Thompson Eye Clinic PA, DAB CR5517 (2020)

DECISION

The Centers for Medicare & Medicaid Services (CMS), through a CMS contractor, deactivated the Medicare billing privileges of Thompson Eye Clinic, PA (Petitioner) effective May 31, 2018.  The CMS contractor later reactivated Petitioner’s billing privileges effective June 21, 2018, creating a gap in billing privileges from May 31 to June 21, 2018.  On reconsideration, the CMS contractor revised the effective date of deactivation to June 6, 2018, reducing the gap in billing privileges.  Petitioner requested a hearing to dispute this gap in its ability to bill Medicare.

The narrow issue over which I have authority in this case is to decide the effective date of the revalidation of Petitioner’s Medicare billing privileges.  The effective date of revalidation is governed by the date the CMS contractor received an enrollment application that it processed to completion.  Based on the record, I conclude that the CMS contractor received Petitioner’s revalidation enrollment application on May 30, 2018, and ultimately processed that application to approval.  Therefore, the effective date of revalidation is May 30, 2018, several days before the CMS contractor deactivated Petitioner’s Medicare billing privileges.  Consequently, there is no gap in Petitioner’s billing privileges.

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I. Background and Procedural History

Petitioner was enrolled in the Medicare program as a supplier on January 1, 2007.  See CMS Exhibit (Ex.) 7 at 1.

A CMS contractor sent a notice to Petitioner on March 8, 2018, indicating that Petitioner needed to revalidate its enrollment either online or by submitting a CMS-855 enrollment application by May 31, 2018.  The notice warned that if the CMS contractor did not receive a response, the CMS contractor may deactivate Petitioner’s Medicare billing privileges, in which event Petitioner would “not be paid for the services rendered during the period of deactivation.  This will cause a gap in . . . reimbursement.”  CMS Ex. 2 at 1.

In response to this notice, Petitioner electronically filed through CMS’s Provider Enrollment, Chain, and Ownership System (PECOS) a revalidation enrollment application, which the CMS contractor received on April 14, 2018.  CMS Ex. 3 at 1.  In an April 24, 2018 notice, the CMS contractor acknowledged receipt of the revalidation enrollment application, but informed Petitioner that it needed to submit a CMS-588 form to authorize electronic transfer of funds and a newly-completed and dated certification statement page from a CMS-855B (enrollment application).  CMS Ex. 4 at 1.  The notice stated that a failure to provide this documentation “within 30 days will result in deactivation of [Petitioner’s] Medicare billing privileges.”  CMS Ex. 4 at 1.  In a May 24, 2018 notice, the CMS contractor stated that it had rejected Petitioner’s revalidation enrollment application because Petitioner did not timely submit the documentation requested by the CMS contractor.  CMS Ex. 5 at 1.  The rejection notice stated that Petitioner would have to submit a new Medicare enrollment application.  CMS Ex. 5 at 1.

On May 30, 2018, the CMS contractor received, through PECOS, another electronically filed revalidation enrollment application from Petitioner.  CMS Ex. 6 at 1; CMS Ex. 8 at 20.  The documentation from PECOS concerning this electronically filed revalidation application indicates that both the application and an electronic funds transfer authorization agreement were electronically signed on June 21, 2018.  CMS Ex. 6 at 1-2.

On July 20, 2018, the CMS contractor issued an initial determination approving Petitioner’s revalidation enrollment application, but stated that Petitioner “will have a gap in billing privileges from May 31, 2018 through June 20, 2018 for failing to timely submit [its] revalidation application.”  CMS Ex. 7 at 1.  Petitioner requested reconsideration.  CMS Ex. 8.  In its November 26, 2018 reconsidered determination, the CMS contractor modified the date of deactivation to June 6, 2018, and maintained that there was gap in Medicare billing privileges from that date through June 20, 2018.  CMS Ex. 1 at 4.  The reconsidered determination stated that the CMS contractor had received an electronically filed reactivation application on June 21, 2018.  CMS Ex. 1 at 3.

