Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Dr. S.A. Brooks, DPM,

(NPI: 1235136292/PTAN: 1062730001),
Petitioner,
v.

Centers for Medicare & Medicaid Services

Docket No. C-14-149

Decision No. CR3216

Date: May 2, 2014

DECISION

Petitioner, Dr. S.A. Brook, DPM, met the requirements of 42 C.F.R. § 424.514 (b)(2) and
(f)! for a hardship exception to the requirement to pay the Medicare enrollment
application fee for her Medicare enrollment revalidation application submitted on June
19, 2013.

I. Procedural Background

Petitioner’ is a podiatrist and a supplier of durable medical equipment, prosthetics,
orthotics, and supplies (DMEPOS) in Belleville, Illinois. Petitioner was enrolled in the
' Citations to the Code of Federal Regulations (C.F.R.) are to the version in effect at the
time of Petitioner’s hardship exception request, unless otherwise stated.

> The evidence shows that Petitioner does business under the name “Arztin Foot Care.”
Centers for Medicare & Medicaid Services (CMS) exhibit (Ex.) | at 8.
Medicare program as a supplier of DMEPOS. In 2013, she was required to revalidate her
enrollment as a DMEPOS supplier. On June 19, 2013, Petitioner submitted a revalidation
application and a letter requesting a hardship exception to the requirement to pay an
application fee. CMS Ex. | at 1, 6-9.

The National Supplier Clearinghouse, (NSC) operated by Palmetto GBA, the Medicare
contractor that processes enrollment applications for suppliers of DMEPOS, notified
Petitioner by letter dated June 24, 2013, that her request for a hardship exception was
denied. NSC advised Petitioner that she could request reconsideration of the denial.
CMS Ex. | at 10. NSC advised Petitioner by a separate letter dated June 24, 2013, that
she had to pay the application fee within 30 days for NSC to process her revalidation
application and, if she failed to pay, her application would be denied, or her billing
privileges would be deactivated, or her enrollment and billing privileges would be
revoked. CMS Ex. | at 11-12.

Petitioner requested reconsideration by letters dated July 3 and 22, 2013, which were
acknowledged by NSC on August 12, 2013. CMS Ex. 1 at 13-17. Petitioner submitted
additional argument and evidence for consideration on reconsideration by letter dated
August 22, 2013. CMS Ex. | at 18-20. Petitioner was advised by letter dated August 27,
2013, that the hearing officer determined on reconsideration that Petitioner did not meet
the requirements for a hardship exception from the application fee. CMS Ex. 1 at 1-5.
Petitioner requested a hearing before an administrative law judge (ALJ) by letter dated
September 16, 2013.

Notwithstanding her request for ALJ review of her denied request for a hardship
exception, the NSC notified Petitioner by letter dated October 30, 2013, that her
enrollment and billing privileges were revoked for nonpayment of the application fee and
that she was barred from reenrolling for one year. CMS Ex. 3.

On November 5, 2013, the case was assigned to me for hearing and decision and an
Acknowledgment and Prehearing Order (Prehearing Order) was issued at my direction.

On December 5, 2013, CMS filed its prehearing exchange, with its prehearing brief and
alternative motion for summary judgment (CMS Br.) with CMS Exs. | through 3.
Petitioner filed her prehearing exchange and response to the CMS motion for summary
judgment (P. Br.) with four exhibits (P. Exs. 1 through 4) on January 27, 2014. CMS
filed a reply brief on February 10, 2014. Petitioner made no objection to my
consideration of CMS Exs. 1, 2, and 3. CMS Exs. 1 and 3 are admitted as evidence.
CMS Ex. 2 is not admitted as it is not relevant to any issue that I may decide. CMS
objects to P. Exs. 1 through 4, arguing that the exhibits constitute new evidence under 42
C.F.R. § 498.56(e). CMS Reply. P. Exs. 1 through 4 are not admitted as evidence
because they are dated after the reconsideration decision or relate to events after the
reconsideration decision and, therefore, they are not relevant to whether or not Petitioner
met the requirements for a fee exception as of the time of the adverse initial and
reconsideration determinations. 73 Fed. Reg. 36,448, 36,452 (June 24, 2008). Petitioner
filed two documents with her request for hearing: an incomplete copy of the August 12,
2013 letter from the NSC hearing officer denying reconsideration; and a September 10,
2013 letter from a banking institution rejecting a loan application for Arztin Foot Care. A
complete copy of the August 12, 2013 letter has been admitted as CMS Ex. | at 17,
therefore it is not necessary to separately admit as a Petitioner’s exhibit an incomplete
copy of the same letter. The September 10, 2013 letter from the bank is dated after the
reconsideration determination. Therefore, the letter is not admitted as it is not relevant to
the issue of whether or not Petitioner met the requirements for a fee exception at the time
of the adverse initial and reconsideration determinations. 73 Fed. Reg. at 36,452.

IL. Discussion
A. Applicable Law

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

The Act requires the Secretary of Health and Human Services (the Secretary) to issue
regulations that establish a process for the enrollment of providers and suppliers,
including the right to a hearing and judicial review of certain enrollment determinations.
Act § 1866(j) (42 U.S.C. § 1395cc). Once enrolled, the supplier receives billing
privileges and is issued a billing number that is required to receive payment for services

> A “supplier” furnishes services under Medicare. The term supplier applies to
physicians or other practitioners and facilities that are not included within the definition
of the phrase “provider of services.” Act § 1861(d) (42 U.S.C. § 1395x(d)). A “provider
of services,” commonly shortened to “provider,” includes hospitals, critical access

ospitals, skilled nursing facilities, comprehensive outpatient rehabilitation facilities,

ome health agencies, hospice programs, and a fund as described in sections 1814(g) and
1835(e) of the Act. Act § 1861(u) (42 C.F.R. § 1395x(u)). The distinction between
providers and suppliers is important because they are treated differently under the Act for
some purposes.

rendered to a Medicare beneficiary. 42 C.F.R. § 424.505. Petitioner is a DMEPOS
supplier and to receive direct-billing privileges, a DMEPOS supplier must meet and
maintain the Medicare application certification standards set forth in 42 C.F.R.

§ 424.57(c). After being granted billing privileges a DMEPOS supplier is required to
revalidate the information in its application for billing privileges every three years or as
directed by CMS, by completing a new application. 42 C.F.R. §§ 424.57(e); 424.515(d),

(e).

Section 1866(j)(2) (42 U.S.C. § 1395cc(j)(2)) of the Act requires that the Secretary
establish screening procedures and application fees for providers and suppliers. The Act
establishes an application fee for individual and institutional providers and suppliers who
are submitting an initial enrollment application or currently enrolled providers who are
revalidating their Medicare enrollment beginning in 2010. Act § 1866(j)(2)(C)(i); 42
C.F.R. § 424.514. Congress authorized the Secretary to use fees collected for program
integrity efforts and to cover the cost of screening providers and suppliers. Act

§ 1866(j)(2)(C)(iii). Congress also authorized the Secretary to exempt a provider or
supplier from the imposition of an application fee. Act § 1866(j)(2)(c)(ii). The Secretary
imposed an application fee for revalidating institutional providers effective March 25,
2011. Institutional providers that are filing an application to revalidate must submit the
application with the application fee or a request for a hardship exception to the
application fee. 42 C.F.R. § 424.514(b). Petitioner is an “institutional provider” as
defined by 42 C.F.R. § 424.502 because she is required to revalidate using a CMS-855S
form as a DMEPOS supplier. 76 Fed. Reg. 5861, 5911 (Feb. 2, 2011). The application
fee was $532 in 2013. CMS Ex. | at 22.

Section 1866(j)(2)(C) of the Act does not establish a procedure for requesting an
exemption from the requirement to pay an application fee. The Act does provide that the
Secretary may grant the exemption on a case-by-case basis, “if the Secretary determines
that the imposition of the application fee would result in a hardship.” Act

§ 1866(j)(2)(C)(iii). The quantity or quality of the hardship that justifies an exemption is
not specified. The Secretary has delegated authority to CMS to grant a hardship
exception to the requirement to pay the application fee. 42 C.F.R. § 424.514(h). The
regulation provides that a “provider or supplier requesting an exception from the
application fee must include with its enrollment application a letter that describes the
hardship and why the hardship justifies an exception.” 42 C.F.R. § 424.514(f); 76 Fed.
Reg. at 5909. Denial of a hardship exception is subject to reconsideration and ALJ and
Departmental Appeals Board (Board) review using the procedures of 42 C.F.R. pt. 498.
42 C.F.R. §§ 405.800, 424.514(h)(2); 76 Fed. Reg. at 5909. A hearing on the record, also
known as an oral hearing, is required under the Act. Crestview Parke Care Ctr. v.
Thompson, 373 F.3d 743, 748-51 (6th Cir. 2004).
B. Issues
Whether summary judgment is appropriate; and

Whether Petitioner met the requirements for a hardship exception to the
requirement to pay a Medicare enrollment application fee.

C. Findings of Fact, Conclusions of Law, and Analysis

My conclusions of law are set forth in bold text followed by my findings of fact and
analysis.

1. Petitioner has a right to request review and I have jurisdiction.

There is no dispute that Petitioner timely requested a hearing and I have jurisdiction.
Pursuant to 42 C.F.R. § 424.514(h)(2) a CMS hardship exception determination is subject
to my review pursuant to “42 C.F.R. § 405.874.” In 2012, 42 C.F.R. § 405.874 was
recodified as 42 C.F.R. §§ 405.800 -.818. 77 Fed. Reg. 29,001, 29,016-17 (May 16,
2012) but 42 C.F.R. § 424.514(h)(2) was not amended to reflect the change. CMS has
not objected to my jurisdiction. CMS Br.; CMS Reply.

