Vital Care Medical Transportation, LLC, DAB CR5138 (2018)

Department of Health and Human Services
Civil Remedies Division

Docket No. C-18-870
Decision No. CR5138


I grant summary judgment in favor of the Centers for Medicare & Medicaid Services (CMS), sustaining its determination to revoke the Medicare enrollment and billing privileges of Petitioner, Vital Care Medical Transportation, L.L.C.

I.  Background

CMS moved for summary judgment.  With its motion it filed a brief plus six exhibits that it identified as CMS Exs. 1-6.  Petitioner opposed the motion, filing a brief plus three exhibits that it identified as P. Exs. 1-3.

It is unnecessary that I receive the parties’ exhibits into evidence inasmuch as I decide this case based on undisputed material facts.  I cite to some of the exhibits, but only to illustrate facts that are not in dispute.

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II.  Issue, Findings of Fact and Conclusions of Law

A.  Issue

The issue is whether CMS is authorized to revoke Petitioner’s Medicare enrollment and billing privileges.

B.  Findings of Fact and Conclusions of Law

These facts are undisputed.  Petitioner participated in Medicare as a supplier of ambulance services.  In its 2008 application for participation it listed an individual, Jeffrey K. Bond (“Bond”) as a person with management control.  CMS Ex. 2 at 6; CMS Ex. 6 at 14.  On February 27, 2013 Bond pled guilty to aggravated assault, a felony.  A court entered a final judgment against Bond on September 29, 2014.  CMS Ex. 3.

On October 5, 2017, CMS notified Petitioner that it had revoked Petitioner’s Medicare enrollment and billing privileges, effective September 29, 2014.  CMS Ex. 4 at 1.1   In its notice CMS cited two grounds for its determination.  First, it asserted that Bond’s felony conviction authorized revocation pursuant to 42 C.F.R. § 424.535(a)(3).  Second, it averred that Petitioner’s failure to timely report Bond’s felony conviction to CMS authorized revocation pursuant to 42 C.F.R. § 424.535(a)(9).  Id.

In its motion for summary judgment CMS relies only on its asserted authority to revoke pursuant to 42 C.F.R. § 424.535(a)(3).  This subsection authorizes CMS to revoke the Medicare billing privileges and enrollment of any supplier, such as Petitioner, whose owner or managing employee was, within the preceding 10 years, convicted of a felony that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries.  Felonies that are the basis for revocation explicitly include felony crimes against persons, such as assault, among other crimes of that nature.  42 C.F.R. § 424.535(a)(3)(i) and (ii)(A).

The undisputed material facts plainly establish CMS’s authority to revoke Petitioner’s Medicare participation and billing privileges.  The facts show that Bond, one of Petitioner’s managers, was convicted of felony assault within the 10 years prior to CMS making its determination.

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Petitioner doesn’t dispute the regulation’s language nor does it challenge any of the facts. It appears to argue that CMS is without authority to revoke here because Bond’s conviction occurred after Petitioner became an approved supplier.  That, apparently according to Petitioner, meant that Petitioner’s only obligation was to report that conviction in subsequent applications for revalidation of its billing privileges.  It contends that CMS did not allege that Petitioner failed to do so and that, consequently, no basis for revocation exists here.

That argument rests on a misreading of the regulation.  42 C.F.R. § 424.535(a)(3) and 42 C.F.R. § 424.535(a)(9) establish separate grounds for revocation.  CMS may revoke a supplier’s participation based on a manager’s conviction of a felony pursuant to 42 C.F.R. § 424.535(a)(3) whether or not the supplier subsequently reports the conviction.  If a conviction for a felony occurs within the ten previous years, CMS may revoke even if the supplier is an enrolled supplier and even if the conviction transpired after the initial enrollment date.  Nothing in the section suggests that it applies only to applicants for participation and nothing in the section suggests that it may not apply to suppliers previously enrolled.

Furthermore, there is nothing in CMS’s October 5, 2017 notice to Petitioner that suggests that CMS’s authority to revoke requires proof that both sections of the regulations are met.  The notice cited both 42 C.F.R. § 424.535(a)(3) and 42 C.F.R. § 424.535(a)(9) as grounds for revocation but those sections were clearly cited as independent authorities.  Nothing in the notice suggests that authority to revoke requires a basis under both sections as opposed to either section.

Petitioner argues also that, if CMS had authority to revoke Petitioner’s enrollment, that authority exists under 42 C.F.R. § 424.535(a)(1).  This section is a general section that allows CMS to revoke a supplier’s participation based on noncompliance with enrollment requirements.  Petitioner asserts that, assuming CMS has authority pursuant to this section, it should have afforded Petitioner the opportunity to file a plan of correction.

Petitioner misreads the regulation.  The section cited by Petitioner, 42 C.F.R. § 424.535(a)(1), grants CMS broad authority to revoke a supplier’s participation for noncompliance with enrollment requirements.  However, section 424.535(a)(3) is a specific provision allowing for revocation based on an owner or manager’s felony

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conviction.  Here, the specific provisions of section 424.535(a)(3) govern and not the general provisions of section 424.535(a)(1).  There is nothing in section 424.535(a)(3) that requires CMS to afford a supplier the opportunity to file a plan of correction.

  • 1. CMS barred Petitioner from re-enrolling in Medicare for a period of three years beginning thirty days after October 5, 2017.  Petitioner did not challenge CMS’s authority to revoke retroactively nor did it challenge its authority to impose a three year re-enrollment bar, assuming that there is a basis for revocation of Petitioner’s enrollment and billing privileges.