Forever Medical Supplies LLC, DAB CR6039 (2022)

DECISION

Petitioner, Forever Medical Supplies LLC, is a supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), located in Oakland Park, Florida.  Until July 12, 2019, Petitioner participated in the Medicare program as a supplier of services.  The Centers for Medicare & Medicaid Services (CMS) has revoked its Medicare supplier number, and Petitioner appeals.

I find that CMS properly revoked Petitioner's supplier number.  As of July 12, 2019, the supplier was not operational to furnish Medicare-covered items or services; it was neither staffed nor accessible.

Background

Until its Medicare supplier number was revoked, effective July 12, 2019, Petitioner participated in the Medicare program as a supplier of DMEPOS.  See 42 C.F.R. § 424.57.  In a letter dated February 4, 2020, the Medicare contractor, National Supplier Clearinghouse (a division of Palmetto GBA), notified Petitioner that its Medicare supplier number was revoked retroactively, pursuant to 42 C.F.R. §§ 405.800; 424.57(e);

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424.535(a)(5); and 424.535(g).  The letter noted that the contractor attempted site visits on July 11 and 12, 2019.  The business was closed during the supplier's posted hours of operation.  The contractor therefore determined that Petitioner was no longer operational to furnish Medicare-covered items or services and that it violated all supplier standards listed in 42 C.F.R. § 424.57(c).  Pursuant to 42 C.F.R. § 424.535(g), the revocation became effective the date CMS determined that the supplier was no longer operational, July 12, 2019.  CMS Ex. 4.

Petitioner sought reconsideration.  CMS Ex. 5 at 2.  In a reconsidered determination, dated February 27, 2020, the contractor 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 all proposed witnesses and to submit their written direct testimony.  Acknowledgment and Pre-hearing Order at 3, 5 (¶¶ 4(c)(iv), 8) (May 4, 2020).  I noted that each party has the right to cross-examine any witness for whom the opposing party offers written direct testimony; however, the party must affirmatively indicate that it wishes to do so.  Acknowledgment at 5 (¶ 9).  I pointed out that a hearing would be necessary only if a party files admissible, written direct testimony, and, in compliance with the order, the opposing party asks to cross-examine.  Acknowledgment at 5 (¶ 10).

Each party lists one witness and provides a written statement.  Neither party has asked to cross-examine the opposing party's witness.  Because the witnesses' direct testimonies are already in the record, and no witnesses will be cross-examined, an in-person hearing would serve no purpose.  This matter may therefore be decided based on the written record.

With its motion and brief (CMS Br.), CMS submits seven exhibits (CMS Exs. 1-7).  Petitioner responds with a written argument (P. Br.) and three exhibits (P. Exs. 1-3).

In the absence of any objections, I admit into evidence CMS Exs. 1-3 and P. Ex. 1-7.

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Discussion

CMS properly revoked the supplier's billing privileges, because the facility was not operational; it was not staffed or accessible during its posted hours of operation.1

Requirements for a DMEPOS supplier's Medicare participation.  To receive Medicare payments for items furnished to a Medicare-eligible beneficiary, a supplier of medical equipment and supplies 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. § 424.57(c).  CMS may revoke its billing privileges if it fails to do so.  42 C.F.R. § 424.57(c)(1) and (d); 42 C.F.R. § 424.535(a)(1), (5).

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.

The supplier's location must be accessible during reasonable business hours.  The supplier must permit CMS or its agents to conduct on-site inspections to ascertain its compliance with governing regulations.  42 C.F.R. § 424.57(c)(7) and (8).  Where, as here, a contractor's representative finds the facility closed during its posted hours of operation, the supplier does not meet the requirements of section 424.57(c), and CMS may appropriately revoke its billing privileges.  Ita Udeobong, d/b/a Midland Care Medical Supply and Equipment, DAB No. 2324 (2010); see 42 C.F.R. § 424.535(a)(5)(ii) (authorizing CMS to revoke billing privileges if the supplier fails to satisfy any Medicare enrollment requirements).

The parties do not dispute the basic facts of this case.  Petitioner's posted hours of operation were Monday through Friday, 10:00 a.m. to 4:30 p.m.  CMS Ex. 3 at 1, 3, 13.  On Thursday, July 11, 2019, at 12:02 p.m., the contractor's field investigator, Jose Ortega, went to Petitioner's practice location.  He found the business closed.  He knocked repeatedly, but no one answered.  After seven to ten minutes of knocking, he left his business card and departed.  CMS Ex. 3 at 2, 7, 8-15; CMS Ex. 7 (Ortega Decl. ¶¶ 3, 5).

On Friday, July 12, 2019, Investigator Ortega returned to the practice location, arriving at approximately 11:10 a.m.  Again, the door was locked, and the business was closed.  He knocked repeatedly, but no one answered.  He called the supplier's business number, but no one answered.  CMS Ex. 3 at 2, 16, 17; CMS Ex. 7 at 2 (Ortega Decl. ¶ 7).

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Petitioner concedes that it was not open during its posted hours of operation but explains that its owner was out of town at the time.  The employee left in charge simply did not show up for work.  P. Br. at 1; P. Exs. 1, 2.

Petitioner was required to be staffed and accessible during its posted hours of operation.  By its own admission, it was not staffed and accessible on July 11 and 12, 2019.  It was therefore not in compliance with section 424.57(c)(7), and CMS justifiably revoked its billing privileges under section 424.57(e).  Ortho Rehab Designs Prosthetics and Orthotics, DAB No. 2591 at 6 (2014).

Petitioner also complains that the contractor allowed it to operate for seven months before advising it that its Medicare billing privileges were revoked retroactively.  During that time, the supplier continued to serve its Medicare customers and to bill the Medicare program.  This has resulted in a substantial overpayment, which the contractor now seeks to recover.  I agree that the delay is deeply troubling.  However, the regulation is inflexible:  if a supplier is not operational, the revocation is effective "the date that CMS or its contractor determined that the . . . supplier was no longer operational."  42 C.F.R. § 424.535(g); Jason R. Bailey, M.D., P.A., DAB No. 2855 at 19 (2018).

Further, as CMS correctly points out, I have no authority to review matters concerning Medicare overpayments.  Horace Bledsoe, M.D., and Bledsoe Family Medicine, DAB No. 2753 at 11 n.13, 14 (2016).

Conclusion

Because the facility was not operational, accessible, and staffed during its listed hours of operation, I sustain CMS's revocation of Petitioner's supplier number, effective July 12, 2019.