Elect Home Health Care, Inc., DAB CR5554 (2020)

DECISION

The Centers for Medicare & Medicaid Services (CMS), through its Medicare administrative contractor, Palmetto GBA (Palmetto), revoked the Medicare enrollment and billing privileges of Petitioner, Elect Home Health Care, Inc., pursuant to 42 C.F.R. § 424.535(a)(1) and (a)(5) because Petitioner was not operational at its practice address on file and because Petitioner did not timely report to Medicare that it had changed its business name to GoodLooking Healthcare.  Because I find that Petitioner was not operational at its practice address on file, I affirm the revocation of Petitioner’s Medicare enrollment and billing privileges.  I decline to address whether the record also supports revocation based on Petitioner’s failure to report its change in business name.

I. Background and Procedural History

Petitioner is a home health agency in Texas that has been operating since 2006.  CMS Exhibit (Ex.) 11 at 2.  In March 2017, Petitioner submitted a Form CMS-855A to notify CMS that it was changing its practice location address to 701 S. Beckham Avenue, Tyler, Texas 75701 (Beckham Avenue address). CMS Ex. 2; see also CMS Ex. 5. Palmetto

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notified Petitioner by letter dated April 28, 2017, that its practice location address was successfully changed. CMS Ex. 6 at 1.

In an initial determination dated September 12, 2017, Petitioner received notice that its Medicare billing privileges were revoked pursuant to 42 C.F.R. § 424.535(a)(1) and (a)(5), effective July 13, 2017, and that it would be subject to a two-year reenrollment bar.  CMS Ex. 8.  The initial determination explained that “[o]n site reviews conducted on July 13, 2017 at 701 S. Beckham Ave, Tyler, Texas, revealed no evidence of business activity and investigators were unable to enter the facility.”  CMS Ex. 8 at 1. The determination further stated that Petitioner also “did not notify [CMS] of this change in practice location.”  Id.

Petitioner requested reconsideration and, on February 14, 2018, CMS’s Provider Enrollment & Oversight Group1 issued an unfavorable reconsidered determination.  CMS Ex. 10.  CMS upheld the revocation under 42 C.F.R. § 424.535(a)(5), finding that Petitioner was not operational at its practice address on file.  CMS Ex. 10 at 4, 6.  CMS also upheld the revocation under 42 C.F.R. § 424.535(a)(1), but revised its reasons for doing so.  CMS acknowledged that Petitioner had, in fact, timely notified CMS of the change in practice location, but found that Petitioner had failed to timely notify CMS of its change in business name.  CMS Ex. 10 at 5-6.  CMS found that Petitioner “legally assumed the name GoodLooking Healthcare with the State of Texas on February 16, 2017, and failed to report this change to Medicare within 90 days of its occurrence.”  Id. at 6.

Petitioner timely requested a hearing before an administrative law judge.  The case was assigned to me and I issued an Acknowledgment and Pre-Hearing Order dated April 26, 2018 (Pre-Hearing Order).  The Pre-Hearing Order directed each party to file a pre‑hearing exchange consisting of a brief and any supporting documents.  Pre‑Hearing Order ¶ 4.  CMS filed a brief (CMS Br.), including a motion for summary judgment, and 11 proposed exhibits (CMS Exs. 1-11).  Petitioner filed a cross‑motion for summary judgment (P. Br.) and one exhibit (P. Ex. 1).  Neither party objected to the exhibits offered by the opposing party.  Therefore, in the absence of objection, I admit CMS Exs. 1-11 and P. Ex. 1 into the record.  Pre-Hearing Order ¶ 7.

The Pre-Hearing Order explained that a hearing would only be necessary if a party requested to cross-examine a witness proposed by the opposing party.  Pre-Hearing Order ¶ 10.  Although the parties each proposed one witness, neither party submitted the written direct testimony of its witness, contrary to the instructions in my Pre‑Hearing Order.  Pre‑Hearing Order ¶ 8 (requiring the parties to submit as a proposed exhibit, the complete, written direct testimony of any proposed witness.).  In any event, neither party

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requested to cross-examine the opposing party’s witness. Pre-Hearing Order ¶ 9 (explaining that, if the party does not affirmatively state so, I will assume a party does not intend to cross-examine the opposing party’s witnesses).  With no written direct testimony filed or requests to cross-examine, there is no need for a hearing and I issue this decision based upon the written record, without regard to whether the standards for summary judgment are met.

