Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Inre CMS LCD COMPLAINT: Ankle-Foot/Knee-Ankle-Foot Orthosis (L142)
Contractor: Noridian Administrative Services
Docket No. C-10-774
Decision No. CR2240

Date: September 9, 2010

DECISION DISMISSING CASE

This Local Coverage Determination (LCD) appeal is before me based on a June 4, 2010
letter filed by Felix Sigal, D.P.M., a treating physician for the Aggrieved Party.' In the
letter, Dr. Sigal seeks appeal of the LCD denial of continued callus debridement
treatment for the Aggrieved Party for less than a 60-day treatment interval.

This appeal was docketed and originally assigned to Administrative Law Judge Alfonso
J. Montafio. Judge Montajio reviewed the complaint and on July 14, 2010 issued a letter
to Dr. Sigal explaining that the June 4, 2010 complaint was not an “acceptable”
complaint challenging a LCD for the following reasons: its failure to provide a copy of
the written authorization to represent the Aggrieved Party; failure to identify why the
callus debridement was “needed” or “medically necessary”; its failure to explain why the
LCD is incorrect; and its failure to provide copies of clinical or scientific evidence to
support the complaint. The July 14, 2010 letter outlined for Dr. Sigal the specific
information required in order to file an “acceptable” complaint to challenge an LCD, and
afforded Dr. Sigal one opportunity to amend the complaint. See 42 C.F.R. § 426.410(b)
and (c).

' The names of Medicare beneficiaries are not listed in published decisions in order to
protect their privacy. 68 Fed. Reg. 63,691, 63,709 (2003).
On July 28, 2010, this case was reassigned to me. Shortly thereafter, the Aggrieved Party
advised my office that she would represent herself in this appeal. A request for an
extension of time to file an acceptable complaint was filed by the Aggrieved Party pro se,
and by Order issued August 2, 2010, I granted her request. In support of her LCD
complaint and in response to the opportunity to amend the initial filing, on August 12,
2010 the Aggrieved Party faxed a copy of a lower extremity arterial evaluation performed
on August 2, 2010 and as requested by her physician Boris Shemer, M.D.

I have reviewed the Aggrieved Party’s August 2, 2010 filing and find that it does not
abate or correct initial deficiencies Judge Montaiio found with the initial unacceptable
complaint. For that reason, I find that the Aggrieved Party has failed to file an acceptable
complaint challenging an LCD, within the time frame provided. Accordingly, this case
must be dismissed pursuant to 42 C.F.R. § 426.410 (c)(2).

This decision contains the information required by 42 C.F.R. § 426.450(b)(1), (2) and (6).
Because I am dismissing this case for failure to file an acceptable complaint, the
information required by 42 C.F.R. § 426.450(b)(3), (4) and (5) is not part of the record
before me and is not included for that reason.

The Aggrieved Party has 30 days from the date of this Decision to file an appeal with the
Departmental Appeals Board, in accordance with 42 C.F.R. § 426.465.

/s/
Richard J. Smith
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

John Blevins Davis,
Petitioner
Vv.
The Inspector General.
Docket No. C-10-743
Decision No. CR2239

Date: September 8, 2010

DECISION

I sustain the determination of the Inspector General (I.G.) to exclude Petitioner, John
Blevins Davis, M.D., from participating in Medicare and other federally financed health
care programs for a minimum period of five years.

I. Background

Petitioner is a physician. The I.G. excluded Petitioner, because he found that Petitioner
had been convicted of a felony as is described at section 1128(a)(4) of the Social Security
Act (Act). Petitioner requested a hearing, and the case was assigned to me for a hearing
and a decision. The LG. filed a brief and four proposed exhibits that are identified as I.G.
Ex. 1 —LG. Ex. 4. Petitioner filed a brief and no exhibits. Neither party requested that I
convene an in-person hearing.

I receive into evidence I.G. Ex. 1 — LG. Ex. 4.
IL. Issues, Findings of Fact, and Conclusions of Law
A. Issues
The issues in this case are whether:

1. Petitioner was convicted of a felony as is described at section 1128(a)(4)
of the Act; and

2. An exclusion of at least five years is mandatory.
B. Findings of Fact and Conclusions of Law
I make the following findings of fact and conclusions of law.

1. Petitioner was convicted of a felony as is described at section
1128(a)(4) of the Act.

Section 1128(a)(4) of the Act mandates the exclusion of any individual that is convicted
pursuant to federal or State law of a felony that occurred after August 21, 1996 relating to
the unlawful manufacture, distribution, prescription, or dispensing of a controlled
substance. The evidence that the I.G. offered establishes unequivocally that Petitioner
was convicted of such a crime.

On March 20, 2008, Petitioner was convicted of Counts One and Eight of a felony
indictment that had been filed against him in the United States District Court for the
Middle District of North Carolina. I.G. Ex. 4 at 1; LG. Ex. 2 at 1, 4. Petitioner’s
conviction was entered pursuant to a plea agreement. I.G. Ex. 3.

Petitioner was found guilty of the following crimes. First, he was convicted of
unlawfully, knowingly, and intentionally obtaining and acquiring possession of a
controlled substance by misrepresentation, fraud, forgery, deception, and subterfuge. I.G.
Ex. 2 at 1. Specifically, Petitioner forged the signature of another physician on a stolen
prescription pad to obtain 40 tablets of hydrocodone, a Schedule II controlled substance,
from a North Carolina pharmacy. Jd. Second, he was convicted of unlawfully,
knowingly, and intentionally attempting to obtain and acquire possession of a controlled
substance by misrepresentation, fraud, forgery, deception and subterfuge. Jd. at 4. As
with the allegations at Count One, Petitioner forged the signature of another physician on
a stolen prescription pad to obtain hydrocodone. Jd.

As I have stated, Petitioner’s crimes are felonies committed after August 21, 1996. They
relate to the unlawful prescription or dispensing of a controlled substance. The essence
of each of Petitioner’s crimes was to obtain quantities of hydrocodone through the
generation of false prescriptions.

Petitioner argues that he was not convicted of an offense as is described at section
1128(a)(4) of the Act, because he was not convicted specifically of unlawfully dispensing
or prescribing a controlled substance, but only of unlawfully obtaining possession or
attempting to obtain possession of a controlled substance. Petitioner’s Brief at 2.
Petitioner’s argument avoids the fact that Petitioner used and attempted to use forged
prescriptions to obtain controlled substances unlawfully. Petitioner’s use of forged
prescriptions as a vehicle for obtaining controlled substances is all that is necessary to
establish that Petitioner’s felonies are related to unlawful prescriptions and dispensing of
controlled substances.

2. Petitioner’s exclusion is mandated by law.

The I.G. must exclude any individual who is convicted of a felony as is described at
section 1128(a)(4) of the Act for a minimum period of five years. Act Section
1128(c)(3)(B). In this case, the I.G. imposed the minimum exclusion of five years.
Petitioner’s exclusion is thus mandated by law.

