Obonoruma Ekhaese, DO, CR6450 (2024)

DECISION

Petitioner, Obonoruma Ekhaese, DO, doing business as C.A.R.E. Surgery Clinic, P.A., was operational at 10907 Memorial Hermann Dr., Suite 440, Pearland, Texas 77584 on June 2, 2023, when a site visit was conducted, and before and after that date.  Accordingly, there was no basis to deny Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.530(a)(5).¹

I. Procedural History and Jurisdiction

Novitas Solutions, a Medicare administrative contractor (MAC), issued an initial determination on July 6, 2023. The MAC denied Petitioner’s application to enroll in

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Medicare as a clinic/group practice.  The MAC cited 42 C.F.R. § 424.530(a)(5) as the authority for denying Petitioner’s application.  The MAC based its determination on the fact that a site investigation was conducted at Petitioner’s practice address at 10907 Memorial Hermann Drive, Suite 440, Pearland, Texas (10907 Memorial Hermann) on June 2, 2023, at 2:00 p.m. and the inspector found the site was not operational because it was under construction.  Centers for Medicare & Medicaid Services (CMS) Exhibit (Ex.) 1 at 10.  The MAC’s initial determination does not state that the report of the inspector was attached or otherwise provided to Petitioner.  The initial determination did advise Petitioner of the right to request a reconsidered determination and submit additional evidence.  CMS Ex. 1 at 10-12. 

Petitioner requested a reconsidered determination on July 21, 2023.  CMS Ex. 1 at 6-9; CMS Ex. 3. 

The MAC issued a reconsidered determination on September 26, 2023.  The MAC upheld denial of Petitioner’s enrollment application citing 42 C.F.R. § 424.530(a)(5) as authority and based on the fact that the June 2, 2023 site inspection found 10907 Memorial Hermann was not an operational practice location for Petitioner.  CMS Ex. 1 at 1-5.  The reconsidered determination shows that the MAC considered the “Site Visit Verification Survey” (site inspection report) related to 10907 Memorial Hermann from June 2, 2023.  CMS Ex. 1 at 2.  The reconsidered determination shows that the MAC received a May 17, 2023 Medicare enrollment application (CMS-855B) to enroll Petitioner as a clinic/group practice effective June 1, 2021, and companion reassignment of benefit applications (CMS-855R) for Petitioner Ekhaese and another practitioner.² The reconsidered determination indicates that the MAC could not validate the 10907 Memorial Hermann address through the United States Postal Service (USPS) website. Therefore, a site inspection was requested. The MAC characterized the results of that inspection as follows:

On June 2, 2023, a site inspector visited the practice location in Pearland, TX to conduct a site visit and noted that the facility was not operational for the following reasons:  (1) the facility was not open for business, (2) personnel were not at the facility, and (3) customers were not at the facility. The inspector further noted the office was just in the process of being set up.

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CMS Ex. 1 at 2. The MAC states in the reconsidered determination that 10907 Memorial Hermann was one of the practice locations listed in Petitioner’s Medicare enrollment application.³ CMS Ex. 1 at 2. The reconsidered determination advised Petitioner of the right to request review by an administrative law judge (ALJ).  CMS Ex. 1 at 3-5.

Petitioner requested ALJ review of the denial of enrollment on October 17, 2023.  On October 18, 2023, the case was assigned to me; the filing of the request for hearing was acknowledged; and my Standing Order was issued.  There is no dispute that Petitioner’s request for hearing was timely filed, and I have jurisdiction. 

On November 9, 2023, CMS filed a motion for summary judgment and supporting brief (CMS Br.) with CMS exhibits 1 through 3.  Petitioner filed a response in opposition and cross-motion for summary judgment and supporting brief (P. Br.) on November 29, 2023, with Petitioner’s exhibits (P. Exs.) 1 through 9.  On December 13, 2023, CMS filed a reply brief and objections to Petitioner’s proposed exhibits (CMS Reply). 