2. Summary judgment is appropriate.

A party may waive appearance at an oral hearing, but must do so affirmatively in writing.
42 C.F.R. § 498.66. In this case, Petitioner has not waived the right to oral hearing or
otherwise consented to decision based only upon the documentary evidence or pleadings.
Accordingly, disposition on the written record alone is not permissible, unless the motion
for summary judgment filed by CMS in this case has merit.

Summary judgment is not automatic upon request but is limited to certain specific
conditions. The procedures established by 42 C.F.R. pt. 498 related to ALJ hearings
applicable in this case do not include a summary judgment procedure. However, the
Board has long recognized the availability of summary judgment in cases subject to 42
C.F.R. pt. 498 and the Board’s interpretative rule has been recognized by the federal
courts. See, e.g., Crestview Parke Care Ctr. v. Thompson, 373 F.3d at 749-50.
Furthermore, a summary judgment procedure was adopted as a matter of judicial
economy within my authority to regulate the course of proceedings and made available to
the parties in the litigation of this case by my Prehearing Order. Prehearing Order §§ I.D
and IL.G.

Summary judgment is appropriate when there is no genuine dispute as to any issue of
material fact for adjudication or the moving party is entitled to judgment as a matter of
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. The party requesting summary
judgment bears the burden of showing that there are no genuine issues of material fact for
trial or that it is entitled to judgment as a matter of law. Generally, the non-movant may
not defeat an adequately supported summary judgment motion by relying on the denials
in its pleadings or briefs, but must furnish evidence of a dispute concerning a material
fact, i.e., a fact that would affect the outcome of the case if proven. Mission Hosp. Reg’!
Med. Ctr., DAB No. 2459 at 4 (2012) (and cases cited therein); Experts Are Us, Inc.,
DAB No. 2452 at 4 (2012) (and cases cited therein); Senior Rehab. & Skilled Nursing
Ctr., DAB No. 2300 at 3 (2010) (and cases cited therein); see also Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986).

The standard for deciding a case on summary judgment and an ALJ’s decision-making in
deciding a summary judgment motion differ from resolving a case after a hearing. On
summary judgment, the ALJ does not make credibility determinations, weigh the
evidence, or decide which inferences to draw from the evidence, as would be done when
finding facts after a hearing on the record. Rather, on summary judgment the ALJ
construes the evidence in a light most favorable to the non-movant and avoids deciding
which version of the facts is more likely true. Holy Cross Vill. at Notre Dame, Inc., DAB
No. 2291 at 5 (2009). The Board has also recognized that on summary judgment it is
appropriate for the ALJ to consider whether a rational trier of fact could find that the
parties’ evidence would be sufficient to meet that party’s evidentiary burden. Dumas
Nursing & Rehab., L.P., DAB No. 2347 at 5 (2010). The Secretary has not provided for
the allocation of the burden of persuasion or the quantum of evidence in 42 C.F.R. pt.
498. The Board, however, has provided some persuasive analysis regarding the
allocation of the burden of persuasion in cases subject to 42 C.F.R. pt. 498. Batavia
Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff'd, Batavia Nursing &
Convalescent Ctr. v. Thompson, 129 Fed. App’x 181 (6th Cir. 2005).

There are no disputes as to material facts in this case that require a hearing. Summary
judgment is appropriate as the issues that require resolution are issues of law related to
the interpretation and application of the regulation that authorizes a hardship exception to
the requirement to pay an application fee and the application of the regulation to the
undisputed facts. A correct construction of 42 C.F.R. § 424.514(f) and application of the
regulation to the undisputed facts requires that this case be resolved against CMS.
Accordingly, I conclude summary judgment is appropriate as this case must be resolved
against CMS as a matter of law. Although, Petitioner did not specifically move for
summary judgment, I find no prejudice to CMS as CMS had the opportunity to fully brief
the legal issues in this case.
3. Petitioner met the requirements of 42 C.F.R. § 424.514 (b)(2) and (f)
for a hardship exception to the requirement to pay the Medicare
enrollment application fee for her Medicare enrollment revalidation
application submitted on June 19, 2013.

4. NSC cannot rely upon a policy statement of CMS that is inconsistent
with 42 C.F.R. § 424.514(f) to deny Petitioner’s application for a
hardship exception to the requirement to pay a Medicare enrollment
application fee.

5. Whether or not a provider or supplier meets the requirements for a
hardship exception under 42 C.F.R. § 424.514 is not a matter within
the sole discretion of CMS as 42 C.F.R. § 424.514(h)(2) specifically
makes the determination reviewable by an ALJ and the Board using
the procedures of 42 C.F.R. pt. 498.

6. My review of the denial of a hardship exception is de novo.

7. Petitioner satisfied the regulatory requirements of 42 C.F.R.
§ 424.54(f) for a hardship exception to the requirement to pay an
application fee.

Petitioner requests review of the denial of her request for a hardship exception to the
requirement to pay a $532 application fee for her Medicare enrollment revalidation
application. Request for Hearing; P. Br. CMS claims that Petitioner failed to present
evidence “in support of a strong argument” showing that she, operating as Arztin Foot
Care, qualified for the hardship exception. CMS Br. at 1, 8-9; CMS Reply at 2. The
facts are not disputed.

a. Facts

On June 19, 2013, Petitioner submitted her revalidation application, a CMS-855S form,
with a letter dated June 14, 2013 requesting a hardship exception to the requirement to
pay an application fee. CMS Ex. 1 at 1, 6-9. Petitioner stated in her letter that: she could
not “afford the fee demanded of all revalidaters [sic];” she attributed her inability to
afford the fee, at least in part, to changes in Illinois Medicaid that limited doctors of
podiatric medicine to individuals under 20, unless diabetic; the Medicaid change
decreased the number of Medicare/Medicaid patients since July 2012; and reduced her
practice to “just break even.” CMS Ex. | at 9. CMS has not rebutted the assertions made
by Petitioner in her June 14, 2013 letter.

Five days after she filed her revalidation application, NSC notified Petitioner by letter
dated June 24, 2013, that her request for a hardship exception was denied. NSC cited the
Medicare Provider Integrity Manual (MPIM), ch. 15, § 9.1.C (§15.9.1.C), as requiring
that a supplier present a strong argument to support a request for a hardship exception,
including providing “comprehensive documentation.” CMS Ex. | at 10. The NSC letter
stated that “there is not strong enough evidence to grant a hardship exception to the
application fee.” CMS Ex. | at 10.

Petitioner requested reconsideration by letter dated July 3, 2013. CMS Ex. | at 13-14. .
Petitioner argued that as a doctor of podiatric medicine, she did not provide her patients
“diabetic therapeutic shoes and other medical devices for a profit but as an incidental
service” and convenience for her patients, particularly the homebound. CMS Ex. 1 at 13.
She also argued that Medicaid limited her to seeing diabetic patients and that she saw
mostly the poor, black, and elderly. CMS Ex. | at 13-14. On July 17, 2013, NSC
returned Petitioner’s July 3, 2013 reconsideration request stating that “[a]s the
documentation provided does not indicate the request for reconsideration, it is being
returned to you.” CMS Ex. | at 15. On July 22, 2013, Petitioner resubmitted her
reconsideration request. CMS Ex. | at 16. On August 12, 2013, the reconsideration
hearing officer acknowledged receipt of Petitioner’s reconsideration request and invited
Petitioner to submit additional documentation. CMS Ex. 1 at 17. Petitioner responded to
the hearing officer by letter dated August 22, 2013. Petitioner continued her argument
that changes in Illinois Medicaid significantly limited her practice income from Medicare
and Medicaid. She added that Medicaid payments were being taken by the state to pay
state taxes for 2011. She also submitted some documents showing that a payment had
been involuntarily withheld by the State of Illinois and her payments from Medicare and
Medicaid in 2012. CMS Ex. 1 at 16-20.

On August 27, 2013, a reconsideration decision was issued upholding the denial of
Petitioner’s hardship exception request. The reconsideration hearing officer, citing
section 19.1.C.2 of the MPIM, concluded that Petitioner failed to present a strong
argument for a hardship exception. In a paragraph titled “Decision” the hearing office
stated that her decision was made “in accordance with Medicare guidelines, as outlined in
42 C.F.R. Section 424.514.” CMS Ex. | at 3.

b. Analysis

Beginning March 25, 2011, the Secretary required that a revalidating institutional
provider such as Petitioner submit with an application for revalidation either the
application fee or a request for hardship exception to the fee requirement. 42 C.F.R.
§ 424.514(b). The regulation establishes the following requirements for a hardship
exception request.
(f) Information needed for submission of a hardship exception
request. A provider or supplier requesting an exception from
the application fee must include with its enrollment
application a letter that describes the hardship and why the
hardship justifies an exception.

42 C.F.R. § 424.514(f). The regulation is clear that all that is required to request a
hardship exception is a letter submitted with the revalidation application that describes
the hardship and why the hardship justifies an exception to the requirement to pay the
application fee.

The drafters of the regulation explained the process for requesting a hardship exception
as follows:

We proposed that a provider or supplier that believes it is
entitled to a hardship exception from the application fee
enclose a letter with the enrollment application or, if using
Internet-based PECOS, with the Certification Statement,
explaining the nature of the hardship.

