Kathy Scott, DAB CR6422 (2024)

DECISION

Noridian Healthcare Services (Noridian), an administrative contractor for the Centers for Medicare & Medicaid Services (CMS), determined that Kathy Scott (Petitioner) reassigned her Medicare billing privileges to Wind River Physical Therapy, LLC (Wind River) effective February 12, 2021, with retrospective billing privileges effective November 14, 2020.  Noridian affirmed the effective date on reconsideration and Petitioner appealed.  Because February 12, 2021, is the date Noridian received  the application from Petitioner that it processed to approval, Noridian correctly determined that Petitioner’s reassignment of her Medicare billing privileges became effective February 12, 2021.  Therefore, I affirm Noridian’s effective date determination.

I.     Procedural Background

After Noridian’s initial determination and a reconsideration determination affirming Petitioner’s enrollment and reassignment date of February 12, 2021, Petitioner timely filed a request for hearing (RFH) with an Administrative Law Judge (ALJ).  Departmental Appeals Board (DAB) E-file 1.  In accordance with the presiding

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Administrative Law Judge’s¹ Standing Order, CMS filed a Pre-Hearing Brief and Motion for Summary Judgment on February 6, 2023 (CMS Br.) and submitted 15 proposed exhibits.  On March 19, 2023, Petitioner filed a document captioned “Kathy Scott’s Pre-Hearing Brief and Motion for Summary Judgment.”  (Pet. Br.).  In a separate document also filed on March 19, 2023, and captioned “Kathy Scott’s List of Exhibits,” Petitioner stated:  “Kathy Scott and Wind River Physical Therapy refer to the List of Proposed Exhibits put forth by Centers for Medicare & Medicaid Services (“CMS”) in Petitioner’s Pre-Hearing Brief.  Petitioner reserves the right to submit additional exhibits as necessary for purposes of impeachment or rebuttal.”  DAB E-file 11.  Petitioner submitted no exhibits and filed no objections to CMS’ exhibits.  Therefore, in the absence of objection, I received CMS Exhibits (CMS Exs.) 1-15.  

Neither CMS nor Petitioner offered the written direct testimony of any witness as part of the prehearing exchange.  The ALJ’s standing order provided that “[a]n in-person hearing to cross-examine witnesses will be necessary only if a party files admissible, written direct testimony, and the opposing party asks to cross-examine.”  Standing Order ¶ 10.  Therefore, an in-person hearing is not required, and I issue this decision based on the written record, without regard to whether the standards for summary judgment are met.  I deny CMS’ motion for summary disposition as moot.

II.    Issue

The issue in this case is whether Noridian, acting on behalf of CMS, properly established that Petitioner’s date of Medicare enrollment and reassignment of billing privileges was February 12, 2021, with retrospective billing permitted beginning November 14, 2020. 

III.   Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R. §§ 498.3(b)(15), 498.5(/)(2); see also Social Security Act (Act) § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)).  

IV.   Discussion

1. Applicable Authorities

Section 1831 of the Act (42 U.S.C. § 1395j) establishes the supplementary medical insurance benefits program for the aged and disabled known as Medicare Part B.

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Payment under the program for services rendered to Medicare-eligible beneficiaries may only be made to eligible providers of services and suppliers.  Act §§ 1835(a) (42 U.S.C. § 1395n(a)); 1842(h)(1) (42 U.S.C. §1395u(h)(1)).  

To receive Medicare payments as a “supplier” of services furnished to program beneficiaries, a prospective supplier must enroll in the program.  42 C.F.R. § 424.505.  When CMS determines that a prospective supplier meets the applicant enrollment requirements, it grants Medicare privileges, which allows the supplier to submit claims and receive payments from Medicare for covered services to program beneficiaries.  In certain instances, a supplier who has received an assignment of billing privileges may reassign those billing privileges to an employer or to an individual or entity with which the supplier has a contractual agreement.  Act § 1842(b)(6) (42 U.S.C. § 1395u(b)(6)); 42 C.F.R. § 424.80(b)(1)-(2).  If the supplier wishes to reassign the billing privileges, the supplier must submit an additional enrollment application.  Act § 1842(b)(6); 42 C.F.R. § 424.80(a)-(b).  The effective date of billing privileges for the supplier is the later of the date of filing of a Medicare enrollment application that was subsequently approved by a Medicare contractor or the date that the supplier first began furnishing services at a new practice location.  42 C.F.R. § 424.520(d).  