/s/
Steven T. Kessel
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Hospitalist Medicine Physicians of Prince George's County, P.C., et al.,!
(PTAN: 152473),

Petitioners
Vv.
Centers for Medicare & Medicaid Services.
Docket No. C-10-664 through C-10-674
Decision No. CR2238

Date: September 8, 2010

DECISION

Hospitalist Medicine Physicians of Prince George’s County, P.C., (Hospitalist) requested
hearings on behalf of itself and ten physician-members of the Hospitalist group
(collectively, Petitioners) to challenge the effective dates assigned to their enrollment in
Medicare. For the reasons explained below, I grant summary judgment in favor of the
Centers for Medicare & Medicaid Services (CMS) upholding the assigned effective
dates, except as to the Hospitalist group and one physician-member Petitioner, Suresh
Malik, M.D. I remand those two appeals to CMS, because the documentation submitted
by the parties is inadequate to establish the correct effective dates to assign to them.

I. Background

By letter dated April 29, 2010, Hospitalist sought review of effective date determinations
for the Medicare enrollment of the Hospitalist group and each of the ten physicians under
Hospitalist’s group account. I issued separate initial orders for Hospitalist and each of
the ten physicians and assigned each a separate docket number, C-10-664 through C-10-
674. Both parties requested consolidation of these cases. Upon review of the records, I

' The names, docket numbers, and Provider Transaction Access number or National
Provider Information number for each Petitioner are listed in an appendix to this decision.
determined that the issues appear to be substantially the same; Petitioners each requested
that their “effective dates” be changed to March 19, 2009.” Accordingly, I found
consolidation was appropriate and issued an order consolidating the cases under the lead
docket number C-10-664. Order Granting Consolidation issued May 21, 2010.

With their hearing request (HR), Petitioners attached a spreadsheet with dated notes
relating to 25 communications or communication attempts that it made during the
application and reconsideration processes. The notes start with April 14, 2009 (the date
on which Petitioners indicate that a group application was submitted for five of the
physicians) and continue through March 4, 2010 (the date Petitioners received a corrected
reconsideration decision letter).* In the hearing request letter, Petitioners explain that
Hospitalist submitted a request for reconsideration of the effective dates of itself and the
ten physicians on August 3, 2009 and did not receive a reconsideration decision until
February 23, 2010. Petitioners state that the reconsideration decision dated February 23,
2010 contained inaccurate information; specifically, the date of Petitioners’ initial request
for reconsideration was stated as being January 28, 2010, not August 3, 2009. HR.
Petitioners argue that their effective dates should be based on the dates requested in their
enrollment applications and that their requests were thwarted by delays caused by
contractor mishandling. HR.

CMS filed a motion to dismiss or, in the alternative, motion for summary judgment, and
pre-hearing brief dated June 7, 2010 (CMS Br.). CMS argues that Petitioners are not

entitled to an administrative hearing under the appeals procedures at 42 C.F.R. Part 498.
CMS Br. at 7. Even if Petitioners are found to be entitled to a hearing, CMS argues, the

> The parties use the term “effective date” to refer to the earliest date of services for
which a Petitioner could bill for Medicare. Under the current regulations, the first date of
services for which a supplier could bill Medicare would ordinarily be the date the
contractor received an application that it ultimately approved and would therefore be the
same as the effective date of the supplier’s enrollment in Medicare. The regulations,
however, permit CMS to allow a supplier to “retrospectively bill” for services for up to
30 days prior to the “effective date” of Medicare enrollment, as it did here. 42 C.F.R.

§ 424.521(a). In that situation, the initial date of retrospective billing is different from the
effective date of enrollment. For clarity, I use “effective date” to refer to the effective
date of enrollment, and not the date on which retrospective billing begins.

3 | decline to rely on this spreadsheet, however, because on its face it is inconsistent in
several respects when compared against the documentation in the record. For example,
Petitioner’s notes for April 14, 2009 read: “Group application submitted with Drs.
Jacobs, Malik, Mirebrahimi-Tafreshi, Obi and Tak.” Upon reviewing the parts of these
physician’s applications in the record, the signatures of Drs. Jacobs, Mirebrahimi-
Tafreshi, Obi, and Tak are dated May 22, 2009, indicating that their applications could
not have been submitted prior to May 22, 2009. CMS Exs. 2, 4, 5, 7, 10 (Dr. Malik’s
application is not in the record). Petitioners have not produced earlier signed applications
or otherwise explained these inconsistencies.
CMS hearing officer’s determinations of the effective dates should be affirmed as a
matter of law. Jd. at 10. With its motions and brief, CMS filed exhibits (CMS Exs.) 1
through 12, which I admit into evidence without objection.

After inquiry from my staff when I received no response to CMS’s motions, Petitioners’
representative indicated that Petitioners have submitted all documents that they would
like to be considered in response to CMS’s motions.*

IL. Issues

The issues in this case are:

1. Whether Petitioners have a right to a hearing on the effective dates of their
enrollment in the Medicare program; and

2. Whether CMS is entitled to summary judgment that Petitioners’ effective dates are
correct as a matter of law.

Ill. Findings of Fact, and Conclusions of Law

My findings and conclusions are in the italicized headings supported by the
subsequent discussions below.

* In addition to their hearing request letter and the attached spreadsheet described above,
Petitioners submitted the following documents with their hearing request: (1) a copy of
the corrected reconsideration decision dated February 23, 2010; (2) a copy of the
February 16, 2010 reconsideration decision with the incorrect date that Petitioner
requested reconsideration; (3) a fax cover sheet dated October 14, 2009, indicating that
the original reconsideration request letters are attached and that only providers Dr.
Konatalapalli and Dr. Munim have received acknowledgement of this request; (4) a fax
transmission verification form dated October 14, 2009 of a four-page fax sent to (717)
302-3667; (5) a fax cover sheet dated November 23, 2009, addressed to the same person
as the previous fax, asking for “the status”; (6) a fax transmission verification form dated
November 22, 2009 of a three-page fax sent to (717) 302-3667; (7) a letter dated January
25, 2010 from Petitioners to Highmark Medicare Services (Highmark), the Medicare
contractor, stating that they submitted a reconsideration request letter on August 3, 2009,
reciting various communications with Highmark including a verbal denial of Petitioners’
reconsideration request, and requesting a written decision be executed within 10 days;
and (8) a copy of the initial reconsideration request that is not dated but that is referred to
in the January 25, 2010 letter as being the August 3, 2009 reconsideration request letter.

A, I reject CMS’s argument that Petitioners have no right to appeal the effective
date determinations.

