Dima Medical Supplies, Inc., DAB CR6347 (2023)

DECISION

Petitioner, Dima Medical Supplies, Inc., is a supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), located in Hialeah, Florida.  Until February 3, 2023, Petitioner participated in the Medicare program as a supplier of services.  The Centers for Medicare & Medicaid Services (CMS) has revoked its Medicare supplier number, and Petitioner appeals.

I find that CMS properly revoked Petitioner’s supplier number.  As of February 3, 2023, the supplier was not operational to furnish Medicare-covered items or services; it was neither staffed nor accessible.

Background

Until its Medicare supplier number was revoked, effective February 3, 2023, Petitioner participated in the Medicare program as a supplier of DMEPOS.  See 42 C.F.R. § 424.57.  In a letter dated February 22, 2023, the Medicare contractor, Novitas Solutions, notified Petitioner that its Medicare supplier number was revoked retroactively, pursuant to 42 C.F.R. §§ 405.800; 424.57(e); 424.535(a)(5)(i); and 424.535(a)(9).  The letter noted that

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the contractor attempted site visits on February 3 and 6, 2023.  The facility was locked, with no evidence of business activity.  The contractor therefore determined that Petitioner was no longer operational to furnish Medicare-covered items or services.  Pursuant to 42 C.F.R. § 424.535(g), the revocation became effective the date CMS determined that the supplier was no longer operational, February 3, 2023.  CMS Ex. 1.

The letter also informed Petitioner that CMS was imposing a three-year re-enrollment bar.  CMS Ex. 1 at 1.

Petitioner sought reconsideration.  CMS Exs. 3-5.  In a reconsidered determination, dated May 23, 2023, Medicare Contractor Palmetto GBA affirmed the revocation of Petitioner’s supplier number.  CMS Ex. 6.  Petitioner now appeals that determination pursuant to 42 C.F.R. § 424.545, and CMS moves for summary judgment.¹

Although CMS has moved for summary judgment, I find that this matter may be decided on the written record, without considering whether the standards for summary judgment are satisfied.  In my initial order, I instructed the parties to list all proposed witnesses and to submit their written direct testimony.  Acknowledgment and Pre-hearing Order at 4, 5 (¶¶ 4(c)(iv), 8) (May 25, 2023).  I noted that each party has the right to cross-examine any witness for whom the opposing party offers written direct testimony; however, the party must affirmatively indicate that it wishes to do so.  Acknowledgment at 5 (¶ 9).  I pointed out that a hearing would be necessary only if a party files admissible, written direct testimony, and, in compliance with the order, the opposing party asks to cross-examine.  Acknowledgment at 6 (¶ 10).

Neither party lists any witnesses.  Because there are no witnesses to be examined or cross-examined, an in-person hearing would serve no purpose.  This matter may therefore be decided based on the written record.

With its motion and brief (CMS Br.), CMS has submitted six exhibits (CMS Exs. 1-6).  Petitioner submitted a short response with no exhibits.

In the absence of any objections, I admit into evidence CMS Exs. 1-6.

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Discussion

1. CMS properly revoked the supplier’s billing privileges, because the facility was not operational; it was not staffed or accessible during its posted hours of operation.²

Requirements for a DMEPOS supplier’s Medicare participation.  To receive Medicare payments for items furnished to a Medicare-eligible beneficiary, a supplier of medical equipment and supplies must be enrolled in the Medicare program and must have a supplier number issued by the Secretary of Health and Human Services.  Social Security Act § 1834(j)(1)(A); 42 C.F.R. § 424.505.  To keep that number, the supplier must be operational and must meet the standards set forth in 42 C.F.R. § 424.57(c).  CMS may revoke its billing privileges if it fails to do so.  42 C.F.R. § 424.57(c)(1) and (d); 42 C.F.R. § 424.535(a)(1), (5).

To be operational, the supplier must, among other requirements, have a qualified physical practice location, be open to the public, and be properly staffed, equipped, and stocked to furnish items and services.  42 C.F.R. § 424.502.

The supplier’s location must be accessible during reasonable business hours.  The supplier must permit CMS or its agents to conduct on-site inspections to ascertain its compliance with governing regulations.  42 C.F.R. § 424.57(c)(7) and (8).  Where, as here, a contractor’s representative finds the facility locked and devoid of business activity during its posted hours of operation, the supplier does not meet the requirements of section 424.57(c), and CMS may appropriately revoke its billing privileges.  Ita Udeobong, d/b/a Midland Care Medical Supply and Equipment, DAB No. 2324 (2010); see 42 C.F.R. § 424.535(a)(5) (authorizing CMS to revoke billing privileges if the supplier is no longer operational or otherwise fails to satisfy any Medicare enrollment requirement).

