Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Southlake Emergency Care Center
(CLIA #45D1021990),

Petitioner
Vv.
Centers for Medicare and Medicaid Services.
Docket No. C-10-877
Decision No. CR2300

Date: January 10, 2011

DECISION

For the reasons set forth below, I grant the Centers for Medicare and Medicaid Services’
(CMS’s) motion for summary judgment. The undisputed evidence establishes that the
owner of Southlake Emergency Care Center (Petitioner) was also the owner of Coppell
Minor Emergency Center, LLC (Coppell Laboratory). CMS previously revoked the
Clinical Laboratory Improvement Amendments (CLIA) certificate of Coppell
Laboratory. I conclude that CMS therefore had authority to revoke Petitioner’s CLIA
certificate, pursuant to 42 C.F.R. § 493.1840(a)(8).

I. Background

On August 9, 2010, Departmental Appeals Board (Board) Member Leslie A. Sussan
issued an Acknowledgment and Pre-Hearing Order, setting procedures for this appeal.'
CMS submitted a “Motion for Summary Judgment, or Alternatively, Motion for
Summary Disposition and/or Pre-Hearing Brief’ (CMS Br.), dated September 8, 2010,
and five exhibits (CMS Exs. 1-5). Petitioner submitted a response to CMS’s motion (P.

' Pursuant to 42 C.F.R. § 498.44, a member of the Board may be designated to hear
appeals taken under part 498.
Br.), dated October 7, 2010, and attached one exhibit (P. Ex. A). CMS submitted a reply
to Petitioner’s response (CMS Reply), dated November 5, 2010. This case was
transferred to me on October 25, 2010. Neither party objected to the admission of any
exhibit. Accordingly, I admit all of the parties’ exhibits as evidence.

I set out here the material facts that are not in dispute. Petitioner, a clinical laboratory in
Southlake, Texas with CLIA Certificate No. 45D1021990, is owned and operated by
Charles J. O’Hearn, M.D. (Dr. O’Hearn). Dr. O’Hearn also owned and operated Coppell
Laboratory in Coppell, Texas with CLIA Certificate No. 45D0996638. On February 18,
2010, the Texas Department of State Health Services (DSHS) conducted a recertification
of Coppell Laboratory and determined that the facility was not in compliance with certain
CLIA regulations. DSHS cited several deficiencies. CMS Ex. 4. On March 5, 2010,
DSHS sent Dr. O’Hearn a written notice requesting a plan of correction (POC) for the
deficiencies cited. See CMS Ex. 2, at 1. On April 20, 2010, CMS issued a notice letter
proposing revocation of Coppell Laboratory’s CLIA certificate, effective June 22, 2010.
CMS Ex. 2, at 3. The notice letter informed Dr. O’Hearn of his appeal rights to challenge
the proposed revocation of Coppell Laboratory’s CLIA certificate for failing to meet
CLIA conditions. CMS Ex. 2, at 4. The notice letter also informed Dr. O’ Hearn that it
was the fourth request for an acceptable POC. CMS Ex. 2, at 1. Specifically, the April
20, 2010 letter stated, in part:

Your laboratory’s CLIA certificate will be revoked effective June 22, 2010
if one or all of the following occurs:
e arequest for a hearing is not received by June 21, 2010; or
e DSHS finds continued condition level non-compliance conditions
on the revisit; or status at the time of the revisit escalates to an
immediate jeopardy; or
e CMS and the State do not receive an AOC [allegation of compliance]
and POC; or
¢ the POC does not ensure correction of the condition level deficiencies.

CMS Ex. 2, at 3 (emphasis in original).