CMS sought dismissal on the basis that the regulations do not permit appeals of effective
date determinations by suppliers whose enrollment is approved. CMS Br. at 7-10. I
reject this argument for the reasons explained here.

The Board recently addressed CMS’s argument about effective date appeals in Victor
Alvarez, M.D., DAB No. 2325 (2010). In Alvarez, the Board concluded that “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.” Alvarez, DAB No.
2325, at 1. The Board explained that this determination is consistent with the historical
interpretation of hearing rights under section 1866(h)(1)(A) and as discussed in the
rulemaking process. Further, “while section 498.3(b)(15) originally applied primarily to
suppliers subject to survey and certification, the term ‘supplier’ as used in 42 C.F.R. Part
498 was amended to cover all Medicare suppliers, including physicians.” Jd. at 3.

In several prior decisions, I also came to the same conclusion. See, e.g., Michael Majette,
D.C., DAB CR2142 (2010); Eugene Rubach, M.D., DAB CR2125 (2010); Mobile Vision,
Inc., DAB CR2124 (2010). I likewise concluded that the wording of section 498.3(b)(15)
appears straightforward in providing that the “effective date of a Medicare provider
agreement or supplier approval” is an appealable initial determination and includes no
qualifying or limiting language. A legislative rule generally binds the agency that issues
it, and the agency is legally bound to follow its own regulations as long as they are in
force. Cal. Dep't of Soc. Servs., DAB No. 1959 (2005); Hermina Traeye Mem’l Nursing
Home, DAB No. 1810 (2002), citing Kenneth Culp Davis and Richard J. Pierce, Jr.,
Administrative Law Treatise § 6.5 (3rd ed. 1994), aff’d sub nom., Sea Island
Comprehensive Healthcare Corp. v. U.S. Dep’t of Health & Human Servs., 79 F. App’x
563 (4th Cir. 2003); 2 AM. JUR. 2d Administrative Law § 236 (2010), available at WL
AM. JUR. ADMINLAW § 236. Absent further rulemaking, I am bound to follow the plain
meaning of the regulation and, as the Board mandated, permit an appeal by any provider
or supplier dissatisfied with a determination as to the effective date of its provider
agreement or supplier approval.

I therefore deny CMS’s motion to dismiss on this basis.

B. I grant summary judgment in favor of CMS as to Petitioners Ronald Casey,
M.D.; Ronnie Jacobs, M.D.; Rukmini Konatalapalli, M.D.; Ali Mirebrahimi-
Tafreshi, M.D.; Abdul Munim, M.D.; Izuchukwu Obi, M.D.; Vitalis Ojiegbe,
M.D.; Olalekan Olufemi, M.D.; and Abdul Tak, M.D.

The determination of the effective date of supplier enrollment and billing privileges is
governed by 42 C.F.R. §§ 424.520 and 424.521. Section 424.520(d) provides that the
effective date for billing privileges for physician, nonphysician practitioners, and
physician and nonphysician practitioner organizations is “the later of the date of filing of
a Medicare enrollment application that was subsequently approved by a Medicare
contractor or the date an enrolled physician or nonphysician practitioner first began
furnishing services at a new practice location.” (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. 69,769 (Nov.
19, 2008).

Certain suppliers, including physicians, may be permitted to bill retrospectively for
certain services provided before approval, if they have met all program requirements.
Current regulations limit retrospective billing to 30 days prior to the effective date, “if
circumstances precluded enrollment in advance of providing services to Medicare
beneficiaries,” or 90 days in certain disaster situations. 42 C.F.R. § 424.521 (a).

Petitioner Hospitalist seeks an effective date of March 19, 2009 for itself and each of the
ten physician Petitioners. I will discuss each of the Petitioners’ effective date
determinations in turn below.

Before doing so, I address Petitioners’ overarching complaint that contractor delays
prejudiced their appeals. Petitioners state in the hearing request letter:

The purpose of this letter is to illustrate the negligence and continued
inconsistency of information given by HMS’s [Medicare contractor
Highmark Medicare Services] office for nine months. We would like to
reach a resolution to our initial requests that we believe may have been
handled differently if they had been attended to within timely standards.
Ultimately, it does not seem just to dismiss the request for reconsideration
on the grounds of submitting within timely filing limits if CMS’s
intermediaries are not willing to adhere or held to the same standards.

HR. The reconsideration requests were not dismissed as untimely but instead based on
Highmark’s erroneous understanding that effective date determinations could not be
challenged. CMS Ex. 12. In any case, I do not have general authority to oversee the
contractor’s manner of performing tasks under its contract with CMS and I can find no
basis here to attribute any prejudicial effect to any delays or procedural errors alleged by
Petitioners. Petitioners’ enrollment applications all appear to have been approved within
a very short time of their signed applications. The delays Petitioners attribute to HMS
instead appear to involve delays in the reconsideration process. Those delays did not
affect the outcome because, as detailed in my discussion below, the contractor’s decision
could not have been different had the contractor reached a decision on August 3, 2009,
the day Petitioners mailed their request for reconsideration to the contractor.

1. The effective date of Petitioner Ronald Casey, M.D. was properly
determined.

The enrollment application for Dr. Casey is date-stamped received on June 17, 2009.
CMS Ex. 1, at 7,9. The “effective date” assigned to Dr. Casey is May 17, 2009. Jd. at 2.
Here, the actual effective date under 42 C.F.R. § 424.520(d) is June 17, 2003, the date of
filing of a Medicare enrollment application that was subsequently approved by a
Medicare contractor. The date set in CMS’s letter dated June 17, 2009 reflects that
Petitioner was granted a 30-day period of retrospective billing to May 17, 2009.

Petitioner does not allege that an approvable application was received by the contractor at
any earlier date. Instead, Hospitalist acknowledges that the applications of this
Petitioner, and the other physician Petitioners, were not submitted timely to the
contractor. HR. According to the reconsideration request, an employee responsible for
submitting the application failed to inform the physicians of the situation and Hospitalist
was “regrettably unaware” of it, with the result that the physicians began treating patients
“in good faith” beginning March 19, 2009.

I simply do not have the authority to grant a longer retrospective billing period than that
allowed by statute and regulation regardless of the good intentions expressed by
Petitioners. Thus, the date from which Petitioner may retrospectively bill for services
rendered was properly set at May 17, 2009, thirty days prior to the date of filing of
Petitioner’s enrollment application.

2. The effective date of Petitioner Ronnie Jacobs, M.D. was properly
determined.

The enrollment application for Dr. Jacobs is date-stamped received on May 26, 2009.
CMS Ex. 2, at 6. The “effective date” assigned to Dr. Jacobs is April 27, 2009. Jd. at 2.
Here, the actual effective date under 42 C.F.R. § 424.520(d) is May 26, 2009, the date of
filing of a Medicare enrollment application that was subsequently approved by a
Medicare contractor.” The date set in CMS’s letter dated June 8, 2009 reflects that
Petitioner was granted a 30-day period of retrospective billing to April 27, 2009.