The parties do not dispute the basic facts of this case.

Petitioner’s posted hours of operation were Monday through Friday, 9:00 a.m. to 5:00 p.m.  CMS Ex. 2 at 2, 10.

On February 3, 2023, at 11:33 a.m., the contractor’s site visit inspector, Jose Ortega, went to Petitioner’s practice location.  He found the business shuttered.  A sign read:  “We are out of the office” and provided a phone number.  He knocked, but no one answered.  After ten minutes of knocking, he left his business card and departed.  CMS Ex. 2 at 5, 7, 12, 14.

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On February 6, 2023, at 1:52 p.m., Investigator Ortega returned to the practice location.  Again, the door was shuttered, and the same sign was in place (“We are out of the office.”).  He knocked repeatedly, but no one answered.  After ten minutes, he left.  CMS Ex. 2 at 7, 19, 21.

Petitioner concedes that the business was not open at the time of the visits but explains that the closures were temporary; its two owners were away, marketing the business, and the supplier had no additional employees at the time.  Citing the plain language of section 424.57(e) and its preamble, the Departmental Appeals Board has rejected the argument that a temporary closure during posted business hours does not justify revocation.  Orthopedic Surgery Associates, DAB No. 2594 at 5-6 (2014); Complete Home Care, DAB No. 2525 at 4-5 (2013).

Petitioner was required to be staffed and accessible during its posted hours of operation.  By its own admission, it was not staffed and accessible on February 3 and 6, 2023.  It was therefore not in compliance with section 424.57(c)(7), and CMS justifiably revoked its billing privileges under section 424.57(e).  Ortho Rehab Designs Prosthetics and Orthotics, DAB No. 2591 at 6 (2014).  The revocation is effective “the date that CMS or its contractor determined that the . . . supplier was no longer operational.”  42 C.F.R. § 424.535(g); Jason R. Bailey, M.D., P.A., DAB No. 2855 at 19 (2018).

2. I have no authority to review CMS’s determination to impose three-year reenrollment bar.

When a supplier’s billing privileges are revoked, it may not participate in the Medicare program until the end of its reenrollment bar, which must be for a minimum of one year but no more than ten years (except under circumstance that don’t apply here), depending on the severity of the underlying offense.  42 C.F.R. § 424.535(c)(1).  Here, CMS imposed a three-year reenrollment bar.

I have no authority to review the length of a reenrollment bar.  42 C.F.R. § 498.3(b); Linda Silva, P.A., DAB No. 2966 at 11 (2019); Vijendra Dave, M.D., DAB No. 2672 at 9-12 (2016); accord, William Garner, MD, DAB No. 3026 at 16 (2020), Lilia Gorovits, MD, DAB No. 2985 at 15-16 (2020).  I am authorized to review initial determinations “to deny or revoke a provider or supplier’s Medicare enrollment in accordance with .  . . [section] 424.535.”  42 C.F.R. § 498.3(b)(17).  As the Board observed in Vijendra Dave, the regulations confer no such right to appeal CMS’s determination concerning the duration of a post-revocation reenrollment bar.  Id. at 10.

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Conclusion

Because the facility was not operational, accessible, and staffed during its listed hours of operation, I sustain CMS’s revocation of Petitioner’s supplier number, effective February 3, 2023.

Endnotes

¹ Petitioner did not respond to CMS’s motion for summary judgment or otherwise comply with my pre-hearing order directing it to file its prehearing exchange no later than August 3, 2023.  See Acknowledgment at 3 (¶ 4(b)).  In an order dated August 8, 2023, I directed Petitioner to advise me whether it intended to pursue its hearing request, and, if so, to submit its exchange and to explain, no later than August 18, 2023, why it failed to comply with my order.  Order to Show Cause (August 8, 2023).  On August 9, 2023, Petitioner filed a short response, explaining why the business was closed and locked when the investigators arrived to conduct site visits.  Petitioner did not explain why it failed to comply with my pre-hearing order.

² My findings of fact/conclusions of law are set forth, in italics and bold, in the discussion captions of this decision.