Dr. O’Hearn states that he submitted a POC for Coppell Laboratory on April 20, 2010,
but then he closed Coppell Laboratory that same month, citing “the present economic
conditions and shrinking healthcare reimbursements.” Hearing Request at 1. Dr.
O’Hearn did not surrender Coppell Laboratory’s CLIA certificate to CMS. See CMS Br.
at 6. On June 23, 2010, CMS issued a notice letter informing Dr. O’Hearn that CMS had
revoked Coppell Laboratory’s CLIA certificate effective June 22, 2010 due to the
laboratory’s failure to ensure correction of condition-level noncompliance and failure to
file an appeal within sixty days from the notice of proposed revocation. CMS Ex. 3, at 2.
Dr. O’Hearn did not request a hearing to appeal the revocation of Coppell Laboratory’s
CLIA certificate by June 21, 2010. Dr. O’Hearn explains that the revocation letter came
two months after he closed Coppell Laboratory for economic reasons, so it made no sense
for him to appeal the certificate. Hearing Request at 1. In both the April 20, 2010 and
the June 23, 2010 notice letters, CMS informed Dr. O’Hearn that 42 U.S.C. § 263a and
42 C.F.R. § 493.1840(a)(8) prohibit the owners or operators of laboratories that have had
their CLIA certificates revoked from owning or operating a laboratory for at least two
years from the date of the revocation. CMS Ex. 2, at 3-4; CMS Ex. 3, at 2.

By letter dated July 20, 2010, CMS proposed revocation of Petitioner’s CLIA certificate.
CMS Ex. 1, at 1. The letter stated that Petitioner’s CLIA certificate would be
automatically revoked on September 21, 2010. Jd. at 2. Petitioner timely appealed its
revocation. Petitioner’s July 23, 2010 Hearing Request proposes that the revocation of
Coppell Laboratory’s CLIA certificate “be undone... .” Hearing Request at 2.
Petitioner further requests that Coppell Laboratory be “closed” so that revocation of its
certificate would not occur, and Petitioner would then be able to continue to operate. Id.

Il. Applicable Legal Authority

CLIA establishes requirements for all laboratories that perform clinical diagnostic tests
on human specimens and provides for Federal certification of such laboratories. Pub. L.
No. 100-578, amending § 353 of the Public Health Service Act (codified at 42 U.S.C.

§ 263a et seg.). The purpose of CLIA is to ensure the accuracy and reliability of
laboratory tests and the public health of all Americans. See H.R. REP. NO. 899, as
reprinted in 1988 U.S.C.C.A.N. 3828, 3839. CMS certification of a laboratory under
CLIA depends on whether the laboratory meets the conditions for certification set out in
the statute and regulations. 42 U.S.C. § 263a(f)(1)(E); 42 C.F.R. § 493.1 et seq.
Pursuant to CLIA, the Secretary of the Department of Health and Human Services
(Secretary) has broad enforcement authority, including the ability to suspend, limit, or
revoke the certificate of a laboratory that is out of compliance with one or more
requirements for certification.

The Secretary has exercised her authority under 42 U.S.C. § 263a(f) and issued
regulations implementing CLIA. See 42 C.F.R. Part 493. The regulations specify
standards and the specific conditions of certification that a laboratory must meet to
achieve compliance. The regulations confer broad authority on CMS to ensure that
laboratories perform as Congress intended, including authority to inspect and sanction
laboratories that fail to comply with the regulatory requirements. CMS has the delegated
authority to suspend, limit, or revoke the CLIA certificate of a laboratory that is out of
compliance with one or more CLIA conditions and may also impose alternative sanctions,
such as a directed plan of correction or monitoring by the state. 42 C.F.R. § 493.1806.

In addition to the sanctions directed against laboratories, CLIA provides the following
with respect to the owners and operators of non-compliant laboratories:
(3) Ineligibility to own or operate laboratories after revocation.

No person who has owned or operated a laboratory which has had
its certificate revoked may, within 2 years of the revocation of the
certificate, own or operate a laboratory for which a certificate has
been issued under this section.

42 U.S.C. § 263a(i).

The implementing regulations provide that CMS may suspend, limit, or revoke a
laboratory's CLIA certificate, if it finds that the owner or operator has:

[w]ithin the preceding two-year period, owned or operated a laboratory
that had its CLIA certificate revoked. (This provision applies only to
the owner or operator, not to all of the laboratory's employees.)

42 CFR. § 493.1840(a)(8).

The Secretary has published policies that acknowledge a laboratory may withdraw from
CLIA by going out of business. CMS State Operations Manual (SOM), section 6256.
However, the Secretary has also established as policy that CMS may nevertheless revoke
a laboratory’s CLIA certificate after a laboratory has gone out of business, if it decides
that the laboratory’s performance warrants proceeding with the enforcement action.
SOM, section 6256.3.

III. Issues
1) Whether Petitioner may contest CMS’s revocation of its CLIA certificate.

2) Whether further discovery shall be permitted regarding the revocation of Coppell
Laboratory’s CLIA certificate.