76 Fed. Reg. at 5909.
During the comment period, CMS received the following suggestion:

Comment: A commenter suggested that CMS develop and
issue a standard enrollment fee “hardship exception form”
that a provider can use when requesting an exception to the
fee.

Response: Whereas a standard form might be useful, there
could be many situations that justify exception from the fee.
We do not want to limit the basis for fee exceptions for
providers and suppliers to a pre-established list of
circumstances. Accordingly we have not listed options for
providers and suppliers to request hardship exceptions from
application fees. As indicated in the preamble to the proposed
tule, each request will be considered on its own merit on a
case-by-case basis.

76 Fed. Reg. at 5909 (emphasis added). The drafters assessed the information collection
requirements for providers and suppliers and estimated that it should require no more
than one hour to prepare the letter requesting an exception. The drafters did not discuss
10

or analyze any requirement to submit any supporting documentation to prove that a
hardship existed. The drafters did not attempt to describe or limit the hardships that
might qualify for an exception to the requirement to pay a fee. 76 Fed. Reg. at 5949.

In this case the NSC and CMS did not deny Petitioner’s request for a hardship exception
because she failed to comply with 42 C.F.R. § 424.514(b) and (f) or because she failed to
explain in the required letter the hardship or why it justified an exception. The NSC and
CMS do not deny or dispute Petitioner’s assertions in her letter regarding the hardship
and that it should justify an exception. Rather, the NSC decided initially and on
reconsideration to deny Petitioner’s request for exception because she failed to meet the
requirement of the MPIM §15.19.1.C to make a strong argument with comprehensive
documentation. CMS Ex. | at 2, 10. CMS also urges me to apply MPIM §15.19.1.C to
deny Petitioner a hardship exception. CMS Br. at 8-9; CMS Reply at 2.

Section 15.19.1.C.2 of the MPIM provides:

Hardship exceptions should not be granted when the provider
simply asserts that the imposition of the application fee
represents a financial hardship. The provider must instead
make a strong argument to support its request, including
providing comprehensive documentation (which may
include without limitation, historical cost reports, recent
financial reports such as balance sheets and income
statements, cash flow statements, tax returns, etc.).

Other factors that may suggest that a hardship exception is
appropriate include the following:

(a) Considerable bad debt expenses,

(b) Significant amount of charity care/financial assistance
furnished to patients,

(c) Presence of substantive partnerships (whereby clinical,
financial integration are present) with those who furnish
medical care to a disproportionately low-income
population[,]

(d) Whether an institutional provider received considerable
amounts of funding through disproportionate share
hospital payments, or

(e) Whether the provider is enrolling in a geographic area
that is a Presidentially-declared disaster under the
Robert T. Stafford Disaster Relief and Emergency
Assistance Act, 42 U.S.C. 5121-5206 (Stafford Act).
11

MPIM, §15.19.1.C.2 (rev. 474, Jul. 23, 2011) (emphasis added); CMS Ex. 1 at 23-24.
This provision of the MPIM is clearly at odds with the plan language of 42 C.F.R.

§ 424.514(f) and the intent of the drafters of that regulation. Due to the inconsistency,
the requirements of the MPIM cannot be enforced against Petitioner as the regulation
controls. The MPIM sets forth CMS policy and instructions for its contractors. The
Board has had many occasions to address the relationship among the Act and the
regulations and the policy statements of CMS.

Unlike the Medicare statute and regulations . .. CMS’s
instructions to contractors do not have the force and effect of
law and are not binding on the Board. See Fady Fayad, M.D.,
DAB No. 2266, at 9 n.6 (2009), citing Massachusetts
Executive Office of Health and Human Services, DAB No.
2218, at 12 (2008); Foxwood Springs Living Center, DAB
No. 2294, at 8-9 (2009). In section 1866(j) of the Act,
Congress specifically directed the Secretary to establish by
regulation the procedures for actions on applications, rather
than relying merely on instruction manuals.

Tri-Valley Family Medicine, Inc., DAB No. 2358 at 7 (2010) (emphasis in
original).

The MPIM is CMS policy and does not have the force and effect of law. MPIM

§ 15.19.1.C.2 creates significant obstacles to requesting a hardship exception by
imposing substantial requirements not found in the Act or regulations. The MPIM
provisions cited by the NSC and CMS may not be used as a basis to deny Petitioner a
hardship exception to the extent they are inconsistent with the plain language of the
regulations and the stated intent of the drafters. I conclude that the application of the
provisions of the MPIM by NSC and CMS rather than the regulation was an error. The
fact that Petitioner failed to satisfy the requirements of the MPIM § 15.19.1.C.2 was not a
proper basis for the denial of her request for a hardship exception that otherwise met the
requirements of 42 C.F.R. § 424.514 (b) and (f).

The determination of whether or not a provider or supplier is entitled to a hardship
exception is not a matter solely within the discretion of CMS, because that determination
is specifically reviewable by an ALJ and the Board. 42 C.F.R. § 424.514(h)(2). Review
by an ALJ applying the procedures of 42 C.F.R. pt. 498 is de novo. Therefore, I must
consider Petitioner’s letter requesting a hardship exception that was submitted with her
revalidation application, to determine whether she identified a hardship and whether that
hardship justifies an exception to the requirement to pay the application fee. Petitioner’s
June 14, 2013 letter submitted with her revalidation application requested a hardship
exception. In that letter Petitioner described her hardship stating: “I cannot afford the fee
demanded of all revalidaters [sic].”” She also explained why the hardship justified the
12

requested exception by stating that she had been struggling to break even since 2011, and
she asked to be granted the “much needed waiver of the enrollment fee due to hardship
from decline of [M]edicare/Medicaid patients coming to my office since July 2012.”
CMS Ex. | at 9. Petitioner’s assertions are unrebutted. Petitioner’s letter satisfies the
requirements of 42 C.F.R. § 424.514(b) and (f) because the letter: was submitted with
the revalidation application; identified the hardship; and stated why the hardship justified
an exception to the requirement to pay the application fee. The Act and regulation do not
specify that a particular quality or quantity of hardship exist. It is sufficient to identify
the hardship and articulate why the hardship justifies the exception for the particular
provider or supplier. I conclude that Petitioner met the requirements for a hardship
exception to the requirement to pay the application fee.

III. Conclusion

For the foregoing reasons, I conclude Petitioner met the requirements for a hardship
exception to the requirement to pay the application fee for her revalidation application
submitted on June 19, 2013.

/s/
Keith W. Sickendick
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division
Abhilasha Singh, M.D.,
(PTAN: K010411),
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-13-1374
Decision Number: CR3211

Date: April 28, 2014

DECISION

Petitioner Abhilasha Singh, M.D., a Medicare supplier,'filed a hearing request to
challenge the effective date of her Medicare enrollment and billing privileges. For the
reasons discussed below, I affirm the Centers for Medicare & Medicaid’s (CMS’s)
determination that the effective date of Petitioner’s Medicare enrollment and billing
privileges is February 1, 2013, with a retrospective billing date of January 3, 2013.

I. Background

On February 1, 2013, CGS, a CMS administrative contractor, received a Medicare
enrollment reassignment application (CMS 855R) on behalf of Petitioner, a physician
employed at Graves Gilbert Clinic (the Clinic). CMS Exhibit (Ex.) 4; Petitioner’s (P.)
Ex. 3, at 3. On February 4, 2013, CGS sent a letter to the Clinic acknowledging receipt
of Petitioner’s CMS 855R. CMS Ex. 3. On March 8, 2013, CGS notified the Clinic that

' A “supplier” is a physician or other practitioner, or an entity other than a provider, that
furnishes health care services under Medicare.” 42 C.F.R. § 400.202.
it approved Petitioner’s reassignment application with an effective date of February 1,
2013.7 CMS Ex. 2.

Petitioner requested reconsideration’ and a September 28, 2012 effective date, arguing
that the Clinic previously sent CGS a CMS 855R reassignment application on September
26, 2012, which CGS received on September 28, 2012. Petitioner enclosed a copy of an
envelope dated September 28, 2012, and a proof of receipt to support this claim. On July
26, 2013, CGS denied Petitioner’s request and upheld the effective date established in its
determination letter. CGS’s reconsideration determination states that:

[T]he application submitted in this envelope was for a nurse practitioner, [KN].
CGS reviewed the entire document box that contains this envelope and all of its
contents. An application for [Petitioner] was not included in this envelope, in
addition a cover letter from [MB, the Clinic’s Administrative Assistant to the
Assistant Administrator] identified that the enclosed information was for [KN].
CGS has determined the effective date was issued correctly based on the receipt
date of the approved application. Therefore the effective date will remain
[February 1, 2013].

CMS Ex. 1, at 2.

Petitioner requested a hearing on September 25, 2013 and again argued she sent her
original CMS 855R with another applicant’s enrollment application via certified mail,
which was delivered to CGS on September 28, 2012. Petitioner argues, accordingly, that
the February 1, 2013 effective date is erroneous and that she is entitled to a September
28, 2012 effective date.

> CGS states in its February 4, 2013 letter that January 3, 2013 is the effective date of
Petitioner’s enrollment and billing privileges. By regulation, however, the effective date
of this supplier’s enrollment and billing privileges is the date that the Medicare contractor
received an enrollment application that it could subsequently approve. 42 C.F.R. §
424.520(d). CMS and its contractors are authorized, however, to permit providers and
suppliers to “retrospectively bill” for their services for up to 30 days prior to their
effective date, which CGS did here when it cited the effective date as January 3, 2013
(the retrospective billing date) not February 1, 2013 (the enrollment effective date). 42
C.F.R. § 424.521(a)(1). For clarity in this case, I refer to the effective date of enrollment
as the date that is established by regulation, February 1, 2013, and not the date on which
Petitioner’s retrospective billing privileges began, January 3, 2013.

