Afily8 Government Solutions, LLC, DAB CR5701 (2020)

DECISION

The Centers for Medicare & Medicaid Services (CMS), acting through its Medicare administrative contractor, First Coast Service Options, Inc. (First Coast), denied Afily8 Government Solutions, LLC’s (Petitioner’s) Medicare enrollment application pursuant to 42 C.F.R. § 424.530(a)(1) and 42 C.F.R. § 424.530(a)(5).  First Coast and CMS denied Petitioner’s enrollment application because Petitioner did not submit a Florida state health care clinic license (HCCL) with its application and because a site visit to the address listed on Petitioner’s application revealed that the location was not open for business.  Petitioner challenges the enrollment denial.  For the reasons set forth below, I affirm that CMS had a legal basis to deny Petitioner’s Medicare enrollment application.

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I.  Background and Procedural History

Petitioner is a portable x-ray supplier operating in Florida.  See CMS Exhibit (Ex.) 1 at 10.1   In August 2018, Petitioner applied for enrollment in the Medicare program by completing Form CMS‑855B, the Medicare Enrollment Application for Clinics/Group Practices and Certain Other Suppliers (enrollment application).  Id. at 1, 34, 54.  The enrollment application listed Jean Guillaume (Mr. Guillaume) as Petitioner’s owner, authorized official, and managing employee.  Id. at 27.

By letter dated December 6, 2019, First Coast denied Petitioner’s enrollment application pursuant to 42 C.F.R. § 424.530(a)(1) because Petitioner did not submit a HCCL with its application and Petitioner’s owner, Mr. Guillaume, did not qualify for an exemption to the licensing requirement.  CMS Ex. 3 at 1.  First Coast also denied Petitioner’s enrollment application pursuant to § 424.530(a)(5) because Petitioner’s location was not open for business at the time of an on-site inspection.  Id.  The notice further stated that if Petitioner could correct the deficiencies and establish its eligibility to participate in the Medicare program, it could submit a corrective action plan (CAP) within 30 days after the date of the letter.  Id. at 1-2.  Finally, the notice informed Petitioner of its right to request reconsideration.  Id. at 2.  In a letter dated December 27, 2019, Mr. Guillaume submitted a CAP and requested reconsideration.  CMS Ex. 4.  By letter dated March 17, 2020, a hearing officer in CMS’s Provider Enrollment and Oversight Group2 issued a reconsidered determination finding the enrollment denial proper pursuant to 42 C.F.R. § 424.530(a)(1) and § 424.530(a)(5).  CMS Ex. 5.

Petitioner timely filed a hearing request (RFH).  See Docket Entry # 1 in the Departmental Appeals Board (DAB) Electronic Filing System (E-File).  The case was assigned to me and, on March 24, 2020, my office acknowledged Petitioner’s hearing request and provided a copy of my Standing Prehearing Order (Prehearing Order).  Pursuant to the Prehearing Order, CMS submitted a Motion for Summary Judgment (CMS Br.) and five exhibits (CMS Exs. 1‑5).  Petitioner filed a brief opposing summary judgment (P. Br.), along with two unlabeled documents that it described as Exhibits A and B.  Additionally, within Petitioner’s brief, Petitioner included a number of additional documents it described as “exhibits.”  Because Petitioner’s submission did not comply with the form or content requirements of my Prehearing Order, I issued an Order to Show

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Cause (OSC) directing Petitioner to file an exhibit list and to refile all its exhibits marked in accordance with ¶ 5 of my Prehearing Order.

In response to the OSC, Petitioner filed an Index of Exhibits and 12 proposed exhibits (P. Exs. 1-12).  Petitioner subsequently filed a motion to supplement the record with additional exhibits.  Docket Entry # 12 in DAB E-File.  CMS did not file a response to Petitioner’s motion to supplement.  However, based on my examination of the proposed exhibits Petitioner filed and the descriptions of the supplementary exhibits Petitioner asked for leave to submit, I concluded that all of Petitioner’s proposed and supplementary exhibits were new.  I issued a Second OSC directing Petitioner to show cause why I should not exclude Petitioner’s proposed exhibits and deny Petitioner’s motion to supplement pursuant to 42 C.F.R. § 498.56(e), because the documents were new evidence and Petitioner had not shown good cause for failing to offer the proposed exhibits at the reconsideration level of review.  I also ordered Petitioner to explain why the supplementary exhibits it wished to file were relevant to the issues before me.