Further, under the regulations, CMS may permit a 30-day retroactive period of billing if the supplier has met all program requirements and if circumstances precluded enrollment in advance of providing services to Medicare beneficiaries.  42 C.F.R. § 424.521(a)(1)(i).  CMS applies the effective date rules at 42 C.F.R. §§ 424.520(d) and 424.521(a)(1) to reassignment of Medicare benefits.  See Gaurav Lakhanpal, M.D., DAB No. 2951 at 6-7 (2019).  

2. Findings of Fact and Conclusions of Law ²
   1. The effective date for Petitioner’s Medicare billing privileges is February 12, 2021, with retrospective billing privileges effective November 14, 2020.

a. Factual Background

In February 2020, Wind River hired Petitioner as a temporary physical therapist.  DAB E-file at 1., Pet. Br. at 1.  On August 24, 2020, Noridian received Petitioner’s Medicare Enrollment Application (CMS- 855I) and Petitioner’s Medicare Enrollment Application Reassignment of Medicare Benefits application (CMS-855R).  CMS Exs. 1 and 2.  The

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applications were submitted to enroll Petitioner in the Medicare program and to reassign her benefits to Wind River.  In a letter dated September 8, 2020, Noridian confirmed receipt of the applications and asked that Petitioner provide additional information for Noridian to process the applications.  Noridian explained that if the additional information was not provided by October 10, 2020, Petitioner’s application(s) may be rejected.  CMS Ex. 3 at 1.  

On October 12, 2020, Noridian informed Petitioner that her applications were rejected because the applications submitted on August 24, 2020 were incomplete and that the additional information was requested by email on September 8, 2020.  Noridian told Petitioner that if she wished to enroll in Medicare, she must complete a new Medicare enrollment application(s).  CMS Ex. 4 at 1. 

On February 12, 2021, Noridian received a CMS-855R application that Wind River’s Office Manager submitted on behalf of Petitioner, requesting a reassignment of Medicare benefits.  CMS Ex. 5.  In a February 18, 2021 letter, Noridian informed Wind River that it received the Medicare enrollment application, however, additional revisions and documentation must be provided by March 4, 2021.  Noridian requested that Petitioner submit a CMS-855I and provide corrections to the CMS-855R.  As with the earlier correspondence, Noridian explained that it may reject the application if the information is not provided within 30 days of the letter.  CMS Ex. 6 at 1.  On March 1, 2021, Noridian received Petitioner’s CMS-855I and a corrected CMS-855R.  CMS Ex. 7.  On March 4, 2021, Noridian confirmed receipt of the applications and explained that revisions and supporting documentation were still needed and that it must be provided by March 11, 2021.  CMS Ex. 8.  On March 11, 2021, Petitioner provided the requested information.  CMS Ex. 9.  

Noridian confirmed on March 31, 2021 that Petitioner’s enrollment and reassignment applications were approved with a “reassignment effective date” of February 1, 2021.³  CMS Ex. 10.