Petitioner did not object to my consideration of the exhibits offered by CMS and CMS Exs. 1 through 3 are admitted as evidence. 

Petitioner requested leave to file P. Exs. 1 through 9, arguing that there was good cause to file the evidence for the first time before me as required by 42 C.F.R. § 498.56(e).  P. Br. at 5-6 (document page counter).  CMS did not object to my consideration of P. Ex. 1, and it is admitted as evidence.  CMS objected to the admission and my consideration of P. Exs. 2 through 9 on the grounds that Petitioner did not present the documents to the MAC at reconsideration.  CMS argues that Petitioner failed to show good cause for submitting the documents marked P. Exs. 2 through 9 for the first time before me.  CMS Reply at 1, 3-6. 

The Secretary of Health and Human Services (the Secretary) has imposed a special evidentiary requirement for provider and supplier enrollment appeals by promulgating 42 C.F.R. § 498.56.  Under 42 C.F.R. § 498.56(e)(1), I must examine any new documentary

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evidence, i.e., documents offered for the first time by a provider or supplier in an enrollment case before me, to determine if the provider or supplier has good cause for not previously presenting the evidence to the MAC or CMS.  If I conclude there is good cause for the provider or supplier not previously submitting the evidence to the MAC or CMS at the time of reconsideration, then I must include the evidence and consider it in reaching a decision.  42 C.F.R. § 498.56(e)(2)(i).  If I conclude that the provider or supplier did not have good cause for not previously offering the evidence, then I am directed to exclude the evidence and may not consider it in reaching a decision.  42 C.F.R. § 498.56(e)(2)(ii).  The regulation provides no definition of the term good cause.

Petitioner argues that there is good cause for Petitioner’s filing of P. Exs. 2 through 9 for the first time before me.  Petitioner supports its argument with the affidavit of Petitioner Ekhaese.  Petitioner states he is the owner and operator of the Petitioner clinic/group practice with its primary location at 10907 Memorial Hermann since June 1, 2021.  He testifies that when he received the initial denial of enrollment, the MAC did not provide the site inspection report.  However, the MAC in the initial denial stated that 10907 Memorial Hermann was under construction when the site inspection occurred.  Petitioner states he knew that was not true.  Because there was other construction in the area of his clinic space, he assumed the inspector had simply gone to the wrong location.  Petitioner testifies that he filed his request for reconsideration believing the inspector went to the wrong location and he explained that he believed that is likely what happened and requested that a new inspection be done.  He testifies in his declaration that it was not until he received the reconsidered determination that he received a copy of the site inspection report.  On reviewing the site inspection report he realized that the site visit occurred on Friday afternoon outside his normal operating hours at the clinic.  He then inquired of the landlord and learned that at the time of the inspection the clinic was being painted by the landlord so that it would be ready for operations the following Monday.  Petitioner testified that the allegation from the initial determination was that he was not operational because the clinic was under construction, not that there was painting going on.  He testified that had he known the details of the site inspection prior to requesting reconsideration, he could have inquired of the landlord and obtained the information he now offers for my consideration, and he would have submitted the information to be considered on reconsideration.  P. Ex. 1 at 2-3 (document page counter).

CMS defends the adequacy of the MAC’s notice of its initial determination.  CMS’ position is that the statement in the initial determination that “[t]he facility was not operational due to being under construction,” gave Petitioner adequate information to address the factual basis for the denial of enrollment.  CMS does not dispute Petitioner’s testimony he did not receive a copy of the site investigation report with the notice of

