Iowa Cancer Specialists, PC, DAB No. 3109 (2023)

FINAL DECISION ON REVIEW OF ADMINISTRATIVE LAW JUDGE DECISION

Iowa Cancer Specialists, PC (Petitioner) appeals the September 30, 2019 decision of an Administrative Law Judge (ALJ), captioned Iowa Cancer Specialists, PC, DAB CR5434 (ALJ Decision).  The ALJ upheld the determination of the Centers for Medicare & Medicaid Services (CMS) that the effective date of Petitioner’s reactivated Medicare billing privileges is August 8, 2018.  We affirm the ALJ Decision for the reasons stated below.

Legal Background

1. Enrollment, Revalidation, Deactivation, and Reactivation

Under the Social Security Act (Act), the Department of Health and Human Services administers the Medicare program through CMS and administrative contractors.  Act §§ 1816, 1842, 1874A.  Regulations at 42 C.F.R. Part 424, Subpart P “contain the requirements for enrollment, periodic resubmission and certification of enrollment information for revalidation, and timely reporting of updates and changes to enrollment information.”¹  42 C.F.R. § 424.500. 

A health care “supplier” – including an “entity” such as Petitioner – must be enrolled in the Medicare program to receive payment from the program for covered items or services.  Act § 1861(d); 42 C.F.R. §§ 400.202 (defining “Supplier” as “a physician or other practitioner, or an entity other than a provider, that furnishes health care services

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under Medicare”), 424.500, 424.505.  To enroll, a supplier must “submit a complete enrollment application and supporting documentation to the designated Medicare fee-for-service contractor.”  42 C.F.R. § 424.510(d)(1); see also id. § 424.510(a)(1).  The enrollment application must contain “complete, accurate, and truthful responses to all information requested” and all supporting documentation required by CMS.  Id. § 424.510(d)(2)(i)-(iii).  The enrollment process includes identifying the supplier, validating its eligibility to provide items or services to Medicare beneficiaries, identifying and confirming its practice location and owners, and granting it Medicare billing privileges.  Id. § 424.502 (defining “Enroll/Enrollment”).

Once a supplier’s enrollment application is validated, the supplier enters a five-year revalidation cycle, which means that to maintain Medicare billing privileges the supplier must resubmit and recertify the accuracy of its enrollment information every five years or at other “off cycle” intervals as CMS requires.  See 42 C.F.R. §§ 424.515, 424.516.  CMS contacts each supplier when it is time to revalidate its enrollment information.  Id. § 424.515(a)(1).  The supplier then must timely “submit to CMS the applicable enrollment application with complete and accurate information and applicable supporting documentation.”  Id. § 424.515(a)(2).  

CMS is authorized to reject a supplier’s application and deactivate a supplier’s billing privileges if the supplier does not timely furnish complete requested information or supporting documentation.  42 C.F.R. §§ 424.525(a)(1), (2); 424.540(a)(3).  To “deactivate” a supplier’s billing privileges means they “were stopped, but can be restored upon the submission of updated information.”  Id. § 424.502.  CMS may not reimburse a supplier for otherwise covered items or services if (and while) the supplier’s billing privileges are deactivated.  Id. § 424.555(b). 

To reactivate Medicare billing privileges, a supplier that is deactivated for not submitting timely and complete revalidation information must submit a new enrollment application, or at least (when deemed appropriate) recertify that its enrollment information currently on file with Medicare is correct.  42 C.F.R. § 424.540(b).  A Medicare contractor’s approval of the revalidation enrollment application determines the effective date of the supplier’s revalidated billing privileges in accordance with section 424.520(d).  “The effective date for billing privileges,” per section 424.520(d), is “the later of” either “[t]he date of filing of a Medicare enrollment application that was subsequently approved by a Medicare contractor” or “[t]he date that the supplier first began furnishing services at a new practice location.”  CMS explained, in the preamble to the rulemaking that promulgated section 424.520, that “date of filing” means the date 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). 