3) Whether CMS is entitled to summary judgment.
IV. Applicable Standard
CMS’s motion made clear that the summary disposition it seeks is in the nature of

summary judgment. CMS Reply at 5. The Board stated the standard for summary
judgment as follows:

Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to
judgment as a matter of law. . .. The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
material fact for trial and that it is entitled to judgment as a matter of

law. ... To defeat an adequately supported summary judgment motion, the
non-moving party may not rely on the denials in its pleadings or briefs, but
must furnish evidence of a dispute concerning a material fact — a fact that, if
proven, would affect the outcome of the case under governing law. . . . 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.

Senior Rehab. and Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
The role of an administrative law judge (ALJ) in deciding a summary judgment motion
differs from the ALJ’s role in resolving a case after a hearing. The ALJ should not assess
credibility or evaluate the weight of conflicting evidence. Holy Cross Vill. at Notre
Dame, Inc., DAB No. 2291, at 5 (2009).

V. Findings of Fact, Conclusions of Law, and Discussion
My conclusions are in the italicized headings followed by discussion.

1. Petitioner may appeal the initial determination of CMS to impose a
sanction against it by revoking its CLIA certification.

CMS argues that Petitioner has no right to an appeal in this matter. CMS Br at 7-13. I
isagree, however, and find that Petitioner does have the right to request a hearing.
Federal regulations clearly provide that laboratories dissatisfied with an initial
letermination, such as the revocation of a laboratory’s CLIA certificate because of
noncompliance with CLIA requirements, have the right to appeal the adverse
leterminations by CMS. 42 C.F.R. § 493.1844(a), (b)(1).

The right to appeal is time-limited under the regulation, however. For that reason, I am
precluded from reopening issues involving Coppell Laboratory’s CLIA sanction in the
instant appeal due to administrative finality. Dr. O’Hearn was afforded a sixty-day
period to challenge the revocation of Coppell Laboratory’s CLIA certificate, and he
ailed to file an appeal pursuant to 42 C.F.R. § 498.40. 42 C.F.R. § 493.1844(a)(2).

Although the revocation of Petitioner’s CLIA certificate is based on the finalized
revocation of another laboratory’s CLIA certificate, the revocation of Petitioner’s CLIA
certificate is an initial determination subject to appeal. 42 C.F.R. § 493.1844(b)(1). That
appeal is not barred by principles of res judicata because CMS’s authority to revoke
Petitioner’s certificate, as opposed to Coppell’s, has never been litigated and has not
become administratively final. Given the plain regulatory language, therefore, it is clear
that Petitioner has the right to appeal the revocation of its CLIA certificate.

Therefore, I have jurisdiction to resolve this case, and dismissal is not appropriate.

2. No further discovery shall be permitted, as estoppel against the federal
government is unavailable.

Petitioner requests “that the ALJ permit limited discovery of CMS’s files to demonstrate
that fundamental due process was denied [Dr. O’Hearn], regarding the Coppell Lab’s
revocation.” P. Br. at 3. Petitioner states that “[u]pon communicating . . . that the
Coppell Lab had ceased operations, CMS indicated that the matter could be resolved
without revocation of the Southlake Lab’s certificate by putting CMS on notice of the
Coppell Lab’s cessation of operations.” P. Br. at 2-3. Petitioner further states:

On or about July 7, 2010, CMS, by and through Patty Nath,
inspected Southlake Lab. At that time, Ms. Nath advised
O’Hearn that the impact of the revocation of Coppell Lab’s
certificate was that the Southlake Lab’s certificate would be
revoked. In response to Ms. Nath’s advice and the receipt of
CMS’s notice of sanctions letter, O’ Hearn contacted CMS’s
Emily Townsend. Ms. Townsend suggested that O’ Hearn
give notice that his intent was to surrender the Coppell Lab’s
certificate and that doing so would solve the issue of the
potential of the Southlake Lab’s certificate being revoked.

P. Br. at 2.

CMS argues that I do not have the authority to order discovery in these proceedings.
CMS Reply at 2-4. However, as an ALJ assigned to this matter, I do have a duty to
develop the record pursuant to 42 C.F.R. § 498.60. Nonetheless, I will not permit further
discovery in this case because, even if Petitioner were to obtain evidence of the kind it
seeks, such evidence could not affect the outcome here.