Petitioner responded to the Second OSC and stated that it had “not found a legal basis or good cause to support the need to admit new evidence” and that it “reverses the attempt to expand this complaint with new evidence.”  P. Response to Second OSC at 2 (Docket Entry # 14 in DAB E-File).  I issued a Ruling and Order excluding P. Ex. 1, P. Exs. 3-9, P. Ex. 10, pages 2-5, and P. Ex. 12 on the grounds that Petitioner had not submitted these exhibits to CMS at the reconsideration level of review and had not shown good cause for failing to offer the exhibits with the request for reconsideration.  I found good cause for the submission of P. Ex. 2 and admitted P. Ex. 2 into the record.  I also admitted P. Ex. 10, page 1 into the record because Petitioner had submitted a copy of the photograph at P. Ex. 10, page 1 with its request for reconsideration.  See CMS Ex. 4 at 5.  Finally, I admitted P. Ex. 11 into the record because, in its request for reconsideration, Petitioner referred to a video on its website, and P. Ex. 11 likely refers to the same video as mentioned in the request for reconsideration.  See CMS Ex. 4 at 4.

Petitioner did not object to the exhibits offered by CMS.  Therefore, in the absence of objection, I admit CMS Exs. 1‑5 into the record.

My Prehearing Order advised the parties that they must submit written direct testimony for any proposed witness and that an in-person hearing would only be necessary if the opposing party requested an opportunity to cross-examine a witness.  Prehearing Order ¶¶ 8-10; Civil Remedies Division Procedures (CRDP) §§ 16(b), 19(b); Pac. 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).  Neither party submitted the written direct testimony of any witness.  Consequently, an in-person hearing is not required, and I issue this decision

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based on the written record, without regard to whether the standards for summary judgment are met.  Prehearing Order ¶¶ 8-11; CRDP § 19(d).  I deny CMS’s motion for summary judgment as moot.

II.  Issue

The issue in this case is whether CMS had a legal basis to deny Petitioner’s Medicare enrollment application.

III.  Jurisdiction

I have jurisdiction to hear and 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

The Act authorizes the Secretary of Health and Human Services (Secretary) to establish regulations for enrolling providers and suppliers in the Medicare program.  Act § 1866(j)(1)(A) (42 U.S.C. § 1395cc(j)(1)(A)).  Petitioner is a prospective supplier of health care services for purposes of the Medicare program.  See Act § 1861(d) (42 U.S.C. § 1395x(d)); 42 C.F.R. §§ 400.202 (definition of supplier), 410.10(e), (f).  In order to enroll in the Medicare program and receive billing privileges, suppliers must meet certain criteria.  42 C.F.R §§ 424.505, 424.510, 424.516.  As applicable here, section 424.516(a)(2) provides that a supplier must be in “[c]ompliance with Federal and State licensure, certification, and regulatory requirements, as required, based on the type of services or supplies the . . . supplier . . . will furnish and bill Medicare.”

Pursuant to 42 C.F.R. § 424.530(a)(1), CMS may deny a prospective supplier’s enrollment application if CMS determines that the supplier fails to comply with any enrollment requirements.  Specifically, the regulation authorizes denial of enrollment under the following circumstances:

The provider or supplier is determined to not be in compliance with the enrollment requirements in this subpart P or in the enrollment application applicable for its provider or supplier type, and has not submitted a plan of corrective action as outlined in part 488 of this chapter.

42 C.F.R. § 424.530(a)(1).

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CMS is also authorized to deny a supplier’s application for Medicare enrollment and billing privileges if, upon on-site review, CMS determines that the supplier is not operational to provide Medicare-covered items or services.  42 C.F.R. § 424.530(a)(5)(i). 

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

1.  CMS had a legal basis to deny Petitioner’s Medicare enrollment application under 42 C.F.R. § 424.530(a)(1) because Petitioner did not have a state license and Petitioner’s owner did not qualify for an exemption to the requirement that Petitioner be licensed.

CMS may deny a supplier’s enrollment in the Medicare program if the “supplier is determined to not be in compliance with the enrollment requirements in this subpart P or in the enrollment application applicable for its provider or supplier type, and has not submitted a plan of corrective action as outlined in part 488 of this chapter.”  42 C.F.R. § 424.530(a)(1).  To qualify for Medicare enrollment, suppliers must provide documentation concerning “all applicable Federal and State licenses” and “[d]ocumentation associated with regulatory and statutory requirements necessary to establish a provider’s or supplier’s eligibility to furnish Medicare covered items or services to beneficiaries in the Medicare program.”  42 C.F.R. § 424.510(d)(2)(iii).  Suppliers must be in compliance with Title XVIII of the Act and applicable Medicare regulations as well as federal and state licensure, certification, and regulatory requirements, based on the type of services or supplies the supplier will furnish and bill Medicare.  42 C.F.R. § 424.516(a)(1)-(2). 

Florida law requires that:

Each mobile clinic must obtain a separate health care clinic license and must provide to the agency, at least quarterly, its projected street location to enable the agency to locate and inspect such clinic.  A portable equipment provider must obtain a health care clinic license for a single administrative office and is not required to submit quarterly projected street locations.

Fla. Stat. § 400.991(b) (2012).