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2. Administrative Review

The effective date of a supplier’s billing privileges is among the specified “initial determinations” subject to administrative review under 42 C.F.R. Part 498.  See 42 C.F.R. §§ 498.3(a)(1), (b)(15), 498.5(l); Victor Alvarez, M.D., DAB No. 2325, at 3 (2010).  A dissatisfied supplier may request a “reconsidered determination” of the effective date from CMS or its contractor, then a hearing on the reconsidered determination before an ALJ.  42 C.F.R. § 498.5(l)(1), (2).  A supplier dissatisfied with an ALJ decision may request review by the Departmental Appeals Board (Board).  Id. § 498.5(l)(3).    

However, neither the rejection of a supplier’s enrollment application, nor deactivation of a supplier’s billing privileges, is an “initial determination” subject to ALJ and Board review under 42 C.F.R. Part 498.  “Enrollment applications that are rejected are not afforded appeal rights.”  42 C.F.R. § 424.525(d).  A supplier whose billing privileges are deactivated may file a written rebuttal with the contractor per section 424.545(b), “but has no right to appeal the contractor’s determination on deactivation to an ALJ or the Board.”  Chaplin Liu, M.D., DAB No. 2976, at 3 (2019).

Case Background²

1. The initial and reconsidered determinations

Petitioner is a clinic/group practice that is incorporated and located in Iowa.  See CMS Ex. 3, at 1-3.  As a clinic/group practice, Petitioner is a “supplier” for purposes of the Medicare program.  ALJ Decision at 5.

On April 30, 2018, CMS contractor Wisconsin Physicians Service Insurance Corporation (WPS) notified Petitioner by letter to revalidate its Medicare enrollment by July 31, 2018, or “we may stop your billing privileges.”  ALJ Decision at 1; CMS Ex. 2, at 1.

In May 2018, WPS received a revalidation application from Petitioner.  ALJ Decision at 2; CMS Ex. 1, at 2; CMS Ex. 3, at 1.  It identified Carol K.³ as a managing employee and the Enrollment Application Contact Person for Petitioner, and provided Carol K.’s telephone and fax numbers and email address.  ALJ Decision at 2; CMS Ex. 3, at 4, 6-7. 

On June 4, 2018, WPS emailed Petitioner a letter, addressed to the attention of Carol K., acknowledging receipt of Petitioner’s revalidation enrollment application and requesting additional information.  ALJ Decision at 2 & n.2; CMS Ex. 1, at 2; CMS Ex. 4.  WPS requested:  verification of each new practice location and phone number; a copy of any

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required business occupancy license/permit (or signed statement that none was required); confirmation concerning a newly added Authorized Official & Managing Employee; and a newly completed and dated CMS 855B Certification Statement.  CMS Ex. 4, at 1.  WPS’s letter warned that “[f]ailure to submit a complete revalidation enrollment application(s) and all supporting documentation within 30 days will result in deactivation of your Medicare billing privileges.”  CMS Ex. 4, at 1.  Also on June 4, 2018, a WPS analyst called Carol K. and left a voice mail requesting a call back regarding the same information and documentation requested in the letter.  ALJ Decision at 2; CMS Ex. 5.

On July 6, 2018, WPS rejected Petitioner’s application pursuant to 42 C.F.R. § 424.515 for Petitioner’s failure to respond to informational inquiries and advised Petitioner to submit a new application with all required documentation.  ALJ Decision at 2; CMS Ex. 1, at 2; CMS Ex. 6, at 1.  Also on July 6, 2018, WPS sent a letter notifying Petitioner of deactivation of its billing privileges effective July 31, 2018, for failure to revalidate Petitioner’s enrollment record or respond to informational requests, and providing information on how to recover Medicare billing privileges.  ALJ Decision at 2; CMS Ex. 7, at 1.

On August 8, 2018, WPS received an electronic revalidation application for Petitioner.  ALJ Decision at 2; CMS Ex. 1, at 2; CMS Ex. 8.  It still identified Carol K. as the Enrollment Application Contact Person for Petitioner.  CMS Ex. 8, at 6.