Petitioner asks me, in effect, to estop the government from applying federal law and
regulations, based on the fact that Petitioner received information from a CMS employee
indicating that surrendering the Coppell Laboratory’s CLIA certificate would resolve the
issue in the instant case. P. Br. at 2. Even if I accept as true that CMS provided bad
advice to Petitioner, it is well-settled that the government cannot be estopped, even after
providing bad advice. As the Board has repeatedly held, estoppel against the federal
government, if available at all, is presumably unavailable absent “affirmative
misconduct.” See, e.g., Pacific Islander Council of Leaders, DAB No. 2091, at 12
(2007); Office of Pers. Mgmt. v. Richmond, 496 U.S. 414, 421 (1990). Petitioner has not
demonstrated that incorrect understandings of legal requirements on the part of CMS or
its contractors rises to the level of affirmative misconduct. See, e.g., Huron Potawatomi,
Inc., DAB No. 1889, at 5 (2003) (holding allegation that incorrect advice was provided
was not to be evidence of affirmative misconduct). No affirmative misconduct has been
alleged here; therefore, I deny Petitioner’s request for limited discovery of CMS’s files
because it would not alter my determination in this case.

Further, it is undisputed that Petitioner never acted upon the purported bad advice to give
notice to CMS that it was surrendering its CLIA certificate.

3. CMS is entitled to summary judgment because undisputed facts
demonstrate that the revocation of Petitioner’s CLIA certificate was legally
authorized.

It is undisputed that Dr. O’Hearn owned and operated both the Southlake Laboratory and
the Coppell Laboratory, and CMS revoked Coppell Laboratory’s CLIA certificate on
June 22, 2010. The revocation of Coppell Laboratory’s CLIA certificate triggers 42
U.S.C. § 263a(i)(3), which provides that “[n]o person who has owned or operated a
laboratory which has had its certificate revoked may, within 2 years of the revocation of
the certificate, own or operate a laboratory for which a certificate has been issued under
this section.” 42 C.F.R. § 493.1840(a)(8) is also triggered, which permits CMS to initiate
adverse action to suspend, limit, or revoke the CLIA certificate of any laboratory if it is
found that the laboratory’s owner or operator owned or operated a laboratory that had its
CLIA certificate revoked within the last two years.

Petitioner argues that CMS should not have revoked the CLIA certificate of the Coppell
Laboratory because Dr. O’Hearn closed the Coppell Laboratory prior to the revocation of
its CLIA certificate. See Hearing Request. The voluntary closure of a laboratory,
however, does not preclude CMS from proceeding with revocation of the laboratory’s
certificate. The Board has held that revocation under such circumstances may form the
basis of the two-year prohibition against that laboratory’s owners or operators operating
another CLIA laboratory. Sentinel Med. Labs., Inc., DAB No. 1762 (2001), aff'd,
Teitelbaum v. Health Care Financing Admin., No. 01-70236 (9th Cir. Mar. 15, 2002),
reh'g denied, No. 01-70236 (9th Cir. May 22, 2002). If laboratories were allowed to
close to escape revocation and their owners to then open another laboratory, the relevant
CLIA regulations would be null, and the government’s enforcement powers could be
evaded. As the ALJ explained in Hematology & Oncology Servs.:

CLIA makes the Secretary responsible for protecting the public from
laboratory owners who are not complying with CLIA but who attempt to
evade the reach of enforcement authority by pulling up stakes and moving
their operations elsewhere. CLIA could be rendered ineffective if a laboratory
owner was able to avoid its enforcement provisions simply by closing the
laboratory’s doors.

Hematology & Oncology Servs., LLC, DAB CR1754-58, at 6 (2008).

After CMS revoked the Coppell Laboratory’s CLIA certificate, Dr. O’ Hearn was banned,
by operation of law, from owning or operating a laboratory for a two-year period. I have
no authority to declare the statute or the regulation invalid or ultra vires.
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.”). Thus, CMS has the authority to revoke Petitioner’s CLIA certificate pursuant
to 42 C.F.R. § 493.1840(a)(8).

