Robert Ruper, M.D., and Retina Medical Associates Group, Inc., DAB CR5046 (2018)

Department of Health and Human Services
Civil Remedies Division

Docket No. C-17-948
Decision No. CR5046


Petitioner’s1   Medicare billing privileges were deactivated on October 26, 2016, as a result of its failure to timely comply with a Medicare enrollment revalidation request.  For the reasons discussed below, I conclude that the effective date of Petitioner’s reactivated Medicare billing privileges remains January 6, 2017, which is the date that the Medicare administrative contractor received Petitioner’s revalidation application.

I. Background and Procedural History

Petitioner is Dr. Robert Ruper, an ophthalmologist, and his medical practice, Retina Medical Associates Group, Inc.  See Centers for Medicare & Medicaid Services (CMS) Exhibits (Exs.) 1; 7 at 2.  Beginning on February 1, 2016, Petitioner entered a

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partnership” with another entity.2   See Request for Hearing; see Petitioner Brief (P. Br.) at 1-2 (stating that Petitioner “briefly went into business with Laser Eye Care of California from February 1, 2016 to September of 2016.”).  Petitioner had been enrolled in the Medicare program, and in June 2016, submitted, inter alia, a Form CMS-588 to change its current electronic funds transfer (EFT) authorization agreement.  CMS Ex. 11; see CMS Ex. 9 at 1 (letter from Noridian Healthcare Solutions, LLC (Noridian), a Medicare administrative contractor, stating that it received the application on June 21, 2016).  Petitioner indicated on the Form CMS-588 that it had a “change of ownership” since its previous EFT authorization agreement submission.3   CMS Ex. 11 at 1.  Petitioner listed an employee and billing supervisor, B. Suarez, as its contact person.  CMS Ex. 11 at 2; see CMS Ex. 3 at 1 (Dr. Ruper’s discussion that Ms. Suarez is a former employee); P. Br. at 2 (stating that “Ruper’s new employee submitted a change to his Electronic Funds Transfer Authorization agreement”).  Petitioner appended to the Form CMS-588 a recent letter from its bank referencing its accountholder, Retina Associates Medical Group, Inc.  CMS Ex. 11 at 4.

On June 29, 2016, a Noridian provider enrollment representative sent an email message to Ms. Suarez requesting “revisions and/or supporting documentation” to its application no later than July 29, 2016.  CMS Ex. 10 at 1.  Noridian’s request included portions of the Form CMS-855B application pertaining to ownership and managing control, and it also requested additional financial institution information and a cancelled check.  CMS Ex. 10 at 2.  In addition, Noridian requested that Petitioner provide updated delegated official information and a signed certification statement.  CMS Ex. 10 at 2-3.

On August 5, 2016, Noridian informed Petitioner by letter that it had rejected the June 2016 application because it was incomplete.  CMS Ex. 9.  Noridian cautioned that “[t]his may cause your billing privileges to be deactivated . . . .”  CMS Ex. 9 at 1.  The letter explained that Noridian had requested additional information in writing on June 29, 2016, and in a telephone conversation on July 29, 2016.4

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Noridian deactivated the Medicare enrollment of Retina Medical Associates Group, Inc. on October 26, 2016.  See CMS Ex. 8.

Petitioner submitted an enrollment application for purposes of reactivating its Medicare enrollment on January 6, 2017.  CMS Ex. 7.  On February 23 and March 17, 2017, Noridian sent separate letters to Dr. Ruper’s medical practice (CMS Ex. 4) and Dr. Ruper (CMS Ex. 5) in which it informed Petitioner that it had reactivated Petitioner’s Medicare enrollment and billing privileges, effective January 6, 2017.

On March 2, 2017, Petitioner, through Dr. Ruper, submitted a request for reconsideration of the effective date assigned for reactivation.  CMS Ex. 3.  Petitioner explained the following, in pertinent part:

I am disputing the effective date as there was an administrative mistake done on behalf of a former employee. The revalidation request was initially filled out by this employee Bertha Suarez incorrectly. Subsequently, Bertha Suarez from Laser Eye Care of California was contacted by Medicare and was given the opportunity to resubmit the revalidation with the appropriate corrections. Bertha was given a due date to complete the request, and she failed to do so, which ultimately led to the deactivation of the group. Unfortunately, I was not made aware of this error until recently as I noticed the group was no longer receiving payment for the Medicare patients being treated. This prompted me to call Medicare, at which time, I was notified by Mel that the group had been deactivated due to the aforementioned situation.

Please note the group has been a Medicare participant for 40 plus years with no gaps and without issue. For these reasons, I am requesting that the effective date for the group be reconsidered and changed to October 26, 2016 as the large gap in enrollment dates will result in great financial hardship for the group since a great deal of Medicare patients have been seen between October 26, 2016 and January 6, 2017.