On September 20, 2018, WPS processed Petitioner’s revalidation application and reactivated Petitioner as a supplier, but with a gap in billing privileges.  ALJ Decision at 2; CMS Ex. 1, at 2.  WPS’s notification letter to Petitioner stated, “you will have a gap in billing privileges from July 31, 2018 through August 08, 2018 for failing to respond to a development request related to a revalidation application.”  ALJ Decision at 2-3; CMS Ex. 9, at 1.  WPS further explained, “You will not be reimbursed for services provided to Medicare beneficiaries during this time period since you were not in compliance with Medicare requirements.”  ALJ Decision at 3; CMS Ex. 9, at 1.

On October 9, 2018, Petitioner mailed a reconsideration request.  ALJ Decision at 3; CMS Ex. 10.  The reconsideration request included a written account of Petitioner’s revalidation efforts and explained that Carol K. “has not worked for us for 3 years, she retired,” and a different individual “took over her position.”  CMS Ex. 10, at 3.  Petitioner raised several complaints, but did not assert that it timely complied with the June 4, 2018 development requests or that it had submitted an application for purposes of revalidation and reactivation that was (or could have been) processed to approval before August 8, 2018.  ALJ Decision at 3; CMS Ex. 10, at 3.

The reconsidered determination, issued on November 12, 2018, maintained the August 8, 2018 effective date of Petitioner’s reactivated billing privileges.  ALJ Decision at 3; CMS Ex. 1.

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2. Proceedings before the ALJ

On November 28, 2018, Petitioner requested an ALJ hearing.  ALJ Decision at 3 & n.4; Request for Hearing (RFH) at 1.  On January 9, 2019, CMS moved for summary judgment, arguing that there were no genuine issues of any material fact, CMS (through WPS) followed the Medicare enrollment regulations, and Petitioner did not contend that its effective enrollment date was incorrectly determined.  CMS Mot. for Summ. J. at 1-2; see also CMS Mem. in Supp. of Mot. for Summ. J. & Resp’t’s Br. at 8.  CMS stated that, “[a]fter receiving a completed revalidation application, CMS approved [Petitioner’s] application with a July 31, 2018, through August 8, 2018 billing privileges gap,” and “[Petitioner] therefore received the earliest possible date available under the regulations.”  CMS Mem. in Supp. of Mot. for Summ. J. & Resp’t’s Br. at 7.

Petitioner missed its February 13, 2019 deadline for submitting a pre-hearing exchange.  On February 14, 2019, the ALJ ordered Petitioner to show cause why its case should not be dismissed for abandonment.  Order to Show Cause at 1.  Petitioner opposed dismissal, explaining that, “As far as the pre-hearing exchange, we do not have any additional records to submit,” and the “initial letter we submitted when submitting the redetermination is all we have to present.”  Feb. 19, 2019 letter, CR Docket No. 6; see also Feb. 27, 2019 letter, CR Docket No. 7 (containing similar text over different signature).  The ALJ did not dismiss the case, which later was reassigned to a different ALJ.  Order Discharging Order to Show Cause at 2; Transfer Letter (Mar. 8, 2019, CR Docket No. 9).

On September 30, 2019, the assigned ALJ issued a written decision that deemed a hearing unnecessary, decided the case on the written record rather than by summary judgment, and upheld the August 8, 2018 effective date of Petitioner’s reactivated Medicare billing privileges.  ALJ Decision at 4 & n.7, 5, 8.  The ALJ concluded that “[a]n effective date earlier than August 8, 2018, is not warranted for the reactivation of Petitioner’s Medicare enrollment and billing privileges,” based upon application of 42 C.F.R. § 424.520(d) to undisputed facts.  ALJ Decision at 5, 7-8.  The ALJ emphasized that the deactivation of Petitioner’s billing privileges from July 31, 2018, through August 8, 2018, “is not reviewable.”  Id. at 7.  The ALJ considered Petitioner’s rationale that WPS sent its development request to a retired employee of Petitioner “utterly unpersuasive because Petitioner continued to list this individual, as well [as] her contact information, in its May 2018 revalidation” application, and thus merely “highlighted its own failure to provide up-to-date enrollment information.”  Id. at 7-8.  Finally, the ALJ stated that, “[t]o the extent that Petitioner’s request for relief is based on principles of equitable relief, I cannot grant such relief,” and Petitioner had cited no authority that would justify not applying the controlling regulations and statutes.  Id. at 8.