Petitioner does not allege that an approvable application was received by the contractor at
any earlier date. Instead, Hospitalist acknowledges that the applications of this
Petitioner, and the other physician Petitioners, were not submitted timely to the
contractor. HR. According to the reconsideration request, an employee responsible for
submitting the application failed to inform the physicians of the situation and Hospitalist

> Tt appears that CMS’s brief contains a typographical error on page 7, which lists the
effective date as May 29, 2009, citing CMS Exhibit 2. Page 6 of CMS Exhibit 2
indicates that the receipt date is May 26, 2009. Moreover, CMS does not dispute the
effective date determined by the Medicare contractor.
was “regrettably unaware” of it, with the result that the physicians began treating patients
“in good faith” beginning March 19, 2009.

I simply do not have the authority to grant a longer retrospective billing period than that
allowed by statute and regulation regardless of the good intentions expressed by
Petitioners. Thus, the date from which Petitioner may retrospectively bill for services
rendered was properly set at April 27, 2009, thirty days prior to the date of filing of
Petitioner’s enrollment application.

3. The effective date of Petitioner Rukmini Konatalapalli, M.D. was
properly determined.

The enrollment application for Dr. Konatalapalli is date-stamped received on May 29,
2009. CMS Ex. 3, at 11. The effective date assigned to Dr. Konatalapalli is May 29,
2009. Id. at 2. Here, the actual effective date was properly determined under 42 C.F.R.

§ 424.520(d) to be the date of filing of a Medicare enrollment application that was
subsequently approved by a Medicare contractor. In a letter dated August 18, 2009, CMS
states that the effective date is changed to April 30, 2009, which reflects that Petitioner
was granted a 30-day period of retrospective billing to April 30, 2009. Id. at 7.

Petitioner did not allege that an approvable application was received by the contractor at
any earlier date. Instead, Hospitalist acknowledges that the applications of this
Petitioner, and the other physician Petitioners, were not submitted timely to the
contractor. HR. According to the reconsideration request, an employee responsible for
submitting the application failed to inform the physicians of the situation and Hospitalist
was “regrettably unaware” of it, with the result that the physicians began treating patients
“in good faith” beginning March 19, 2009.

I simply do not have the authority to grant a longer retrospective billing period than that
allowed by statute and regulation regardless of the good intentions expressed by
Petitioners. Thus, the date from which Petitioner may retrospectively bill for services
rendered was properly set at April 30, 2009, thirty days prior to the date of filing of
Petitioner’s enrollment application.

4. The effective date of Petitioner Ali Mirebrahimi-Tafreshi, M.D. was
properly determined.

The enrollment application for Dr. Mirebrahimi-Tafreshi is date-stamped received on
May 26, 2009 on the first page of the application pages submitted. CMS Ex. 5, at 2.
Two other application pages submitted are date-stamped received on June 9, 2009. Id. at
3, 5. The “effective date” assigned to Dr. Mirebrahimi-Tafreshi is April 27, 2009. Jd. at
8. Based on that effective date determination, it appears that the pages of the application
date-stamped June 9, 2009 were likely submitted in response to a contractor’s request for
additional information after the application was initially received on May 26, 2009. The
fact that CMS used the earlier receipt date is to Petitioner’s benefit, and CMS does not
dispute that effective date determination. Here, the actual effective date under 42 C.F.R.
§ 424.520(d) is May 26, 2009, the date of filing of a Medicare enrollment application that
was subsequently approved by a Medicare contractor. The date set in CMS’s letter dated
June 10, 2009 reflects that Petitioner was granted a 30-day period of retrospective billing
to April 27, 2009. Id.

Petitioner does not allege that an approvable application was received by the contractor at
any earlier date. Instead, Hospitalist acknowledges that the applications of this
Petitioner, and the other physician Petitioners, were not submitted timely to the
contractor. HR. According to the reconsideration request, an employee responsible for
submitting the application failed to inform the physicians of the situation and Hospitalist
was “regrettably unaware” of it, with the result that the physicians began treating patients
“in good faith” beginning March 19, 2009.

I simply do not have the authority to grant a longer retrospective billing period than that
allowed by statute and regulation regardless of the good intentions expressed by
Petitioners. Thus, the date from which Petitioner may retrospectively bill for services
rendered was properly set at April 27, 2009, thirty days prior to the date of filing of
Petitioner’s enrollment application.

5. The effective date of Petitioner Abdul Munim, M.D. was properly
determined.

The enrollment application for Dr. Munim is date-stamped received on May 29, 2009.
CMS Ex. 6, at 12. The effective date assigned to Dr. Munim is May 29, 2009. Jd. at 2.
Here, the actual effective date was properly determined under 42 C.F.R. § 424.520(d) to
be the date of filing of a Medicare enrollment application that was subsequently approved
by a Medicare contractor. In a letter dated August 18, 2009, CMS states that the effective
date is changed to April 30, 2009, which reflects that Petitioner was granted a 30-day
period of retrospective billing to April 30, 2009. Id. at 7.

Petitioner did not allege that an approvable application was received by the contractor at
any earlier date. Instead, Hospitalist acknowledges that the applications of this
Petitioner, and the other physician Petitioners, were not submitted timely to the
contractor. HR. According to the reconsideration request, an employee responsible for
submitting the application failed to inform the physicians of the situation and Hospitalist
was “regrettably unaware” of it, with the result that the physicians began treating patients
“in good faith” beginning March 19, 2009.

I simply do not have the authority to grant a longer retrospective billing period than that
allowed by statute and regulation regardless of the good intentions expressed by
Petitioners. Thus, the date from which Petitioner may retrospectively bill for services
rendered was properly set at April 30, 2009, thirty days prior to the date of filing of
Petitioner’s enrollment application.

6. The effective date of Petitioner Izuchukwu Obi, M.D. was properly
determined.

The enrollment application for Dr. Obi is date-stamped received on May 26, 2009. CMS
Ex. 7, at 6. The “effective date” assigned to Dr. Obi is April 27, 2009. Jd. at 2. Here, the
actual effective date under 42 C.F.R. § 424.520(d) is May 26, 2009, the date of filing of a
Medicare enrollment application that was subsequently approved by a Medicare
contractor. The date set in CMS’s letter dated June 10, 2009 reflects that Petitioner was
granted a 30-day period of retrospective billing to April 27, 2009. Jd..

Petitioner does not allege that an approvable application was received by the contractor at
any earlier date. Instead, Hospitalist acknowledges that the applications of this
Petitioner, and the other physician Petitioners, were not submitted timely to the
contractor. HR. According to the reconsideration request, an employee responsible for
submitting the application failed to inform the physicians of the situation and Hospitalist
was “regrettably unaware” of it, with the result that the physicians began treating patients
“in good faith” beginning March 19, 2009.