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initial determination or before the reconsidered determination.⁴ Petitioner’s testimony that he was not aware the clinic space was being painted during the site inspection; that he jumped to the conclusion the site inspector visited the wrong site, and that he only realized what happened after he saw the site inspection report and inquired of his landlord is not disputed or rebutted by CMS.  CMS offers no explanation for why the site investigation report was not provided to Petitioner with the MAC’s initial determination.  The regulations in 42 C.F.R. pt. 424 do not impose specific requirements for the content of notices by CMS and the MACs of adverse actions related to provider and supplier enrollment.  The content of notices of initial and reconsidered determinations are specified by 42 C.F.R. §§ 498.20(a) and 498.25(a). The regulations require that CMS or the MAC inform an affected party of the reasons for the determination, the effect of the determination, and the right to further review.  42 C.F.R. §§ 498.20(a) and 498.25(a).  The regulations do not require a detailed explanation for the factual basis for the determination.  However, it is fundamental that any notice of adverse action must give sufficient notice to allow the adversely affected party to exercise their procedural due process rights to ALJ review and further appeal as provided by the Social Security Act (Act) § 1866(b)(2) (42 U.S.C. § 1395cc(b)(2)) and 42 C.F.R. § 424.545 and 42 C.F.R. pt. 498.  The MAC’s notice of the initial determination was inadequate because it did not include the evidence on which it was based, i.e., the site inspection report, or at a minimum an accurate and more detailed description of the site inspection report.  As a result, Petitioner was deprived of a meaningful opportunity to submit evidence to address the site investigation at reconsideration and he was deprived of a meaningful reconsidered determination.  Due to the inadequacy of the notice provided Petitioner by the MAC’s notice of initial determination, I conclude that there is good cause for Petitioner to offer P. Exs. 2 through 9 for the first time before me.⁵

CMS also objects to P. Ex. 9 on the grounds that the photographs of Petitioner’s practice location are not time-stamped.  Petitioner is clear in his declaration that the photographs

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marked as P. Ex. 9 are not offered to show the condition of the property when the site inspection occurred, but rather, to reflect the condition of the property when Petitioner first leased it in June of 2021.  Petitioner’s testimony is sufficient to authenticate the pictures (P. Ex. 1 at 3 (document page counter)) and the CMS objection is overruled. 

I conclude pursuant to 42 C.F.R. § 498.56(e)(2)(i), that there is good cause and admit P. Exs. 2 through 9. 

II.  Discussion

A. Applicable Law

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.  Administration of the Part B program is through contractors, such as Novitas Solutions.  Act § 1842(a) (42 U.S.C. § 1395u(a)).  Payment under the program for services rendered to Medicare-eligible beneficiaries may only be made to eligible providers of services and suppliers.⁶  Act §§ 1835(a) (42 U.S.C. § 1395n(a)), 1842(h)(1) (42 U.S.C. § 1395u(h)(1)).

The Act requires the Secretary to issue regulations that establish a process for enrolling providers and suppliers in Medicare, including the requirement to provide the right to a hearing and judicial review of certain enrollment determinations, such as the denial or revocation of enrollment and billing privileges.  Act § 1866(j) (42 U.S.C. § 1395cc(j)).  The Supreme Court has clarified that under sections 1871(a)(1)-(2) and (b) of the Act (42 U.S.C. § 1395hh(a)(1)-(2), (b)), the Secretary must use notice and comment rulemaking under the Administrative Procedure Act, 5 U.S.C. § 553, to impose requirements upon regulated entities that are intended to have the force and effect of law.  Act § 1871(a)(2); Azar v. Allina Health Servs., __ U.S. __, 139 S.Ct. 1804 (2019).

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Pursuant to 42 C.F.R. § 424.505, suppliers such as Petitioner must be issued a National Provider Identifier (NPI) and apply to enroll to have Medicare billing privileges and to be eligible to receive payment for services rendered to a Medicare-eligible beneficiary. 

The Secretary has delegated the authority to accept or deny applications for enrollment in the Medicare program to CMS, which administers the program through the MACs.  42 C.F.R. § 424.530.  Pursuant to its regulations, a MAC may deny a supplier’s enrollment application for any of the reasons set out in 42 C.F.R. § 424.530(a).  In this case, the MAC’s initial determination indicates that the MAC denied Petitioner’s application under 42 C.F.R. § 424.530(a)(5), which provides:  

(5)  On-site review.  Upon on-site review or other reliable evidence, CMS determines that the provider or supplier: 

(i)  Is not operational to furnish Medicare-covered items or services; or

(ii)  Otherwise fails to satisfy any Medicare enrollment requirement. 