In a letter dated December 7, 2021, Petitioner submitted an untimely request that her Medicare billing privileges be backdated to February 2020.  CMS Ex. 11.  Initially, Noridian denied the reconsideration request as it was submitted more than 65 calendar days after the initial determination letter.  CMS Ex. 12.  However, in a letter dated February 23, 2022, Noridian issued a revised initial determination and approved the February 12, 2021 applications with a “reassignment effective date” of November 14,

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2020.  CMS Ex. 13.  Petitioner requested reconsideration of the revised initial determination.  CMS Ex. 14.  After finding good cause to waive the untimeliness of the request, Noridian issued a reconsidered determination that Petitioner’s reassignment effective date was February 12 (rather than February 1 as indicated in the March 31, 2021 initial determination, or November 14, 2020, as indicated in the February 23, 2022 revised initial determination) and clarifying that, under 42 C.F.R. 424.521(a)(1)(ii), November 14, 2020, was the earliest permissible retrospective billing date.  CMS Ex. 13 at 1; CMS Ex. 14; and CMS Ex. 15 at 4. 

In the November 29, 2022 RFH, Petitioner seeks a retrospective billing date back to February 2020, when she asserts that she began the application process.  DAB E-file 1; Pet. Br. at 5, 8, 9.  

b. Discussion

The Board has explained that “[t]he governing law on how CMS (and its Medicare contractors) determine the effective date for [suppliers] applying for Medicare bill privileges is set by regulation . . . [at] 42 C.F.R. § 424.520(d).”  Willie Goffney, Jr., M.D., DAB No. 2763 at 7 (2017).  Notwithstanding the arguments posed by both the Petitioner and CMS, the effective date of Medicare billing privileges is the “date of filing of a Medicare enrollment application that was subsequently approved by a Medicare contractor.”  42 C.F.R. § 424.520(d)(1) (emphasis added).  Further, CMS has specified, in the preamble to the rulemaking that promulgated section 424.520, that the term “date of filing” means “the date that the Medicare . . . contractor receives a signed Medicare enrollment application that the Medicare . . . contractor is able to process to approval.”  73 Fed. Reg. 69,726, 69,766-67 (Final Rule) (Nov. 19, 2008); Sandeep Gupta, M.D., et al., DAB No. 3088 at 2 (2023). 

Petitioner does not dispute that Noridian received the CMS 855R application that it processed to approval on February 12, 2021, or that as late as March 4, 2021, Noridian requested additional information (including a CMS 855I initial enrollment application) to process that application.  CMS Exs. 5 and 6.  There is no dispute that in a letter dated March 31, 2021, Noridian confirmed that it approved Petitioner’s initial enrollment and reassignment applications with a reassignment effective date of “February 1, 2021.”⁴  CMS Ex. 7.  Additionally, Petitioner does not dispute that in a letter dated February 23, 2022, Noridian confirmed that the “reassignment effect date” for Petitioner’s enrollment and reassignment was November 14, 2020.

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Petitioner asserts that when Petitioner was hired by Wind River as a temporary hire in 2020, Petitioner began the “credentialing process” and was to see private insurance patients “until her CMS credentialing was finalized.”  Pet. Br. at 1.  Petitioner further asserts that during the initial conversations with Noridian, Wind River “was informed by Noridian staff that Petitioner’s credentialing start date would be dated from when she started the credentialing process.”  Petitioner contends that on at least three occasions, Noridian staff verbally assured Wind River that Petitioner’s approval date would be in February 2020 and that these telephone conversations were recorded by Noridian.  Id. at 5.  Petitioner contends, however, that Noridian deleted these conversations and that these conversations would have verified Petitioner’s and Wind River’s claims that they were following Noridian staff directions during the entire process.  Id. at 5.  

Petitioner does not deny that Noridian requested additional information after receiving the initial applications or that in July 2020, Noridian told Petitioner that a new application must be filed.  Id. at 2.  Despite Petitioner’s assertions that it provided the requested information and that it received verbal assurances from Noridian of a February 2020 start date, Petitioner does not deny that her 855R application, which the contractor received on February 12, 2021, was the application Noridian processed to approval, with written confirmation in Noridian’s March 31, 2021 letter.  Therefore, the effective date for the reassignment of Petitioner’s billing privileges is February 12, 2021.  42 C.F.R. § 424.520(d)(1).  Further, Petitioner also acknowledges that Noridian granted a 90-day retrospective filing privileges period permitted under 42 C.F.R. § 424.521(a)(1)(ii) due to the Covid-19 pandemic.⁵  Pet. Br. at 4.