VI. Conclusion

After reviewing the evidence in the light most favorable to Petitioner, I conclude that the
regulatory language is plain, and there is no genuine issue of material fact here. I
therefore grant Summary Judgment to CMS because CMS acted within its regulatory
authority to revoke Petitioner’s CLIA certificate, pursuant to 42 U.S.C. § 263a(i)(3) and
42 CFR. § 493.1840(a)(8).

/s/
Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Jennifer Tarr, M.D.,
Petitioner
Vv.
Centers for Medicare and Medicaid Services.
Docket No. C-10-895
Decision No. CR2299

Date: December 23, 2010

DECISION

Dr. Jennifer Tarr (Petitioner) appealed the determination of Palmetto, GBA (Palmetto), a
Medicare contractor, that she was not eligible for enrollment in the Medicare program as
a supplier! earlier than March 10, 2010, and could not submit claims for payment earlier
than February 8, 2010. I grant the Centers for Medicare and Medicaid Services’ (CMS’s)
motion for summary judgment, finding that Petitioner did not submit an application that
was able to be processed to approval until March 10, 2010.

I. Background

On December 10, 2009, Petitioner submitted, through her office manager, an enrollment
application to Palmetto for Medicare billing privileges, along with three other physicians
in her new practice group, MedCorp of Stark County (MedCorp). However, Petitioner
did not sign her application, while the other three MedCorp physicians signed their
applications. By letter dated January 13, 2010, Palmetto approved the Medicare

' Medicare defines “supplier” to mean “a physician or other practitioner, a facility, or
other entity (other than a provider of services) that furnishes items or services” under the
Medicare statute. Social Security Act (Act) § 1861(d), 42 U.S.C. § 1395x(d).
enrollment applications for the other three MedCorp physicians who signed their
applications. CMS Ex. 6. Palmetto returned Petitioner’s incomplete application, with a
letter dated January 7, 2010, explaining that Petitioner’s application’s signature page,
section 15, was missing. CMS Ex. 7. The January 7, 2010 letter stated that “[i]f you
wish to have this application(s) processed, please obtain the correct signatures and/or
dates, along with any additional information as noted above and re-submit the application
tous.” Jd. In response, Petitioner submitted an entirely blank Medicare enrollment
application that contained only Petitioner’s name and signature (CMS Ex. 9), which
Palmetto received on January 28, 2010. By letter dated February 11, 2010, Palmetto
returned the blank application and directed Petitioner to complete the application
materials “‘in their entirety.” CMS Ex. 10. On March 10, 2010, Palmetto received
Petitioner’s application materials with all required signatures and information. Palmetto
approved and processed these applications. Palmetto informed Petitioner of its approval
by letter dated March 25, 2010. CMS Ex. 11. Palmetto granted Petitioner an effective
date of February 8, 2010,” thirty days before March 10, 2010, the date of receipt of her
application that was processed to approval.

Petitioner requested reconsideration review in a March 31, 2010 letter and asked
Palmetto to grant Petitioner an effective date of August 1, 2009, the same date as the
MedCorp doctors who simultaneously submitted signed applications along with her
unsigned application. After an unfavorable reconsideration decision issued on April 20,
2010, Petitioner filed an untimely hearing request on August 5, 2010, pursuant to 42
C.F.R. § 498.40. This case was initially assigned to Board Member Leslie A. Sussan
pursuant to 42 C.F.R. § 498.44, which permits a Board Member of the Departmental
Appeals Board (Board) to hear appeals under part 498.

On August 16, 2010, Board Member Sussan issued an Order To Show Cause as to the
untimely request for hearing. In response, Petitioner sent an August 23, 2010 letter, and
Board Member Sussan ultimately declined to dismiss this case because there was no
mention of appeal rights in her reconsideration decision dated April 20, 2010. However,
as the Board later recognized in Victor Alvarez, M.D., DAB No. 2325 (2010), a
determination of a supplier’s effective date of enrollment in Medicare is an initial
determination subject to appeal rights under 42 C.F.R. Part 498. Accordingly, Board
Member Sussan found good cause to extend the time for filing and accepted Petitioner’s
hearing request on August 27, 2010. On October 25, 2010, this case was transferred to
me for hearing and decision.