> Apparently Petitioner requested reconsideration twice. Her first request was returned
because it was not properly signed. CMS Ex. 8.
The case was assigned to me for hearing and decision. I issued an Acknowledgment and
Pre-Hearing Order on October 24, 2013 (October 24 Order). Pursuant to my October 24
Order, CMS filed a brief (CMS Br.) and nine exhibits (CMS Exs. 1 — 9). Petitioner filed
a brief (P. Br.) and four exhibits (P. Exs. 1 — 4).

My October 24 Order advised the parties that they must submit written direct testimony
for each proposed witness and that an in-person hearing would only be necessary if the
opposing party affirmatively requested an opportunity to cross-examine a witness.
October 24 Order 8, 9; see Vandalia Park, DAB No. 1940 (2004); Pacific Regency
Arvin, DAB No. 1823, at 8 (2002) (holding that the use of written direct testimony for
witnesses is permissible so long as the opposing party has the opportunity to cross-
examine those witnesses). CMS listed one witness, JG, a CGS hearing officer, and filed
her declaration as CMS Ex. 9. Petitioner filed affidavits for two witnesses: CH, the
Clinic’s Assistant Administrator (P. Ex. 4) and MB, CH’s Administrative Assistant (P.
Ex. 3). As neither party requests cross-examination, | find that an in-person hearing in
this case is unnecessary, and I issue this decision on the full merits of the written record.
October 24 Order 10, 11.

The regulations at 42 C.F.R. Part 498 set forth the procedures for hearings and appeals
here. In cases subject to Part 498, the Departmental Appeals Board (Board) has found
that CMS must establish a prima facie showing of a regulatory violation, and the
regulated entity then bears the burden of showing by a preponderance of the evidence that
it was compliant with the Social Security Act (Act) or regulations, or that it had a
defense. Evergreene Nursing Care Ctr., DAB No. 2069, at 7-8 (2007); Batavia Nursing
and Convalescent Inn, DAB No. 1911 (2004); Batavia Nursing and Convalescent Ctr.,

DAB No. 1904 (2004); Emerald Oaks, DAB
Ctr., DAB No. 1665 (1998). The Board has
forward with the evidence and the burden of

No. 1800 (2001); Cross Creek Health Care
found this allocation of the burden of going
persuasion properly applied in supplier

enrollment cases. MediSource Corp., DAB No. 2011, at 2-3 (2006).

IL. Discussion

A. Issue Presented

Whether CGS, acting on behalf of CMS, properly established February 1, 2013, as
Petitioner’s effective date for enrollment in Medicare, with her retrospective billing

privileges starting on January 3, 2013.
B. Findings of Fact and Conclusions of Law

1. The effective date of Petitioner’s Medicare enrollment and billing privileges
is the date I find CGS received an enrollment application from Petitioner
that it was able to subsequently approve.

Suppliers such as Petitioner must enroll in the Medicare program to “receive payment for
covered Medicare items or services from either Medicare (in the case of an assigned
claim) or a Medicare beneficiary (in the case of an unassigned claim) ....” 42 C.F.R.

§ 424.505. The regulations at 42 C.F.R. Part 424, subpart P, establish the requirements
for a supplier to enroll in the Medicare program. See also Act § 1866(j)(1)(A)
(authorizing the Secretary of the U.S. Department of Health and Human Services to
establish by regulation the process for enrolling providers and suppliers in the Medicare
program).

The regulation addressing the effective date of a physician’s Medicare billing privileges
states:

The effective date for billing privileges for physicians . . . 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 . . . first began furnishing
services at a new practice location.

42 C.F.R. § 424.520(d). The “date of filing” is the date that the Medicare contractor
“receives” a signed provider enrollment application that the Medicare contractor is able
to process to approval. 73 Fed. Reg. 69,726, at 69,769 (Nov. 19, 2008). Under 42 C.F.R.
§ 424.521(a)(1), physicians may retrospectively bill for their services when they have
“met all program requirements” and “services were provided at the enrolled practice
location for up to —. . . 30 days prior to their effective date if circumstances precluded
enrollment in advance of providing services to Medicare beneficiaries. . . .” *

CMS argues the critical receipt date of Petitioner’s application was February 1, 2013,
while Petitioner argues CGS received it on September 28, 2012 but that CGS must have
lost it.

2. Ido not find that that CGS received Petitioner’s enrollment application on
September 28, 2013.

Petitioner argues that she should have been enrolled in Medicare as a physician at the
Clinic as of September 28, 2012, the date on which Petitioner argues CGS received her

* There is also a 90-day retrospective billing period if a Presidentially-declared disaster
precluded enrollment. 42 C.F.R. § 424.521(a)(2).
CMS 855R. Petitioner submitted Petitioner’s application as an exhibit, purportedly
signed by Petitioner on September 26, 2012, affixed to which is a post-it note stating:
“This app wasn’t mailed until 9/26 because we had to obtain Dr. Singh’s Medicare #
from previous office. Sent certified mail 9/26/12.” P. Ex. 1.

MB, the Clinic employee responsible for credentialing physicians, testified that she sent
Petitioner’s CMS 855R to CGS, along with the CMS 8558 for KN, a Nurse Practitioner
applicant, on September 26, 2012. MB testified that she placed Petitioner’s CMS 855R
in an envelope along with KN’s CMS 8558S. MB testified that she also placed a cover
letter in the envelope referencing only KN’s CMS 8558, at CGS’s suggestion, because
CGS claimed never to have received an earlier enrollment application for KN. MB
testified that she did not include a cover letter for Petitioner’s application because she
does not typically include a cover letter when submitting enrollment applications and
only did so for KN because of the “special circumstances” of CGS not receiving earlier
applications MB submitted for KN. She explained she did not mention Petitioner in the
letter because doing so would have been “irrelevant” to those special circumstances.

MB testified she typically follows up on credentialing applications about 45 days after
their submission to ensure that CGS is processing the submitted applications, but she did
not do so in Petitioner’s instance due to “[the Clinic] adding a number of providers
during the time and an increase in job responsibilities.” MB testifies she did not realize
there was a problem with Petitioner’s CMS 855R until a Clinic billing supervisor alerted
her that the Clinic was not being reimbursed for Petitioner’s services in January 2013. It
is undisputed, however, that on October 2, 2012, CGS only acknowledged the CMS 855S
for KN, which CGS received on September 28, 2012, and not the application for
Petitioner. It is also undisputed that the Clinic did not receive a CGS acknowledgment
for Petitioner’s CMS 855R until February 2013, after MB purportedly re-mailed
Petitioner’s application. CGS subsequently processed that February submission to
approval. P. Br. at 1-3; P. Ex. 3.

MB testified she contacted CGS after the billing supervisor alerted her in January 2013,
and CGS informed her that they did not have a record of receipt of Petitioner’s CMS
855R. MB testifies that she then re-sent the “original” CMS 855R, along with proof that
it was delivered on September 28, 2012. MB testified that it is likely that CGS lost or
misplaced the CMS 855R Petitioner submitted in September 2012 because CGS had also
previously lost or misplaced KN’s CMS 855R. P. Br. at 5-6; P. Ex. 3.

JG, a CGS hearing officer who decided Petitioner’s reconsideration request, testified that
all enrollment applications CGS receives by mail are scanned into its computer system
and that the hard copies of the enrollment applications and their envelopes are stored in a
box. The entire contents of an envelope, which could contain multiple enrollment
applications, are placed in one box. JG further testified that she had the CGS mailroom
“pull” the box containing KN’s CMS 8558S, which CGS received on September 28, 2012.
JG testified that she first had another CGS employee search the box and then she herself
searched the “entire box.” She testified she viewed KN’s CMS 855S, the envelope in
which it was mailed, and the cover letter referencing it. She testified that she did not find
a CMS 855R for Petitioner in that envelope. CMS Exs. 8, 9.

The receipt of mailing and post office tracking shows only that CGS received an
envelope from the Clinic in September 2012. In accordance with the cover letter, I find it
more likely that the envelope only contained KN’s application materials and not
Petitioner’s application. MB’s testimony lacks credibility — it does not sound reasonable
that she would only mention KN’s application in that cover letter if Petitioner’s
application were also actually included in the submission. Moreover, I find credible JG’s
explanation with regard to CGS’s acknowledgment and retention of records, and her own
personal search of those records. I assign, therefore, JG’s testimony more weight than
MB’s testimony. Although CH, MB’s supervisor, testified that MB’s job performance is
“very highly rated” and that he believes her account of transmitting Petitioner’s
application in September 2012, I find it would be a reasonable expectation that MB, who
had considerable experience with the Medicare application process, would have
followed-up earlier with CGS if she did not get a timely acknowledgment receipt for
Petitioner’s application, especially because CGS did acknowledge receipt of KN’s
application. Considering JG herself actually searched the relevant box and did not find
Petitioner’s CMS 855R, combined with the fact that CGS did not acknowledge a CMS
855R for Petitioner prior to February 4, 2013, I find it more likely that CGS did not
receive a CMS 855R for Petitioner on September 28, 2012. Especially considering MB’s
reference to previous receipt issues with KN’s application, I would have reasonably
expected MB to document Petitioner’s application in the cover letter if she did in fact
submit it in the envelope she mailed to CGS in September 2012.

