22) (emphasis added).

The Secretary has delegated to CMS the authority to revoke Medicare enrollment and billing privileges.  42 C.F.R. §§ 424.57(e)(1), 424.535.  CMS or its contractor may

Page 4

revoke an enrolled supplier’s Medicare enrollment and billing privileges and supplier agreement for any of the reasons listed in 42 C.F.R. § 424.535.  Noncompliance with DMEPOS‐specific enrollment requirements established by 42 C.F.R. § 424.57(b) and (c) for DMEPOS suppliers is also a basis for revoking Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.57(e)(1).  When Medicare enrollment and billing privileges are revoked pursuant to 42 C.F.R. § 424.57(e)(1), revocation is effective 30 days after the DMEPOS supplier is sent notice of the revocation.  If a supplier’s Medicare billing privileges are revoked, the supplier is barred from re-enrolling in the Medicare program for one to three years.  42 C.F.R. § 424.535(c).1

A supplier whose enrollment and billing privileges are revoked may request reconsideration and review as provided by 42 C.F.R. pt. 498.  42 C.F.R. § 424.545(a).  A supplier submits a written request for reconsideration to CMS or its contractor.  42 C.F.R. § 498.22(a).  CMS or its contractor must give notice of its reconsidered determination to the supplier, giving the reasons for its determination, specifying the conditions or requirements the supplier failed to meet, and advising the supplier of its right to an ALJ hearing.  42 C.F.R. § 498.25.  If the decision on reconsideration is unfavorable to the supplier, the supplier has the right to request a hearing by an ALJ and further review by the Departmental Appeals Board (Board).  Act § 1866(j)(8) (42 U.S.C. § 1395cc(j)(8)); 42 C.F.R. §§ 424.545, 498.3(b)(17), 498.5.  A hearing on the record, also known as an oral hearing, is required under the Act.  *Crestview Parke Care Ctr. v. Thompson*, 373 F.3d 743, 748-51 (6th Cir. 2004).  The supplier bears the burden to demonstrate that it meets enrollment requirements.  42 C.F.R. § 424.545(c).

**Summary Judgment****Summary judgment**.  Summary judgment is appropriate if a case presents no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law.  *Bartley Healthcare Nursing & Rehab.*, DAB No. 2539 at 3 (2013) (citing*Celotex Corp. v. Catrett*, 477 U.S. 317, 322-25 (1986)); *Ill. Knights Templar Home*, DAB No. 2274 at 3‐4 (2009) and cases cited therein.

The moving party may show the absence of a genuine factual dispute by presenting evidence so one-sided that it must prevail as a matter of law or by showing that the non‐moving party has presented no evidence “sufficient to establish the existence of an element essential to [that party’s] case and on which [that party] will bear the burden of proof at trial.”  *Livingston Care Ctr. v. U.S. Dep’t of Health & Human Servs.*, 388 F.3d 168, 173 (6th Cir. 2004) (quoting *Celotex Corp.*, 477 U.S. at 323-24).  To avoid summary

Page 5

judgment, the non-moving party must then act affirmatively by tendering evidence of specific facts showing that a dispute exists.  *Matsushita Elec. Indus. Co. v. Zenith Radio Corp.*, 475 U.S. 574, 586 n.11 (1986); *see also Vandalia Park*, DAB No. 1939 (2004); *Lebanon Nursing & Rehab. Ctr.*, DAB No. 1918 (2004).  The non-moving party may not simply rely on denials, but must furnish admissible evidence of a dispute concerning a material fact.  *Ill. Knights Templar Home*, DAB No. 2274 at 4; *Livingston Care Ctr*., DAB No. 1871 at 5 (2003).  In doing so, the non-moving party must show more than “some metaphysical doubt as to the material facts.”  *West Tex. LTC Partners, Inc.*, DAB No. 2652 at 6 (2015), *aff’d, West Tex. LTC Partners, Inc. v. U.S. Dep’t of Health & Human Servs.*, 843 F.3d 1043 (5th Cir. 2016); *1866ICPayday.com L.L.C.*, DAB No. 2289 at 3 (2009) (quoting *Matsushita Elec. Indus. Co.*, 475 U.S. at 587).

In examining the evidence for purposes of determining whether summary judgment is appropriate, I must draw all reasonable inferences in the light most favorable to the non‐moving party.  *Brightview Care Ctr.*, DAB No. 2132 at 2, 9 (2007); *Livingston Care Ctr.*, 388 F.3d at 172; *Guardian Health Care Ctr.*, DAB No. 1943 at 8 (2004); *but see* *Brightview Care Ctr.*, DAB No. 2132 at 10 (entry of summary judgment was upheld where inferences and views of the non-moving party were not reasonable).  However, drawing factual inferences in the light most favorable to the non-moving party does not require that I accept the non-moving party’s legal conclusions.  *West Tex. LTC Partners, Inc.*, DAB No. 2652 at 6-7, 14-15; *cf. Guardian Health Care Ctr.*, DAB No. 1943 at 11 (“A dispute over the conclusion to be drawn from applying relevant legal criteria to undisputed facts does not preclude summary judgment if the record is sufficiently developed and there is only one reasonable conclusion that can be drawn from those facts.”).

