Hal Medical O&P PC, CR6292 (2023)

DECISION

This decision AFFIRMS the revocation of Petitioner’s Medicare enrollment and billing privileges by the Centers for Medicare & Medicaid Services (CMS). 

I.   Background and Procedural History

On November 23, 2022, Hal Medical O&P PC (Petitioner) timely requested a hearing before an Administrative Law Judge (ALJ) to contest the revocation of its Medicare enrollment and billing privileges.  On that same day, at my direction, the Civil Remedies Division (CRD) issued an acknowledgement letter and my standing prehearing order (Standing Order), which set forth a schedule for briefing and submitting supporting evidence and other procedural requirements. 

On January 10, 2023, CMS filed a Motion for Summary Judgment and supporting memorandum in support thereof (CMS Br.), along with 24 exhibits (CMS Exs. 1-24).  CMS did not propose any witnesses.

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On February 16, 2023, an Order to Show Cause was issued because Petitioner failed to file a brief and response to CMS’s Motion for Summary Judgment.  On February 27, 2023, Petitioner submitted a letter replying to the Order to Show Cause (P. Letter) along with its response to CMS’s Motion for Summary Judgment (P. Response).  Petitioner submitted no exhibits and proposed no witnesses.  Petitioner did not object to CMS’s proposed exhibits.  Absent objection, CMS Exs. 1-24 are admitted into evidence. 

On March 2, 2023, an Order Discharging Order to Show Cause and Closing Record (Order) was issued.  The Order stated that a hearing for cross-examination of witnesses was not necessary because neither party submitted any proposed witnesses.  The Order also stated the record was closed and a decision would be issued on the written record.  Because the matter is resolved based on the written record, CMS’s motion for summary judgment is moot. 

II. Jurisdiction

This tribunal has the authority to hear and decide this matter.  42 U.S.C. § 1395cc(j)(8); 42 C.F.R. §§ 424.545(a), 498.1(g), 498.3(b)(17), 498.5(l)(2). 

III.   Issue

The issue to be decided is whether CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. §§ 424.57(e)(1), 424.535(a)(1), and 424.535(g). 

IV.   Findings of Fact

The following facts are undisputed. 

Petitioner was enrolled in the Medicare program as a supplier of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS).  CMS Exs. 2 at 1; 10 at 1; 11 at 1; 12 at 1; 13; 14 at 5.  In its Medicare enrollment applications from 2015 through March of 2022, Petitioner asserted that Alabama was the only state in which it furnished DMEPOS.  CMS Exs. 10 at 2-3; 11 at 2-3; 12 at 2; 13 at 4; 14 at 10.  Further, during the same time period, Petitioner did not include neuromuscular stimulators, pneumatic compression devices or traction equipment as products it furnished to Medicare beneficiaries.Id.

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On March 10, 2022, Palmetto GBA (Palmetto)¹, a Medicare Administrative Contractor, sent Petitioner a letter stating that Petitioner was in violation of DMEPOS Supplier Standards 1, 2, 10, and 25 by failing to provide the following information in its Medicare enrollment applications:  Alabama Therapeutic Shoe Fitter License (diabetic shoes/non custom), Alabama Pedorthist License (diabetic shoes), Alabama Prosthetist License (lower limb prostheses), Florida Orthotic Fitter License, Florida Prosthetist License and Florida Orthotist License.  CMS Ex. 7 at 1-2.  Palmetto also noted that Petitioner failed to notify Medicare of changes in its supplier file including, but not limited to, the products Petitioner was no longer providing and its intention to service patients in Florida.  Id. at 2.  Palmetto further noted that the liability insurance policy it had on file for Petitioner had expired.  Id.  Finally, Palmetto informed Petitioner that, during an August 27, 2021 site inspection at Petitioner’s facility, Petitioner disclosed that it no longer had the qualified personnel to provide lower limb prostheses or custom fabricated orthotics but failed to have those products deleted from Petitioner’s enrollment record with Medicare.  Id.  Palmetto provided Petitioner 21 days from the date of the letter to provide the requested information.  Id. 

On July 28, 2022, Palmetto sent a letter to Petitioner stating that it had not received a response to the March 10, 2022 letter and that Petitioner’s Medicare supplier number would be revoked effective 30 days from the date of the letter pursuant to 42 C.F.R. §§ 424.57(c) and 424.535(a)(1).  CMS Ex. 2.  In the notice letter, Palmetto also noted that Petitioner was barred from re-enrolling in Medicare for one year from the effective date.  Id. at 1.  Specifically, the notice letter stated that Petitioner violated the following regulations: 

• 42 C.F.R. § 424.57(c)(1):  for “providing or planning on providing custom fabricated diabetic footwear, pneumatic compression devices, and custom fitted orthotics to Medicare beneficiaries in the states of Alabama, Florida and South Carolina without the required state licenses.”
• 42 C.F.R. § 424.57(c)(2):  for “submitting claims for beneficiaries residing outside of the state of Alabama and for products not disclosed such as neuromuscular stimulators, pneumatic compression devices, and traction equipment without updating your supplier’s file.  Therefore, [Petitioner] failed to notify [Palmetto] regarding changes in [its]supplier file including, but not limited to, [Petitioner’s] intention to service beneficiaries residing in multiple states and the products [Petitioner is] providing to beneficiaries.”