This appeal followed.

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Standard of Review

The Board’s standard of review on a disputed factual issue is “whether the ALJ decision is supported by substantial evidence in the record as a whole.”  Guidelines – Appellate Review of Decisions of Administrative Law Judges Affecting a Provider’s or Supplier’s Enrollment in the Medicare Program  (Guidelines), “Completion of the Review Process,” ¶ (c) (available at https://www.hhs.gov/about/agencies/dab/different-appeals-at-dab/appeals-to-board/guidelines/enrollment/index.html).  The Board’s standard of review on a disputed legal issue is “whether the ALJ decision is erroneous,” meaning “contrary to law or applicable regulations.”  Id.

Analysis

On appeal to the Board, Petitioner states that it understands “the reasoning behind the judge’s ruling” but considers this case to be “out of the norm.”  Request for Review (RR) at 1.  Petitioner explains that the relevant events occurred while Petitioner was “in the process of one office manager,” namely Carol K., “leaving and a new one starting.”  Id.  Petitioner states that Carol K. had animosity toward the office, and complains that WPS’s June 2018 informational inquiry “was sent to her email and the call was made to her own personal cell phone.”  Id.  Petitioner asserts that Carol K. did not pass on WPS’s requests to the new office manager or to “any of the remaining office staff.”  Id.  Petitioner adds that the new office manager “was also not properly trained” concerning updating information for Medicare.  Id.  Petitioner maintains that, as a result, Petitioner “was not aware of any of this until receiving a notice of the deactivation letter.”  Id.

CMS responds that Petitioner “does not dispute any finding of fact or conclusion of law by the ALJ,” and instead “only repeats its claim for equitable relief,” which the Board lacks power to grant.  CMS’ Appeal Br. at 5-6.  CMS argues that we should affirm that August 8, 2018, is the effective date of Petitioner’s reactivated Medicare billing privileges, as the “ALJ’s factual findings regarding the effective date were supported by substantial evidence and the legal findings were not clearly erroneous.”  Id. at 6.

1. The ALJ correctly concluded that the only reviewable issue was the effective date assigned for Petitioner’s reactivated billing privileges.

The ALJ did not err in determining that “the deactivation of Petitioner’s billing privileges is not reviewable” and that the only reviewable issue is “the effective date assigned for Petitioner’s reactivated billing privileges.”  See ALJ Decision at 7.  To the extent Petitioner seeks relief because of allegedly delayed notice of deactivation, that issue is beyond the Board’s scope of review.  See Urology Grp. of NJ, LLC, DAB No. 2860, at 7 (2018) (“[W]hether or not Petitioner was notified of the deactivation of its Medicare billing privileges is outside the Board’s authority to review.”); see also Frederick Brodeur, M.D., DAB No. 2857, at 12 (2018) (“A contractor’s deactivation decision is not

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an initial determination subject to ALJ or Board review.”) (citing 42 C.F.R. § 498.3(b)).  Petitioner appears to imply maladministration by WPS because, according to Petitioner, WPS called Carol K.’s “personal cell phone.”  RR at 1.  Yet WPS merely used the phone number that Petitioner provided in the “Enrollment Application Contact Person” sections of both its May 2018 and August 8, 2018 revalidation applications.  Compare CMS Ex. 5 with CMS Ex. 3, at 6, and CMS Ex. 8, at 6.  Regardless, the ALJ and the Board have no authority to overturn a contractor’s determination to reject an enrollment application because its processing “did not go as the applicant expected or preferred.”  Lindsay Zamis, M.D., a Pro. Corp., DAB No. 2802, at 9-10 (2017).  The only reviewable issue is the effective date of Petitioner’s reenrollment application, which CMS (through WPS) determined correctly, and the ALJ appropriately upheld, as explained below.

2. The ALJ’s conclusion that the effective date of Petitioner’s reactivated Medicare billing privileges is August 8, 2018, is supported by substantial evidence and free of legal error.