Petitioner acknowledges that it does not have a HCCL.  RFH at 2, 4, 6-7; CMS Ex. 4 at 1.  Petitioner states that it “was not provided a HCCL” by the State of Florida Agency for Health Care Administration (AHCA).  RFH at 2.  Petitioner appealed the AHCA decision

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and the appeal is still pending, as far as the record before me reveals.  Id.; see P. Ex. 2.  For these reasons, Petitioner asserts that it does not have a HCCL because the AHCA has not yet approved its application for a HCCL, through no fault of Petitioner.  RFH at 2.  Petitioner argues that whether and when the AHCA approves its HCCL application is beyond its control; therefore Petitioner contends that it has complied with all Medicare enrollment requirements.  RFH at 4-6.

Petitioner’s argument is without merit.  When completing its Medicare enrollment application, Petitioner indicated that a state license was “Not Applicable.”  CMS Ex. 1 at 11.  Petitioner also stated in its CAP that it did not have a HCCL.  CMS Ex. 4 at 1.  However, to qualify for Medicare enrollment as a supplier of portable x-ray services, Petitioner must comply with federal and state licensure, certification, and regulatory requirements.  42 C.F.R. § 424.516(a)(2).  Under Florida law, Petitioner, a mobile clinic, is required to obtain a HCCL for its administrative office.  Fla. Stat. § 400.991(b) (2012).  Further, Petitioner is not eligible for an exemption from Florida state licensure requirements for health care clinics because Petitioner’s owner, Mr. Guillaume, is not one of the enumerated health care professionals that is exempt under the statute.3   CMS Ex. 5 at 3; see Fla. Stat. § 400.9905(4)(g) (2018).  Because Petitioner did not have the required state license and was not exempt from the state licensure requirement, it could not and did not submit documentation of its HCCL with its Medicare enrollment application as required by 42 C.F.R. § 424.510(d)(2)(iii).  For these reasons, CMS had a sufficient basis to deny Petitioner’s Medicare enrollment application for noncompliance with enrollment requirements pursuant to 42 C.F.R. § 424.530(a)(1).

To the extent Petitioner argues that denial of its enrollment application is inequitable because Petitioner is not at fault for the Florida AHCA’s delay in approving its HCCL application (RFH at 4-7), I may not consider this argument.  I have no authority to grant Petitioner equitable relief.  US Ultrasound, DAB No. 2302 at 8 (2010).

2.  I need not decide whether CMS had a legal basis to deny Petitioner’s enrollment application under 42 C.F.R. § 424.530(a)(5).

Having concluded that CMS had a legal basis to deny Petitioner’s enrollment application because it did not have a HCCL, I need not decide whether CMS also had a basis to deny Petitioner’s enrollment application under 42 C.F.R. § 424.530(a)(5), based on Petitioner’s

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failure to be operational to furnish Medicare-covered items or services.  It is unnecessary for me to do so because CMS’s decision to deny enrollment pursuant to 42 C.F.R. § 424.530(a)(1) is supported by the record.  See, e.g., Daniel Wiltz & Family Healthcare Clinic, APMC, DAB No. 2864 at 12 (2018) (if one basis for CMS’s action is established, the action would be sustained “regardless of the existence of any additional bases”).  Thus, even if I were to conclude that CMS did not have a basis to deny Petitioner’s enrollment application based on 42 C.F.R. § 424.530(a)(5) because Petitioner was operational on the date of the on-site review, this would not result in a favorable outcome for Petitioner.  For these reasons, I do not decide whether CMS had a legal basis to deny Petitioner’s enrollment application based on a failure to be operational in accordance with 42 C.F.R. § 424.530(a)(5).

3.  I lack authority to grant Petitioner’s additional requests for relief.

Petitioner also requests injunctive relief, declaratory judgment, and a refund of its enrollment application fees.  RFH at 17-18.  The only matter properly before me is whether CMS had a lawful basis to deny Petitioner’s enrollment application.  42 C.F.R. § 498.3(b)(17).  I therefore lack jurisdiction over Petitioner’s additional requests for relief.

V.  Conclusion

For the foregoing reasons, I affirm CMS’s determination to deny Petitioner’s application for Medicare enrollment and billing privileges.  I deny CMS’s motion for summary judgment as moot.

1. For unknown reasons, the PDF page numbers of the document in the record do not match the page numbers marked on CMS Exhibit 1.  I refer to the page numbers as marked on the exhibit.
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2. The Provider Enrollment and Oversight Group is a component of CMS itself, not an administrative contractor.
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3. Petitioner’s owner, Mr. Guillaume, is a licensed radiology technician.  RFH at 5; CMS Ex. 5 at 3.  Radiology technicians are licensed pursuant to Fla. Stat. § 468.304.  A mobile clinic owner licensed under chapter 468 is not eligible for the exception to the clinic license requirement defined at Fla. Stat. § 400.9905(4)(g).  Doctors of Medicine or Osteopathy, Dentists, Podiatrists, and Chiropractors are examples of practitioners who may own a clinic without obtaining a separate license.  Fla. Stat. § 400.9905(4)(g).
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