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Petitioner timely requested a hearing to dispute the gap in coverage.  On January 29, 2019, I issued an Acknowledgment and Prehearing Order (Prehearing Order), which established a schedule for prehearing exchanges.  In response, CMS filed a brief (CMS Br.) and eight exhibits (CMS Exs. 1-8).  Petitioner then filed a brief (P. Br.).     

II. Decision on the Written Record

I admit CMS Exs. 1-8 without objection.  Prehearing Order ¶ 7; Civil Remedies Division Procedures (CRDP) § 14(e).

The Prehearing Order advised the parties to submit written direct testimony for each witness and that an in-person hearing would only be held if a party requested to cross-examine a witness.  Prehearing Order ¶¶ 8-10; CRDP §§ 16(b), 19(b).  Neither party has offered any written direct testimony.  Therefore, I issue this decision based on the written record.  Prehearing Order ¶¶ 10-11; CRDP § 19(d).

III. Issue

Whether CMS had a legitimate basis to assign June 21, 2018, as the effective date for the reactivation of Petitioner’s Medicare billing privileges.

IV. Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R §§ 498.3(b)(15), 498.5(l)(2); see also 42 U.S.C. § 1395cc(j)(8).

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

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

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).  A “supplier” is “a physician or other practitioner, a facility, or other entity (other than a provider of services) that furnishes items or services” under the Medicare provisions of the Act.  42 U.S.C. § 1395x(d); see also 42 U.S.C. § 1395x(u).

A supplier must enroll in the Medicare program to receive payment for covered Medicare items or services.  42 C.F.R. § 424.505.  The term “Enroll/Enrollment means the process that Medicare uses to establish eligibility to submit claims for Medicare covered items and services.”  42 C.F.R. § 424.502.  A supplier seeking billing privileges under the Medicare program must “submit enrollment information on the applicable enrollment application.  Once the . . . supplier successfully completes the enrollment process . . .

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CMS enrolls the . . . supplier into the Medicare program.”  42 C.F.R. § 424.510(a).  On the enrollment application, the certification statement must be signed by an individual who has authority to legally and financially bind the supplier.  42 C.F.R. § 424.510(d)(3).  When CMS enrolls a supplier, CMS establishes an effective date for billing privileges and may permit limited retrospective billing.  42 C.F.R. §§ 424.510(b), 424.520, 424.521.

To maintain Medicare billing privileges, suppliers must revalidate their enrollment information at least every five years; however, CMS reserves the right to require revalidation at any time.  When CMS notifies suppliers that it is time to revalidate, the suppliers must submit a signed enrollment application, accurate information, and supporting documents within 60 calendar days of CMS’s notification.  42 C.F.R. § 424.515.

CMS may reject an enrollment application.  It may do so immediately if the supplier fails to provide the application fee or a request for waiver of that fee.  42 C.F.R. §§ 424.514(g)(1), 424.525(a)(3).  However, if a supplier fails to furnish complete information on the enrollment application or furnish all supporting documentation, CMS may only reject an enrollment application after the supplier has been given 30 days to provide the necessary information or documentation.  42 C.F.R. § 424.525(a)(1)-(2).       

CMS can also deactivate an enrolled supplier’s Medicare billing privileges if the enrollee fails to comply with revalidation requirements.  42 C.F.R. § 424.540(a)(3).  When CMS deactivates a supplier’s Medicare billing privileges, “[n]o payment may be made for otherwise Medicare covered items or services furnished to a Medicare beneficiary.”  42 C.F.R. § 424.555(b).  If CMS deactivates a supplier’s billing privileges due to an untimely response to a revalidation request, the enrolled supplier may apply for CMS to reactivate its Medicare billing privileges by completing a new enrollment application or, if deemed appropriate, recertifying its enrollment information that is on file.  42 C.F.R. § 424.540(b)(1).