I simply do not have the authority to grant a longer retrospective billing period than that
allowed by statute and regulation regardless of the good intentions expressed by
Petitioners. Thus, the date from which Petitioner may retrospectively bill for services
rendered was properly set at April 27, 2009, thirty days prior to the date of filing of
Petitioner’s enrollment application.

7. The effective date of Petitioner Vitalis Ojiegbe, M.D. was properly
determined.

The enrollment application for Dr. Ojiegbe is date-stamped received on June 11, 2009.
CMS Ex. 8, at 6. The “effective date” assigned to Dr. Ojiegbe is May 13, 2009. Jd. at 2.
Here, the actual effective date under 42 C.F.R. § 424.520(d) is June 11, 2009, the date of
filing of a Medicare enrollment application that was subsequently approved by a
Medicare contractor. The date set in CMS’s letter dated June 17, 2009 reflects that
Petitioner was granted a 30-day period of retrospective billing to May 13, 2009. Id.

Petitioner did not allege that an approvable application was received by the contractor at
any earlier date. Instead, Hospitalist acknowledges that the applications of this
Petitioner, and the other physician Petitioners, were not submitted timely to the
contractor. HR. According to the reconsideration request, an employee failed to inform
the physicians of the situation and Hospitalist was “regrettably unaware” of it, with the
result that the physicians began treating patients “in good faith” beginning March 19,
2009.
10

I simply do not have the authority to grant a longer retrospective billing period than that
allowed by statute and regulation regardless of the good intentions expressed by
Petitioners. Thus, the date from which Petitioner may retrospectively bill for services
rendered was properly set at May 13, 2009, thirty days prior to the date of filing of
Petitioner’s enrollment application.

8. The effective date of Petitioner Olalekan Olufemi, M.D. was
properly determined.

The enrollment application for Dr. Olufemi is date-stamped received on June 11, 2009.
CMS Ex. 9, at 6. The “effective date” assigned to Dr. Olufemi is May 13, 2009. Id. at 2.
Here, the actual effective date under 42 C.F.R. § 424.520(d) is June 11, 2009, the date of
filing of a Medicare enrollment application that was subsequently approved by a
Medicare contractor. The date set in CMS’s letter dated June 17, 2009 reflects that
Petitioner was granted a 30-day period of retrospective billing to May 13, 2009. Id.

Petitioner did not allege that an approvable application was received by the contractor at
any earlier date. Instead, Hospitalist acknowledges that the applications of this
Petitioner, and the other physician Petitioners, were not submitted timely to the
contractor. HR. According to the reconsideration request, an employee responsible for
submitting the application failed to inform the physicians of the situation and Hospitalist
was “regrettably unaware” of it, with the result that the physicians began treating patients
“in good faith” beginning March 19, 2009.

I simply do not have the authority to grant a longer retrospective billing period than that
allowed by statute and regulation regardless of the good intentions expressed by
Petitioners. Thus, the date from which Petitioner may retrospectively bill for services
rendered was properly set at May 13, 2009, thirty days prior to the date of filing of
Petitioner’s enrollment application.

9. The effective date of Petitioner Abdul Tak, M.D. was properly
determined.

None of the pages of Petitioner Abdul Tak, M.D.’s enrollment application included in the
record are date-stamped with the date of receipt of Petitioner’s application. See CMS Ex.
10, at 6-7. CMS submitted a letter dated June 5, 2009 from CMS to Petitioner
confirming the receipt of Petitioner’s “Medicare enrollment application(s) to update or
change an existing enrollment.” CMS Ex. 10, at 2. However, that letter does not indicate
that June 5, 2009 is the date Petitioner’s application was received. In a letter dated June
8, 2009, HMS assigned Dr. Tak the “effective date” of April 27, 2009. Jd. at 3. Based on
that “effective date” given to Petitioner, and the fact that the Medicare contractor has
repeatedly and consistently incorporated the 30-day retroactive billing period as the
“effective date,” I can reasonably infer that the contractor received Petitioner’s
11

enrollment application on May 26, 2009.° Id. Thus, the actual effective date under 42
C.F.R. § 424.520(d) is May 26, 2009, the date of filing of a Medicare enrollment
application that was subsequently approved by a Medicare contractor. Therefore, I
conclude that the “effective date” of April 27, 2009 reflects that Petitioner was granted a
30-day period of retrospective billing to April 27, 2009.

Moreover, Petitioner did not allege that an approvable application was received by the
contractor at any earlier date. Instead, Hospitalist acknowledges that the applications of
this Petitioner, and the other physician Petitioners, were not submitted timely to the
contractor. HR. According to the reconsideration request, an employee responsible for
submitting the application failed to inform the physicians of the situation and Hospitalist
was “regrettably unaware” of it, with the result that the physicians began treating patients
“in good faith” beginning March 19, 2009.

As mentioned above, the date set in CMS’s letter dated June 8, 2009 reflects that
Petitioner was granted that 30-day period of retrospective billing to April 27, 2009. Id. I
simply do not have the authority to grant a longer retrospective billing period than that
allowed by statute and regulation regardless of the good intentions expressed by
Petitioners. Thus, the date from which Petitioner may retrospectively bill for services
rendered was properly set at April 27, 2009, thirty days prior to the date of filing of
Petitioner’s enrollment application.

Based on my analysis, I conclude that these Petitioners have identified no genuine dispute
of fact material to the determination of their effective dates and that those dates are
required by law to be set as indicated by CMS.

I therefore grant CMS’s motion for summary judgment as to these Petitioners.
C. Iremand the cases of Petitioners Hospitalist and Suresh Malik, M.D. to
CMS to determine whether their effective dates were properly determined
because the parties have not filed enough documentation for me to make
such determinations.

The reconsideration decision letter dated February 23, 2010 reads:

Although I am unable to render an official decision, I have reviewed all
pertinent documentation, and I concur with HMS’ decision to assign the

® This inference is further supported by the fact that CMS does not argue that the
effective date assigned to Petitioner is incorrect despite asserting in its brief that the
application was received on June 5, 2009. CMS Br. at 6, 10. In addition, the effective
date cannot be earlier than May 22, 2009, the date next to Petitioner’s signature on the
application. CMS Ex. 10, at 6. It follows that it is reasonable to conclude that the
contractor did in fact receive Petitioner’s application on May 26, 2009.
12

Medicare effective billing date of April 27, 2009 to Hospitalist Medicine
Physicians of Prince George’s County, PC as well as the decision to assign
the following members their Medicare effective dates: ... Suresh Malik,
MD 4/27/09...

CMS Ex. 12, at 2. Neither Petitioners nor CMS have provided me with sufficient
documentation to conclude whether these effective dates were properly determined.

