Wound Pros Nevada, DAB CR6250 (2023)

DECISION

The Centers for Medicare & Medicaid Services (CMS), through an administrative contractor, National Supplier Clearinghouse (NSC), revoked the enrollment of Wound Pros Nevada (Petitioner) in the Medicare program as a supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).  NSC concluded, based on two attempted site inspections of Petitioner’s offices, that Petitioner was not operational during the hours of operation identified by Petitioner on its Medicare enrollment application. 

Petitioner asserts that it was operational during the attempted site visits.  Petitioner argues that Petitioner primarily provides physician services to patients at their homes and only supplies limited DMEPOS products (primarily bandages) to the patients it treats.  Therefore, Petitioner posits that its office does not need to be open or staffed at any specific time or day. 

As explained below, I affirm the revocation of Petitioner’s Medicare enrollment as a DMEPOS supplier because an NSC inspector confirmed that Petitioner’s qualified practice location (i.e., the physical office location Petitioner identified on a Medicare enrollment application) was not open to the public on days and at times when Petitioner was to be open to the public (as indicated on a Medicare enrollment application).  As a result, Petitioner’s Medicare enrollment was subject to revocation because Petitioner was not considered “operational” under the regulations. 

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I.      Background

Petitioner was enrolled in the Medicare program as a DMEPOS supplier.  In a March 1, 2022 notice of initial determination, NSC revoked Petitioner’s Medicare enrollment as of November 18, 2021.  CMS Ex. 4 at 1.  NSC identified the following reason for the revocation:

42 CFR § 424.535(a)(5) –  On Site Review.  Upon on-site review or other reliable evidence, CMS determines that the provider or supplier is either of the following:
(i) No longer operational to furnish Medicare-covered items or services.
(ii) Otherwise fails to satisfy any Medicare enrollment requirement.
Wound Pros Nevada is no longer operation to furnish Medicare covered items or services.  Site visits conducted on November 18, 2021 and November 19, 2021 at 1700 E Desert Inn Rd., Suite 103, Las Vegas, Nevada 89169-3206, revealed a locked facility with no evidence of business activity during the hours of operation disclosed to the NSC.  Thus, you are considered to be in violation of all supplier standards defined in 42 CFR 424.57(c) and pursuant to 424.535(g), the revocation is effective the date CMS determined that you were no longer operational.

Based upon a review of the facts, we have determined that your facility is not operational to furnish Medicare covered items and services.  Thus, you are considered to be in violation of 42 CFR §§ 424.535(a)(5), all supplier standards defined in 42 CFR 424.57(c) and pursuant to 424.535(g), the revocation is effective the date CMS determined that you were no longer operational.

CMS Ex. 4 at 1­.  NSC barred Petitioner from reenrollment in the Medicare program for a period of three years, effective 30 days from the postmark date on the letter.  CMS Ex. 2 at 1. 

Petitioner requested that NSC reconsider the revocation, stating in part: 

[Petitioner] is a wound care practice that specializes in treating advanced wound care to patients in their homes, hospices, or skilled nursing facilities.  We do not see patients at the office 1700 E. Desert Inn Road, Suite 103, Las Vegas,

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NV  89169-3206, which is used for administrative purposes and storage of DME supplies only.

Furthermore, we are also a physician-owned Medicare supplier.  This means we only supply DME items (wound care/surgical dressings) to our own patients in our practice as a part of their treatment plan.  These items are usually dispensed at the bedside or shipped to the patient’s homes.

We have two full-time clinicians that see up to 15 patients a day and we are growing rapidly.

The days the inspector came to our office we happened to have all our staff out in the field seeing patients, and due to COVID restrictions, we had a limited front desk staff.

CMS Ex. 3 at 1, 6; see CMS Ex. 2 at 2.  Petitioner also submitted various documents in support of its reconsideration request.  CMS Ex. 2 at 3-20; CMS Ex. 3 at 6-19. 

On March 25, 2022, an NSC hearing officer issued an unfavorable reconsidered determination upholding the revocation of Petitioner’s Medicare enrollment.  CMS Ex. 1.  After summarizing the facts and Petitioner’s reconsideration request, the NSC hearing officer decided the following: 

The NSC concludes that there is no error made in the determination that resulted in a revocation.  Wound Pros Nevada has not provided a verifiable explanation for their noncompliance with 42 C.F.R. § 424.535(a)(5) as the site visit attempts on November 18, 2021, and November 19, 2021, were unsuccessful and the NSC was not able to verify compliance with the supplier standards and therefore determined that the facility was not operational during attempted visits to furnish Medicare covered items and services.  Furthermore, Medicare beneficiaries should be able to access . . . the physical location.  After carefully reviewing the submitted documentation, the NSC cannot grant Wound Pros Nevada access to the Medicare Trust Fund by way of a Medicare number. 