1. Petitioner submitted a revalidation enrollment application electronically via PECOS, which CMS received on May 30, 2018, and CMS later approved that application after Petitioner electronically signed a certification statement and electronic funds transfer authorization agreement on June 21, 2018.

Following the rejection of Petitioner’s first revalidation enrollment application, Petitioner submitted a new revalidation enrollment application through PECOS, which the CMS contractor received on May 30, 2018.  CMS Ex. 6 at 1; CMS Ex. 8 at 20; CMS Ex. 1 at 2.  This filing was still one day before the original due date the CMS contractor set for Petitioner to submit a revalidation enrollment application.  CMS Ex. 2 at 1.  Petitioner later electronically signed an Authorized Official Certification Statement for Clinics and Group Practices, as well as an Electronic Funds Transfer Authorization Agreement, on

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June 21, 2018.  CMS Ex. 6 at 1-2.  The CMS contractor approved this revalidation enrollment application.  CMS Ex. 7.

CMS admits that this revalidation enrollment application (i.e., CMS Ex. 6) is “[t]he only application CMS received from [Petitioner] that was processed to completion . . . and was approved one month later.”; however, CMS asserts that the application was received on June 21, 2018.  CMS Br. at 7.  For its part, Petitioner says that it submitted the electronic funds transfer authorization on May 30, 2018, after discussing the matter with a CMS contractor employee, but does not mention the second revalidation enrollment application.  CMS Ex. 8 at 6; P. Br. at 9.  Despite these arguments in briefs, I am required to render a decision in this case “based on the evidence of record.”  42 C.F.R. § 498.74(a).  The evidence in the record shows that the CMS contractor received Petitioner’s second revalidation enrollment application on May 30, 2018, and ultimately processed that application to approval.  CMS Ex. 6 at 1; CMS Ex. 8 at 20; CMS Ex. 1 at 2.  Specifically, the subsection of the PECOS Application Data Report labeled “Submission History for the Application” identifies May 30, 2018, as the date the contractor received the revalidation enrollment application, as does the Logging & Tracking ID (“L&T ID”) subsection.  CMS Ex. 6 at 1.  Further, although CMS contends the application was received on June 21, 2018, neither CMS nor its contractor have, at any stage of appeal, offered any explanation as to why the Application Data Report instead identifies May 30, 2018, as the date of contractor receipt.

2. The effective date for Petitioner’s Medicare billing privileges is May 30, 2018.

In the present case, the CMS contractor, in both the initial and reconsidered determinations, indicated that the end of Petitioner’s gap in Medicare billing privileges (i.e., the effective date of reactivation) was June 21, 2018.  CMS Ex. 1 at 4; CMS Ex. 7 at 1.  In the reconsidered determination, the CMS contractor stated that it received Petitioner’s revalidation enrollment application on June 21, 2018.  CMS Ex. 1 at 3.  However, the record shows that the revalidation enrollment application was actually received on May 30, 2018, and that Petitioner electronically signed a certification statement and electronic funds transfer agreement on June 21, 2018.  CMS Ex. 6 at 1-2. 

I construe the CMS contractor’s finding, that the enrollment application was not received until June 21, 2018, to mean that it did not consider Petitioner’s revalidation enrollment application filed until June 21, 2018, when Petitioner electronically signed the certification statement and electronic funds transfer authorization.  However, the effective date of enrollment is the date of filing of the enrollment application so long as the CMS contractor continues to process that application to approval.  42 C.F.R. §§ 424.520(d) (the effective date for billing privileges for physician organizations is the date of filing of an enrollment application that is subsequently approved); 424.525(a)(2) (CMS must give suppliers 30 days to provide missing information from their enrollment applications

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before CMS can reject those applications). This is true even if the supplier does not submit the certification statement with the enrollment application, but timely submits it in response to a notice that there is missing information on the enrollment application. See CheunJu Chen, M.D., DAB CR5465 at 4-8 (2019) (providing detailed discussion on this issue, which I find persuasive and adopt). As the Departmental Appeals Board (DAB) interpreted the regulations regarding a missing signature on an enrollment application:

Prior to the effective date of the amended section 424.520(d), neither the regulations nor their preamble directly addressed this question.  As explained below, we conclude that, at the very least, a missing signature fell within the scope of section 424.525.  