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• 42 C.F.R. § 424.57(c)(21):  “Information to complete [Petitioner’s] revalidation was requested by [Palmetto] on April 13, 2022, by email; however, this information was not received and [Palmetto] is unable to complete [Petitioner’s] revalidation application.  In addition, on March 10, 2022, a Medicare representative sent [Petitioner] a letter allowing [Petitioner] twenty-one days to submit documentation; however, [Petitioner] also failed to provide this documentation.  Therefore, [Petitioner] failed to comply with this standard.”
• 42 C.F.R. § 424.57(c)(25):  “Our records do not reflect that [Petitioner is] accredited to provide neuromuscular stimulators, traction equipment, and pneumatic compression devices; however, [Petitioner] billed for these services.  [Petitioner] failed to have accreditation for all the services [Petitioner] provide[s] to beneficiaries.”

CMS Ex. 2 at 1-2.

On August 29, 2022, Petitioner filed a timely request for reconsideration in which it admitted that it was in violation of 42 C.F.R. § 424.57(c) by stating that “[t]hose claims for custom work was [sic] submitted in error and have been fixed” and that “[Petitioner is] notifying [the Medicare Provider Enrollment, Chain and Ownership System] (PECOS) we want to continue with the billing of these products.”  CMS Ex. 3 at 2. 

On August 30, 2022, Petitioner submitted a corrective action plan (CAP) to Palmetto along with forms demonstrating that, on August 30, 2022, Petitioner made corrections to its PECOS enrollment application.  CMS Ex. 4 at 36-42.  Specifically, Petitioner “added” pneumatic compression devices, neurostimulators, traction equipment and neuromuscular electrical stimulators  to the “products and services to be furnished” to Medicare beneficiaries.  Id.  However, the application still only listed Alabama as the state in which Petitioner would provide the stated products and services.  Id.  Florida and South Carolina, where Petitioner provided DMEPOS in the past, were not listed.  Id. at 38, 42; see also CMS Exs. 19 at 4; 20 at 4-28. 

On August 31, 2022, Petitioner sent Palmetto an additional email stating that Petitioner had “removed all custom services and will not be providing them.”  CMS Ex. 5 at 1. 

On September 26, 2022, Palmetto sent Petitioner a CAP decision in which it upheld Petitioner’s violations of supplier standards at 42 C.F.R. § 424.57(c)(2) and (25) and removed the violations of 42 C.F.R. § 424.57(c)(1) and (21).  CMS Ex. 23 at 3, 7.  With regard to the violation of 42 C.F.R. § 424.57(c)(2), Palmetto stated that Petitioner “submitted claims for beneficiaries residing outside the state of Alabama and for products not disclosed, such as neuromuscular stimulators, pneumatic compression devices, and traction equipment without updating [its] supplier profile.”  Id. at 6.  Regarding the violation of 42 C.F.R. § 424.57(c)(25), Palmetto stated that Petitioner “billed for

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neuromuscular stimulators, traction equipment, and pneumatic compression devices that [it is] not accredited for.”  Id. at 7. 

On October 28, 2022, Palmetto issued an unfavorable reconsideration decision upholding the revocation of Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.57(c)(2) and (c)(25).  CMS Ex. 1 at 4-5.  Palmetto determined Petitioner violated 42 C.F.R. § 424.57(c)(2) because Petitioner “submitt[ed] claims for beneficiaries residing outside of the state of Alabama and for products not disclosed such as neuromuscular stimulators, pneumatic compressing devices, and traction equipment without updating [its] supplier’s file.”  Id. at 4.  Palmetto also found that Petitioner violated 42 C.F.R. § 424.57(c)(25) because Petitioner “billed claims for products not disclosed such as neuromuscular stimulators, pneumatic compressing devices, and traction equipment without updating [its] supplier’s file and not being accredited to provide these items.”  Id.  

V.   Legal Authorities

The Social Security Act (the Act) establishes the enrollment process for providers and suppliers participating in Medicare or Medicare related programs.  42 U.S.C. §§ 1302(a), 1395cc(j).  Under the Act, “suppliers” are physicians or other practitioners, 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).  Providers include hospitals, skilled nursing facilities, and home health agencies.  42 U.S.C. § 1395x(u).  Any physician who participates in the Medicare program is considered a “supplier.”  42 U.S.C. § 1395x(d); 42 C.F.R. § 400.202 (definition of “supplier”).  In this case, Petitioner is considered a “supplier.” 

A provider or supplier must be enrolled in the Medicare program in order to receive payment for covered items or services from either Medicare (in the case of an assigned claim) or a Medicare beneficiary.  Once enrolled, the provider or supplier receives billing privileges and is issued a valid billing number effective for the date a claim was submitted for an item that was furnished or a service that was rendered.  42 C.F.R. § 424.505. 

