Arizona Mobile Imaging, LLC, DAB CR5744 (2020)

DECISION

In this case, we revisit yet again an issue that the Departmental Appeals Board seemingly resolved some years ago:  is the effective date for Medicare enrollment the date the applicant files an unsigned application that is subsequently completed and approved, or is it the date the applicant submits the required signatures?

Petitioner, Arizona Mobile Imaging, LLC, is an independent diagnostic testing facility, located in Mesa, Arizona, that participates in the Medicare program as a supplier of services.  The facility's Medicare billing privileges were deactivated, and it subsequently reenrolled in the program.  The Centers for Medicare & Medicaid Services (CMS) granted the application, with an effective date of December 26, 2017, resulting in a coverage gap from November 27 through December 25, 2017.

The evidence, however, establishes that Petitioner filed its application to reactivate its Medicare enrollment on September 29, 2017.  Although the facility did not submit all the necessary signatures until December 26, 2017, the Medicare contractor did not, in fact, reject that application, but, ultimately, processed it to completion.  September 29, 2017, is therefore the correct effective date for its reactivated enrollment.

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Background

In a notice letter dated March 23, 2018, the Medicare contractor, Noridian Healthcare Solutions, advised Petitioner that it approved the facility's revalidated Medicare enrollment application, although with a gap in billing privileges from November 27 through December 25, 2017.  CMS Ex. 7.  Petitioner requested reconsideration.  CMS Ex. 8 at 7-8.

In a reconsidered determination, dated August 10, 2018, the contractor affirmed the initial determination.  CMS Ex. 9.  Petitioner appealed.

CMS moves for summary judgment.  However, because neither party proposes any witnesses, an in-person hearing would serve no purpose.  See Acknowledgment and Prehearing Order at 3, 5, 6 (¶¶ 4(c)(iv), 8, 10) (October 18, 2018).  I may therefore decide this case based on the written record, without considering whether the standards for summary judgment are satisfied.

CMS submits its motion and brief (CMS Br.) with ten exhibits (CMS Exs. 1-10).  Petitioner submits a response (P. Br.) with two exhibits (P. Exs. 1-2).1  In the absence of any objections, I admit into evidence CMS Exs. 1-10 and P. Exs. 1-2.  See Acknowledgment and Prehearing Order at 5 (¶ 7).

Discussion

On September 29, 2017, Petitioner filed its subsequently‑approved application to reactivate its billing privileges, and September 29, 2017 is therefore the effective date of its Medicare enrollment.  42 C.F.R. § 424.520(d).2

Enrollment.  Petitioner participates in the Medicare program as a "supplier" of services.  Social Security Act § 1861(d); 42 C.F.R. § 498.2.  To receive Medicare payments for the services furnished to program beneficiaries, a prospective supplier must enroll in the program.  Act § 1834(j)(1)(A); 42 C.F.R. § 424.505.  "Enrollment" is the process by which CMS and its contractors:  1) identify the prospective supplier; 2) validate the supplier's eligibility to provide items or services to Medicare beneficiaries; 3) identify and

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confirm a supplier's owners and practice location; and 4) grant the supplier Medicare billing privileges. 42 C.F.R. § 424.502.

To enroll, a prospective supplier must complete and submit an enrollment application.  42 C.F.R. §§ 424.510(d)(1), 424.515(a).  An enrollment application is either a CMS‑approved paper application or an electronic process approved by the Office of Management and Budget.  42 C.F.R. § 424.502.3   When CMS determines that a prospective supplier meets the applicable enrollment requirements, it grants Medicare billing privileges, which means that the supplier can submit claims and receive payments from Medicare for covered services provided to program beneficiaries.  For an independent diagnostic testing facility, the effective date for billing privileges is the later of the date of filing a subsequently-approved enrollment application or the date the facility first started furnishing services at its new practice location.  42 C.F.R. § 410.33(i); see 42 C.F.R. § 424.520(b), (d).

Revalidation and deactivation.  To maintain its billing privileges, a supplier must, at least every five years, resubmit and recertify the accuracy of its enrollment information, a process referred to as "revalidation."  42 C.F.R. § 424.515.  In addition to periodic revalidations, CMS may, at other times and for its own reasons, ask a supplier to recertify the accuracy of its enrollment information.  42 C.F.R. § 424.515(d)-(e).  Within 60 days of receiving CMS's notice to recertify, the supplier must submit an appropriate enrollment application with complete and accurate information and supporting documentation.  42 C.F.R. § 424.515(a)(2).