Section 424.525 specifically provides that an applicant will have at least 30 days to provide any missing information or supporting documentation before a contractor may reject an application.  As noted above, the preamble indicated that an application would not be rejected if the applicant was actively communicating with contractor. . . .  Thus, the regulations in effect at the time of the November 2008 application created a process in which a contractor was able to subsequently approve an application even if it was not signed and fully complete when it was first submitted.  Neither regulation [section 424.525 or section 424.530] treated a missing signature as different from other information or documentation to be handled through that process.

Tri-Valley Family Med., Inc. DAB No. 2358 at 8 (2010).  In Tri-Valley, the supplier filed the enrollment application just before the publication of a final rule modifying certain enrollment regulations.  In the preamble to that final rule, CMS responded to a public comment indicating that the date of filing of an enrollment application is the date of receipt of a signed enrollment application.  73 Fed. Reg. 69,726, 69,769 (Nov. 19, 2008).  Because the hearing level decision used that preamble language in its analysis, the DAB explained, in regard to its discussion quoted at length above, the “amended regulations do not alter the process established by sections 424.525 and 424.530.  Thus, even after the amended regulation became effective, an application need not be fully complete at the time of submission to be processed to approval.”  Tri-Valley, DAB No. 2358 at 8 n.6.1 This decision simply acknowledges that it is the regulatory text itself that has the force of

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law, see Chrysler Corp. v. Brown, 441 U.S. 281, 295 (1979), and not statements made in response to public comments.

In the present case, Petitioner submitted the signed certification statement and electronic funds authorization agreement within 30 days of filing the May 30, 2018 revalidation enrollment application.  Further, the CMS contractor eventually approved that application.  Therefore, the effective date of revalidation is May 30, 2018.                         

Because the effective date of revalidation is May 30, 2018, several days before the contractor deactivated Petitioner’s Medicare billing privileges, there is no gap in Petitioner’s billing privileges.  For completeness, I address Petitioner’s arguments related to its deactivation, and clarify that I do not have the authority to review CMS’s decision to reject Petitioner’s first revalidation enrollment application and deactivate Petitioner’s Medicare billing privileges.  CMS’s rejection of an enrollment application is not subject to administrative review.  42 C.F.R. § 424.525(d).  I also do not have the authority to review CMS’s deactivation of Petitioner’s Medicare billing privileges because deactivation is not an “initial determination” subject to appeal, and deactivation decisions have a separate review process involving the submission of a rebuttal to CMS.  See 42 C.F.R. §§ 424.545(b), 498.3(b); see also Willie Goffney, Jr., M.D., DAB No. 2763 at 4-5 (2017), aff’d, Goffney v. Azar, No. CV 17-8032 MRW (C.D. Cal. Sept. 25, 2019).  As stated above, I only have authority to decide whether the date of revalidation/reactivation of Petitioner’s billing privileges is correct based on the facts in this case and the law.  Arkansas Health Group, DAB No. 2929 at 12 (2019) (“Where, as here, the contractor deactivated Petitioner’s billing privileges, the issue for us (and the ALJ) is the effective date of reactivation.”).  However, given that the correct effective date for revalidation predates the alleged date of deactivation (CMS did not submit the deactivation notice as an exhibit), there should no longer be any gap in Petitioner’s Medicare billing privileges and the deactivation is a moot issue.

VI. Conclusion

The effective date for Petitioner’s revalidation of enrollment is May 30, 2018.

1. Although the DAB later questioned certain aspects of Tri-Valley, this did not affect the portions of it relevant to this case. See Chen, DAB CR5465 at 7-8.
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