42 C.F.R. § 424.530(a)(5). The initial determination does not specify whether 42 C.F.R. § 424.530(a)(5)(i) or (ii) applies, but the notice states that the site inspection determined Petitioner was not operational at 10907 Memorial Hermann.  The initial determination does not specify any other Medicare requirement Petitioner failed to satisfy.  Therefore, it is clear that 42 C.F.R. § 424.530(a)(5)(i) is the authority the MAC relied on to deny Petitioner enrollment because the MAC determined that Petitioner was not operational at the time of the June 2, 2023 site inspection. 

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 in original). I note that the definition of operational does not define qualified physical practice location and no definition of that term appears in 42 C.F.R. pt. 424.  The definition of operational does not require that a provider or supplier’s physical practice location be open to the public at all times, for a certain amount of time each day, or how many days per week.  The definition of operational does not require that

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a provider or supplier’s physical practice location be staffed at all times, or at any particular times on any particular days.  The regulations do not require that Medicare claims be submitted from the qualified practice location.  Required equipment and stockage is determined based on the type of provider or supplier and the regulation does not specify that equipment and stock cannot be obtained as needed rather than being always on hand.⁷ 

A prospective supplier whose enrollment application has been denied may request reconsideration and review as provided by 42 C.F.R. pt. 498.  42 C.F.R. § 424.545(a).  A prospective supplier submits a written request for reconsideration to CMS or its contractor.  42 C.F.R. § 498.22(a), (b).  CMS or its contractor must give notice of its reconsidered determination to the prospective supplier, give the reasons for its determination, specify the conditions or requirements the prospective supplier failed to meet, and advise the prospective supplier of the right to an ALJ hearing.  42 C.F.R. § 498.25.  If the decision on reconsideration is unfavorable to the prospective supplier, they have the right to request a hearing by an ALJ and further review by the Departmental Appeals Board (the Board).  Act § 1866(j)(8) (42 U.S.C. § 1395cc(j)(8)); 42 C.F.R. §§ 424.545, 498.3(b)(17), 498.5.⁸  A hearing on the record, also known as an oral hearing, is required under the Act.  Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743, 748-51 (6th Cir. 2004).  The prospective supplier bears the burden to demonstrate that the supplier meets or met enrollment requirements with documents and records.  42 C.F.R. § 424.545(c). 

B. Issues

Whether there is a basis for the denial of Petitioner’s application for Medicare enrollment and billing privileges.

C. Findings of Fact and Conclusions of Law

My conclusions of law are set forth in bold followed by my findings of undisputed fact and analysis.

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1. Summary judgment is appropriate in favor of Petitioner but not CMS.

CMS and Petitioner both request that I decide this case in their favor using summary judgment rather than convening a hearing. 

A supplier, such as Petitioner, denied enrollment in Medicare and billing privileges, has a right to a hearing and judicial review.  A hearing on the record before an ALJ, also known as an oral hearing, is required under the Act.  Act §§ 205(b), 1866(h)(1), (j)(8); 42 C.F.R. §§ 498.3(b)(17), 498.5(l); Crestview, 373 F.3d at 748-51.  A party may waive appearance at an oral hearing but must do so affirmatively in writing.  42 C.F.R. § 498.66.  In this case, Petitioner has not waived the right to an oral hearing or otherwise consented to a decision based only upon the documentary evidence and pleadings.  Contrary to CMS’ suggestion (CMS Br. at 7), deciding this based on the prehearing exchanges without an oral hearing is not permissible, unless I conclude that summary judgment is an appropriate procedure for deciding the case in lieu of convening a hearing.