As to Dr. Malik, CMS submitted an approval letter dated June 11, 2009 setting the
effective date of April 27, 2009. CMS Ex. 4, at 2. The supporting documentation,
however, belonged to a different physician. /d. at 6-11. Despite inquiry by my office,
CMS was not able to timely produce documentation relating to Dr. Malik. Petitioner did
not submit any documentation relevant to establishing the correct effective date for Dr.
Malik.

The reconsideration decision indicates that the Hospitalist group was assigned an
“effective billing date” of April 27, 2009, but provides no other information about when
the group’s enrollment application was received. CMS Ex. 12, at 2. Neither party
submitted any documentation relevant to establishing the correct effective date for
Hospitalist.

Therefore, I must remand the cases of Hospitalist and Dr. Malik to CMS to review and
determine whether their effective dates were properly determined in accordance with 42
C.F.R. §§ 424.520(d) and 424.521(a). Ifa dispute remains after those determinations are
issued, Hospitalist and Dr. Malik may file a new appeal.

IV. Conclusion

I grant summary judgment in favor of CMS as to Petitioners Ronald Casey, M.D.; Ronnie
Jacobs, M.D.; Rukmini Konatalapalli, M.D.; Ali Mirebrahimi-Tafreshi, M.D.; Abdul
Munim, M.D.; Izuchukwu Obi, M.D.; Vitalis Ojiegbe, M.D.; Olalekan Olufemi, M.D.;
and Abdul Tak, M.D. These Petitioners have identified no genuine dispute of fact
material to the determination of their effective dates and those dates are required by law
to be set as indicated by CMS.

I remand the cases of Petitioners Hospitalist and Suresh Malik, M.D. to CMS for
determination of whether their effective dates were properly determined in accordance
with 42 C.F.R. §§ 424.520(d) and 424.521(a).

/s/
Leslie A. Sussan
Board Member

13

APPENDIX
Petitioner Name Docket No. PTAN NPI

Hospitalist Medicine Physicians} C-10-664 152473

of Prince George’s County, P.C.

Ronald Casey, M.D. C-10-665 1720025695
Ronnie Jacobs, M.D. C-10-666 1205898483
Rukmini Konatalapalli, M.D. C-10-667 1053500074
Suresh Malik, M.D. C-10-668 1447466552
Ali Mirebrahimi-Tafreshi, M.D.|__C-10-669 1295860732
Abdul Munim, M.D. C-10-670 1215960703
Izuchukwu Obi, M.D. C-10-671 1710150362
Vitalis Ojiegbe, M.D. C-10-672 1689684177
Olalekan Olufemi, M.D. C-10-673 1851340517
Abdul Tak, M.D. C-10-674 1306899968


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Bentley Pharmacy, Inc.,
(NPI: 1598760761),

Petitioner
Vv.
Centers for Medicare & Medicaid Services.
Docket No. C-10-630
Decision No. CR2235

Date: September 3, 2010

DECISION

For the reasons set forth below, I grant the Centers for Medicare & Medicaid Services’
(CMS’s) motion for summary judgment. The undisputed evidence establishes that
Petitioner, Bentley Pharmacy, Inc., was not in compliance with Medicare program
requirements, and, as a consequence, CMS has the authority to revoke Petitioner’s
Medicare supplier number.

I. Applicable Law and Regulations

Section 1834(a)(16)(B) of the Social Security Act (Act), 42 U.S.C. § 1395m(a)(16)(B),
states that the Secretary of Health and Human Services (Secretary) “shall not provide for
the issuance (or renewal) of a provider number for a supplier of durable medical
equipment for purposes of payment . . . for durable medical equipment furnished by the
supplier unless the supplier provides the Secretary on a continuing basis . . . with a surety
bond in a form specified by the Secretary and in an amount that is not less than $50,000.”
CMS’s regulations implement these requirements among the “supplier standards” at 42
C.F.R. § 424.57(c), which suppliers of durable medical equipment, prosthetics, orthotics,
and supplies (DMEPOS) must meet to maintain Medicare billing privileges. As relevant
here, section 424.57(c) provides:

(c) Application certification standards. The supplier must meet and must
certify in its application for billing privileges that it meets and will continue
to meet the following standards. The supplier:

oR RK

(26) Must meet the surety bond requirements specified in paragraph (d) of
this section.

The surety bond requirements at 42 C.F.R. § 424.57(d), referenced in supplier standard
26, state, as relevant here, that “beginning October 2, 2009, each Medicare-enrolled
DMEPOS supplier must meet the requirements of paragraph (d),” which include “a bond
that is continuous,” which “meet[s] the minimum requirements of liability coverage
($50,000),” and provides that “[t]he surety is liable for unpaid claims, CMPs [civil money
penalties], or assessments that occur during the term of the bond.” 42 C.F.R.

§ 424.57(d)(1)(ii), (4), (5). “The term of the initial surety bond must be effective on the
ate that the application is submitted to the NSC [National Supplier Clearinghouse, a
Medicare contractor].” 42 C.F.R. § 424.57(d)(2).

The regulations provide that failure to submit a surety bond as required is grounds for
revocation of a supplier’s billing privileges. 42 C.F.R. § 424.57(d)(4)(ii)(B); see also 42
C.F.R. § 424.57(d)(11) (“CMS revokes the DMEPOS supplier’s billing privileges if an
enrolled supplier fails to obtain, file timely, or maintain a surety bond as specified in this
subpart and CMS instructions.”). The regulations also provide more generally that CMS
“will revoke a supplier’s billing privileges if it is found not to meet” the supplier
standards or other requirements in section 424.57(c). 42 C.F.R. § 424.57(e) (formerly

§ 424.57(d)).’

A supplier that has had its billing privileges revoked is “barred from participating in the
Medicare program from the effective date of the revocation until the end of the re-
enrollment bar. The re-enrollment bar is a minimum of | year, but not greater than 3
years depending on the severity of the basis for revocation.” 42 C.F.R. § 424.535(c).

' Paragraph (e) of section 424.57 was previously designated paragraph (d) and was
redesignated by the rulemaking that imposed the surety bond requirements at paragraph
(d); however, the redesignations have not yet been incorporated into the Code of Federal
Regulations. See 42 C.F.R. Ch. IV § 424.57, Editorial Note (Oct. 1, 2009). References
are to the regulation as redesignated.
CMS may at any time require a DMEPOS supplier to show compliance with the surety
bond requirement. 42 C.F.R. § 424.57(d)(12).

II. Background

Petitioner is a Medicare DMEPOS supplier. NSC determined that Petitioner was not in
compliance with 42 C.F.R. § 424.57(c)(26) (supplier standard 26) and revoked

Petitioner’s Medicare supplier number by notice letter dated November 10, 2009. CMS
Ex. 1.