CMS Ex. 3 at 1-2. 

Noridian issued a reconsidered determination on May 23, 2017, in which it explained that it correctly rejected Petitioner’s August 5, 2016 change of information application “due to not supplying the needed corrections included in the email sent June 29, 2016.”  CMS Ex. 2 at 2.  The letter further explained that the August 5, 2016 rejection letter “included that the group could face being deac[tivated] if the required changes were not completed.”  CMS Ex. 2 at 2.  Noridian explained that it deactivated Petitioner on October 26, 2016 “due to failing to submit a new application to complete the changes that

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are required to be updated on their enrollment record,” and that the January 6, 2017 effective date of reactivated billing privileges is correct because “[a] reactivation effective date is the date the contractor receives the application that is processed” and that “[a] reactivation is not eligible for retrospective billing.”  CMS Ex. 2 at 2. 

Petitioner submitted a request for hearing that was received at the Civil Remedies Division on July 21, 2017.  CMS filed a motion for summary judgment, with a supporting memorandum in support of summary judgment (CMS Br.), along with eleven exhibits.5   (CMS Exs. 1 - 11).  Petitioner filed a response (P. Br.).  In the absence of any objections, I admit CMS Exhibits 1 through 11 into the record. 

Neither party has offered the testimony of any witnesses, and therefore, a hearing for the purpose of cross‑examination of witnesses is not necessary.  See Acknowledgment and Pre-Hearing Order, §§ 8, 9, and 10.  I consider the record in this case to be closed, and the matter is ready for a decision on the merits.6

II. Issue

Whether CMS had a legitimate basis for establishing January 6, 2017, as the effective date of Petitioner’s reactivated billing privileges.

III. Jurisdiction

I have jurisdiction to decide this case.  42 C.F.R. §§ 498.3(b)(15), 498.5(l)(2).

IV. Findings of Fact, Conclusions of Law, and Analysis

1. On or about June 21, 2016, Petitioner submitted a Form CMS‑588 in which it reported a change in ownership, but it did not submit an enrollment application updating its enrollment information at that time.

2. On June 29, 2016, Noridian sent an email to Petitioner in which it requested that Petitioner submit updated enrollment

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    information, to include information regarding its reported change in ownership.

3. After Petitioner did not respond to the email request, Noridian sent Petitioner a letter informing Petitioner that it had rejected Petitioner’s application and that Petitioner’s enrollment could be deactivated.

4. Because as of October 26, 2016, Petitioner had not submitted the requested update of its enrollment information, Noridian deactivated Petitioner’s enrollment as of that date.

5. Petitioner submitted a new enrollment application on January 6, 2017.  

6. An effective date earlier than January 6, 2017, the date Noridian received Petitioner’s enrollment application for purposes of reactivation, is not warranted for the reactivation of Petitioner’s Medicare enrollment and billing privileges.

Section 1831 of the Social Security Act (the Act) (42 U.S.C. § 1395j) establishes the supplementary medical insurance benefits program for the aged and disabled known as Medicare Part B.  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)).  Petitioner is a “supplier” of services under the Act and the regulations.  A “supplier” furnishes services under Medicare, and the term “supplier” applies to 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)).  Pursuant to 42 C.F.R. § 424.505, a provider or supplier must be enrolled in the Medicare program and be issued a billing number to have billing privileges and to be eligible to receive payment for services rendered to a Medicare-eligible beneficiary. 

The effective date of enrollment in Medicare of a physician or physician organization is governed by 42 C.F.R. § 424.520(d).  Pursuant to section 424.520(d), the effective date of enrollment for a physician or physician organization may only be the later of two dates:  the date when the practitioner filed an application for enrollment that was subsequently approved by a Medicare contractor charged with reviewing the application on behalf of CMS; or, the date when the practitioner first began providing services at a new practice location.  As applicable here, an enrolled physician or physician organization may retrospectively bill Medicare for services provided to Medicare-eligible beneficiaries up to 30 days prior to the effective date of enrollment, if circumstances precluded enrollment before the services were provided.  42 C.F.R. § 424.521(a).