CMS Ex. 1 at 4.

On May 27, 2022, Petitioner requested a hearing by an administrative law judge to dispute the reconsidered determination.  On June 1, 2022, the Civil Remedies Division

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acknowledged receipt of the hearing request and issued my Standing Prehearing Order (SPO), which provides the parties with procedures and dates for the filing of prehearing exchanges.

On July 7, 2022, CMS filed a prehearing brief and motion for summary judgment along with seven proposed exhibits.  On August 23, 2022, Petitioner filed a prehearing brief and opposition to summary judgment (P. Br.) and a witness list.  Petitioner did not submit any proposed exhibits.  On September 7, 2023, CMS filed a reply brief (CMS Reply) and an objection to Petitioner’s proposed witness. 

II.      Admission of Evidence

I admit all of CMS’s proposed exhibits, without objection.  See SPO ¶ 10; CRD Procedures § 14(e). 

III.      Decision on the Record

Petitioner submitted a witness list in which it proposed that one witness testify in this case.  Petitioner did not submit the written direct testimony for this witness.  CMS objected to the witness because Petitioner did not comply with the SPO’s requirement that the parties submit, as proposed exhibits with their prehearing exchange, the written direct testimony for all witnesses.  Petitioner did not respond to that objection. 

I sustain CMS’s objection to Petitioner’s witness.  I directed the parties to submit, with their prehearing exchanges, the written direct testimony for all witnesses that the parties wanted to present in this case.  SPO ¶ 7(d)(iv); CRD Procedures § 16(b).  Specifically, the written direct testimony had to be either in the form of an affidavit or signed under penalty of perjury, and the parties had to submit written direct testimony as proposed exhibits.  SPO ¶ 11; CRD Procedures §§ 16(b), 19(b).  Petitioner did not submit written direct testimony for its witness, who, according to the witness list, is “a principle of Petitioner Wound Pros.”  Further, although Petitioner has had months to respond to CMS’s objection or seek to submit the written direct testimony late, Petitioner has filed nothing. 

CMS submitted a report by an NSC site inspector, which the site inspector signed under penalty of perjury.  CMS Ex. 6 at 4.  Under the SPO, a party who wants to cross-examine a witness must affirmatively request to cross-examine that witness.  SPO ¶ 12; CRD Procedures § 19(b); Vandalia Park, DAB No. 1940 (2004); 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).  However, Petitioner did not request to cross-examine the site inspector. 

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There is no need to hold an in-person hearing in this case.  I stated in the SPO that I would only hold a hearing if a party files admissible written direct testimony and the opposing party asks to cross-examine the witness.  SPO ¶ 13; CRD Procedures § 19(b).  Petitioner did not file written direct testimony and did not request to cross-examine CMS’s site inspector.  Therefore, I decide this case based on the written record.  SPO ¶ 14; CRD Procedures § 19(d). 

IV.      Issue

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

V.      Jurisdiction

I have jurisdiction to adjudicate this case.  42 C.F.R. §§ 498.3(b)(17), 498.5(l)(2); see also 42 U.S.C. § 1395cc(j)(8); 42 C.F.R. §§ 424.545(a), 498.1(g). 

VI.      Findings of Fact

1. Petitioner’s Medicare Provider Transaction Access Number (PTAN) became effective on March 1, 2020.  CMS Ex. 2 at 17; CMS Ex. 3 at 7. 
2. On November 5, 2021, a Medicare contractor received an electronically filed Medicare enrollment application from Petitioner.  Petitioner indicated the following reason for submitting the enrollment application:  “Enrolled DMEPOS Supplier is Updating their Enrollment by Adding, Deleting and/or Charging Information.”  CMS Ex. 5 at 1. 
3. The November 5, 2021 enrollment application indicated that Petitioner’s “Primary Supplier Type” was “Physician – General Practice” and that it was “exempt from DMEPOS accreditation based on supplier type.”  CMS Ex. 5 at 2. 
4. The November 5, 2021 enrollment application stated that, effective February 24, 2020, Petitioner’s physical address was 1700 E Desert Road, Suite 103, Las Vegas, NV 89169-3206.  CMS Ex. 5 at 2. 