Summary judgment is not automatic upon request but is limited to certain specific conditions. The Secretary’s regulations at 42 C.F.R. pt. 498 that establish the procedure to be followed in adjudicating Petitioner’s case do not establish a summary judgment procedure or recognize such a procedure.  However, the Board has long accepted that summary judgment is an acceptable procedural device in cases adjudicated pursuant to 42 C.F.R. pt. 498.  See, e.g., Ill. Knights Templar Home, DAB No. 2274 at 3-4 (2009); Garden City Med. Clinic, DAB No. 1763 (2001); Everett Rehab. & Med. Ctr., DAB No. 1628 at 3 (1997).  The Board also has recognized that the Federal Rules of Civil Procedure do not apply in administrative adjudications such as this, but the Board has accepted that Fed. R. Civ. Pro. 56 and related cases provide useful guidance for determining whether summary judgment is appropriate.  A summary judgment procedure was adopted as a matter of judicial economy within my authority to regulate the course of proceedings and made available to the parties in the litigation of this case by my Standing Order ¶¶ D, G, K.  The parties were informed that the law as it has developed related to Fed. R. Civ. Pro. 56 will be applied.  Standing Order ¶ G. 

Summary judgment is appropriate when there is no genuine dispute as to any material fact for adjudication and/or the moving party is entitled to judgment as a matter of law.  In determining whether there are genuine issues of material fact for trial, the reviewer must view the evidence in the light most favorable to the non-moving party, drawing all reasonable inferences in that party’s favor.  The party requesting summary judgment bears the burden of showing that there are no genuine issues of material fact for trial and/or that it is entitled to judgment as a matter of law.  Generally, the non-movant may not defeat an adequately supported summary judgment motion by relying upon the denials in its pleadings or briefs but must furnish evidence of a dispute concerning a material fact, i.e., a fact that would affect the outcome of the case if proven.  Mission

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Hosp. Reg’l Med. Ctr., DAB No. 2459 at 5-6 (2012) (and cases cited therein); Experts Are Us, Inc., DAB No. 2452 at 5-6 (2012) (and cases cited therein); Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010) (and cases cited therein); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

The standard for deciding a case on summary judgment and an ALJ’s decision-making in deciding a summary judgment motion both differ from that used in resolving a case after a hearing.  On summary judgment, the ALJ does not make credibility determinations, weigh the evidence, or decide which inferences to draw from the evidence, as is done when finding facts after a hearing on the record.  Rather, on summary judgment, the ALJ construes the evidence in a light most favorable to the non-movant and avoids deciding which version of the facts is more likely true.  Holy Cross Vill. at Notre Dame, Inc., DAB No. 2291 at 5 (2009).  The Board also has recognized that on summary judgment it is appropriate for the ALJ to consider whether a rational trier of fact could find that the party’s evidence would be sufficient to meet that party’s evidentiary burden.  Dumas Nursing & Rehab., L.P., DAB No. 2347 at 5 (2010).  The Secretary has not provided in 42 C.F.R. pt. 498 for the allocation of the burden of persuasion or the quantum of evidence required to satisfy the burden.  However, the Board has provided some persuasive analysis regarding the allocation of the burden of persuasion in cases subject to 42 C.F.R. pt. 498.  Batavia Nursing & Convalescent Ctr., DAB No. 1904 (2004), aff’d, Batavia Nursing & Convalescent Ctr. v. Thompson, 129 Fed. App’x 181 (6th Cir. 2005).

The parties were advised by my standing order that on summary judgment:

[A] fact alleged and not specifically denied, may be accepted as true for purposes of a motion or cross-motion for summary judgment.  Any evidence will be considered admissible and true unless specific objection is made to its admissibility and accuracy.   

Standing Order ¶ G.