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CMS is authorized to deactivate an enrolled supplier’s Medicare billing privileges if the enrollee does not provide complete and accurate information within 90 days of a request for such information.  42 C.F.R. § 424.540(a)(3).  If CMS deactivates a supplier’s Medicare billing privileges, “[n]o payment may be made for otherwise Medicare covered items or services furnished to a Medicare beneficiary.”  42 C.F.R. § 424.555(b).  Further, and quite significantly, the Departmental Appeals Board (DAB) has unambiguously stated that “[i]t is certainly true that [the petitioner] may not receive payment for claims for services during any period when his billing privileges were deactivated.”  Willie Goffney, Jr., M.D., DAB No. 2763 at 6.  The regulation authorizing deactivation explains that “[d]eactivation of Medicare billing privileges is considered an action to protect the provider or supplier from misuse of its billing number and to protect the Medicare Trust Funds from unnecessary overpayments.”  42 C.F.R. § 424.540(c).  

The reactivation of an enrolled provider or supplier’s billing privileges is governed by 42 C.F.R. § 424.540(b), and the process for reactivation is contingent on the reason for deactivation.  If CMS deactivates a supplier’s billing privileges due to the supplier’s failure to respond to a request for updated enrollment information, such as in this case, the supplier may apply for CMS to reactivate its Medicare billing privileges by completing and submitting the appropriate enrollment application(s) or recertifying its enrollment information, if deemed appropriate.  42 C.F.R. §§ 424.540(a)(3), (b)(1).

The facts are simple:  Petitioner entered a “partnership” with another entity beginning in February 2016.  CMS Ex. 11 at 1.  The record does not evidence that Petitioner had previously reported that it had entered this partnership; rather, Petitioner inadvertently reported this change of ownership when it sought to update its EFT authorization agreement.7   CMS Ex. 11 at 1.  In response to Petitioner’s submission of an EFT

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authorization agreement that reported a change in ownership (CMS Ex. 11 at 1), Noridian requested that Petitioner update its enrollment information.  CMS Ex. 10.  Petitioner did not comply with the request, and Noridian sent Petitioner a letter notifying it that Noridian had rejected its June 2016 application and that it could be subject to deactivation.  CMS Ex. 9.  After not receiving the requested and required update to its enrollment information, Noridian deactivated Petitioner’s Medicare enrollment.  See CMS Ex. 8.  Petitioner submitted a new application on January 6, 2017 (CMS Ex. 7 at 1), and Noridian ultimately processed that application to approval.  CMS Exs. 4, 5.  Noridian granted an effective date of reactivated billing privileges of January 6, 2017, the date it received the enrollment activation for purposes of reactivation.  CMS Ex. 7 at 1.

The pertinent regulation with respect to the effective date of reactivation is 42 C.F.R. § 424.520(d).  Arkady B. Stern, M.D., DAB No. 2329 at 4 (2010).  Section 424.520(d) states that “[t]he effective date for billing privileges for physicians . . . is the later of – (1) [t]he date of filing of a Medicare enrollment application that was subsequently approved by a Medicare contractor; or (2) [t]he date that the supplier first began furnishing services at a new practice location.”  The DAB has explained that the “date of filing” is the date “that an application, however sent to a contractor, is actually received.”  Alexander C. Gatzimos, MD, JD, LLC, DAB No. 2730 at 5 (2016) (emphasis omitted).  Petitioner’s date of filing was January 6, 2017, the date Noridian received its enrollment application.  CMS Ex. 7 at 1.  Based on the January 6, 2017 receipt date of the enrollment application, Noridian correctly assigned a January 6, 2017 effective date for reactivated billing privileges.  See Goffney, DAB No. 2763 at 6 (“[i]t is certainly true that [the petitioner] may not receive payment for claims for services during any period when his billing privileges were deactivated.”); 42 C.F.R. § 424.520(d).  The DAB has explained that a deactivation action is not reviewable, and “[t]he only action in the reconsidered determination which is appealable is . . . the initial determination of the effective date of the enrollment application reinstating [the petitioner].”8   Goffney, DAB No. 2763 at 3-5.  Noridian correctly deactivated Petitioner’s billing privileges because it failed to comply with the request for additional information in accordance with the time period prescribed by 42 C.F.R. § 424.540(a)(3), and Noridian assigned an appropriate effective date for Petitioner’s reactivated billing privileges, January 6, 2017, based on a correct application of 42 C.F.R. § 424.520(d).