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5. The November 5, 2021 enrollment application stated that the “DME [Durable Medical Equipment] Hours of Operation were 9:00 a.m. to 5:00 p.m. Monday through Friday.”  The application also stated:  “Total Hours Available to the Public Weekly:  40.”  CMS Ex. 5 at 2. 
6. In a November 12, 2021 notice, a Medicare contractor issued a notice acknowledging that Petitioner’s “practice address has been updated” to “1700 E DESERT INN RD STE 103 LAS VEGAS NEVADA 89169-3206.”  CMS Ex. 2 at 17; CMS Ex. 3 at 7. 
7. On November 18, 2021, at 2:15 p.m., and November 19, 2021, at 10:00 a.m., a site inspector with NSC arrived at 1700 E Desert Inn Road, Suite 103, Las Vegas, Nevada 89169, to conduct an unannounced site inspection of Petitioner’s practice location.  CMS Ex. 6 at 1.  For both visits, the inspector observed that Petitioner’s office was in a storefront location in an “Office Suite-Strip Mall.”  CMS Ex. 6 at 1.  The inspector also noted that Petitioner was not open for business, did not appear to have staff present, did not have a sign indicating Petitioner’s name, had no business hours posted, and did not appear to be operational (as defined in the regulations).  CMS Ex. 6 at 2. 
8. Regarding the November 18, 2021 site visit, the inspector’s report stated the following:  “There was temporary signage with “Wound Pros Suite 103” posted.  However, door was locked and a UPS attempted delivery sticker was on the door dated November 18^th.  I knocked on the door. No one answered.”  CMS Ex. 6 at 4.  The inspector took photographs outside Petitioner’s practice location.  CMS Ex. 6 at 5-7. 
9. Regarding the November 19, 2021 site visit, the inspector’s report stated the following:  “The door was locked.  I knocked on the door.  No one answered.”  There were two attempted delivery stickers from UPS – one dated 11/18 and one dated 11/19.  It appears the facility is in the process of opening but [i]s not yet operational.  There is not any permanent business signage or hours of operation.”  CMS Ex. 6 at 4.  The inspector took a photograph of the front of Petitioner’s practice location.  CMS Ex. 6 at 5. 

VII.      Conclusions of Law

1. Based on two attempted site inspections, Petitioner’s practice location was not “operational,” as that term is defined in 42 C.F.R. § 424.502.
2. CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment because it was not operational to furnish Medicare-covered items or services under 42 C.F.R. § 424.535(a)(5)(i).

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VIII.      Analysis

The Secretary of Health and Human Services (Secretary) has the authority to establish enrollment requirements for providers and suppliers.  42 U.S.C. § 1395cc(j).  In order to enroll and obtain Medicare billing privileges, a provider or supplier must file an enrollment application that discloses a variety of information to CMS, including its “practice location.”  42 C.F.R. §§ 424.505, 424.510. 

After the provider or supplier submits the enrollment application, CMS may conduct a site visit of the provider or supplier’s practice location to verify compliance with Medicare enrollment requirements.  42 C.F.R. § 424.510(d)(8).  One purpose of a site visit is to determine whether a provider or supplier is “operational.”  42 C.F.R. § 424.510(d)(8)(i)-(ii).  A failure to be operational is a basis to deny an enrollment application.  42 C.F.R. § 424.530(a)(5)(i).  The term “operational” means: 

the provider or supplier has 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 (definition of Operational).  In order “[t]o be ‘operational’ in accordance with the definition in section 424.502, a provider [or supplier], among other things, must have a ‘qualified physical practice location’ that is ‘open to the public for the purpose of providing health care related services.’”  Viora Home Health, Inc., DAB No. 2690 at 7 (2016).  A qualified physical practice location is the supplier’s address that is on file with CMS at the time of a site visit.  Foot Specialists of Northridge, DAB No. 2773 at 8-10 (2017). 

Once CMS enrolls a provider or supplier in the Medicare program, the provider or supplier must update information that it originally provided to CMS when it enrolled.  42 C.F.R. §§ 424.515, 424.516.  CMS has the authority to perform onsite inspections of a provider or supplier to verify the accuracy of the information submitted to CMS and to determine compliance with enrollment requirements.  42 C.F.R. § 424.517.  CMS’s contractors conduct site visits without notice to the providers or suppliers.  76 Fed. Reg. 5862, 5870 (Feb. 2, 2011) (“[T]the primary purpose of an unannounced and unscheduled site visit is to ensure that a provider or supplier is operational at the practice location found on the Medicare enrollment application.”). 