The notice letter stated that the revocation was effective 30 days from the date of
postmark and that Petitioner was barred from re-enrolling in the Medicare program for
one year from the effective date of the revocation. CMS Ex. 1; see 42 C.F.R.

§ 405.874(b)(2) (revocation effective 30 days after CMS or the CMS contractor mails the
notice of its determination). The letter informed Petitioner that it could appeal the
lecision by requesting reconsideration within 60 days of the date of postmark, and/or it
could submit a corrective action plan (CAP) within 30 days. CMS Ex. 1, at 2.

By letter dated November 20, 2009, Petitioner submitted a CAP to NSC, enclosed a
surety bond dated September 23, 2009, and stated that it had mailed that surety bond to
the contractor on September 24, 2009. CMS Ex. 2. Petitioner also submitted a rider
indicating that effective October 13, 2009, the principal’s name was modified from SAD
Realty Holdings I, LTD d/b/a Bentley Medical to Bentley Pharmacy, Inc., d/b/a Bentley
Medical Supply. /d. at 12. The contractor denied Petitioner’s CAP on December 8,
2009, noting that the surety bond listed an incorrect legal business name for the principal
and was not signed by a person listed as an affiliate of the supplier.? CMS Ex. 3; see
CMS Ex. 2, at 10-13. The notice further advised Petitioner of its right to request
reconsideration before a Medicare hearing officer and stated that the request was due by
January 9, 2010. CMS Ex. 3.

By letter dated December 16, 2009, Petitioner filed a request for reconsideration. CMS
Ex. 4, at 1. With its request, Petitioner included a revised surety bond that listed the legal
business name as the bond’s principal and was signed by the supplier’s authorized
official. CMS Ex. 4, at 2-3; see CMS Ex. 2, at 9. This revised surety bond was also

> CMS’s decision to not reinstate the supplier based on its CAP is not an initial
determination and not reviewable by an ALJ. 42 C.F.R. § 405.874(e). Thus, the
disposition of the CAP is not before me. The Departmental Appeals Board (Board) has
held that a contractor has discretion as to whether to accept such later correction and
reverse a revocation. DMS Imaging, Inc., DAB No. 2313, at 5 (2010). During the
reconsideration and appeal process, the issue is whether a basis for revocation legally
sufficient to support CMS’s action existed at the time of the revocation notice, not
whether the basis was later eliminated pursuant to a CAP.
dated September 23, 2009, presumably back-dated because also in this submission
Petitioner indicated that the surety bond previously submitted was incorrect, and enclosed
“a copy of [its] Surety Bond with the corrected name.” CMS Ex. 4, at 1.

The Medicare hearing officer issued an unfavorable decision on April 2, 2010.
The hearing officer noted that, although Petitioner attempted to satisfy the surety
bond requirement with the newly submitted surety bond, her scope of review was
limited to whether the contractor’s reason for imposing the initial revocation was
valid at the time the revocation was issued. CMS Ex. 7 at 2. Further, “[i]fa
provider or supplier provides evidence that demonstrates or proves that they met
or maintained compliance after the date of denial or revocation, the contractor
shall exclude this information from the scope of the review.” /d., quoting
Medicare PIM, ch. 10, § 19.4. The hearing officer concluded that the supplier
was not compliant with supplier standard 26 at the time of revocation. CMS Ex. 7,
at 2.

Petitioner timely requested a hearing before an Administrative Law Judge (ALJ).
Petitioner submitted a hearing request dated April 15, 2010 (HR) and included yet
another amended surety bond and rider issued April 12, 2010 amending the name of the
principal. This case was assigned to me for hearing and decision pursuant to 42 C.F.R.
§ 498.44, which permits designation of a member of the Board to hear appeals taken
under part 498. I issued an initial order on April 20, 2010.

On May 20, 2010, pursuant to the briefing schedule, CMS filed a motion for summary
judgment and supporting memorandum (CMS Br.). CMS accompanied its May 20, 2010
submission with CMS Exhibits 1-11, which I admit into evidence without objection. On
May 25, 2010, Petitioner filed its response (P. Br.) to CMS’s submission and included
one exhibit, which I also admit without objection.’

In its motion, CMS argues that the September 23, 2009 surety bond submitted with
Petitioner’s reconsideration request should not be admitted because it is not relevant to
determine whether the initial decision to revoke Petitioner’s enrollment was correct when
made. CMS Br. at 11-12. Similarly, CMS argues that the surety bond and rider effective
April 12, 2010, submitted with Petitioner’s hearing request, should be excluded as new
evidence and that they are, in any case, not relevant because the rider became effective
well past the October 2, 2009 deadline. /d. at 12-13. I address below CMS’s objections.

> Petitioner’s exhibit 1 is a document indicating that Petitioner was found in compliance
with the “Community Health Accreditation Program,” a private non-governmental
accrediting program. I note that an outside body’s finding of compliance with that
organization’s standards is not related to whether Petitioner is in compliance with the
standard for participation in the Medicare program for which Petitioner was cited nor to
whether Petitioner’s enrollment as a supplier was rightfully revoked.
III. Issue

The issue in this case is whether CMS is entitled to summary judgment on the ground that
the undisputed facts demonstrate that the revocation of Petitioner’s Medicare billing
privileges was legally authorized.

IV. Applicable Standard
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 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

I make a single finding and conclusion set out below and followed by my supporting
discussion:

CMS was authorized to revoke Petitioner’s billing privileges based on
undisputed evidence that Petitioner did not obtain a surety bond as 42 C.F.R.
§ 424.57(c)(26) and (d) required.

As noted above, the statute states that the Secretary shall not issue or renew a DMEPOS
supplier number “unless the supplier provides the Secretary on a continuing basis . . .
with a surety bond... .” 42 U.S.C. § 1395m(a)(16)(B).
This requirement for continuous compliance is implemented in the regulations that the
Secretary issued. The introductory language of 42 C.F.R. § 424.57(c) states, in pertinent
part, “‘[t]he supplier must meet and must certify in its application for billing privileges
that it meets and will continue to meet” the supplier standards listed within. Those
standards include section 424.57(c)(26) (supplier standard 26), which states that a
supplier “[m]ust meet the surety bond requirements specified in paragraph (d) of this
section.” One of these requirements is that the “surety bond must name the DMEPOS
supplier as Principal, CMS as Obligee, and the surety . . . as surety.” 42 C.F.R.

§ 424.57(d)(10). It follows that a supplier must meet the surety bond requirements
specified in paragraph (d) on a continuing basis.

Consistent with this, the preamble to the final rule on appeals of CMS determinations,
when a provider or supplier fails to meet the requirements for Medicare billing privileges,
states “we believe all providers and suppliers must meet and maintain all Federal and
State requirements for their provider or supplier type to enroll or maintain their
enrollment in the Medicare Program.” 73 Fed. Reg. 36,448, 36,452 (June 27, 2008).