If, within 90 days from receipt of CMS's notice, the supplier does not furnish complete and accurate information and all supporting documentation or does not resubmit and certify the accuracy of its enrollment information, CMS may deactivate its billing privileges, and no Medicare payments will be made.  42 C.F.R. §§ 424.540(a)(3), 424.555(b).  To reactivate its billing privileges, the supplier must complete and submit a new enrollment application.  42 C.F.R. § 424.540(b)(1).  Following deactivation, section 424.520 governs the effective date of reenrollment.  See Howard M. Sokoloff, DPM, MS, Inc., DAB No. 2972 (2019); Urology Grp. of NJ, LLC, DAB No. 2860 (2018); Willie Goffney, Jr., M.D., DAB No. 2763 at 7 (2017), aff'd sub nom. Goffney v. Azar, No. CV 17-8032 MRW (C.D. Cal. Sept. 25, 2019).4

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Petitioner's deactivation and reenrollment.  Here, in a notice letter, dated July 5, 2017, the contractor directed Petitioner to revalidate its Medicare enrollment by updating or confirming the information in its record.  The letter directed the facility to revalidate, no later than September 30, 2017, by updating its information through PECOS or submitting an updated paper application (Form CMS-855).  The letter warned that, if the facility did not respond, the contractor could deactivate its enrollment, which could cause a gap in reimbursement.  CMS Ex. 1.

On July 6, 2017, Petitioner filed an application, via PECOS.  CMS Ex. 2.  It isn't clear whether Petitioner was responding to the July 5 notice or, coincidentally, was updating its enrollment information.  On its face, it indicates that the supplier is "adding, deleting, or changing general Medicare enrollment information," which suggests that this document may not be relevant to the question before me.  CMS Ex. 2 at 1.

In any event, on September 29, 2017, Petitioner filed an application "revalidating its Medicare enrollment information."  CMS Ex. 6 at 1.  The contractor determined that the application was incomplete, and, in an email request sent October 27, 2017, asked Petitioner to submit additional documents before November 26, 2017.  CMS Ex. 3.  The request warned that the contractor might reject the application if the facility did not furnish complete information within 30 days of the initial request.  CMS Ex. 3 at 1.

Petitioner responded on November 22, 2017, by submitting additional information.  CMS Ex. 4.  Dissatisfied with the facility's response, on November 27, 2017, the contractor advised Petitioner that the facility's billing privileges were stopped, effective November 27, 2017, because it had not revalidated its enrollment record or had not responded to the contractor's request for more information.  The notice instructed Petitioner to revalidate its enrollment record through PECOS or to submit an updated paper enrollment application, CMS-855.  CMS Ex. 5.

Although the contractor deactivated Petitioner's enrollment, it did not reject the facility's September 29 enrollment application.  As the document itself shows, corrections were "received" on December 22, 2017, and the document was signed electronically on December 26, 2017.  CMS Ex. 6 at 1.  Thus, pursuant to sections 410.33(i) and 424.520(d), the date Petitioner filed its subsequently-approved enrollment application – September 29, 2017 – is the correct effective date of Petitioner's enrollment.  Sokoloff, DAB No. 2972; Urology Grp., DAB No. 2860; Goffney, DAB No. 2763 at 7, aff'd sub nom. Goffney v. Azar, No. CV 17-8032 MRW; see Karthik Ramaswamy, DAB No. 2563 at 5 (2014) (en banc), aff'd, Ramaswamy v. Burwell, 83 F. Supp. 3d 846, 854 (E.D. Mo. 2015); Tri-Valley Family Medicine, Inc., DAB No. 2358 (2010).

The regulations allow CMS to reject an incomplete enrollment application if the prospective supplier "fails to furnish complete enrollment information on the . . . supplier enrollment application within 30 calendar days from the date of the contractor request for

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the missing information."  42 C.F.R. § 424.525(a).  However, so long as the contractor continues to process that application to a decision – as the contractor did here – the effective date will relate back to the date of its filing.  Ramaswamy, DAB No. 2563 at 5; Tri-Valley,DAB No. 2358.

Under 42 C.F.R. § 424.525(a)(1), applicants are "given an opportunity to cure any deficiencies or supply any missing documentation before an application will be rejected."  Tri-Valley, DAB No. 2358 at 5.  CMS may deny an enrollment application if the supplier does not comply with Medicare enrollment requirements, "which include the requirement for a signature on the certification statement," and does not submit a corrective action plan.  Tri-Valley, DAB No. 2358 at 5.  Thus, where, as here, an application lacks necessary signatures, the regulations give the Medicare contractor two options:  1) treat the missing signature like any other missing information and request it within the regulatory deadline; or 2) treat the failure as noncompliance and deny the application.  Tri-Valley, DAB No. 2358 at 6.