In addition to the general authority to establish provider and supplier enrollment requirements, the Secretary has the authority to establish supplier standards for DMEPOS

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suppliers.  42 U.S.C. § 1395m(j)(1)(B)(ii).  The Secretary must include in the supplier standards a requirement that all DMEPOS suppliers “maintain a physical facility on an appropriate site.”  42 U.S.C. § 1395m(j)(1)(B)(ii)(II).  The Secretary promulgated DMEPOS supplier standards at 42 C.F.R. § 424.57(c).  The supplier standards state that a DMEPOS supplier must be “open to the public a minimum of 30 hours per week,” post its hours of operation, and be “accessible and staffed during posted hours of operation.”  42 C.F.R. §§ 424.57(c)(7)(i), (c)(30)(i).  However, a physician who furnishes “items to his or her own patient(s) as part of his or her professional services” is exempt from the requirement of being open to the public for a minimum of 30 hours per week.  42 C.F.R. § 424.57(c)(30)(ii)(A). 

A supplier is subject to revocation of its Medicare billing privileges if it violates the DMEPOS supplier standards or the regulatory requirements applicable to all suppliers.  42 C.F.R. §§ 424.57(e), 424.535(a).  Relevant to the present case, CMS may revoke a supplier’s enrollment if CMS determines, based on an on-site review or other reliable evidence, that a provider or supplier is “no longer operational to furnish Medicare-covered items or services.”  42 C.F.R. § 424.535(a)(5)(i). 

In the present case, it is undisputed that the site inspector twice attempted to conduct a site visit of the practice location that Petitioner provided on its enrollment application form.  However, the inspector was unable to complete either site visit because Petitioner’s practice location was locked, and no one was present to answer the door.  Further, the site inspector attempted these visits on days and at times when, based on the information in the enrollment application, Petitioner would be open to the public. 

These facts are sufficient for me to conclude that Petitioner was not open to the public, and, therefore, not operational.  In making this conclusion, I am mindful “that the proper inquiry is to assess the supplier’s operational status at the time of the onsite review because the intent of the applicable regulations ‘is that a supplier must maintain, and be able to demonstrate, continued compliance with the requirements for receiving Medicare billing privileges.’”  Viora, DAB No. 2690 at 7 n.7 (quoting A to Z DME, LLC, DAB No. 2303 at 7 (2010)).  Petitioner’s failure to be open to the public on either of the days that the inspector attempted site visits prevented the inspector from determining whether Petitioner was compliant with enrollment requirements. 

Petitioner disagrees that it was not operational.  After quoting the definition of “operational” from the regulations, Petitioner argues as follows: 

[T]he definition of “operational” is flexible and designed to accommodate different types of medical practices and delivery systems.  Here, Wound Pros is not in the business of selling DMEPOS to walk in clientele.  Rather, the public it serves is bedridden and unable to come to doctors’ offices.  

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Thus, the type of staffing, equipment and method of stocking supplies for Wound Pros facility-based practice is very different from that utilized by businesses that sell wheel chairs, portable toilets and crutches to Medicare beneficiaries in need of DMEPOS. Since there has never been a single allegation of Wound Pros providing substandard care to the patients it serves, there is absolutely no evidence that it is not adequately staffed, equipped or stocked.

42 C.F.R. (c)(7)(i)(C) does state that offices supplying DMEPOS to Medicare beneficiaries must be “accessible and staffed during posted office hours.”  However, DMEPOS suppliers who provide items to their own patients are exempt from this requirement.  Specifically, the requirement for how long DMEPOS suppliers must keep their doors open to the public is found in 42 C.F.R. § 424.57(c)(30), which states that a DMEPOS supplier must certify that it:

“(i) Except as specified in paragraph (c)(30)(ii) of this section, is open to the public a minimum of 30 hours per week.

(ii) The provision of paragraph (c)(30)(i) of this section is not applicable at a practice location where  a –

(A) Physician whose services are defined in section 1848(j)(3)1 of the Act furnishes items to his or her own patient(s) as part of his or her professional service;” (Emphasis added).

As discussed above, Wound Pros only provides surgical dressings as part of the professional physician services provided to its patients, at bedside.  Thus, there is no requirement that it post any hours of operation.  To do so would be senseless, as there is never a circumstance where one of its patients would come to the office.  The facility isn’t designed or equipped to treat patients with chronic wounds, and Wound Pros is not in the business of selling surgical dressing to the general public.