**Summary judgment applied to administrative review in Medicare cases**.  It is well‐established that an administrative law judge is empowered to decide a case on a motion for summary judgment, without an evidentiary hearing.  *Shah v. Azar*, 920 F.3d 987, 996 (5th Cir. 2019) (citing *Cedar Lake Nursing Home v. U.S. Dep’t of Health & Human Servs.*, 619 F.3d 453, 457 (5th Cir. 2010)); *see Fal-Meridian, Inc. v. U.S. Dep’t of Health & Human Servs.*, 604 F.3d 445, 449 (7th Cir. 2010).  Nevertheless, there seems to be some confusion about applying such well-founded principles of civil litigation to these proceedings, with some ill-informed advocates suggesting that, to do so, denies a party a fundamental right.  In one succinct observation, Judge Posner of the Seventh Circuit Court of Appeals rejected such misapprehensions:  “All it means for a decision to be based on a grant of summary judgment is that there are *no issues that would benefit from being resolved in an evidentiary hearing*.”  *Fal-Meridian, Inc.*, 604 F.3d at 449 (emphasis added).

Here, Petitioner admitted in its request for reconsideration and again in its brief filed in this matter that, beginning July 1, 2018, it was not accredited as a DMEPOS supplier and

Page 6

was attempting to receive a waiver of the accreditation requirement when the accreditation lapsed.

**Findings of Fact, Conclusions of Law, and Analysis**My conclusions of law are set forth in italics and bold, followed by my findings of fact and analysis.

***CMS is entitled to summary judgment because Petitioner did not tender evidence showing that it was accredited by a CMS-approved accreditation organization or had been approved for an exception as provided by 42 C.F.R. § 424.57(c)(22) and 42 U.S.C. § 1395m(a)(20)(G).
	Petitioner was not in compliance with 42 C.F.R. § 424.57(c)(22) (Supplier Standard 22) because Petitioner had a lapse in accreditation and did not have an approved exception.
	There is a basis for revocation of Petitioner’s enrollment and billing privileges pursuant to 42 C.F.R. § 424.57(e)(1) based on Petitioner’s violation of 42 C.F.R. § 424.57(c)(22) (Supplier Standard 22).
	The effective date of revocation of Petitioner’s Medicare enrollment and billing privileges is January 10, 2019, 30 days from the date of the December 11, 2018 notice setting forth the initial determination to revoke. 42 C.F.R. § 424.57(e)(1).*****Facts**The material facts are undisputed.  Petitioner admitted in its request for reconsideration that its accreditation expired on July 1, 2018.  CMS Ex.10; P. Br. at 1.  I accept as true for purposes of summary judgment Petitioner’s assertion in its request for reconsideration that it applied for reaccreditation on September 28, 2018.  I also accept as true for purposes of summary judgment that Petitioner was reaccredited on May 22, 2019.  P. Br. at 2.

**Analysis**Even a single violation of a supplier standard is an adequate basis for revocation of billing privileges and enrollment.  *1866ICPayday.com L.L.C.*, DAB No. 2289 at 13.  Furthermore, 42 C.F.R. § 424.57(e)(1) requires that CMS revoke a supplier’s billing privileges if it is determined that the supplier does not meet the standards established by 42 C.F.R. § 424.57(b) and (c).  Supplier Standard 22 (42 C.F.R. § 424.57(c)(22)) requires that Petitioner, a DMEPOS supplier, be accredited by a CMS‐approved accreditation

Page 7

organization in order to maintain Medicare enrollment and receive and retain a supplier billing number.  A provider or supplier must be able to demonstrate that it meets enrollment requirements and produce the documents necessary to show its compliance with enrollment requirements.  42 C.F.R. § 424.545(c).

The undisputed facts establish that Petitioner violated 42 C.F.R. § 424.57(c)(22) (Supplier Standard 22) because Petitioner was not accredited beginning July 1, 2018 and continuing until May 22, 2019.  Although Petitioner was eventually reaccredited, that fact is not material as the requirement is to “be accredited by a CMS-approved accreditation organization in order to receive and retain a supplier billing number.”  42 C.F.R. § 424.57(c)(22).  Petitioner concedes that it was not accredited at the time of revocation.  P. Br. at 2.  Accordingly, revocation for a violation of 42 C.F.R. § 424.57(c)(22) is required by 42 C.F.R. § 424.57(e)(1), which provides that “CMS revokes a supplier’s billing privileges if it is found not to meet the standards in paragraphs (b) and (c) of this section.”