CMS filed a “Motion for Summary Affirmance” accompanied by 13 exhibits. Through
an electronic submission dated October 28, 2010, Petitioner stated that she “had nothing
more to submit” and requested a “decision on the record.” Neither party objected to any

>I disagree with February 8, 2010 being the “effective date,” as I explain later in my
analysis.
exhibit or identified any exhibit as “new evidence” subject to the restrictions of 42 C.F.R.
§ 498.56(e). I admit all proffered exhibits into evidence.

II. Issue

The issue in this case is whether CMS is entitled to summary judgment based on
undisputed facts, showing the effective date that Palmetto assigned Petitioner is
authorized as a matter of law.

Ill. Analysis

My findings of fact and conclusions of law are set forth in italics and bold in the
discussion captions of this decision.

a. This case is appropriate for summary judgment.

CMS’s motion makes clear that the summary affirmance, which it seeks, is in the nature
of summary judgment. The Board stated the standard for summary judgment as follows:

Summary judgment is appropriate when the record shows that there is no
genuine issue as to any material fact, and the moving party is entitled to
judgment as a matter of law. ... The party moving for summary judgment
bears the initial burden of showing that there are no genuine issues of
material fact for trial and that it is entitled to judgment as a matter of law. . .
. To defeat an adequately supported summary judgment motion, the non-
moving party may not rely on the denials in its pleadings or briefs, but must
furnish evidence of a dispute concerning a material fact — a fact that, if
proven, would affect the outcome of the case under governing law. ... 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.

Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300, at 3 (2010) (citations omitted).
The role of an Administrative Law Judge (ALJ) in deciding a summary judgment motion
differs from the ALJ’s role in resolving a case after a hearing. The ALJ should not assess
credibility or evaluate the weight of conflicting evidence. Holy Cross Vill. at Notre
Dame, DAB No. 2291, at 4-5 (2009).

CMS argues that it is entitled to summary judgment, because “no genuine disputes of
material fact exist.” CMS Br. at 1. Petitioner’s filings are limited to her hearing request,
the August 23, 2010 letter in response to the Order to Show Cause, and her October 28,
2010 email stating she has “nothing more to submit.” In her August 23, 2010 letter,
Petitioner states that her “application was sent the same time as her three colleagues” and
that it was “sent back when they were approved because a signature was missing.”
Petitioner also states in this letter that “[e]ach time the applications came back for
corrections, they were corrected promptly and sent by overnight mail to Palmetto GBA.”
These statements do not place in dispute any fact material to my resolution of the case.
After CMS filed its brief on September 15, 2010, Petitioner did not dispute any of the
facts that CMS presented. Most importantly, Petitioner never disputed that CMS did not
receive a fully completed and signed application until March 10, 2010.

b. Palmetto properly required Petitioner to submit an enrollment application
that was complete and contained her signature in accordance with 42 C.F.R. §
424.510(d)(1) and (3).

Petitioner asserts that she should be granted the same enrollment date as the other
MedCorp doctors who simultaneously submitted signed applications with her unsigned
application. Hearing Request. It is undisputed that on December 10, 2009, Petitioner
submitted an application lacking her signature and then submitted a blank application
containing only her signature, which was received on January 28, 2010. The parties

agree that it was not until March 10, 2010 that Petitioner submitted a completed
application bearing her signature. Hearing Request; CMS Br. at 6. Section 424.510(d) of
42 C.F.R. sets forth the application requirements for supplier enrollment in the Medicare
program. The regulation explicitly requires the submission of an enrollment application
that is both complete and contains the supplier’s signature certification:

(1) Submittal of the enrollment application. A provider or supplier must
submit a complete enrollment application and supporting documentation to
the designated Medicare fee-for-service contractor.

* * *

(3) Signature(s) required on the enrollment application. The certification
statement found on the enrollment application must be signed by an
individual who has the authority to bind the provider or supplier, both
legally and financially, to the requirements set forth in this chapter. This
person must also have an ownership or control interest in the provider or
supplier, as that term is defined in section 1124(a)(3) of the Act, such as,
the general partner, chairman of the board, chief financial officer, chief
executive officer, president, or hold a position of similar status and
authority within the provider or supplier organization. The signature attests
that the information submitted is accurate and that the provider or supplier
is aware of, and abides by, all applicable statutes, regulations, and program
instructions.
The signature certification requirement serves an important legal function to bind the
supplier, both legally and financially, and is not a mere formality. CMS instituted these
regulatory requirements in its policy at the relevant time, stating that all applications shall
be returned “immediately” if there is “no signature on the CMS-855 application.”
Medicare Program Integrity Manual (MPIM), Ch. 10 § 3.2A. CMS considers such a
returned application a non-application. Jd.; see, e.g., Tri-Valley Family Med., Inc., DAB
CR2179, at 3 n.1 (2010).

