Rehab Care Associates, LLC, DAB CR5182 (2018)

Department of Health and Human Services
Civil Remedies Division

Docket No. C-16-729
Decision No. CR5182


Petitioner, Rehab Care Associates, LLC, is a group medical and rehabilitation practice, located in New Jersey that, until recently, participated in the Medicare program.  The Centers for Medicare & Medicaid Services (CMS) has revoked its Medicare supplier number, and Petitioner appeals.  CMS now moves for summary judgment.

I find that, as of December 28, 2015, the supplier was not operational to furnish Medicare-covered items or services at the practice location it listed in its 2014 revalidation application.  CMS was therefore authorized to revoke Petitioner’s supplier number.


Until its Medicare supplier number was revoked, effective December 28, 2015, Petitioner participated in the Medicare program as a supplier of medical and rehabilitative services. In a letter dated April 21, 2016, the Medicare contractor, Novitas Solutions, Inc., notified Petitioner that its Medicare supplier number was revoked retroactively, pursuant to 42 C.F.R. § 424.535(a)(5) and (9).  The letter noted that:  1) on December 28, 2015, a site

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visit to 230 North Maple Avenue, Ste. B1 329, Marlton, New Jersey, confirmed that the supplier was not operational; and 2) the supplier had not notified CMS of a change in its practice location, as required by 42 C.F.R. § 424.516.  CMS Exhibit (Ex.) 2.

Petitioner sought reconsideration.  CMS Ex. 3.  In a reconsidered determination, dated May 18, 2016, a Medicare hearing officer affirmed the revocation of Petitioner’s supplier number.  CMS Ex. 1.  Petitioner now appeals that determination pursuant to 42 C.F.R. § 424.545.

Although CMS has moved for summary judgment, I find that this matter may be decided on the written record, without considering whether the standards for summary judgment are satisfied.  In my initial order, I instructed the parties to list their proposed witnesses (if any) and to submit their written direct testimony.  Acknowledgment and Pre-hearing Order at 3, 5 (¶¶ 4, 8) (July 21, 2016).  I also directed each party to state, affirmatively, whether it intended to cross-examine any proposed witness.  Order at 5 (¶ 9).  An in‑person hearing is necessary “only if a party files admissible, written direct testimony, and the opposing party asks to cross-examine.”  Order at 5 (¶ 10).  CMS listed no witnesses.  Petitioner listed five witnesses and provided their written direct testimony (P. Exs. A-E).  However, CMS did not ask to cross-examine any of Petitioner’s witnesses.  An in-person hearing would therefore serve no purpose, and I may decide the case based on the written record, without considering whether the standards for summary judgment are satisfied.

With its motion and brief (CMS Br.), CMS submits seven exhibits (CMS Exs. 1-7).  Petitioner responds (P. Br.) and submits five exhibits (P. Exs. A-E).

In the absence of any objections, I admit into evidence CMS Exs. 1-7 and P. Exs. A-E.


CMS had the authority to revoke the supplier’s billing privileges because the medical practice was not operational at the practice location it listed on its revalidation application.1

Program requirements.  To receive Medicare payments for items furnished to a Medicare‑eligible beneficiary, a supplier, such as Petitioner, must be enrolled in the Medicare program and must have a supplier number issued by the Secretary of Health and Human Services.  Social Security Act § 1834(j)(1)(A); 42 C.F.R. § 424.505.  To keep that number, the supplier must be operational and must meet the standards set forth in 42 C.F.R. §§ 424.505; 424.510; 424.516.  CMS may revoke the supplier’s billing privileges if it fails to do so.  42 C.F.R. § 424.535(a)(1), (5).

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To be operational, the supplier must, among other requirements, have a qualified physical practice location, be open to the public, and be properly staffed, equipped, and stocked to furnish items and services.  42 C.F.R. § 424.502.

To maintain its billing privileges, a supplier must, at least every five years, resubmit and recertify the accuracy of its enrollment information, a process referred to as “revalidation.”  42 C.F.R. § 424.515.  CMS may perform an on-site inspection to verify that the information submitted is accurate and to determine the supplier’s compliance with Medicare enrollment requirements.  42 C.F.R. §§ 424.510(d)(8); 424.515(c); 424.517(a).

If the supplier is not operational, its revocation takes effect on the date CMS determines it was no longer operational.  42 C.F.R. § 424.535(g).

Petitioner’s revalidation application and the site investigation.  Here, Petitioner filed its revalidation application on July 22, 2014.  CMS Ex. 4.  In that document, it listed, as its primary practice location, 230 North Maple Ave, Suite B1 329, Marlton, New Jersey.  CMS Ex. 4 at 17.  On December 28, 2015, an investigator working for the Medicare contractor visited that address and discovered that it was not a medical practice location, but a UPS store.  CMS Ex. 6.

Petitioner concedes that the Maple Avenue address is a UPS store and not a medical practice location.  According to Petitioner, the supplier’s former billing company erroneously typed in the practice’s mailing address, rather than its practice locations.  P. Br. at 3.  The practice, according to Petitioner, was always operational at its qualified physical locations and fully open to the public.  It committed a “typographical enrollment error” that is “distinct from failing to be operational.”  P. Br. at 3.  The Departmental Appeal Board has soundly and repeatedly rejected this position.  A supplier’s practice location is “the location reported to the physician’s or physician practitioner organization’s Medicare contractor . . . .”  Jason R. Bailey, M.D., P.A., DAB No. 2855 at 10 (2018).

Petitioner also complains that CMS violated a provision in the Medicare Program Integrity Manual, which advises contractors not to “issue any revocation or revocation letter without prior approval from CMS Central Office’s provider enrollment unit.”  PIM § 15.27.2A.  CMS will review the regulatory basis for the revocation, as well as the extent to which the revoked supplier’s locations are affected by the revocation.  PIM § 15.27.2B.  Petitioner faults (without citing any actual evidence) the timing and conclusions of CMS’s geographic review.  P. Br. at 11-12.

My authority here is limited.  I may review whether the regulations authorize CMS to revoke Petitioner’s supplier number.  I may not review its decision-making processes nor

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its decision to exercise its discretion to revoke.  So long as CMS shows that one of the regulatory bases for revocation exists, I may not refuse to apply the regulation, but must uphold the revocation.  Wassim Younes, M.D. and Wassim Younes, M.D. P.L.C., DAB No. 2861 at 8 (2018), citing Patrick Brueggeman, D.P.M., DAB No. 2725 at 15 (2016).

By its own admission, Petitioner Rehab Care Associates was not operational at the practice location it listed on its revalidation application.  CMS therefore justifiably revoked its billing privileges under sections 424.535(a)(1) and (5).  December 28, 2015 is the date CMS determined that the practice was no longer operational and is therefore the appropriate revocation date.  42 C.F.R. § 424.535(g).


Because the facility was not operational at the practice location listed on its revalidation application, CMS was authorized to revoke its supplier number.

  • 1. I make this one finding of fact/conclusion of law.