Skip to main content
U.S. flag

An official website of the United States government

Here’s how you know

Dot gov

Official websites use .gov
A .gov website belongs to an official government organization in the United States.

HTTPS

Secure .gov websites use HTTPS
A lock (LockA locked padlock) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.

  • About HHS
  • Programs & Services
  • Grants & Contracts
  • Laws & Regulations
  • Radical Transparency
  • Big Wins
Breadcrumb
  1. Home
  2. About
  3. Agencies
  4. DAB
  5. Decisions
  6. ALJ Decisions
  7. 2020
  8. MDS Medical Device Specialty, Inc., DAB CR5605 (2020)
  • Departmental Appeals Board (DAB)
  • About DAB
    • Organizational Overview
    • Who are the Judges?
    • DAB Divisions
    • Contact DAB
  • Filing an Appeal Online
    • DAB E-File
    • Medicare Operations Division (MOD) E-File
  • Different Appeals at DAB
    • Appeals to DAB Administrative Law Judges (ALJs)
      • Forms
      • Procedures
    • Appeals to Board
      • Practice Manual
      • Guidelines
      • Regulations
      • National Coverage Determination Complaints
    • Appeals to the Medicare Appeals Council (Council)
      • Forms
      • Fully Integrated Duals Advantage (FIDA) Demonstration Project
  • Alternative Dispute Resolution Services
    • Sharing Neutrals
    • ADR Training
    • Other ADR Services
  • DAB Decisions
    • Board Decisions
    • DAB Administrative Law Judge (ALJ) Decisions
    • Medicare Appeals Council (Council) Decisions
  • Stakeholder Feedback
  • Careers
    • Open Career Opportunities
    • Internships & Externships

MDS Medical Device Specialty, Inc., DAB CR5605 (2020)


Department of Health and Human Services
DEPARTMENTAL APPEALS BOARD
Civil Remedies Division

MDS Medical Device Specialty, Inc.,
(NPI: 1932144383)
Petitioner,

v.

Centers for Medicare & Medicaid Services.

Docket No. C-20-289
Decision No. CR5605
May 5, 2020

DECISION

I reverse the determination of a Medicare contractor, as affirmed upon reconsideration, to revoke the Medicare supplier number of Petitioner, MDS Medical Device Specialty, Inc., a supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).   The contractor and CMS lacked regulatory authority, in this case, to revoke Petitioner’s participation.

I. Background

The Centers for Medicare & Medicaid Services (CMS) moved for summary judgment, filing five supporting exhibits identified as CMS Exhibit (Ex.) 1-CMS Ex. 5.  Petitioner opposed the motion without filing supporting exhibits.

Although the facts of this case are not disputed, it is unnecessary that I decide it using the criteria for granting or denying summary judgment.  Neither CMS nor Petitioner offered the testimony of a witness.  Petitioner did not object to my receiving CMS’s proposed

Page 2

exhibits.  I receive them into the record, and I decide this case based on the parties’ written exchanges.

II. Issue, Findings of Fact and Conclusions of Law

A. Issue

The issue is whether CMS is authorized to revoke Petitioner’s participation in Medicare.

B. Findings of Fact and Conclusions of Law

A supplier, including a DMEPOS supplier, must be “operational” in order to qualify to participate in the Medicare program.  Regulations define “operational” to mean, among other things, that the supplier:

has a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims, and is properly staffed, equipped, and stocked (as applicable, based on the type of facility or organization, provider, or supplier specialty, or the services or items being rendered) to furnish these items or services.

42 C.F.R. § 424.502. 

CMS may revoke a DMEPOS supplier’s Medicare participation if it determines that the supplier is no longer operational to furnish Medicare-covered items or services.  42 C.F.R. § 424.535(a)(5)(i).

The undisputed facts of this case are that Petitioner filed an application to renew its Medicare participation on August 23, 2019.  CMS Ex. 1.  In its application, Petitioner stated that its office address was 2441 S. 1560 W. Woods Cross, UT 84087.

On October 8, 2019, an agent of the contractor visited Petitioner’s stated address in order to verify that it maintained a practice location there.  CMS Ex. 2.  The agent discovered that Petitioner was not located at that address, but that another entity occupied the premises.  Id.  Based on that finding, the contractor determined to revoke Petitioner’s Medicare participation.

Petitioner asserts that it was forced to move from its stated office address just one week prior to the contractor’s agent’s visit.  Request for Hearing Exhibit D.  It asserts that its failure to notify the contractor of this change was a mere oversight on its part.  CMS does not dispute Petitioner’s assertion.  I find that Petitioner relocated its office on or about October 1, 2019.

Page 3

CMS rests its case entirely on the fact that, as of October 8, 2019, Petitioner did not have an office at the location stated in its revalidation application.  It does not contend that Petitioner failed to meet any of the other criteria for being operational.  CMS does not assert that Petitioner, at its new office address,:  was not open to the public; that it was unprepared to submit valid Medicare claims from that new address; or that it was unstaffed, unequipped, or lacked necessary stock to furnish the items and services for which it was enrolled as a Medicare supplier.

Regulations governing DMEPOS suppliers specifically define the supplier’s duty when there is a change in the information that it has provided the contractor or CMS on its application for participation or revalidation:

The supplier must report to CMS any changes in information supplied on the application within 30 days of the change.

42 C.F.R. § 424.57(c)(2).This special requirement for DMEPOS suppliers is more stringent than the general requirement applying to all suppliers stated at 42 C.F.R. § 424.516(e)(2). That section requires suppliers to report any changes in enrollment information within 90 days.

The plain meaning of the regulatory language is that a DMEPOS supplier has a 30-day grace period within which to report changes in its application, including changes relating to its operational status.  Here, Petitioner had 30 days from October 1, 2019 to report to the contractor or CMS that it had changed its business address.  Neither the contractor nor CMS have authority to revoke Petitioner’s Medicare enrollment, because Petitioner was within that 30-day grace period on October 8, 2019.

My decision is on all fours with a Department Appeals Board decision, Adora Healthcare Services, Inc., DAB No. 2714 (2016), reconsideration denied, DAB Ruling No. 2017-4 (May 8, 2017).  In Adora, a Board appellate panel found that a home health agency’s participation could not be revoked because it was non-operational, when the facts relied on by CMS were limited to a finding that Petitioner was no longer doing business from its listed business address.  In that case, Petitioner had moved within 90 days of the inspection that found it no longer at its listed address.  The Board panel concluded that Petitioner was protected against revocation by virtue of the fact that it was still within the

Page 4

90-day grace period for notification of change in enrollment status allowed for suppliers other than DMEPOS suppliers.  42 C.F.R. § 424.516(e)(2).  The Adora analysis applies equally to the 30-day grace period allowed for DMEPOS suppliers.

/s/

Steven T. Kessel Administrative Law Judge

Back to top

Subscribe to Email Updates

Receive the latest updates from the Secretary and Press Releases.

Subscribe
  • Contact HHS
  • Careers
  • HHS FAQs
  • Nondiscrimination Notice
  • Press Room
  • HHS Archive
  • Accessibility Statement
  • Privacy Policy
  • Budget/Performance
  • Inspector General
  • Web Site Disclaimers
  • EEO/No Fear Act
  • FOIA
  • The White House
  • USA.gov
  • Vulnerability Disclosure Policy
HHS Logo

HHS Headquarters

200 Independence Avenue, S.W.
Washington, D.C. 20201
Toll Free Call Center: 1-877-696-6775​

Follow HHS

Follow Secretary Kennedy