Petitioner has not disputed the facts contained in CMS Exs. 1 through 3. Petitioner has submitted a sworn declaration, supported by P. Exs. 2 through 9.  Drawing all favorable inferences for Petitioner in considering the CMS motion for summary judgment as I am required to do, Petitioner’s evidence shows that Petitioner has been operating since June 1, 2021, at 10907 Memorial Hermann and the evidence supports a favorable inference that Petitioner was operational at the time of the site inspection on June 2, 2023.  The site investigation occurred about 2:00 pm on June 2, 2023, after Petitioner’s normal hours of operation on Friday, June 2, 2023.  No painting or construction was in progress during Petitioner’s hours of operation during the morning of Friday, June 2, 2023.  At the time of the site investigation, the clinic space leased by Petitioner was undergoing painting at the direction of the landlord.  Petitioner continued operations the next Wednesday during

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Petitioner’s regular hours at that clinic. CMS did not dispute or otherwise attempt to rebut by the submission of any evidence the facts asserted by Petitioner in his declaration (P. Ex. 1) as supported by P. Exs. 2 through 9.  CMS Reply.⁹  Accordingly, I conclude that this case may not be decided in CMS’ favor by summary judgment.

Summary judgment is appropriate for resolving this case in favor of Petitioner. CMS objected to the admission of P. Exs. 2 through 9, but not P. Ex. 1, Petitioner’s declaration.  CMS’ objection to P. Exs. 2 through 9 was that the exhibits had not previously been submitted by Petitioner at reconsideration.  Except for P. Ex. 9, CMS did not object to the relevance or authenticity of Petitioner’s exhibits.  The CMS objection to P. Ex. 9 was that the photographs in the exhibit did not contain date or time stamps to permit me to determine their relevance.  However, Petitioner explained the relevance of the photographs in his declaration and, also, established that they are authentic.  CMS did not dispute or submit evidence to rebut the evidence presented by Petitioner.  CMS’ evidence is accepted as true and all favorable inferences are drawn in favor of CMS,  There is no dispute that when the site inspection was done on June 2, 2023, at about 2:00 p.m. the site inspector observed that the door to the clinic was locked, no patients were present, no staff was present, and it was plainly visible through the door that some sort of work was being done to the interior of the clinic.  CMS Ex. 1 at 15-21.  The legal conclusion in the site inspection, the initial determination, and the reconsidered determination, that Petitioner was not operational is a legal determination and not a fact, and that legal determination need not be and is not accepted as true or correct or binding on me.  CMS does not dispute the facts set forth by Petitioner in his declaration as supported by P. Exs. 2 through 9, that the inspection occurred outside Petitioner’s normal hours of operation; that the work observed by the inspector was painting directed by Petitioner’s landlord; that Petitioner only conducted business at that location on Wednesday and Friday mornings; or that Petitioner’s operations continued the next Wednesday during Petitioner’s normal hours of operation at 10907 Memorial Hermann.  Based on the undisputed evidence, even drawing all inferences in CMS’ favor, a rational trier of fact can find based on all the evidence in this case that Petitioner can satisfy Petitioner’s burden to show it is more likely than not that Petitioner was operational within the meaning of 42 C.F.R. § 424.502 at 10907 Memorial Hermann from June 1, 2021, through the site inspection on June 2, 2023, and thereafter.  Accordingly, resolving this case on summary judgment in favor of Petitioner is appropriate.

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2. Petitioner was operational to furnish Medicare-covered items or services at the time of the site inspection on June 2, 2023.

3. There was no basis for denial of Petitioner’s enrollment in Medicare pursuant to 42 C.F.R. § 424.530(a)(5)(i) because Petitioner was operational within the meaning of 42 C.F.R. § 424.502, when the site inspection was conducted.

a. Facts

The material facts are undisputed.