For these same reasons, I do not find persuasive the copy of Petitioner’s application,
purportedly signed in September 2012, which Petitioner now produces for the first time
in support of a showing of its inclusion in the September 2012 mailing. See P. Ex. 1.
MB testified that, in January 2013, she resent the original application Petitioner signed in
September 2012. However, the application that CMS processed to approval was signed
by Petitioner in January 2013. CMS Ex. 4, at 7. Further, I am precluded from
considering, without good cause, evidence first presented at the ALJ level in supplier
enrollment appeals. See 42 C.F.R. § 498.56(e)(2)(ii); CMS Ex. 1, at 2.

III. Conclusion

I affirm CMS’s determination that the effective date of Petitioner’s supplier enrollment
and billing privileges is February 1, 2013, with a retrospective billing date to January 3,
2013. The weight of the evidence shows that CGS first received a CMS 855R for
Petitioner on February 1, 2013 and not on September 28, 2012.

/s/

Joseph Grow
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Abundant Health Family Medicine, LLC,
Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-14-465
Decision No. CR3209

Date: April 25, 2014

DECISION

Wisconsin Physicians Service Insurance Corporation (WPS), an administrative contractor
acting on behalf of the Centers for Medicare & Medicaid Services (CMS), determined
that Petitioner’s effective date of enrollment in the Medicare program was April 17,
2013, with a retrospective billing period starting on March 18, 2013. Petitioner disputed
this determination and requested a hearing before an administrative law judge. For the
reasons stated below, I affirm WPS’s determination.

I. Background and Procedural History

In 2012, Brian Lumpkin, M.D., an enrolled Medicare supplier, decided to establish
Petitioner, Abundant Health Family Medicine, LLC. Petitioner Exhibit (P. Ex.) 2 § 2.
Dr. Lumpkin hired Service Resource Group, Inc. (SRG), in July 2012 to assist him in
enrolling Petitioner in the Medicare program. P. Ex. 1, at 18-19; P. Ex.2 97. By early
August 2012, Petitioner was prepared to submit an application for enrollment in the
Medicare program. P. Ex. 1, at 19. However, WPS advised SRG not to submit the
application until August 20, 2012, because WPS was in the middle of a transition that
might complicate receipt and processing of new enrollment applications. P. Ex. 1, at 19.
On August 20, 2012, SRG attempted to electronically submit Petitioner’s enrollment
application through the Provider Enrollment, Chain and Ownership System (PECOS) and
believed that it had been submitted “despite numerous page errors, and computer glitches
from screen to screen.” P. Ex. 1, at 19. Following this attempt, SRG called and spoke
with WPS representatives numerous times and was told by WPS that it had a backlog in
reviewing enrollment applications and that they could not locate a “control number” for
Petitioner’s application. P. Ex. 1, at 19.

On April 16, 2013, SRG submitted another enrollment application on behalf of Petitioner;
iowever, SRG believed, based on its contact with WPS, that this was a resubmission of
the August 20, 2012 application. P. Ex. 1, at 19-20. On July 12, 2013, WPS requested
addition information from Petitioner. CMS Ex. 4. Because WPS was experiencing
problems with PECOS, a WPS representative suggested that Petitioner submit a paper
enrollment application, which SRG did on July 12, 2013. P. Ex. 1, at 20, 32-50.

Ina July 22, 2013 initial determination, WPS enrolled Petitioner as a Medicare supplier
and established March 18, 2013, as the effective date for Petitioner’s Medicare billing
privileges. CMS Ex. 1, at 1-2. Petitioner requested reconsideration of the initial
determination and sought an effective date of September 7, 2012, for its Medicare billing
privileges. P. Ex. 1, at 8-9. In a reconsidered determination, WPS upheld the effective
date of March 18, 2013, for Petitioner’s Medicare billing privileges. CMS Ex. 2. WPS
stated that it received Petitioner’s enrollment application on April 17, 2013, and that the
effective date was determined based on this date of receipt of a valid enrollment
application that WPS approved. CMS Ex. 2, at 2. WPS also stated that Petitioner had
not provided evidence to support an earlier effective date. CMS Ex. 2, at 2.

Petitioner disputed WPS’s determination and filed a request for hearing with the
Departmental Appeals Board (DAB), Civil Remedies Division (CRD). The director of
CRD administratively assigned this case to me for hearing and decision. In response to
my Acknowledgment and Pre-hearing Order (Order), CMS filed a brief (CMS Br.) and
six exhibits (CMS Exs. 1-6) as its pre-hearing exchange. Petitioner filed a brief (P. Br.)
and nine exhibits (P. Exs. 1-9) as its pre-hearing exchange.

II. Decision on the Written Record

Neither party objected to any of the proposed exhibits. See Order 7. Therefore, I admit
CMS Exs. 1-6 and P. Exs. 1-9 into the record.

My Order advised the parties that they must submit written direct testimony for each
proposed witness and that an in-person hearing would only be necessary if the opposing
party requested an opportunity to cross-examine a witness. Order §{ 8, 9, 10; Vandalia
Park, DAB No. 1940 (2004); Pacific Regency Arvin, DAB No. 1823, at 8 (2002)
(holding that the use of written direct testimony for witnesses is permissible so long as
the opposing party has the opportunity to cross-examine those witnesses).' CMS did not
offer any witnesses that Petitioner could request to cross-examine. Petitioner offered
affidavits for two witnesses (P. Ex. 1, at 18-21; P. Ex. 2); however, CMS did not request
to cross-examine those individuals. See Order { 9. Consequently, I will not hold an in-
person hearing in this matter and I will decide this matter based on the written record.
Order § 11.

III. Issue

Whether CMS had a legitimate basis for establishing April 17, 2013, as the effective date
of Petitioner’s Medicare billing privileges and March 18, 2013, as the beginning of
Petitioner’s retrospective billing period.

I have jurisdiction to decide this issue. 42 C.F.R. § 498.3(b)(15); see also 42 U.S.C.
§ 1395cc(j)(8).

IV. Findings of Fact, Conclusions of Law, and Analysis”

The Social Security Act (Act) authorizes the Secretary of Health and Human Services
(Secretary) to promulgate regulations governing the enrollment process for providers and
suppliers.> 42 U.S.C. §§ 1302, 1395cc(j). Under the Secretary’s regulations, a provider
or supplier that seeks billing privileges under the Medicare program must “submit
enrollment information on the applicable enrollment application. Once the provider or
supplier successfully completes the enrollment process . . . CMS enrolls the provider or
supplier into the Medicare program.” 42 C.F.R. § 424.510(a). CMS then establishes an
effective date for billing privileges under the requirements stated in 42 C.F.R.

§ 424.520(d) and may permit limited retrospective billing under 42 C.F.R. § 424.521.

I. WPS received Petitioner’s signed Medicare enrollment application on
April 17, 2013.

Petitioner submitted a Form CMS-855B electronically via PECOS on April 16, 2013.
CMS Ex. 3, at 9. Also on April 16, 2013, Dr. Lumpkin physically signed two
certification statements and sent them to WPS by Federal Express overnight delivery.
CMS Ex. 3, at 1-8. The parties do not disagree that the date of receipt of the certification

' Administrative decisions cited in this decision are accessible on the internet at:
http://www.hhs.gov/dab/decisions/index.html.

> My findings of fact and conclusions of law are set forth in italics and bold font.

> Petitioner is considered a “supplier” for purposes of the Act and the regulations. See
42 U.S.C. § 1395x(d),(u); 42 C.F.R. § 498.2; see also 42 C.F.R. § 400.202.
statements was April 17, 2013. CMS Exs. 2, at 2; CMS Br. at 2; P. Br. at 5. Therefore, I
find that WPS received Petitioner’s signed enrollment application on April 17, 2013.

2. The effective date for Petitioner’s Medicare billing privileges is April
17, 2013, because that is the date WPS received Petitioner’s Medicare
enrollment application that was subsequently approved.

WPS received Petitioner’s Medicare enrollment application on April 17, 2013. CMS Ex.
2, at 2. On July 22, 2013, WPS approved Petitioner’s Medicare enrollment application.
CMS Ex. 1. WPS set March 18, 2013, as Petitioner’s “effective date.” CMS Ex. 1, at 2.
WPS noted that this date was “determined by the receipt date of a valid application that is
approved.” CMS Ex. 2, at 2.

The relevant regulation regarding the effective date of Medicare billing privileges states:

The effective date for billing privileges for physicians,
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.

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. 69,726, 69,769 (Nov.
19, 2008); see also Caroline Lott Douglas, PA, DAB CR2406, at 5-7 (2011); Rizwan
Sadiq, M.D., DAB CR2401, at 5 (2011). Because WPS received an application from
Petitioner on April 17, 2013, that WPS ultimately approved, I conclude that the effective
date for Petitioner’s Medicare billing privileges is April 17, 2013.

Petitioner disputes this conclusion because it asserts that it submitted its enrollment
application on August 20, 2012, through PECOS, and that due to an error on WPS’s part,
that application was not processed. Petitioner argues that it has proof that it submitted the
enrollment application on August 20, 2012, in the form of an affidavit. P. Br. at 7; P. Ex.
1, at 19. Petitioner asserts that PECOS has documented technological deficiencies and
Petitioner should not be penalized because of this. P. Br. at 8-10; P. Exs. 6-9.

