Beacon Ambulance Service, Inc., DAB CR5224 (2018)

Department of Health and Human Services
Civil Remedies Division

Docket No. C-18-1258
Decision No. CR5224


I grant summary judgment in favor of the Centers for Medicare & Medicaid Services (CMS) sustaining the determination of a Medicare contractor, as affirmed on reconsideration, to reactivate the Medicare enrollment of Petitioner, Beacon Ambulance Service, Inc., effective May 15, 2018.

I. Background

CMS moved for summary judgment. Petitioner opposed CMS's motion and cross-moved for summary judgment. CMS offered exhibits, identified as CMS Exhibit (Ex.) 1-CMS Ex. 20, in support of its motion. Petitioner also filed exhibits, identified as P. Ex. 1-P. Ex. 3.

It is unnecessary that I receive exhibits into evidence inasmuch as there is no disputed issue of material facts. However, I cite to some of the parties' exhibits in order to illustrate some of the facts not in dispute.

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II. Issue, Findings of Fact and Conclusions of Law

A. Issue

The issue is whether a Medicare contractor correctly determined to reactivate Petitioner's Medicare billing privileges effective May 15, 2018.

B. Findings of Fact and Conclusions of Law

Suppliers enrolled as participants in the Medicare program must revalidate their Medicare billing privileges in response to requests sent to them by CMS or one of its contractors. 42 C.F.R. § 424.515. In order to reactivate, the supplier must file certain requisite information with a Medicare contractor or with CMS. 42 C.F.R. § 424.510. CMS or its contractor may deactivate a supplier if the supplier fails to file requisite information within 90 days of receiving a request to file that information. 42 C.F.R. § 424.540(a)(3).

A decision by a Medicare contractor to deactivate a supplier's billing privileges is not an appealable determination and it confers no hearing rights on the deactivated supplier. 42 C.F.R. § 498.3(b). Consequently, a deactivated supplier has no route of appeal from the deactivation but must file a new Medicare enrollment application in order to have its billing privileges reactivated. 42 C.F.R. § 424.540(b)(1).

CMS and its contractors process an application for reactivation of billing privileges under the identical criteria that they use to process new enrollment applications, relying on the requirements of 42 C.F.R. § 424.520(d)(1). This regulation effectively states that the earliest effective date of participation of a participating Medicare supplier will be the date when the contractor receives an enrollment application that the contractor accepts. As a consequence of this application, the deactivated supplier may not receive an effective participation date (date of reactivation) that is earlier than the date that it submits an application for reactivation that the contractor subsequently approves. 42 C.F.R. § 424.520(d)(1); Medicare Program Integrity Manual (MPIM), CMS Pub. 100‑08, Ch. 15, §§,

Medicare will not accept a supplier's claims for reimbursement for items or services that it provides on dates that fall between the date of deactivation and the effective date of reactivation. 42 C.F.R. § 424.555(b). The regulations plainly allow for a reimbursement gap. But, that gap, should it occur, is the consequence of regulatory language as has been interpreted by the Secretary via CMS.

The regulations governing reactivation have been the subject of numerous cases before the Departmental Appeals Board (Board). Administrative law judges and the Board itself have ruled that CMS's application of the regulations constitutes a reasonable reading of

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regulatory language and, more importantly, expresses the Secretary's will. Willie Goffney, Jr. M.D., DAB No. 2763 at 6 (2017). CMS's interpretation of its regulations is settled law within this Department and at this juncture I have no authority to revisit it nor to overturn it.

I find the following facts to be undisputed. Petitioner is a supplier of ambulance services that participates in Medicare. CMS Ex. 1 at 2. On January 10, 2018, a Medicare contractor sent a notice to Petitioner directing it to revalidate its Medicare participation. CMS Ex. 2. On March 27, 2018, Petitioner submitted an enrollment application to CMS. CMS Ex. 3.

The contractor found Petitioner's enrollment application to be incomplete in material respects. There ensued a series of communications between the contractor and Petitioner concerning the application and the additional information that the contractor sought from Petitioner. On April 27, 2018, the contractor rejected Petitioner's application on the ground that Petitioner had not submitted a complete application and supporting information pursuant to the contractor's request. CMS Ex. 10. On April 30, 2018, the contractor advised Petitioner that it had deactivated Petitioner's Medicare billing privileges, effective April 27, due to Petitioner's failure to revalidate its Medicare enrollment. CMS Ex. 11 at 1. The contractor advised Petitioner that it must file a new enrollment application in order to reactivate its billing privileges. Id.

Petitioner then filed a new enrollment application on May 15, 2018 (Petitioner sent the application on May 14 but Petitioner's authorized official did not electronically sign it until the following day). CMS Ex. 12 at 1. The contractor, after requesting additional information from Petitioner, processed this application and on June 19, 2018, the contractor approved it, granting Petitioner an effective reenrollment date of May 15, 2018. CMS Ex. 18.

As I have discussed, Petitioner may not appeal the contractor's decision to deactivate its billing privileges. The contractor determined to reactivate Petitioner's billing privileges effective May 15, 2018 based on the reenrollment application that Petitioner's authorized representative signed on that date. That is the earliest date when Petitioner qualified for reactivation. Consequently, the undisputed facts and the applicable law support the contractor's determination and I must sustain it.

Petitioner argues that the contractor improperly rejected Petitioner's initial revalidation application. It contends that the contractor demanded without authority that Petitioner produce a municipal business license. See P. Ex. 1; Petitioner's pre-hearing brief at 3-4. That argument is a direct attack by Petitioner on the contractor's decision to reject Petitioner's revalidation application and to deactivate Petitioner's billing privileges. As I

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have explained, Petitioner has no right to a hearing to challenge the deactivation decision and I am without authority to hear Petitioner's claim that the revalidation application should not have been rejected.

Petitioner argues, however, that an appellate panel of the Departmental Appeals Board has held that a contractor may not deny an application for participation based on a supplier's failure to provide information that the contractor was not authorized to demand. Petitioner's pre-hearing brief at 4‑5; West Norman Endoscopy Ctr., LLC,DAB No. 2331 (2010). The West Norman decision is distinguishable; that case involved a challenge to the effective participation date that a contractor granted to an applicant for initial enrollment in Medicare. DAB No. 2331. This case, unlike West Norman, involves a reactivation determination after a contractor deactivated Petitioner's billing privileges. As the Board held in Willie Goffney, administrative law judges and the Board have no authority to hear a challenge to a decision to deactivate a supplier's Medicare billing privileges. DAB No. 2763 at 6. Furthermore, Petitioner offered no arguments challenging the contractor's determination to reactivate its billing privileges. Its arguments aim squarely at the decision to deactivate.

Petitioner makes additional arguments. It asserts that it acted in good faith throughout its attempts to revalidate and then, reactivate, its billing privileges. It argues also that the contractor's actions cost it a substantial sum and produced a potentially devastating financial impact on its operations.

Accepting Petitioner's contentions as true, they provide me with no basis to grant Petitioner an earlier reactivation date than May 15, 2018. As I have discussed, the earliest date that Petitioner could qualify for reactivation was May 15, 2018. The regulations confer no authority on me to grant Petitioner an earlier date. I may not waive or ignore regulatory requirements based on equitable considerations. US Ultrasound, DAB No. 2302 at 8 (2010).