1. Petitioner began operations at 10907 Memorial Herman Drive, Suite 440, Pearland Texas on or about June 1, 2021, where Petitioner had continuous occupancy through at least November 10, 2023.  P. Exs. 1-5.  The clinical and office space was leased to Petitioner by Memorial Hermann Pearland Hospital.  P. Exs. 1-6.
2. Pursuant to the terms of Petitioner’s lease, Petitioner could operate using the office space, equipment, and supplies at 10907 Memorial Hermann the second and fourth Wednesday of each month from 8:00 a.m. to Noon, every Wednesday from 1:00 p.m. to 5:00 p.m., and every Friday from 8:00 a.m. to Noon.  P. Ex. 3 at 2 (document page counter).  The hours of use were subsequently changed to 8:00 a.m. to Noon every Wednesday and Friday and from 1:00 p.m. to 5:00 p.m. on Wednesdays.  P. Ex. 4 at 1 (document page counter); P. Ex. 5.
3. Petitioner filed an application for enrollment in the Medicare program as a clinic/group practice on May 17, 2023.  Petitioner listed in the application practice locations at 10907 Memorial Hermann Drive, Suite 440, Pearland, Texas, 77584-4114 and 1507 West League City Parkway, Suite 200, League City, Texas, 77573-7340.  CMS Ex. 1 at 22, 24-25.
4. The MAC could not verify the 10907 Memorial Hermann address through the USPS website and ordered a site inspection.  CMS Ex. 1 at 2.
5. A site inspection was conducted at about 2:00 p.m. on June 2, 2023.  The site inspector reported that 10907 Memorial Herman suite 440 was an office suite in an office building.  The office was not open for business, there were no staff or employees present, there were no signs of customer activity, and the inspector concluded that the facility did not appear to be operational, at least at the time of the site visit.  CMS Ex. 1 at 15-16.  The site inspection report in evidence includes photographs.  One photograph shows a sign in the window of suite 440 that said, “open come in,” but the inspector stated that the facility was found to be under

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construction.  CMS Ex. 1 at 18.  Another photograph of the interior of suite 440 taken through the window shows signage, stacked chairs, protective covering on a window and on the floor affixed with painter’s tape.  CMS Ex. 1 at 19.  A photograph of the business directory lists Petitioner and multiple other entities as operating in suite 440.  Another sign indicates that suite 440 is a timeshare leased by multiple private practices with office hours of 8:00 a.m. to 4:30 p.m., Monday through Friday.  CMS Ex. 1 at 19-21.

6. According to Memorial Hermann Hospital’s Timeshare Manager, 10907 Memorial Hermann suite 440 was being painted on Friday afternoon, June 2, 2023.  P. Ex. 2. 
7. On July 6, 2023, The MAC denied Petitioner’s application to enroll in Medicare as a clinic/group practice based on the site inspection and the conclusion that 10907 Memorial Hermann was under construction and not operating.  CMS Ex. 1 at 10. 
8. On September 26, 2023, the MAC upheld the denial of Petitioner’s enrollment application based on the results of the site inspection.  CMS Ex. 1 at 1-5.

b. Analysis

The sole issue I must resolve is whether CMS had a legal basis to deny Petitioner’s enrollment application.  Petitioner has the burden to show by a preponderance of the evidence that Petitioner was operational to furnish Medicare-covered items or services.  Petitioner must show that Petitioner had a qualified physical practice location, which was open to the public to provide health care related services, that it was prepared to submit valid Medicare claims, and that it was properly staffed, equipped, and stocked to furnish these items or services.  42 C.F.R. §§ 424.530(a)(5)(i), 424.545(c); A to Z DME, LLC, DAB No. 2303 at 6-7 (2010) (quoting 73 Fed. Reg. 36,448, 36,452 (June 27, 2008)).  The regulations in 42 C.F.R. pt. 424, do not require that suppliers like Petitioner, who are not suppliers of DMEPOS, have posted hours of operation or to state their hours of operation in their Medicare enrollment applications. 

There is no dispute that Petitioner had a qualified physical practice location, that was open to the public for the purpose of providing health care related services.  There is no dispute that Petitioner began leasing 10907 Memorial Hermann suite 440 on June 1, 2021, with Petitioner’s use limited to the hours provided in the lease agreement, which did not include Friday after Noon.  P. Ex. 1; P. Ex. 3 at 1-2 (document page counter); P. Ex. 4 at 1-2 (document page counter).  There is no dispute that Petitioner was prepared to submit valid Medicare claims.  P. Ex. 1.  There is no dispute that Petitioner was properly staffed, equipped, and stocked to furnish health care related items or services.  P. Ex. 1; P. Ex. 3 at 1 (document page counter); P. Ex. 4 at 1-2 (document page counter).