II. Issue

Whether CMS had a basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(1) and (a)(5).

III. Jurisdiction

I have jurisdiction to decide this case.  42 C.F.R. §§ 498.3(b)(17), 498.5(l)(2); see also Social Security Act (Act) § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).

IV. Discussion

A. Statutory and Regulatory Background

As a home health agency, Petitioner is a “provider” for purposes of the Medicare program.  See 42 U.S.C. § 1395x(u); 42 C.F.R. §§ 400.202 (definition of provider), 409.41.  In order to participate in the Medicare program as a provider, an entity must meet certain criteria to enroll and receive billing privileges.  42 C.F.R. §§ 424.505, 424.510.  CMS may revoke the enrollment and billing privileges of a provider for any reason stated in 42 C.F.R. § 424.535.  When CMS revokes a provider’s Medicare billing privileges, CMS establishes a reenrollment bar for a period ranging from one to three years.2 42 C.F.R. § 424.535(c).  Generally, a revocation becomes effective 30 days after CMS mails the initial determination revoking Medicare billing privileges, but if CMS finds a provider to be non-operational, as it did here, the revocation is effective from the date that CMS determines that the provider was not operational.  42 C.F.R. § 424.535(g).

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B. Findings of Fact, Conclusions of Law, and Analysis.3

1. A CMS-contracted inspector attempted to conduct a site visit on July 13, 2017, at Petitioner’s practice location on file with CMS (701 S. Beckham Avenue, Tyler, Texas 75701), but the inspector found the building vacant and locked.

On July 13, 2017, at approximately 12:45 p.m., Inspector Jaime McSwain conducted an on-site visit at the Beckham Avenue address to determine Petitioner’s compliance with Medicare participation requirements.  CMS Ex. 7 at 1-2.  Inspector McSwain completed a Site Verification Survey Form on which she reported that the building at the location was “[v]acant and locked.”  Id.  Inspector McSwain also reported that no employees or staff were present and that there were no signs of customer activity.  Id.  Attached to the Survey Form were photographs of the building with the window blinds closed and the parking lot empty.  Id. at 2-6. 

2. CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5)(i) because it was not operational at the practice location on file with CMS.

CMS may revoke a currently enrolled provider’s Medicare billing privileges when, upon on-site review or other reliable evidence, CMS determines that the provider is no longer operational to furnish Medicare-covered items or services.  42 C.F.R. § 424.535(a)(5)(i).4 A provider is “operational” when it:

[H]as a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims, and is properly staffed, equipped, and stocked (as applicable based on the type of facility or organization, provider or supplier specialty, or the services or items being rendered) to furnish these items or services.

42 C.F.R. § 424.502.  As an appellate panel of the Departmental Appeals Board (DAB) has explained, to determine whether CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5)(i),

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I must answer two questions:  1) What was the practice location address on file with the Medicare Administrative Contractor on the date of the on-site visit? and 2) Was Petitioner operational at that address on the date of the on-site visit?  Care Pro Home Health, Inc., DAB No. 2723 at 15 (2016).

Here, Petitioner’s address on file at the time of the July 13, 2017 on-site visit was the Beckham Avenue address.  The Site Verification Survey Form documenting Inspector McSwain’s visit to that address, described above and not disputed by Petitioner (see P. Br. at 2), supports the finding that Petitioner was not operational and not “open to the public for the purpose of providing health care related services” on the date of the on-site visit.  Therefore, I conclude that CMS had a legal basis to revoke Petitioner’s enrollment and billing privileges under 42 C.F.R. § 424.535(a)(5)(i).

3. Petitioner’s arguments that it was “operational” at a location or locations other than the Beckham Avenue address do not provide a basis to overturn the revocation of its Medicare enrollment and billing privileges.

Petitioner raises several arguments, all of which amount to variations on the theme that the regulations permit a home health agency to be deemed “operational” under circumstances that would not support such a finding for other types of providers or suppliers.  These arguments are without merit.