CMS argues that Petitioner’s problems with PECOS on August 20, 2012, probably
indicate that Petitioner was not successful in electronically submitting the enrollment
application. CMS Br. at 10. Further, CMS notes in support of this theory that Petitioner
has not asserted that it received a confirmation receipt and tracking number from PECOS
on August 20, 2012, when it submitted the application. CMS Br. at 10. CMS argues, in

any event, that the August 20, 2012 enrollment application was never completed because
Petitioner “has neither asserted nor provided evidence that it sent to WPS a signed
Certification Statement for its August 2012 electronic submission . . . .”. CMS Br. at 10.

Iam persuaded by CMS’s argument. Petitioner called WPS several times after August
20, 2012, and, significantly, WPS could not locate a “control number” for Petitioner’s
application. P. Ex. 1, at 19. It is likely that this meant that Petitioner was unsuccessful in
electronically filing the application. However, even if Petitioner successfully submitted
the enrollment application through PECOS on August 20, 2012, there is no evidence that
Petitioner “[mlJail[ed] the original signed Certification Statement from Internet-based
PECOS . . . to the Medicare contractor within 15 days of [Petitioner’s] electronic
submission,” as the PECOS website informs users. P. Ex. 5, at 1. Submitting a signed
certification statement is an “enrollment requirement” and, in order “[t]o be enrolled, a
provider or supplier must meet enrollment requirements specified [in the regulations].”
42 C.F.R. § 424.510(a), (d)(3). Petitioner did not submit a signed certification statement
to WPS until April 16, 2013, which was received on April 17, 2013. CMS Ex. 3.
Petitioner has provided no evidence of an earlier submission; therefore, the regulations
require that the effective date be assigned based on this date since the enrollment
application received on April 17, 2013, was ultimately approved. See Joseph Ravid,
M.D., DAB CR25339, at 3 (2012).

3. WPS’s reference to an “effective date” means the date
Petitioner’s retrospective billing period begins.

Under the regulations set forth below, CMS may permit limited retrospective billing if
a physician meets all program requirements.

Physicians, nonphysician practitioners and physician and
nonphysician practitioner organizations may retrospectively
bill for services when a physician or nonphysician
practitioner or a physician or a nonphysician practitioner
organization have met all program requirements, including
State licensure requirements, and services were provided at
the enrolled practice location for up to—

(1) 30 days prior to their effective date if circumstances
precluded enrollment in advance of providing services to

Medicare beneficiaries, or

(2) 90 days [in certain emergencies not applicable to this
case. ]

42 CFR. § 424.521 (a).
In its initial determination, WPS erroneously characterized the beginning of the
retrospective billing period to be the effective date. CMS Ex. 1, at 2. This conclusion is
based on reading WPS’s initial and reconsidered determinations consistently with the
regulation quoted above. See Jorge M. Ballesteros, DAB CR2067, at 2 (2010) (“CMS
apparently sets enrollment effective dates 30 days prior to the date of application, which
is what the Medicare contractor did here.””). Therefore, I interpret WPS’s determination
to mean that the “effective date” is the beginning of the retrospective billing period.
Sadiq, DAB CR2401, at 5-6.

Accordingly, in the present matter, the earliest date for retrospective billing privileges
that WPS could grant Petitioner is 30 days prior to April 17, 2013, or March 18, 2013.
WPS sent this as the effective date for billing. Therefore, I conclude that WPS granted
Petitioner retrospective billing privileges consistent with the requirements in 42 C.F.R.
§ 424.521.

4. I cannot grant equitable relief to Petitioner.

Petitioner seeks relief in this matter because Dr. Lumpkin used his personal savings to
establish Petitioner and Dr. Lumpkin provided services to an underserved area expecting
to receive reimbursement from Medicare once Petitioner was enrolled. However, I
simply have no authority to grant equitable relief and must apply the regulations as
written, despite the part that PECOS and SRG may have played in causing this situation.
See US Ultrasound, DAB No. 2302, at 8 (2010); 1866/CPayday.com, L.L.C., DAB No.
2289, at 14 (2009).

V. Conclusion

For the reasons explained above, I affirm WPS’s determination that Petitioner’s effective
date for Medicare billing privileges is April 17, 2013, and that its retrospective billing
date is March 18, 2013.

/s/
Scott Anderson
Administrative Law Judge


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD

Civil Remedies Division

Southeastern Orthotics and Prosthetics, Inc.
(Supplier No. 0130020002),

Petitioner,
v.
Centers for Medicare & Medicaid Services.
Docket No. C-14-315
Decision No. CR3208

Date: April 23, 2014

DECISION

Palmetto GBA National Supplier Clearinghouse (NSC), an administrative contractor for
the Centers for Medicare & Medicaid Services (CMS) revoked the Medicare enrollment
and billing privileges of Southeastern Orthotics and Prosthetics, Inc. (Petitioner) after it
determined Petitioner did not comply with the enrollment requirements for suppliers of
durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). Petitioner
requested reconsideration. An NSC hearing officer upheld the revocation of Petitioner’s
enrollment, citing Petitioner’s noncompliance with 42 C.F.R. § 424.57(c)(7) (Supplier
Standard 7). Petitioner then requested a hearing before an administrative law judge.

As explained more below, I find that Petitioner was not in compliance with the
requirement at 42 C.F.R. § 424.57(c)(7) during two attempted on-site inspections. NSC,
acting on behalf of CMS, was authorized to revoke Petitioner’s Medicare enrollment.
However, because NSC premised its reconsidered determination only on Petitioner’s
violation of Supplier Standard 7, I must modify the effective date of revocation to
October 1, 2013. 42 C.F.R. § 424.57(d). Petitioner is, therefore, eligible to submit
claims for payment of services rendered to Medicare program beneficiaries through
September 30, 2013.
I. Background and Procedural History

Petitioner is located in Cleveland, Tennessee, and had been enrolled in the Medicare
program as a DMEPOS supplier. As such, Petitioner was subject to a variety of rules,
including the DMEPOS Supplier Standards in 42 C.F.R. § 424.57, and other
requirements in 42 C.F.R. Part 424, subpart P. In order to verify compliance with these
requirements, NSC attempted on-site reviews of Petitioner’s location on Tuesday, July
16, 2013, at 2:08 p.m., and Tuesday, August 6, 2013, at 1:06 p.m. CMS Exhibit (Ex.) 1.
On both occasions, the inspector found Petitioner’s doors were locked and “dark curtains
were pulled closed.” CMS Ex. 1, at 6. The hours of operation posted on Petitioner’s
front door stated it was open from 1:00 p.m. to 5:00 p.m. on Tuesdays, from 8:00 a.m. to
5:00 p.m. on Thursdays, “By Appointment” on Mondays and Wednesdays, and closed on
Fridays. CMS Ex. 1, at 7-8.

By letter dated September 16, 2013, NSC notified Petitioner that its Medicare enrollment
and billing privileges were being revoked “pursuant to 42 CFR §§ 405.800, 424.57(e),
424.535(a)(1), 424.535(a)(5)(ii), and 424.535(g),” effective August 6, 2013, the date of
the second attempted on-site inspection. CMS Ex. 2, at 1. NSC also imposed a two-year
bar on Petitioner’s re-enrollment in the Medicare program. NSC stated that Petitioner
was noncompliant with Supplier Standard 7 because during the two attempted on-site
inspections, Petitioner “was closed during your posted hours of operation.” CMS Ex. 2.

On September 20, 2013, Petitioner requested reconsideration and submitted a corrective
action plan (CAP). CMS Ex. 3. Petitioner clarified that on days when patients are not
being seen, a “single clerical staff person” worked inside. CMS Ex. 3, at 2. Petitioner
explained that to “ensure safety of this employee, the front door is locked when patients
are not being seen.” CMS Ex. 3, at 2. The clerical staff member also “closes the office
mid-day for lunch.” CMS Ex. 3, at 2. Petitioner also stated that it sees all patients “by
appointment,” and that actual hours of operation were 8:00 a.m. to 5:00 p.m., Monday
through Thursday, as provided in its Medicare enrollment application. CMS Ex. 3, at 2.
Petitioner stated that it would install a bell near the front door to alert staff to visitors and
would post a sign on the front door when staff was out to lunch. CMS Ex. 3, at 3.

On October 25, 2013, NSC issued its reconsidered determination, which affirmed the
revocation of Petitioner’s billing privileges effective August 6, 2013. CMS Ex. 4. The
hearing officer noted the discrepancy between the posted hours of operation and those
stated in Petitioner’s reconsideration request, but restated the site inspector’s findings that
the “facility was not open during posted hours of operation.” CMS Ex. 4, at 2-3. The
hearing officer also noted that Petitioner “was not afforded the rights to [a CAP], but
rather a reconsideration request.” CMS Ex. 4, at 3. The hearing officer went on to cite
various regulatory provisions including the right of CMS to conduct on-site inspections
and the definition of “operational.” CMS Ex. 4, at 3. Ultimately, the hearing officer
concluded that “the facility location on record with the NSC was not open during posted
hours of operation therefore the site inspector was unable to verify compliance with the
supplier standards.” CMS Ex. 4, at 3-4. The hearing officer found that Petitioner had not
shown compliance with Supplier Standard 7. CMS Ex. 4, at 4.

On November 13, 2013, Petitioner filed a request for hearing (RFH) challenging the
revocation of its enrollment. Petitioner again explained its hours of operation, namely
that it is open from 8:00 a.m. to 5:00 p.m. on Monday through Thursday, but closed on
Fridays. RFH at 1. Petitioner acknowledged that its “signage needed to be improved to
clarify its hours of operation and we needed to ensure we have a failsafe mechanism for
individuals to make their presence known who wish to enter this facility.” RFH at 3.
Pursuant to my Acknowledgment and Pre-hearing Order (Pre-hrg. Order), CMS filed its
motion for summary judgment and supporting brief (CMS Br.) as well as six proposed
exhibits (CMS Exs. 1-6). Petitioner, acting through its owner,’ filed its “Petition for
Hearing and Judgment” and supporting brief (P. Br.), which opposed summary judgment,
as well as eight proposed exhibits (P. Exs. 1-8).? CMS subsequently filed a reply brief
(CMS Reply).