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Petitioner satisfied the definition of operational under 42 C.F.R. § 424.502 at the time of the June 2, 2023 site inspection even though the office was not open or staffed at the time.  Accordingly, I conclude that there was no basis to deny Petitioner enrollment pursuant to 42 C.F.R. § 424.530(a)(5)(i) on grounds Petitioner was not operational within the meaning of 42 C.F.R. § 424.502 at the time of the site inspection.

III. Conclusion

For the foregoing reasons, I conclude that CMS had no basis to deny Petitioner’s application to enroll in Medicare pursuant to 42 C.F.R. § 424.530(a)(5)(i).

Endnotes

¹ Citations are to the 2022 revision of the Code of Federal Regulations (C.F.R.), which was in effect at the time of the initial determination, unless otherwise indicated.  An appellate panel of the Departmental Appeals Board (Board) concluded in Mark A. Kabat, D.O., DAB No. 2875 at 9-11 (2018) that the applicable regulations are those in effect at the time of the initial determination.

² The applications are in evidence as CMS Ex. 1 at 22-36.

³  Petitioner's May 17, 2023 CMS-855B also lists 1507 W. League City Parkway, Suite 200, League City, Texas as a practice location.  CMS Ex. 1 at 25.  There is no evidence that a site inspection was conducted at the second practice location.  The evidence does not show whether Petitioner filed a separate CMS-855B for the second practice location or was attempting to enroll both practice locations as a clinic/group practice with a single application.  The Medicare enrollment summary reflects the two practice locations for Petitioner and supports the inference that the denial of Petitioner’s Medicare enrollment is related to both practice locations. CMS Ex. 2.

⁴ The reconsidered determination indicates that the MAC considered the site inspection report but it is listed as an exhibit separate from the MAC’s initial denial and Petitioner’s reconsideration request.  CMS Ex. 1 at 1-2.  The fact the site report was considered on reconsideration is not inconsistent with Petitioner’s testimony that he did not receive a copy with the initial determination.  Rather, the consideration of the site inspection report as a separate exhibit is consistent with the MAC obtaining that report from its own file.

⁵ Remand to CMS to provide Petitioner a proper reconsidered determination may be appropriate.  However, remand is unnecessary, as my review of whether CMS has a basis to deny Petitioner’s enrollment is de novo and I do not require a new reconsidered determination by CMS to decide the issue in this case.

⁶ A “supplier” furnishes services under Medicare and includes physicians or other practitioners and facilities that are not included within the definition of the phrase “provider of services.”  Act § 1861(d) (42 U.S.C. § 1395x(d)).  A “provider of services,” commonly shortened to “provider,” includes hospitals, critical access hospitals, skilled nursing facilities, comprehensive outpatient rehabilitation facilities, home health agencies, hospice programs, and a fund as described in sections 1814(g) (42 U.S.C. § 1395f(g)) and 1835(e) (42 U.S.C. § 1395n(e)) of the Act.  Act § 1861(u) (42 U.S.C. § 1395x(u)).  The distinction between providers and suppliers is important because they are treated differently under the Act for some purposes.  Petitioner, doing business as a physician practice, is a supplier under the Act.  Act § 1861(d), (q), (r) (42 U.S.C. § 1395x(d), (q), (r)); 42 C.F.R. § 424.502.

⁷  Petitioner is not a supplier of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) for which requirements are much more detailed.  42 C.F.R. § 424.57(b)-(d).

⁸ If CMS is dissatisfied with a reconsidered determination, CMS may also request ALJ review.  If CMS is dissatisfied with an ALJ decision, CMS may request Board review.  42 C.F.R. § 498.5(l)(2)-(3). 

⁹ The Standing Order advised CMS that if Petitioner filed a cross-motion for summary judgment, the CMS reply brief would serve as the CMS opposition to the cross-motion.  Standing Order ¶ D.3.