The regulations provide that CMS may revoke the enrollment of suppliers for several reasons, including when a supplier is found to be in violation of the regulations set forth in 42 C.F.R. § 424.57(c).  42 C.F.R. §§ 424.57(e)(1), 424.535(a)(1), 424.535(g). 

VI.   Analysis and Conclusions of Law²

A. Petitioner was noncompliant with 42 C.F.R. § 424.57(c)(2).

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42 C.F.R. § 424.57(c)(2) states that: 

The supplier must meet and must certify in its application for billing privileges that it meets and will continue to meet the following standards:

(2)  Has not made, or caused to be made, any false statement or misrepresentation of a material fact on its application for billing privileges.  (The supplier must provide complete and accurate information in response to questions on its application for billing privileges.  The supplier must report to CMS any changes in information supplied on the application within 30 days of the change.) 

Petitioner does not dispute that it failed to list Florida and South Carolina as states in which it would provide items and services to Medicare beneficiaries.  Nor does Petitioner dispute that it failed to include neuromuscular stimulators, pneumatic compression devices or traction equipment as “products and services to be provided by this supplier” in its enrollment application.  Finally, it is not disputed that Petitioner failed to report these changes to CMS within 30 days.  CMS Exs. 3-6; P. Request for Hearing (stating “[w]e only want to file Medicare claims in the State of Alabama . . . .  We no longer want to do, or have we been doing Custom orthotic work, Diabetic shoes, Custom diabetic shoes, stim devices, or traction devices.”); P. Letter; P. Response. 

It is undisputed that Petitioner billed Medicare $18,000 for pneumatic compression devices and $126.10 for traction equipment in Florida and South Carolina between March 12, 2022 and April 29, 2022.  CMS Exs. 21 at 1, 4, 7-8; 22 at 9.  Petitioner also submitted claims to Medicare for $1,344.84 for neuromuscular stimulators, $219.98 for traction equipment, and $13,500 for pneumatic compression devices for dates of service between September 1, 2021 and March 9, 2022.  CMS Exs. 19 at 2; 20 at 2.  Finally, Petitioner submitted claims for products furnished to Medicare beneficiaries outside of Alabama with dates of service beginning September 1, 2021.  CMS Exs. 19 at 4; 20 at 4-28. 

While the record shows that Petitioner attempted to correct its prior noncompliance by amending its enrollment application, such corrections cannot undo past noncompliance.  Pepper Hill Nursing & Rehab Ctr., LLC, DAB No. 2395 at 5-6 (2011).  Moreover, Petitioner did not attempt to amend its enrollment application until August 30, 2022, more than a month after the revocation of its billing privileges and well beyond the 30‑day period in which Petitioner was to notify CMS of any changes to the information supplied in its enrollment application.  CMS Ex. 4 at 1; 42 C.F.R. § 424.57(c)(2).

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Accordingly, I find that Petitioner was in violation of 42 C.F.R. § 424.57(c)(2) and that CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment pursuant to 42 C.F.R. §§ 424.57(e)(1) and 424.535(a)(1). 

B. Petitioner was noncompliant with 42 C.F.R. § 424.57(c)(25).

The regulation provides that “[t]he supplier must meet and must certify in its application for billing privileges that it meets and will continue to meet the following standards:” 

All DMEPOS suppliers must disclose upon enrollment all products and services, including the addition of new product lines for which they are seeking accreditation.  If a new product line is added after enrollment, the DMEPOS supplier will be responsible for notifying the accrediting body of the new product so that the DMEPOS supplier can be re-surveyed and accredited for these new products. 

42 C.F.R. § 424.57(c)(25).  It is undisputed that Petitioner sold products and services that it was not accredited for.  CMS Exs. 19 at 1; 20 at 2; 21 at 1, 4, 7-8; 22 at 9.  Also, the record shows that Petitioner did not update its enrollment application to add new products and services until after its enrollment and billing privileges were revoked.  CMS Ex. 9 at 4-5. 

Petitioner argues that its enrollment and billing privileges should not be revoked because it is a “small business, and we need help.”  P. Request for Hearing; see also P. Letter (stating “[w]e need mercy on the courts [sic] behave [sic] for forgiveness and its leniency.”).  However, Petitioner’s argument amounts to a request for equitable relief.  While I empathize with Petitioner, I do not have the authority to grant relief on equitable grounds.  Amber Mullins, N.P., DAB No. 2729 at 4-5 (2016). 

As there is no dispute of the fact that Petitioner violated 42 C.F.R. § 424.57(c)(25), I find that CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment pursuant to 42 C.F.R. §§ 424.57(e)(1) and 424.535(a)(1).

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VII.   Conclusion

Based on the evidence set forth, I find that CMS has established a legal basis for the revocation of Petitioner’s Medicare enrollment and billing privileges based on violations of 42 C.F.R. § 424.57(c)(2), (25).  I therefore affirm the revocation of Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. §§ 424.57(e)(1) and 424.535(a)(1).

Endnotes

¹ Palmetto was the administrator for the National Supplier Clearinghouse (NSC) an entity tasked with issuing or revoking Medicare billing privileges for suppliers of DMEPOS.

² My findings of fact and conclusions of law are set forth in bold and italicized headings below.