In the Board's view, the regulatory changes, effective January 1, 2009, that added section 424.520(d) did not change the regulations governing the contractor's options for responding to a deficient enrollment application.  The preamble to section 424.520 says that the "date of filing" is the date that a Medicare contractor receives a signed application that it is able to process to approval.  73 Fed. Reg. 69,726, 69,769 (2008).  As the Board points out, "This was the first indication that lack of a signature on an application might affect the timing of when a physician could get paid for covered services."  Tri-Valley, DAB No. 2358 at 6.  The Board concluded that nothing in the regulations or the language of the preamble indicates that the effective date should be determined by the submission of a complete application:

Instead, the regulation refers to an application that is "subsequently approved" by the contractor.  It does not require that the application be "approvable" as initially submitted.  The regulatory process, which was unchanged, included provision for the contractor to request information or supporting documentation if an application was not complete.  Thus, if the information or documentation was timely submitted and all other requirements were met, the application could be approved, and a provider or supplier was not required to submit an additional application.  The preamble language . . . recognizes this by referring to an application that the contractor is able to process to approval.  Indeed, the preamble indicated agreement with the comment that the filing date should not be the date when the application is "deemed complete and ready for approval."

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Tri-Valley, DAB No. 2358 at 7, citing 73 Fed. Reg. at 69,769 (emphasis in original).

Judge Anderson recently noted that section 1871 of the Act supports the Board's reluctance to give legal effect to sub-regulatory guidance that directly and negatively affects a supplier's effective date for enrollment.  Martina Sheftic, M.D., DAB CR5563 at 6 (2020).  Section 1871 provides:

No rule, requirement, or other statement of policy (other than a national coverage determination) that establishes or changes a substantive legal standard governing the scope of benefits, the payment for services, or the eligibility of individuals, entities, or organizations to furnish or receive services or benefits under this title shall take effect unless it is promulgated by the Secretary by regulation . . . .

Act § 1871(a)(2); see Azar v. Allina Health Services, et al., 139 S. Ct. 1804, 1810-14 (2019) (rejecting agency efforts to change reimbursement rules through sub-regulatory guidance).  CMS's policy of returning (or closing) enrollment applications must be viewed as a "substantive legal standard" that affects payment for services and the supplier's eligibility to furnish services and is, at best, suspect.5

For reasons unrelated to this conclusion, Tri-Valley represented a bit of a departure.  The case involved an earlier application that, in the Board's view, "could have been processed to approval" had the contractor "properly requested" missing information.  Tri-Valley, DAB No. 2358 at 1.  Even though that earlier application was rejected (a determination that is not reviewable), and the Board was reviewing the effective date of a subsequent application, the review panel in Tri-Valley accepted, as the effective date, the filing date of the original application.  Since then, the Board has soundly rejected supplier requests for review of prior applications under the guise of challenging the effective dates of their subsequently-approved applications.  Ramaswamy, DAB No. 2563 at 5.

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We will not determine de novo that an application could have been processed to approval in the face of the contractor's actual determination to deny the application because it was not approvable.  To do so would improperly use [the] scope of review to revisit a legally binding and administratively final determination.

Ramaswamy, DAB No. 2563 at 9 (emphasis in original).

The Board in Ramaswamy nevertheless agreed with the Tri-Valley conclusion that "while the contractor may require and request additional information to complete the application, the effective date will relate back to the date of filing so long as that application continues to be processed to a decision on whether to approve it."  Ramaswamy, DAB No. 2563 at 5 (emphases added and in original).

Conclusion

Because Petitioner filed its subsequently-approved reenrollment application on September 29, 2017, its Medicare reenrollment is effective as of that date.

1. Petitioner's submission consists of a written argument with two attachments, labeled Exhibits 1 and 2.  The submission is somewhat confusing because Petitioner also labels the entire submission, including the written argument, as "P. Ex. 1."  I do not consider the written argument an exhibit and disregard its label.  I consider each of the documents attached to it a separate exhibit.
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2. I make this one finding of fact/conclusion of law.
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3. CMS's electronic process is referred to as PECOS (Provider Enrollment, Chain, and Ownership System).
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4. The cases cited involve the types of suppliers governed by 42 C.F.R. § 424.520(d) (physicians, non-physician practitioners, practice organizations, ambulance services).  The provisions governing independent diagnostic testing facilities are identical.  42 C.F.R. §§ 410.33(i), 424.520(b).
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5. Moreover, although the regulation has not changed, CMS has changed its instructions to contractors, going back and forth on how they should treat PECOS applications that are missing signatures.  Compare MPIM ¶ 15.17A (Rev. 582, Issued:  03-04-15; Effective:  05-28-15) ("The date of filing for [PECOS] applications is the date that the contractor received an electronic version of the enrollment application and a signed certification statement submitted via paper or electronically.") with MPIM ¶ 15.17A (Rev. 865, Issued:  02-21-19; Effective:  03-12-19) ("The date of filing for Form CMS‑855 applications is the date on which the contractor received the application, regardless of whether the application was submitted via paper or Internet-based PECOS.").
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