One Source Medical Group, LLC, DAB CR6408 (2023)

DECISION

I sustain the determinations of a Medicare contractor, as ratified by the Centers for Medicare & Medicaid Services (CMS), to revoke the Medicare billing privileges and enrollment of Petitioner, One Source Medical Group, LLC a supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), and to impose a one-year bar against Petitioner’s re-enrolling in Medicare. 

I. Background

This case was transferred to my docket recently from the docket of another administrative law judge. 

The record includes the parties’ briefs and proposed exhibits. CMS filed a brief, a reply brief, and nine exhibits, identified as CMS Ex. 1 – CMS Ex. 9. Petitioner filed a brief and a single exhibit, identified as P. Ex. 1. I receive the parties’ exhibits into the record. 

P. Ex. 1 is the attestation of Robert Mueller, Petitioner’s vice president in charge of compliance. CMS did not request to cross-examine him. Mr. Mueller is the only witness

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in this case. I find this case ripe for decision based on the parties’ exchanges. There is no need to convene an in-person hearing.

II. Issue, Findings of Fact and Conclusions of Law

A. Issue

The issue is whether the contractor and CMS may revoke Petitioner’s Medicare billing privileges and impose a bar on re-enrollment against Petitioner. 

B. Findings of Fact and Conclusions of Law

There are regulations that govern the participation of DMEPOS suppliers in the Medicare program. Pertinent here are the participation requirements stated at 42 C.F.R. §§ 424.57(c)(2) and (c)(10). A DMEPOS supplier must report to CMS within 30 days any change in information that it has supplied with its application for Medicare enrollment. 42 C.F.R. § 424.57(c)(2). 

A DMEPOS supplier must at all times maintain a comprehensive liability insurance policy of at least $300,000 at its place of business. Failure to do so will result in revocation of billing privileges retroactive to the date that the insurance lapsed. 42 C.F.R. § 424.57(c)(10). 

CMS may revoke a DMEPOS supplier’s billing privileges and Medicare participation for failure to comply with participation requirements. 42 C.F.R. §§ 424.57(e); 424.535(a)(1). CMS may impose a re-enrollment bar for one to 10 years as a remedy for a supplier’s noncompliance with participation requirements. 42 C.F.R. § 424.535(c)(1).1 

CMS alleges that revocation of Petitioner’s Medicare billing privileges and participation is justified by Petitioner’s noncompliance with DMEPOS participation requirements consisting of failures to: (1) timely inform CMS of changes in its hours of operation; and (2) provide CMS with proof of its continued liability insurance. CMS argues additionally that the bases for revocation also authorize it to impose a re-enrollment bar against Petitioner. 

Either failure is in and of itself sufficient to provide CMS with authority to revoke Petitioner’s Medicare billing privileges and participation and to impose a re-enrollment bar. 

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On November 3, 2020, an inspector employed by a Medicare contractor visited Petitioner’s Augusta, Georgia facility to perform an onsite inspection of the premises. The inspector noted that Petitioner posted its hours of operation on its facility door, stating that those hours were from 9:00 a.m. to 4:00 p.m., Monday through Friday. CMS Ex. 1 at 10. 

The posted hours differ from the hours stated in Petitioner’s Medicare enrollment application. In the application, Petitioner represents that its hours of operation are from 8:30 a.m. to 4:30 p.m., Monday through Friday. CMS Ex. 1 at 1. 

The inspector found also that Petitioner’s liability insurance policy was due to expire on April 11, 2021. CMS Ex. 1 at 27. 

On August 23, 2021, the contractor sent a letter to Petitioner in which it asked Petitioner to furnish information within 21 days that would verify Petitioner’s hours of operation and the status of its liability insurance. CMS Ex. 2. The contractor informed Petitioner that failure by it to respond to the contractor’s request might cause the contractor to terminate Petitioner’s Medicare billing privileges and enrollment. Id.

The contractor sent the August 23 letter to Petitioner at two addresses, Petitioner’s facility in Augusta, Georgia, and its correspondence address in Tampa, Florida. CMS Ex. 1 at 28-29. The letter sent to the Augusta address was delivered but was then sent back to the contractor marked “addressee unknown.” CMS Ex. 4 at 1-2. There is no tracking information showing delivery or non-delivery of the letter that the contractor sent to Petitioner’s Tampa address. Petitioner did not reply to the contractor’s letter within 21 days or at all. 

On May 19, 2022, the contractor revoked Petitioner’s Medicare billing privileges and Medicare enrollment and imposed a one-year bar on re-enrollment. Petitioner’s failure to update its hours of operation within 30 days and lapsed liability insurance were among the reasons cited by the contractor for its determinations. CMS Ex. 5 at 1-3. 