Petitioner admits that it was not in compliance with the surety bond requirement at the
time CMS revoked its supplier number. See HR. In its response to CMS’s motion,
Petitioner states that it experienced difficulties because it was in the process of a sale that
did not finalize and, as a consequence, did not provide the correct DMEPOS name as
principal. Specifically, Petitioner asserts that —

the new supervisor was working on purchasing the surety bond. The new
supervisor did not know how the company should be legally listed on the
bond. Then they realized their mistake and tried again with a rider, but was
still not the legal name. When this was finally discovered by the manager
and owner of Bentley Medical, we quickly got this taken care of, but it was
after the fact.

We realize we were out of compliance with [M]edicare but we made a very
hard attempt to correct this once we were informed of this matter, which
was in February. We have the surety bond now and it has the correct legal
name on it. I feel that we have an honest reason for this mistake and for the
reason this has happened.

P. Br. at 1. On its face, this letter discloses that Petitioner had not successfully obtained a
compliant surety bond in accordance with the requirements of 42 C.F.R. § 424.57(d) at
the time of the revocation action.

The issue before me is not whether Petitioner intended to be compliant or can belatedly
achieve compliance with the surety bond requirements, but whether CMS correctly found
that, at the time of the revocation action, Petitioner was not in compliance. If CMS
correctly found that Petitioner was not in compliance with the regulatory requirements,
CMS had authority to revoke Petitioner’s supplier number.

As noted, CMS objects to the admission of the revised surety bond that Petitioner
submitted with its request for reconsideration and the surety bond that Petitioner
submitted with its hearing request. CMS argues that these surety bonds do not bear on
the question of whether the initial decision of revocation was correct when made, and
also that the April 12, 2010 surety bond was new evidence because it was not submitted
on reconsideration. CMS Br. at 11-13.‘ I agree that the April 12, 2010 surety bond
constitutes new evidence and is therefore not admissible absent a showing of good cause,
which Petitioner’s account of events does not establish. I conclude, however, that
regardless of whether these surety bonds are admissible, they are both immaterial.

First, as noted, the issue before me is not whether Petitioner has belatedly achieved
compliance with the surety bond requirement, but whether CMS correctly found that, at
the time of the revocation, Petitioner was not in compliance and that CMS therefore had
authority to revoke. Petitioner admits it did not have a compliant surety bond at the time
of the revocation. Although Petitioner appears to have belatedly obtained a surety bond
with the corrected name which the surety made retroactively effective, I find no authority
by which that action may be found to cause Petitioner to be retroactively compliant. That
a surety was willing to undertake to cover Petitioner’s potential overpayments after the
‘act does not mean that CMS was protected at the relevant time from fraud or billing
errors by Petitioner. Furthermore, it is unlikely that a surety would undertake such
retroactive coverage for a supplier had fraud or abuse been discovered during the past
period when no coverage for Petitioner’s legal business was in place. Therefore, a
belated retroactive surety bond does not satisfy the statutory and regulatory purpose of
providing continuous protection to the Medicare program from the risk of loss due to a
supplier’s fraud or abuse.

Second, I must apply the regulations as they are stated. The applicable regulations
clearly required Petitioner to have in place a compliant surety bond by October 2, 2009.
Petitioner points to no source of authority for me to waive the compliance requirement or
grant an exemption on equitable grounds. Moreover, I have no authority to declare the
statute or the regulation invalid or ultra vires. 1866/CPayday.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 if I did have such authority,
there would be no basis where, as here, the regulation does what the statute grants the
Secretary the authority to do, that is, to require DMEPOS suppliers to demonstrate that

+ The bond presented to the hearing officer is not “new evidence” for purposes of 42
C.F.R. § 498.56(e) (requiring a showing of good cause for submission of documentary
evidence “for the first time at the ALJ level”). The bond submitted with the hearing
request may be considered new evidence under this standard.

they have obtained a surety bond “in a form specified by the Secretary” and maintain
such coverage “on a continuing basis.” 42 U.S.C. § 1395m(a)(16)(B).

The regulation at 42 C.F.R. § 424.535 plainly authorizes CMS to revoke a supplier’s
Medicare enrollment whenever the supplier fails to maintain compliance with enrollment
requirements. Section 424.535 provides that a supplier’s billing privileges are revoked
when the supplier “is determined not to be in compliance with the enrollment
requirements described in this section, or in the enrollment application applicable for its
provider or supplier type, and has not submitted a plan of corrective action as outlined in
part 488 of this chapter.”

It is an enrollment requirement that “[t]he supplier must meet and must certify in its
application for billing privileges that it meets and will continue to meet” the supplier
standards in 42 C.F.R. § 424.57(c), which includes the surety bond requirement of section
424.57(c)(26). CMS may revoke the supplier’s Medicare billing privileges if the supplier
fails to meet any of these standards. 42 C.F.R. § 424.57(e); 1866/CPayday.com, DAB
No. 2289, at 13 (“[FJailure to comply with even one supplier standard is a sufficient basis
for revoking a supplier’s billing privileges.”).

Section 424.57(d)(11) further makes abundantly clear the consequences of a failure to
maintain a compliant surety bond:

CMS revokes the DMEPOS supplier’s billing privileges if an enrolled
supplier fails to obtain, file timely, or maintain a surety bond as specified in
this subpart and CMS instructions. Notwithstanding paragraph (e) of this
section, the revocation is effective the date the bond lapsed and any
payments for items furnished on or after that date must be repaid to CMS
by the DMEPOS supplier.

42 CFR. § 424.57(d)(11); see also 42 C.F.R. § 424.57(c)(26). In addition, a supplier
that has its billing privileges revoked is barred from participating in the Medicare
program from the effective date of the revocation until the end of the re-enrollment bar
and the re-enrollment bar is a minimum of 1 year. 42 C.F.R. § 424.535(c).

The regulatory language is plain. A supplier must comply with a// standards, or CMS
will revoke its billing privileges. I am bound by applicable laws and have no authority to
invalidate or change an existing regulation or grant Petitioner an exemption from
compliance with regulatory requirements. 1866/CPayday.com, L.L.C., DAB No. 2289,
at 14 (2009). I must sustain CMS’s determination where the facts establish
noncompliance with one or more of the regulatory standards.

I conclude that CMS acted within its regulatory authority to revoke Petitioner’s Medicare
supplier number, because Petitioner was not compliant with the surety bond requirements
of 42 C.F.R. § 424.57(c)(26) and (d) by October 2, 2009. I therefore uphold the
revocation of Petitioner’s Medicare billing privileges and supplier number and the one-
year bar on re-enrollment.

VI. Conclusion

For the reasons explained above, I grant summary judgment in favor of CMS.

/s/
Leslie A. Sussan
Board Member