Petitioner has not challenged the factual findings supporting the ALJ’s determination that August 8, 2018, is the correct effective date for Petitioner’s reactivated Medicare billing privileges.  It is undisputed that Petitioner submitted a reactivation enrollment application in May 2018.  ALJ Decision at 2; CMS Ex. 10, at 3.  There is no dispute that on June 4, 2018, WPS sent Petitioner both written and telephonic development requests directed to the attention of Petitioner’s designated “Enrollment Application Contact Person,” Carol K.  ALJ Decision at 5; CMS Exs. 4, 5.  There also is no dispute that Petitioner did not timely submit the requested development, so WPS rejected Petitioner’s revalidation application and deactivated its billing privileges effective July 31, 2018.  ALJ Decision at 5; CMS Exs. 6, 7.  Finally, there is no dispute that on August 8, 2018, Petitioner submitted another revalidation enrollment application, which WPS approved, assigning an August 8, 2018 effective date for Petitioner’s reactivated Medicare billing privileges. ALJ Decision at 5; CMS Exs. 8, 9.  We perceive no error in these findings.

Petitioner also points to no legal error in the ALJ’s determination that August 8, 2018, is the correct effective date for Petitioner’s reactivated Medicare billing privileges, and we affirm that determination as consistent with the controlling regulation.  The relevant regulatory language of 42 C.F.R. § 424.520(d), “though perhaps intricate, is also plain.”  See Timothy Onyiuke, M.D., DAB No. 3092, at 11 (2023).  By section 424.520(d)’s plain language, the “effective date for billing privileges” must be “the later of” either 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).  Petitioner indicates no changes to its practice location since 2009.  See CMS Ex. 3, at 3, CMS Ex. 8, at 3.  Therefore, by a plain-language application of section 424.520(d)(1), Petitioner’s effective date must be August 8, 2018, and the ALJ’s determination is not legally erroneous.

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3. The ALJ correctly rejected Petitioner’s arguments that are equitable in nature.

The ALJ also did not err in denying Petitioner’s request for relief to the extent it is based on principles of equity.  By alleging that exceptional circumstances related to Petitioner’s office manager affected Petitioner’s 2018 revalidation and take this case “out of the norm,” Petitioner essentially seeks equitable relief.  However, where, as here, a petitioner’s arguments for relief concern only “tangential, immaterial explanations for Petitioner’s belated submission of compliant enrollment forms . . . those rationales cannot alter the legally required result.”  See Onyiuke at 14.  “In an appeal of a lawful CMS determination affecting a supplier’s Medicare enrollment, neither the ALJ nor the Board has the authority to reverse CMS’s action on equitable grounds.”  Edward J.S. Picardi, M.D., DAB No. 3045, at 17 (2021).  “We must follow Part 424, subpart P regulations and cannot alter a billing date for equity reasons.”  Anil Hanuman, D.O., DAB No. 3080, at 10 (2022).  The ALJ therefore did not err in rejecting Petitioner’s equitable arguments.

Conclusion

We affirm the ALJ’s September 30, 2019 decision upholding CMS’s determination that the effective date of Petitioner’s reactivated Medicare billing privileges is August 8, 2018. 

Endnotes

¹  We cite to and apply the regulations in effect on September 20, 2018, the date of the initial determination of the effective date of Petitioner’s reactivated billing privileges.  See George Yaplee Med. Ctr., DAB No. 3003, at 3 n.3 (2020) (“We cite to, and apply, the enrollment regulations in effect on . . . the date CMS’s contractor issued the initial determination.”).  CMS later amended several regulations governing Medicare enrollment and billing privileges, including 42 C.F.R. § 424.520 (amended effective January 1, 2020, January 1, 2021, and January 1, 2022).  See 84 Fed. Reg. 62,568 (Nov. 15, 2019), 85 Fed. Reg. 70,298 (Nov. 4, 2020), and 86 Fed. Reg. 62,240 (Nov. 9, 2021).  Those amendments do not apply to this appeal.

²  This section, which is drawn from the ALJ Decision and the record before the ALJ, provides context for the issues Petitioner has raised on appeal but does not replace or modify the ALJ’s factual findings.

³  We omit the full surname from this Decision for privacy protection purposes.