IL. Issues

This case presents the following issues:
1. Whether summary judgment is appropriate;

2. Whether NSC was authorized to revoke Petitioner’s Medicare enrollment and
billing privileges pursuant to 42 C.F.R. § 424.57; and

3. IfNSC was authorized to revoke Petitioner’s Medicare enrollment and billing
privileges, whether NSC’s basis for revocation supports a retroactive effective
date for that revocation.

' At one point during this proceeding (after Petitioner filed its hearing request, but prior
to Petitioner filing its pre-hearing exchange), Petitioner obtained counsel. The attorney
soon filed a Motion to Withdraw as counsel for Petitioner, citing the decision of
Petitioner’s owner to terminate the representation and to proceed without an attorney.

> Petitioner requested leave to file its pre-hearing exchange late due to severe winter
weather and icy conditions in its region on the date its exchange was due. CMS did not
oppose this request. I find Petitioner has demonstrated good cause for filing its pre-
hearing exchange late and I will consider it as though it had been timely submitted.
Ill. Evidentiary Rulings

Because Petitioner did not object to the admission of CMS Exs. 1-6, I admit them into the
record.

In its reply brief, CMS objected to admission of P. Exs. 1-8 as “new evidence” precluded
under 42 C.F.R. § 498.56(e) absent a showing of good cause. CMS Reply at 3-4. I note
that P. Ex. | and P. Ex. 3 are duplicative and need not be admitted for me to consider
them. P. Ex. | is NSC’s initial determination, previously offered as CMS Ex. 2. P. Ex. 3
is NSC’s October 25, 2013 reconsidered determination, previously offered as CMS Ex. 4.
Therefore, I do not admit P. Ex. 1 or P. Ex. 3.

P. Ex. 2 contains Petitioner’s RFH, which is already part of the record as the initial
pleading in this case, as well as several photographs that allegedly show Petitioner’s
current compliance with the standards in 42 C.F.R. § 424.57(c). See P. Ex. 2, at 4-7. The
photographs demonstrate that Petitioner followed-through with its proposed CAP, but
those photographs were apparently not submitted to NSC with Petitioner’s
reconsideration request. Petitioner has not offered any explanation as to why it did not
provide these photographs to the contractor, and has not demonstrated any reason, let
alone good cause, for admitting them at this level of review. See 42 C.F.R.
§§ 405.803(e), 498.56(e)(1); Pre-hrg. Order J 6. Moreover, these photographs are not
relevant to whether Petitioner was compliant with Supplier Standard 7 at the time of the
on-site inspections. Therefore, I do not admit P. Ex. 2. However, Petitioner’s RFH
remains part of the record that I consider in reaching this decision.

P. Ex. 4 contains the electronic “time records” of the employee that Petitioner alleges was
present at the time of the attempt on-site inspections. Petitioner acknowledges that it did
not submit these documents to NSC with its request for reconsideration. P. Br. at 3
(unnumbered). Petitioner explains that it has offered this new evidence for the first time
at this level of review “to provide clarification of our intent to meet the needs of patients,
including Medicare beneficiaries at this site location.” P. Br. at 3. Petitioner’s
explanation implies that the presence of the employee behind locked doors and closed
curtains demonstrated it was able to “meet the needs of patients.” However, Petitioner’s
explanation also suggests that these documents were submitted for the first time at this
level due to a strategic error in omitting them at the reconsideration level. Providing
additional documents for “clarification” of an issue addressed in the initial determination
is not good cause for the admission of those documents when they are presented for the
first time at this level of review. Petitioner’s offers no reason why these documents were
not or could not have been produced to the contractor with its reconsideration request.
Therefore, this evidence is precluded by regulation. I do not admit P. Ex. 4. See

42 CFR. §§ 405.803(e), 498.56(e)(1); Pre-hrg. Order § 6.

P. Exs. 5-8 are declarations of various staff members and other individuals directly
related to Petitioner’s operations. The regulatory provision that precludes the admission
of new evidence presented for the first time at this level of review (absent a showing of
good cause) limits that preclusion to “documentary evidence,” not testimonial evidence.
See 42 C.F.R. § 498.56(e)(1). Therefore, because P. Exs. 5-8 represent testimonial
evidence not subject to exclusion, I admit them into the record. See Arkady B. Stern,
M.D., DAB No. 2329 at 4 n.4 (2010) (“Testimonial evidence that is submitted in written
form in lieu of live in-person testimony is not ‘documentary evidence’ within the
meaning of 42 C.F.R. § 498.56(e)....”).?

IV. Decision on the Written Record

As mentioned above, Petitioner has offered the affidavits of several employees, one of
which, when viewed in a light most favorable to Petitioner, raises a dispute about whether
the NSC inspector actually attempted a site inspection on either day in question. See P.
Ex. 8. In that affidavit, the employee that was apparently inside Petitioner’s office on
both days the NSC inspector attempted to gain entry stated that she did “not recall seeing
anyone that I did not invite into the office those days.” P. Ex. 8, at 1. She asserts that “‘it
is very easy to observe events that are taking place outside because of the translucent
quality of the material from which [the window blinds] are made.” P. Ex. 8, at 2. Even
though Petitioner stated in its brief that it did not dispute that NSC attempted two on-site
inspections or that its door was locked on both days of the attempted inspections and it
was “not being answered by [Petitioner’s] staff member,” the contents of that declaration,
when viewed in a light most favorable to Petitioner, establish a dispute as to whether the
NSC inspector actually attempted to gain entry to Petitioner’s office or whether she
knocked upon finding Petitioner’s door locked. To set aside the declaration of
Petitioner’s employee and accept the assertions in Petitioner’s brief, I must evaluate and
weigh the evidence before me. Therefore, I cannot grant summary judgment in favor of
CMS.

CMS offered the direct written testimony of the NSC site inspector. CMS Ex. 6.
Petitioner offered the direct written testimony of several of its employees. P. Exs. 5-8.
Neither party, however, has requested an opportunity to cross-examine any witness. See
Pre-hrg. Order {9 (“Petitioner has the right to cross-examine any witness for whom CMS
offers written direct testimony. However, I will assume that Petitioner does not wish to
cross-examine any proposed CMS witness if Petitioner’s brief fails to affirmatively state
so.”); CMS Reply at 4 (“CMS does not wish to cross-examine any of Petitioner’s
witnesses.”). Therefore, an in-person hearing is not required, and I will issue this
decision based on the written record. See Pre-hrg. Order §§ 10-11; see also Vandalia
Park, DAB No. 1940 (2004); Pacific Regency Arvin, DAB No. 1823, at 7-8 (2002)

> Administrative decisions cited in this decision are accessible on the internet at:
http://www.hhs.gov/dab/decisions/index.html.
(holding that the use of written direct testimony for witnesses is permissible so long as
the opposing party has the opportunity to cross-examine those witnesses).

V. Discussion

To participate in the Medicare program and receive payment for services provided to
program beneficiaries, a prospective supplier must enroll by completing the applicable
enrollment application. See 42 C.F.R. §§ 424.57(b)(1), 424.510(a). CMS may perform
periodic revalidations and on-site reviews to verify the enrollment information submitted
to CMS, determine the supplier’s compliance with Medicare enrollment requirements,
and determine whether the supplier is operational. 42 C.F.R. §§ 424.510(d)(8);
424.515(c), 424.517(a). The Supplier Standards require a DMEPOS supplier to, among
other things, maintain a physical facility on an appropriate site. 42 C.F.R. § 424.57(c)(7).
CMS will revoke the enrollment of a DMEPOS supplier if it fails to comply with any of
the Supplier Standards stated in 42 C.F.R. § 424.57(c). See 42 C.F.R. § 424.57(d).

1. Petitioner was not accessible during posted hours of operation on Tuesday,
July 16, 2013, or on Tuesday, August 6, 2013.

A supplier of DMEPOS must maintain a “physical facility on an appropriate site,” which
includes maintaining “‘a permanent visible sign in plain view and post[ing] hours of
operation.” 42 C.F.R. § 424.57(c)(7)(i)(D). The supplier must also be “accessible and
staffed during posted hours of operation.” 42 C.F.R. § 424.57(c)(7)(i)(C). Although the
regulations do not define “accessible,” its use elsewhere in requirements for DMEPOS
suppliers indicates that the regulatory drafters intended “accessible” to mean open with
no restriction of entering. For example, the regulations require that a DMEPOS supplier
be “in a location that is accessible to the public... .” 42 C.F.R. § 424.57(c)(7)(i)(B)
(emphasis added). The regulation clarifies that the location “must not be in a gated
community or other restricted area where access is restricted.” Jd. The clarification in
section 424.57(c)(7)(i)(B) of what “accessible” means demonstrates that its regulatory
meaning, including in section 424.57(c)(7)(i)(C), is akin to being open with unrestricted
access, not merely being “accessible” to those individuals with disabilities. See 75 Fed.
Reg. 52,629, 52,636 (Aug. 27, 2010) (“[S]uppliers should be available during posted
business hours.” (emphasis added)).