Petitioner’s arguments to excuse its violation of Supplier Standard 22 and avoid revocation are without merit.  Petitioner asserts that the lapse in accreditation was because Petitioner “thought that it was possible to step down from accreditation simply by indicating that [Petitioner] would not sell products that needed accreditation on the revalidation form.”  P. Br. at 1.  Petitioner contends that it was not aware of any special forms or notices required to step down from the accreditation.  Petitioner notes that it learned of the requirement after a representative attended a legal seminar in August 2018.  However, this statement is at odds with a document titled Attestation for Exemption from Accreditation for a Medicare Enrolled Pharmacy (Attestation), dated July 1, 2018.  CMS Ex. 10 at 31.  Petitioner submitted a copy of the same Attestation document with its request for hearing.  CMS Dkt. No. 1b at 33.  With its request for hearing, Petitioner also submitted a November 2010 document titled Pharmacy Accreditation Exemption Statement Fact Sheet.  CMS Dkt. No. 1b at 31.  The Fact Sheet discusses the process for submitting an exemption request but also warns:

It is recommended that you do not terminate your accreditation until you receive notice from [the CMS contractor] that your accreditation exemption statement has been accepted.  We make this recommendation because if you are no longer accredited and do not qualify for the exemption, your Medicare billing privileges will be revoked.

Petitioner has not provided evidence that it was accredited by a recognized source at the time of revocation or that it received an approved exception to those requirements at the time the accreditation lapsed on July 1, 2018.  Nor has Petitioner cited any statute, regulation, or CMS policy that permits an enrolled supplier or provider to avoid enforcement of participation requirements.  Petitioner cannot avoid responsibility for

Page 8

failure to comply with accreditation requirements by stating it was unaware of the requirement to remain accredited until it received approval of an exemption from the accreditation requirements.

I find that CMS had a basis for revocation of Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.57(e)(1).  I do not have the authority to review the exercise of discretion by CMS or its contractor to revoke, where there is a basis for revocation.  *Abdul Razzaque Ahmed, M.D.*, DAB No. 2261 at 19 (2009), *aff’d*, *Ahmed v. Sebelius*, 710 F. Supp. 2d 167 (D. Mass. 2010).  My authority is limited to determining whether there is a legal basis for revocation of Petitioner’s Medicare enrollment and billing privileges.  *Id*.

Petitioner’s arguments may also be considered as a request for equitable relief.  I do not have the authority to grant equitable relief.  *US Ultrasound*, DAB No. 2302 at 8 (2010).  I must follow the Act and regulations, and I have no authority to declare any statute or regulation invalid.  *1866ICPayday.com L.L.C.*, DAB No. 2289 at 14.

Pursuant to 42 C.F.R. § 424.57(e)(1), revocation for noncompliance with supplier standards established by 42 C.F.R. § 424.57(b) and (c) is effective 30 days after the supplier is sent notice of the revocation.  Because CMS declined to defend Petitioner’s revocation based upon a violation of 42 C.F.R. § 424.57(c)(7), the revocation cannot be effective any earlier than 30 days after the date the notice of revocation was issued.  Additionally, in its brief, CMS notes that it “defends Petitioner’s revocation pursuant to **42 C.F.R. § 424.57(c)(22) only**” and “acknowledges that the effective date of Petitioner’s revocation **should be changed from November 7, 2018 to January 10, 2019**pursuant to 42 C.F.R. § 424.57(e)(1).”  CMS Br. at 2 (emphasis added).

Thus, the correct effective date for revocation of Petitioner’s Medicare enrollment and billing privileges is 30 days after the December 11, 2018 notice of the revocation was issued.  *See Neb Grp. of Ariz. LLC*, DAB No. 2573 at 7-8 (2014).  Accordingly, I conclude that the effective date of revocation of Petitioner’s Medicare enrollment and billing privileges was January 10, 2019, which is 30 days after the notice of revocation was issued.

Page 9

IV.  Conclusion

For the foregoing reasons, I conclude that Petitioner’s Medicare enrollment and billing privileges are revoked pursuant to 42 C.F.R. § 424.57(e)(1), effective January 10, 2019.  I also affirm CMS’s determination to impose upon Petitioner a two year re-enrollment bar.


          /s/
        Wallace Hubbard

                      Administrative Law Judge
      1. CMS amended 42 C.F.R. § 535(c)(1)(i) to allow increased re-enrollment bars of 10 years, effective November 4, 2019.  84 Fed. Reg. 47,794, 47,855 (Sept. 10, 2019).  In this case, CMS imposed the two year re‐enrollment bar by correspondence dated December 11, 2018, effective before the amended regulation.  CMS Ex. 4. back to note 1 Back to top
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