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Petitioner does not contend that Noridian was not authorized to deactivate its enrollment and billing privileges from October 26, 2016, until its reactivation on January 6, 2017.  Rather, Petitioner limits its arguments to equitable ones that are not based on the merits, arguing that “equity can be considered, and in some situation[s] is the basis for retroactive billing, under Title 42 of the Code of Federal Regulations section 424.521, subdivision (a).”  P. Br. at 3.  Petitioner further argues that “equitable consideration is appropriate because the statute already allows for exceptions based on equity and strict adherence to the black letter law leads to an unjust result.”  P. Br. at 4.  To the extent that Petitioner’s argument can be construed as a request for equitable relief in the form of an earlier effective date of reactivated billing privileges, I am unable to grant equitable relief.  US Ultrasound, DAB No. 2302 at 8 (2010) (“[n]either the ALJ nor the [DAB] is authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements.”).  I cannot grant Petitioner relief on this basis because I do not have the authority to “[f]ind invalid or refuse to follow Federal statutes or regulations or secretarial delegations of authority.”  See, e.g.,, L.L.C., DAB No. 2289 at 14 (2009) (“An ALJ is bound by applicable laws and regulations and may not invalidate either a law or regulation on any ground, even a constitutional one.”).  I reiterate that, despite Petitioner’s belief that the effective date of its reactivated billing privileges is unjust, Petitioner’s billing privileges had been deactivated for slightly longer than two months, resulting in a gap in billing privileges for 72 days.  Had Noridian pursued revocation based on Petitioner’s failure to report a change in ownership, it could have revoked Petitioner’s enrollment and imposed a much lengthier re-enrollment bar.  See 42 C.F.R. § 424.535(a)(9), (c)(1).  To the extent that Petitioner did not timely report change in ownership (CMS Ex. 11 at 1), Noridian exercised significant discretion in its favor; Petitioner is correct that strict adherence to the law would have yielded a harsh result, and Petitioner is fortunate that Noridian pursued deactivation rather than revocation. 

In the absence of any basis to grant an earlier date for the reactivation of billing privileges, the January 6, 2017 effective date for the reactivation of Petitioner’s billing privileges must stand.

V. Conclusion

For the foregoing reasons, I uphold the January 6, 2017 effective date of Petitioner’s reactivated billing privileges.

  • 1. I collectively refer to Robert Ruper, M.D., and Retina Medical Associates Group, Inc., as a single entity.
  • 2. The record does not contain evidence that Petitioner reported a change of ownership or other enrollment information until June 2016. See CMS Ex. 11. When it reported the change of ownership, it placed a check mark to indicate it had a change of ownership but provided no further details. CMS Ex. 11 at 1.
  • 3. The Form CMS-588 instructs: “If you checked either a change of ownership or change of practice location above, you must submit a change of information (using the Medicare enrollment application) to the Medicare contractor that services your geographical area(s) prior to or accompanying this EFT authorization agreement submission.” CMS Ex. 11 at 1. Petitioner did not submit a Medicare enrollment application as directed.
  • 4. The letter states: “We visited about what information was missing on 7/29/2016.” The author of the letter is presumably based in Fargo, ND, and Petitioner is based in California. The “visit” referenced by Noridian is clearly a telephone conversation.
  • 5. CMS initially submitted its supporting exhibits collectively as a single exhibit, and I directed CMS to re-file its pre-hearing exchange. See Acknowledgment and Pre-Hearing Order, § 5 (requiring each exhibit to be filed as a separate documents in DAB E-File). CMS subsequently submitted a substitute pre-hearing exchange.
  • 6. It is unnecessary in this instance to address the issue of summary judgment, as neither party has requested an in person hearing.
  • 7. As I previously referenced, the available evidence indicates that Petitioner did not report a change in ownership until June 2016. CMS Ex. 11. While not addressed by CMS, I recognize that such delayed notification of a change in ownership, if supported by the evidence, could have resulted in the revocation of billing privileges based on a failure to comply with enrollment requirements. See 42 C.F.R. §§ 424.516(d), 424.535(a)(9). In addition to revocation of billing privileges, such a failure to meet enrollment requirements could have resulted in one-year re-enrollment bar, at a minimum, whereas the total duration of Petitioner’s deactivated billing privileges was for slightly longer than two months. 42 C.F.R. § 424.535(c). Thus, it may be fortuitous for Petitioner that Noridian deactivated its billing privileges rather than revoking its Medicare supplier agreement and establishing a re-enrollment bar. Although Petitioner attributes its failure to timely update its enrollment information to an employee, Dr. Ruper was ultimately responsible for updating Petitioner’s enrollment information, regardless of whether Noridian requested such an update.
  • 8. The DAB explained: “Moreover, neither [42 C.F.R. §] 424.545(b) nor any other regulation provides appeal rights from the contractor’s deactivation determination or any rebuttal determination.” Goffney, DAB No. 2763 at 5; see also Arkady B. Stern, M.D., DAB No. 2417 at 3 n.4 (2011) (Petitioner argues on appeal that deactivation was improper, but the DAB “does not have the authority to review” deactivation under circumstances of this case, (citing 42 C.F.R. §§ 424.545(b) and 498.3(b))); Andrew J. Elliott, M.D., DAB No. 2334 at 4 n.4 (2010) (DAB “does not have authority to review” a deactivation).