Here, an NSC site inspector attempted to conduct an on-site inspection of Petitioner’s
location on Tuesday, July 16, 2013 at 2:08 p.m., but found Petitioner’s front door locked.
CMS Ex. 1, at 6. The NSC inspector photographed the exterior of Petitioner’s office,
including the front door, a large window next to the door with the window shades drawn,
and the posted hours of operation, which, for Tuesdays, read “1:00 PM — 5:00 PM.”
CMS Ex. 1, at 7. The photographs establish that the NSC inspector was at Petitioner’s
location. CMS Ex. 1, at 7. However, Petitioner’s employee testified that she did not see
anyone in the parking lot on the day of the first attempted inspection. P. Ex. 8, at 1. The
employee also suggests that she “may have been away for lunch” at the time of the
inspection, which undercuts any inference that the employee would have seen the
inspector in the parking lot at the time of the inspection. See P. Ex. 8, at 1. The site
inspector testified that she knocked on the door, but no one answered. CMS Ex. 6, at 1 §
5; see P. Br. at 2. The inspector also reported that she observed an “older couple”
attempting to enter Petitioner’s office, but they could not do so because the door was
locked. CMS Ex. 6, at 1 44. I accord less weight to the claim of Petitioner’s employee
than to the NSC’s documented efforts to conduct a site visit on that date.

The NSC inspector attempted to conduct a second on-site inspection of Petitioner’s
location on Tuesday, August 6, 2013 at 1:06 p.m., but again found Petitioner’s front door
locked. CMS Ex. 1, at 6. The NSC inspector photographed the exterior of Petitioner’s
office, including the front door, the large window next to the door with the window
shades drawn, and the posted hours of operation, which were unchanged from the first
attempted inspection. CMS Ex. 1, at 7. Again, the inspector knocked “loudly enough for
anyone inside to hear,” but no one answered. CMS Ex. 6, at 2410. Petitioner concedes
that the employee who should have been inside at the time of this inspection was not in
the office, but on her lunch break. P. Br. at 4.

The evidence establishes that Petitioner was not accessible on either Tuesday, July 16,
2013 at 2:08 p.m., or Tuesday, August 6, 2013 at 1:06 p.m., both of which were within
Petitioner’s posted hours of operation.’ Its door was locked and unanswered. There was
no way for the NSC inspector, or any other member of the general public, to gain access
to Petitioner’s facility at those times. Even accepting that on August 6, 2013, Petitioner’s
employee was on a lunch break during the attempted site visit, the office’s posted hours
of operation did not indicate that the office would be closed for that lunch break. See Ita
Udeobong, d/b/a Midland Care Med. Supply & Equip., DAB No. 2324, at 6-7 (2010). A
supplier may not close, even temporarily, during its posted hours of operation. Complete
Home Care Inc., DAB No. 2525, at 5 (2013). Petitioner, therefore, did not comply with
Supplier Standard 7 (42 C.F.R. § 424.57(c)(7)) on either occasion.

* As noted in NSC’s reconsidered determination, there is a discrepancy between
Petitioner’s hours of operation as stated in its initial enrollment application and those
actually posted on Petitioner’s door. In its application, Petitioner stated its hours of
operation were Monday through Thursday, from 8:00 a.m. to 5:00 p.m., but the posted
hours were only Tuesday from 1:00 p.m. to 5:00 p.m. and Thursdays from 8:00 a.m. to
5:00 p.m., with Monday and Wednesday being “By Appointment.” Compare CMS Ex. 5
with CMS Ex. 1, at 7. The applicable regulation refers to the “posted hours of operation.”
42 C.F.R. § 424.57(c)(7)(i)(C). In any event, this discrepancy is ultimately not material
to the outcome because both attempted site inspections were during Petitioner’s hours of
operations under either its reported hours in the enrollment application or its posted hours
of operation.
Petitioner claims that its employee was supposed to open the door for individuals with
appointments and other visitors, which notably did not happen during either attempted
inspection. P. Br. at 3. Petitioner’s employee states that locking the front door was
implemented as a safety measure because she had an earlier traumatic encounter with a
psychiatric patient. P. Ex. 8, at 1. However, even with the employee present to unlock
the door for individuals with appointments, Petitioner was still not “accessible” because
Petitioner’s locked-door approach represented a restricted form of access contrary to the
plain meaning of Supplier Standard 7. The fact that the NSC inspector twice attempted to
access Petitioner’s location but could not do so sufficiently demonstrates the restricted
access Petitioner’s approach caused. While it is understandable that Petitioner sought to
protect its employee, it needed to do so in a manner that ensured that it was accessible
during normal posted hours of operation. Because Petitioner did not provide that access,
it violated Supplier Standard 7 and subjected itself to revocation.

2. CMS was authorized to revoke Petitioner’s Medicare enrollment pursuant to
42 C.F.R. § 424.57(d) because Petitioner was not in compliance with
Supplier Standard 7 (42 C.F.R. § 424.57(c)(7)) at the time of two attempted
on-site inspections.

CMS will revoke the Medicare enrollment if a supplier of DMEPOS “is found not to
meet the standards in paragraphs (b) and (c) of this section.” 42 C.F.R. § 424.57(d).
Subsection (c) provides the Supplier Standards for DMEPOS suppliers. A supplier’s
“failure to comply with even one supplier standard is a sufficient basis for revoking a
supplier’s billing privileges.” /866/CPayday.com, LLC, DAB No. 2289, at 13 (2009).

Petitioner did not meet Supplier Standard 7 at the time of the two attempted on-site
inspections. Both inspections were done during Petitioner’s posted hours of operation.
Petitioner was not accessible because its doors were locked and no one answered when
the inspector knocked. Therefore, NSC, acting on behalf of CMS, was authorized to
revoke Petitioner’s Medicare enrollment pursuant to 42 C.F.R. § 424.57(d).

Petitioner submitted a CAP to NSC in response to the initial determination, but the NSC
hearing officer refused to consider it. CMS Ex. 4, at 3 (“[T]he supplier was not afforded
the rights to a corrective action plan (CAP), but rather a reconsideration request.”). In its
hearing request and brief, Petitioner again attempts to demonstrate that it is now
compliant with Supplier Standard 7. However, review of a revocation is limited to
whether Petitioner was compliant at the time of revocation. See Whalen Optical Lab,
Inc., DAB CR2196, at 6 (2010). It is beyond the scope of this review to make a
determination about Petitioner’s current compliance with the Supplier Standards, and
such compliance, even if true, cannot be a basis to reverse the revocation. Also, I have
no authority to review the decision not to accept a CAP. See DMS Imaging, Inc., DAB
No. 2313 (2010); see also 42 C.F.R. § 405.809.
3. The effective date of the revocation of Petitioner’s Medicare enrollment is
October 1, 2013, 15 days after NSC sent notice of the revocation, because
NSC’s reconsidered determination premised the revocation of Petitioner’s
enrollment only on a violation of Supplier Standard 7.

NSC’s initial determination stated that Petitioner was “not operational” and identified
42 C.F.R. § 424.535(a)(5)(ii) as one of the bases for revocation. Based on this finding,
NSC imposed retroactive revocation to August 6, 2013, the date NSC determined that
Petitioner was “not operational.” CMS Ex. 2. For a revocation action taken pursuant to
42 C.F.R. § 424.535(a)(5), the regulations provide that “the revocation is effective with
the date . . . that CMS or its contractor determined that the . . . supplier was no longer
operational.” 42 C.F.R. § 424.535(g).

However, in the reconsidered determination, NSC did not make any finding that
Petitioner was “not operational,” but instead relied solely on a violation of Supplier
Standard 7 as the basis to revoke Petitioner. CMS Ex. 4. When a revocation is based on
a failure to meet any of the Supplier Standards listed in 42 C.F.R. § 424.57(c), then the
regulation provides that “revocation is effective 15 days after the entity is sent notice of
the revocation.” 42 C.F.R. § 424.57(d).

In a provider or supplier enrollment case, it is the reconsidered determination upon which
administrative law judge review is predicated. See Hiva Vakil, M.D., DAB No. 2460, at
4-5 (2012) (holding that a supplier cannot obtain administrative law judge review of the
initial determination; the supplier may only obtain administrative law judge review when
there is a reconsidered determination); see also 42 C.F.R. §§ 498.5(1), 498.20(b)(1),
498.24(c), 498.25(b)(2). My review, therefore, is of NSC’s reconsidered determination
and the basis for revocation stated therein.

Here, NSC issued a reconsidered determination that significantly modified the initial
determination’s stated reasons for revocation. NSC no longer relied on Petitioner being
“not operational” or its noncompliance with 42 C.F.R. § 424.535(a)(5)(ii), but limited its
determination expressly to Petitioner’s violation of Supplier Standard 7. CMS Ex. 4.
NSC defined “operational” in the reconsidered determination, but made absolutely no _
analysis concerning Petitioner’s failure to meet that definition or a finding in that regard.”
Based on that determination, the effective date for Petitioner’s revocation is October 1,
2013, or 15 days from the issuance of the September 16, 2013 initial determination.
Petitioner is, from an enrollment perspective, eligible to submit claims for items or
services provided to Medicare beneficiaries from August 6, 2013 through September 30,
2013.

> Even at this level of review, CMS made one only passing citation in its brief to
42 C.F.R. § 424.535(a)(5)(ii), but never argued that Petitioner was “not operational.”
10

VI. Conclusion
For the reasons explained above, I affirm CMS’s determination to revoke Petitioner’s

Medicare billing privileges. The revocation is effective October 1, 2013.

/s/
Scott Anderson

Administrative Law Judge