The evidence cited by the contractor unequivocally supports its determinations – subsequently adopted by CMS. 

The hours of operation that Petitioner advertised at its facility plainly differ from those that Petitioner recited in its application for participation. Petitioner was obliged to inform CMS or its agent, the contractor, within 30 days of the change in business hours. It failed to do so in violation of 42 C.F.R. § 424.57(c)(2). This failure to provide CMS with necessary information is in and of itself grounds for CMS to revoke Petitioner’s billing privileges and Medicare participation and for imposition of a re-enrollment bar. 42 C.F.R. §§ 424.57(e); 424.535(a)(1); 424.535(c)(1). 

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The additional failure by Petitioner to provide the contractor and CMS with proof of a current liability insurance policy is additional grounds for revocation and imposition of a re-enrollment bar. However, in this case, it is not a prerequisite to the determinations to revoke and to impose a re-enrollment bar. Failure by Petitioner to provide CMS with information concerning a change in its business hours is sufficient basis for the determinations. 

I have considered Petitioner’s arguments and I find them to be unavailing. 

Petitioner does not deny that its posted hours of operation were different from those hours that it stated in its enrollment application. Nor does it deny its failure to send notice of the change to the contractor within 30 days of the change becoming effective. It characterizes the discrepancy between what it posted and what is in its application as a “technical error.” Petitioner’s Response to Centers for Medicare & Medicaid Services’ Prehearing Brief (Petitioner’s brief) at 2. It asserts additionally that at the time of revocation it was open for longer hours of operation than what it had reported to the contractor. Id.  It contends that beneficiaries were not harmed, as they had what it characterizes as additional time to request services from Petitioner. Id. at 2-3. 

Petitioner also attempts to shift blame to the contractor for the discrepancy between Petitioner’s posted hours of operation and the hours stated in Petitioner’s application, reciting, without documentation, what it contends are attempts by Petitioner to clear up the discrepancy that somehow fell on deaf ears. Petitioner’s brief at 3. 

Nothing that Petitioner avers gainsays the obvious discrepancy between its posted hours of operation and those that it had advertised in its enrollment application. Petitioner does not deny receiving the contractor’s August 23, 2021, letter at its Tampa, Florida correspondence address. It does not explain its failure to send a written response to the letter. Nor does it present any documentation of its asserted efforts to inform the contractor of its changed hours of operation. And finally, it does not contend that its alleged efforts to inform the contractor of its actual hours of operation were made timely. 

Petitioner’s argument that beneficiaries were unharmed by the discrepancy in stated hours of operation – an essentially equitable argument – provides no legal defense to its failure to provide the contractor timely with required information. The regulations do not require CMS to balance contractor noncompliance against the presence or absence of harm. 

Petitioner argues that it was always insured and that CMS’s assertion that it failed to maintain liability insurance is incorrect. Petitioner’s brief at 3-5. It points to a copy of its liability insurance policy that it attached to its request for a hearing, showing that it had been insured during the period that ran from April 11, 2021, to April 11, 2022, as proof of its allegedly continuously insured status. Petitioner’s brief at 4. 

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CMS objects to my accepting this policy as evidence. It notes – and Petitioner does not deny – that Petitioner failed to offer the policy to the contractor at any time prior to filing its hearing request. CMS characterizes Petitioner’s proffer as an attempt to offer new evidence not presented at reconsideration of the initial determinations without the good cause that is required by 42 C.F.R. §§ 498.56(a)(2) and (e). Respondent Centers for Medicare & Medicaid Services’ Reply to Petitioner’s Response to Centers for Medicare & Medicaid Services Pre-hearing brief (CMS’s reply brief) at 3. 

Technically, Petitioner’s reference to its insurance policy isn’t an offer of new evidence because Petitioner did not submit it as an exhibit and request that I receive it. Nevertheless, Petitioner should have submitted this policy – not just at reconsideration – but in response to the contractor’s August 23, 2021, letter. It did not proffer the policy until long after the contractor made its determination to revoke Petitioner’s billing privileges and Medicare participation. 

The contractor had every reason to conclude that there was a failure by Petitioner to maintain its insurance based on Petitioner’s failure to respond to the August 23 letter. The fact that Petitioner did not offer proof of its insurance at any time up to and including its request for reconsideration is reason enough to conclude that it slept on its opportunity to prove that it was insured. 

Moreover, and as I have explained, a finding that Petitioner’s insurance had lapsed is not a prerequisite to concluding that the contractor and CMS are authorized to revoke Petitioner’s billing privileges and Medicare participation, and to impose a one-year bar. The failure by Petitioner to inform the contractor timely of its changed business hours is reason enough to find those determinations to be authorized.