The requirement of a signature is also set forth clearly on the application materials
Petitioner submitted. See CMS Ex. 9, at 22 (stating supplier “MUST sign the
certification statement below to be enrolled in the Medicare program”). The form also
states that the provider or supplier will be certifying, among other things, that the
contents of the application are “true, correct, and complete.” Jd. Also, the application
has the applicant certify:

I have read and understand the Penalties for Falsifying Information, as
printed in this application. I understand that any deliberate omission,
misrepresentation, or falsification of any information contained in this
application or contained in any communication supplying information to
Medicare, or any deliberate alteration of any text on this application form,
may be punished by criminal, civil, or administrative penalties including,
but not limited to, the denial or revocation of Medicare billing privileges,
and/or the imposition of fines, civil damages, and/or imprisonment.

Id. In addition, the application materials require Petitioner’s signature certifying that, “I
understand that any misrepresentation or concealment of any information requested in
this application may subject me to liability under civil and criminal laws.” CMS Ex. 8, at
3.

Palmetto properly returned Petitioner’s December 10, 2009 application, because it was
not signed. Although Petitioner’s next application, on January 28, 2010, contained a
signature, Palmetto acted appropriately also in returning that application, considering the
rest of the application was entirely blank, and Petitioner was therefore certifying to the
truth and accuracy of absolutely no information. Finally, on March 10, 2010, Palmetto
received application materials from Petitioner that were completed and signed. Palmetto
began properly processing these materials, as of March 10, 2010, and notified Petitioner
of the approval of her billing privileges by letter dated March 25, 2010. CMS Ex. 11.

G Palmetto’s receipt of Petitioner’s signed application necessarily
determines her effective date and retrospective billing privileges.

The determination of the effective date of Medicare enrollment is governed by 42 C.F.R.
§ 424.520, which provides, in part, that the effective date for enrollment for physicians,
among others, is “the /ater of the date of filing of a Medicare enrollment application that
was subsequently approved by a Medicare contractor or the date an enrolled physician . .
. first began furnishing services at a new practice location.” 42 C.F.R. § 424.520(d)
(emphasis added). The “date of filing” is the date that the Medicare contractor “receives”
a signed provider enrollment application that the Medicare contractor is able to process to
approval. 73 Fed. Reg. 69,725, 69,769 (Nov. 19, 2008).

In this case, the effective date of Medicare enrollment depended on the date the
contractor first received an approvable application. This is consistent with the preamble
to the final rule and the plain language of the regulation. 73 Fed Reg. at 69,769; 42
C.F.R. § 424.520(d). Prior cases have further clarified this requirement that the receipt of
a signed, fully complete application by a contractor triggers the effective date of
Medicare enrollment. See, e.g., Tri-Valley Family Med., Inc., DAB CR2179 (2010), at
10-11. Therefore Petitioner’s applications could not be considered approvable until
Palmetto received her completed and signed application. It is undisputed that Petitioner
did not send a signed, complete, and approvable application to Palmetto before March 10,
2010.

Although Palmetto erroneously referred to February 8, 2010 as Petitioner’s “effective
date” (CMS Ex. 11), regulations actually require the contractor to assign the date of
receipt of the application as the effective date of Petitioner’s enrollment, while permitting
the contractor to grant retrospective billing privileges for 30 days prior to the effective
date. 42 C.F.R. § 424.521(a)(1). Thus, I am treating Palmetto’s action as if it intended
to set February 8, 2010 as the earliest date for which Petitioner may submit reimbursable
claims, with the effective date of Petitioner’s enrollment as March 10, 2010.

IV. Conclusion

For the reasons explained above, I conclude based on the undisputed facts that Palmetto
did not receive a completed application with Petitioner’s signature until March 10, 2010,
which properly started the application process and necessarily determined her effective
date and retroactive billing period.

/s/
Joseph Grow
Administrative Law Judge