P. Br. at 4-5.

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CMS responds by disputing that Petitioner is not required to post its hours of operation and pointing out that Petitioner did not give notice to CMS that it would not be open to the public.  CMS Reply at 3.  CMS states the following in support: 

The Medicare enrollment application for DMEPOS suppliers requires Petitioner to list its “posted hours of operation as displayed at the business location.”  CMS Ex. 11 at 8.  The application further requires that Petitioner list all hours of each day it is open, or alternatively, that it check a box to indicate that they are open by appointment only with no fixed days or hours.  Id.  More specifically, the application form notes that the supplier may only check the box for appointment only if they qualify for that exemption.  Id. Petitioner has submitted no evidence that they indeed checked that box on the application.  See CMS Ex. 5 at 2; Pet. PHB.

It is undisputed that Petitioner listed its hours of operation as 9:00 AM to 5:00 PM.  Petitioner’s enrollment application listed its business hours as Monday through Friday, 9 am to 5 pm. CMS Ex. 5 at 2.  Petitioner explicitly stated that it was available 40 hours per week to the public.  Id. (“ Total Hours Available to the Public Weekly: 40”).  There was no indication either via signage at the door, or in its hours listed in its enrollment application, that there would be any specific hours in which its offices would not actually have staff present during the hours of 9 am to 5 pm Monday through Friday. CMS Ex. 5 at 2; CMS Ex. 6 at 5-7. Petitioner does not allege that the hours in its enrollment record listed as business hours are incorrect.  See CMS Exs. 2 and 3.  Even assuming as true that Petitioner was not required to be available to the public for 30 hours per week pursuant to 42 C.F.R. § 424.57(c)(30)(ii), once Petitioner decided it would be available to the public for 40 hours per week, Monday through Friday from 9 am – 5 pm, it was obligated to be staffed and operational during that time.  Petitioner cannot now allege that, despite its listed hours of operation, that [sic] CMS or its contractors should not have been able to use that information to verify the accuracy of its enrollment application information.  Petitioner has submitted no evidence it was staffed or operating on November 18, 2021 or November 19, 2021 at its practice location during the business hours listed on its enrollment application.  Thus,

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Petitioner was obligated to be accessible and staffed during its chosen hours of operation. 42 C.F.R. § 424.57(c)(7). 

CMS Reply at 3-4. 

I agree with CMS’s argument.  Although Petitioner may be exempt from the normal DMEPOS requirement that it be open to the public for a minimum of 30 hours per week, this exemption does not entirely absolve Petitioner from being open to the public.  Ortho Rehab Designs Prosthetics & Orthotics, Inc., DAB No. 2591 at 5-6 (2014); Sonoma Prosthetic Eyes, DAB No. 2622 at 5-6 (2015).  Further, once Petitioner informed CMS that it would be open to the public for 40 hours each week from Monday to Friday, Petitioner’s offices were obligated to be open during those hours. 

As the ALJ pointed out, although Supplier Standard 30 would have allowed Ortho to be open for less than 30 hours a week, Ortho chose to adopt Monday through Friday from 9 a.m. to 5 p.m. as its posted hours of operation (for a total of 40 hours per week).  Even though these hours exceeded the requirements of Supplier Standard 30, under Supplier Standard 7, once Ortho posted those hours, it needed to be “staffed and accessible” during those hours.

Ortho, DAB No. 2591 at 6 (citation omitted).  Although the quote above relates to a case involving Supplier Standard 7, which requires that a DMPEPOS supplier be open and accessible to the public, the essential reasoning is applicable to whether a supplier is “operational” under 42 C.F.R. § 424.535(a)(5)(i) as well. 

As stated above, the term “operational” means: 

the provider or supplier has 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 (emphasis added).  Even for a provider or supplier that provides health care services away from its offices, a failure to answer the door for a site inspector is evidence that the provider or supplier is not operational.  See Vamet Consulting & Medical Services, DAB No. 2778 at 7 (2017). 

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In the present case, Petitioner’s “physical practice location,” as specified on an enrollment application, was not open to the public on the days and at the times specified on the enrollment application.  Therefore, CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment because an on-site inspection indicated that Petitioner was not operational.  42 C.F.R § 424.535(a)(5)(i). 

IX.      Conclusion

I affirm CMS’s revocation of Petitioner’s Medicare enrollment and billing privileges effective November 18, 2021. 

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Endnotes

¹   Although the parties discussed in detail a variety of DMEPOS supplier standards in 42 C.F.R. § 424.57(c), I note that NSC based Petitioner’s revocation on 42 C.F.R. § 424.535(a)(5).  CMS Ex. 1 at 4.  Therefore, all discussion in this decision of the DMEPOS supplier standards is not meant to imply that I uphold the revocation on any basis than 42 C.F.R. § 424.535(a)(5).