Petitioner first argues that, based on a plain reading of the regulatory language, it is the provider—and not the provider’s physical practice location—that needs to be “open to the public” for the purpose of providing health care related services.  P. Br. at 2‑4.  It is Petitioner’s position that, because its staff delivers home health care services in patients’ homes and not in a single physical practice location, it was “open to the public” and “operational” for purposes of the regulation, because staff members were available by telephone or by home visit.  Id.  As further support for its position that the “operational” requirement applies differently to different types of providers, Petitioner points out that section 424.57(c)(7) specifically requires practice locations of suppliers of Durable Medical Equipment, Prosthetics, Orthotics & Supplies (DMEPOS) to be “accessible and staffed during posted hours of operation,” but that there is no similar regulation for home health providers.  P. Br. at 5-6. 

However, appellate panels of the DAB have consistently rejected Petitioner’s reading of the regulatory language.  See, e.g., OC Housecalls, Inc., DAB No. 2893 at 4 (2018) (to satisfy the definition at 42 C.F.R. § 424.502, a provider or supplier must be “operational” at its qualified physical practice location on file with CMS or CMS’s contractor at the time of the on-site visit).  The panel in OC Housecalls emphasized that there is no exception to this rule, even where the provider is a home health agency or can otherwise provide care at a location other than its practice location on file.  Id. at 10; see also Care

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Pro Home Health Inc., DAB No. 2723 at 6; Viora Home Health, Inc., DAB No. 2690 at 12‑13 (2016); Vamet Consulting & Medical Servs., DAB No. 2778 at 8-9 (2017).

As both appellate panels and administrative law judges of the DAB have recognized, the policy reasons for requiring that a provider be “operational” and open to the public at a practice location on file apply equally to home health providers as to all other Medicare providers and suppliers.  As one administrative law judge has explained,

The regulatory language is explicit and does not suggest that there are exceptions to the rule that a provider or a supplier has an office that is accessible to the public. . . .  The fact that a home health agency delivers care at locations other than its office premises does not mean that there wouldn’t be times when either beneficiaries or members of their families would have need to talk to [the provider’s] office staff in person.  They might wish to visit in person to ask questions about what home health care consists of and their eligibility for such care.  They might do so to seek instructions about care to be given to relatives or to ask questions about that care.

Guardian Care Servs., Inc., DAB CR4195 at 4 (2015) (cited with approval in Vamet Consulting & Medical Servs., DAB No. 2778 at 9 (adding that “members of the public might [also] want to visit multiple home health agencies [at their office locations] to decide which one to select for home health services”)).  Accordingly, the fact that Petitioner may have had staff available to answer telephone inquiries or to provide home health visits is not a substitute for the requirement that Petitioner be operational and open to the public at its practice location on file.

Similarly, it is of no consequence that, hypothetically, the site inspector may have been able to gain access to Petitioner’s practice location had she contacted Petitioner by telephone.  See, e.g., P. Br. at 2.  In Vamet Consulting & Medical Servs., the provider, also a home health provider in Texas, argued that the site inspector could have called its phone number, which was posted on its door, after finding the office locked.  The appellate panel in Vamet rejected the provider’s attempt to “put the onus on the site inspector to exhaust all possible means of contacting the provider when faced with a locked facility.”  DAB No. 2778 at 7.  The panel elaborated,

As we indicated above, the site visits provided for in the regulations are intended to be unannounced.  Were providers permitted to evade this requirement for Medicare enrollment and participation by imposing upon site inspectors the burden to announce themselves prior to conducting site visits, the purpose of CMS’s rulemaking would be completely frustrated.  Therefore, the posting of Vamet’s telephone number does not constitute

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compliance with the requirement that the provider be “open to the public for the purpose of providing health care related services.”

Id. (internal citations omitted).  For the reasons explained in Vamet, I find that the site inspector was not required to call the number listed on Petitioner’s door during the on-site visit.  I further find that the posting of Petitioner’s telephone number does not constitute compliance with the requirement that a provider be “open to the public for the purpose of providing health care related services.”