2. I  do not have authority to grant equitable relief.

Petitioner appears to rely on two primary arguments for its position that Noridian’s determination and CMS’s affirmation should be reversed.  First, Petitioner argues that throughout communication with Noridian, Petitioner was optimistic that recorded phone conversations and fax communication “could be reviewed to confirm that Petitioner had sent in the requested information in a timely manner throughout the application process, which had started in February 2020.”  Pet. Br. at 4.  Petitioner asserts that the application was initiated in February 2020 and was “mishandled or lost by Noridian due to staffing issues during the Covid-19 pandemic.”  Pet. Br. at 5.

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Secondly, Petitioner contends that during various telephone conversations, Noridian assured Petitioner that the Medicare application would be back dated to February 2020.  Id. at 5.

Assuming that Noridian mishandled or lost information that Petitioner provided and/or Noridian staff may have implied that Petitioner would be granted an earlier effective date (contrary to the applicable regulations), Petitioner’s attempt to enforce Noridian’s implied promise would rely on the doctrine of equitable estoppel.  As the Board has recognized, equitable estoppel will not lie against a government entity absent some type of affirmative misconduct.  See e.g., Richard Weinberger, M.D. and Barbara Vizy, M.D., DAB No. 2823 at 19 (2017) (citing Office of Personnel Management v. Richmond, 496 U.S. 414, 419-21 (1990)).  In Weinberger & Vizy, the Board specifically noted that “‘affirmative misconduct appears to require something more than failing to provide accurate information or negligently giving wrong advice.’”  Richard Weinberger, M.D. and Barbara Vizy, M.D., DAB No. 2823 at 19 (citations omitted).  

In Petitioner’s RFH, Petitioner asserts that Petitioner billed approximately $30,000 during 2020 with the expectation that Wind River would be reimbursed for Medicare services provided.  RFH at 2.  Petitioner also contends that Wind River had two other physical therapists also credentialed with Medicare who could have easily seen those patients instead of Petitioner.  Pet. Br. at 2.  I understand that Petitioner is arguing that Petitioner and Wind River are denied compensation for services that they provided in good faith and with the expectation of payment.

Petitioner’s arguments, however, are equitable in nature, and despite how compelling they may be, I have no authority to grant the equitable relief Petitioner seeks.  I cannot set aside the lawful exercise of discretion by CMS, or its contractor, based on principles of equity.  US Ultrasound, DAB No. 2302 at 8 (2010).

To the extent that Petitioner contends that Noridian’s rejection of her applications prior to her February 2021 submission is erroneous, I have no authority to review those determinations.  I am not authorized to review Noridian’s rejection of Petitioner’s applications because “[e]nrollment applications that are rejected are not afforded appeal rights.”  42 C.F.R. § 424.525(d).  As the Board noted in Wishon Radiological Med. Grp., Inc., DAB No. 2941 at 8 (2019), there is “no applicable authority allowing a supplier to seek review of an unappealable rejection of an incomplete application by the ‘back door’ route of challenging the effective date of a later application which was processed to approval.”

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V.    Conclusion

I affirm Noridian’s determination that Petitioner reassigned her right to receive Medicare payments to Wind River effective February 12, 2021, with retrospective billing privileges effective November 14, 2020.

Endnotes

¹  This case was initially assigned to a different ALJ and later transferred to the undersigned.

²  My findings of fact and conclusions of law appear as numbered headings in bold italic type.

³  Noridian changed the date to February 12, 2021 in the reconsideration determination. CMS Ex. 15 at 4.

⁴  Noridian received the successfully processed application on February 12, 2021. It is possible Noridian’s reference to “February 1”is a typo.

⁵  The retrospective billing period can be up to 90 days in the event of certain Presidentially declared disasters as stated in 42 C.F.R. § 424.521(a)(1)(ii).