Finally, Petitioner contends that requiring immediate access to a surveyor is inconsistent with how Texas state surveyors have understood the “operational” requirement in the past decade.  P. Br. at 5.  Petitioner explains that Texas state surveyors follow a “two-hour rule” for home health agencies:  “If a surveyor arrives during regular business hours and the agency is closed, an administrator, alternative administrator, or a designated agency representative must provide the surveyor entry to the agency within two hours after the surveyor’s arrival at the agency.”  Id. (citing 40 Tex. Admin. Code § 97.523 (2017)) (current version at 26 Tex. Admin. Code § 558.523 (2019)).  Petitioner adds that CMS has “issued a de facto endorsement” of the state’s protocol by “utilizing [the state agency] as its site survey contractor for more than a decade” and that, contrary to the protocol, the surveyor here did not attempt to contact its staff by telephone during the visit.  P. Br. at 5; see also P. Br. at 2 (noting that the “agency’s toll-free hotline was operational to receive calls from patients, physicians, and the community”).

I find these contentions unpersuasive, as well.  The Texas Administrative Code protocol cited by Petitioner is irrelevant to my review in this case.  While CMS may contract with the state agency to perform surveys of home health agencies to assess their compliance with Medicare health and safety conditions of participation pursuant to 42 C.F.R. Part 484, the site inspection at issue in the present case was conducted under separate regulatory authority for a different purpose.  It is apparent that CMS has contracted with a different entity to conduct inspections for compliance with Medicare enrollment requirements.  As such, there was no “de facto endorsement” of the state protocol for purposes of assessing whether a home health agency in Texas meets the federal definition of “operational” for purposes of continued Medicare enrollment.  For all these reasons, CMS did not err in concluding that Petitioner was not operational at its practice location on file at the time of the site visit.

4. I need not decide whether CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(1).

Because I have concluded that CMS was authorized to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5)(i), I need not decide whether CMS also had a basis to revoke Petitioner’s enrollment and billing

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privileges pursuant to 42 C.F.R. § 424.535(a)(1).  See, e.g., Daniel Wiltz, M.D. and Family Healthcare Clinic, APMC, DAB No. 2864 at 12 (2018) (if one basis for sanction is established, CMS’s action would be sustained “regardless of the existence of any additional bases for revocation”).  For this reason, I do not decide whether CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(1) based on Petitioner’s alleged failure to report a change to its business name.

I do not decide this issue because the record as presently constituted does not permit me to determine whether Petitioner failed to report its name change as required.  Even if Petitioner changed its “doing business as” name to “GoodLooking Healthcare” with the State of Texas on February 16, 2017, Petitioner submitted a Form CMS-855A to update its enrollment information in March 2017, which was within the 90-day regulatory window for reporting.  CMS Ex. 2 at 17.  It further appears that Petitioner properly indicated that “GoodLooking Healthcare” was its “doing business as” name in section 2B of the form, under “Identification Information.”  CMS Ex. 2 at 3.

CMS maintains that Petitioner failed to report its business name change because it failed to complete section 2F of the form.  CMS Br. at 9-10; CMS Ex. 10 at 5.  But the form instructions indicate that section 2F must be completed when there is a change in ownership (“Change of Ownership (CHOW) Information”).  CMS Ex. 2 at 1, 5.  There is nothing in the record to indicate that Petitioner underwent a change of ownership.  Absent a change in ownership, it does not appear that Petitioner would be required to complete section 2F of the form.  Because the record is not fully developed on this point, I am unable to determine with certainty whether or not Petitioner experienced a change in ownership.  I need not resolve this issue, however, because, as I stated, there is a basis for revoking Petitioner’s enrollment and billing privileges under section 424.535(a)(5)(i), for failing to be operational.

V. Conclusion

For the forgoing reasons, I affirm CMS’s determination to revoke Petitioner’s Medicare enrollment and billing privileges.  I deny the parties’ cross-motions for summary judgment as moot.

1. The Provider Enrollment & Oversight Group is a component of CMS itself, not an administrative contractor.
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2. Effective November 4, 2019, CMS increased the maximum reenrollment bar from 3 to 10 years, with exceptions. 84 Fed. Reg. 47,794, 47,826-28 (Sept. 10, 2019).
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3. My findings of fact and conclusions of law are set forth in italics and bold font.
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4. The reconsidered determination in this case cites 42 C.F.R. § 424.535(a)(5) as the basis for revoking Petitioner’s Medicare enrollment and billing privileges, and does not specify either subsection (i) or (ii). CMS Ex. 10 at 1, 6. However, because the reconsidered determination concluded that Petitioner was “nonoperational,” I infer that the revocation was pursuant to 42 C.F.R. § 424.535(a)(5)(i).
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