West Michigan Anesthesia, PC, DAB CR6493 (2024)

DECISION

The effective date of the reactivated billing privileges of Petitioner, West Michigan Anesthesia, PC, is April 10, 2023. 

I.     Background and Procedural History

Petitioner is enrolled as a clinic/group practice in the Medicare program.  See Centers for Medicare & Medicaid Services (CMS) Ex. 15 at 1. 

On August 31, 2022, Wisconsin Physicians Service Insurance Corporation (WPS), a Medicare administrative contractor, sent a letter to Petitioner informing it that it needed to update its enrollment record because a deceased managing employee continued to be listed on its enrollment record.  CMS Ex. 2  at 1; see CMS Ex. 4 at 24 (March 2023 enrollment record listing the deceased individual identified by WPS as a managing employee).  WPS informed Petitioner that it was “allowed 90 calendar days from the postmarked date of [its] letter to provide a change of information that may allow [it] to verify [Petitioner’s] full compliance with regulations,” and that if Petitioner “fail[ed] to

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comply with the 90-day deadline, CMS will deactivate [its] enrollment for non-submission of a change of information, per 42 [C.F.R. § ] 424.540(a)(2).”  CMS Ex. 2 at 1.  After WPS did not receive a response to its letter requesting that Petitioner update its enrollment record, WPS, by three separate letters dated February 28, 2023, deactivated Petitioner’s billing privileges effective February 27, 2023, pursuant to 42 C.F.R. § 424.540(a)(2).  CMS Ex. 3.  Each letter explained that a managing employee listed on Petitioner’s enrollment record was deceased and that Petitioner had not timely updated its enrollment record.  CMS Ex. 3 at 1, 3, 5; see CMS Ex. 4 at 5, 18, 24 (March 2023 enrollment record listing the three deceased individuals identified by WPS as managing employees).  WPS informed Petitioner that, pursuant to 42 C.F.R. § 424.545(b), it could submit a written rebuttal within 15 days.  CMS Ex. 3 at 1, 3, 5.  The evidentiary record does not evidence that Petitioner submitted a written rebuttal to any of the letters. 

On March 1, 2023, Petitioner submitted an internet-based enrollment application to reactivate its Medicare billing privileges.  CMS Ex. 4.  On March 6, 2023, WPS informed Petitioner that three deceased managing employees had been listed on the March 1, 2023 enrollment application, and that the application lacked an electronic funds transfer authorization agreement and confirmation of bank account information on bank letterhead or a voided check.  CMS Ex. 5 at 1.  WPS instructed Petitioner to “upload the requested information/documents and provide new e-signatures or uploaded signatures (if applicable) . . . for expedited processing of the application.”  CMS Ex. 5 at 1-2.  WPS cautioned, “Consistent with regulations found at 42 [C.F.R. § ] 424.525 we may reject this application if you do not furnish complete information within 30 calendar days of the date of this request.”  CMS Ex. 5 at 2. 

Petitioner submitted a revised internet-based enrollment application on March 7, 2023.  CMS Ex. 7.  After WPS did not receive an electronic funds transfer authorization agreement and confirmation of account information on bank letterhead or a voided check, it notified Petitioner that its enrollment application had been rejected on April 4, 2023.¹  CMS Ex. 8 at 1. 

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Petitioner submitted another internet-based enrollment application on April 10, 2023.  CMS Ex. 11.  WPS, in a letter dated April 11, 2023, again requested revisions and supporting documentation, to include a Form CMS-855I and/or CMS-855R application because at least one group member application was required and a Form CMS-855R was required for reactivation.  CMS Ex. 12 at 1.  CMS also requested that Petitioner submit confirmation of account information on bank letterhead or a voided check.  CMS Ex. 12 at 1.  WPS sent follow-up correspondence regarding the requested development via an email message on April 12, 2023, at which time it also requested that the application be re-signed.  CMS Ex. 13.  Petitioner complied with the development requests on April 19, 2023.  CMS Ex. 14 at 1, 21-49. 

WPS approved Petitioner’s reactivation enrollment application on April 21, 2023, with an effective date of April 10, 2023.  CMS Ex. 15 at 1. 

In a letter dated May 6, 2023, Petitioner requested reconsideration of the effective date of its reactivated billing privileges, requesting a February 27, 2023 effective date of billing privileges.  CMS Ex. 16. 

On July 28, 2023, WPS issued a reconsidered determination in which it explained the following:  

An independent review has been completed of the enrollment record and reconsideration request for [Petitioner].  To maintain an active enrollment status in the Medicare program providers are required to submit updates and changes to the enrollment information to our office on the appropriate form within specified time frames.  [Petitioner] was notified with letter dated August 31, 2022, that you must remove the deceased Managing Employee’s from your group enrollment. The letter also notified you that if you don’t comply your enrollment will deactivate for non-submission of a change of information, per 42 [C.F.R. § ]424.540(a)(2). After further review, the deceased [managers] were not removed from the group enrollment record until the completion of the enrollment CMS 855B application . . .  on April 21, 2023.  According to our records the contractor correctly deactivated the provider or supplier’s Medicare billing privileges due to not receiving the requested information to be in full compliance with regulations. 

In accordance [with] MPIM 100-08, Chapter 10, Section 10.4.6-Reactivations, the effective date of a reactivation of billing privileges is the date the contractor received the provider’s or supplier’s reactivation submission that the contractor processed to approval.  Based on these processing guidelines the effective date April 10, 2023, was issued

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correctly.  We are unable to grant an earlier effective date of February 27, 2023, as requested. 

CMS Ex. 1 at 3. 

Petitioner filed a request for hearing on September 13, 2023.  The Civil Remedies Division issued my standing pre-hearing order (Pre-Hearing Order) on September 29, 2023.  CMS filed a motion for summary judgment and pre-hearing brief (CMS Br.), along with 18 proposed exhibits (CMS Exs. 1-18).  Petitioner filed a “Motion for Summary Judgment, Pre-Trial Statement, and Response to Respondent’s Motion for Summary Judgment,” along with two exhibits (P. Exs. 1-2).  Thereafter, CMS filed a reply.  In the absence of any objections to the proposed exhibits, I admit CMS Exs. 1-18 and P. Exs. 1-2 into the evidentiary record.  I consider the record in this case to be closed, and the matter is ready for a decision on the merits.² 

II.     Issue

Whether the effective date of Petitioner’s reactivated Medicare billing privileges is April 10, 2023.  

III.     Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R § 498.3(b)(15); Victor Alvarez, M.D., DAB No. 2325 at 8-12 (2010); see also 42 U.S.C. § 1395cc(j)(8).  

IV.     Findings of Fact, Conclusions of Law, and Analysis ³

1. In correspondence dated August 31, 2022, WPS informed Petitioner that a managing employee listed in its enrollment record was deceased and that Petitioner needed to update its enrollment record. 

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2. Pursuant to 42 C.F.R. § 424.516(d)(2), a supplier must timely report changes to its enrollment record within 90 days. 

3. After more than 90 days had elapsed following WPS’s August 31, 2022 notice and Petitioner had not updated its enrollment record, WPS deactivated Petitioner’s Medicare billing privileges effective February 27, 2023, pursuant to 42 C.F.R. § 424.540(a)(2). 

4. On March 1, 2023, Petitioner submitted an internet-based enrollment application to reactivate its deactivated billing privileges.  

5. Based on noncompliance with development requests, WPS rejected Petitioner’s March 1, 2023 application. 

6. Pursuant to 42 C.F.R. § 424.525(d), the rejection of an enrollment application is not reviewable by an ALJ. 

7. Petitioner submitted a new enrollment application on April 10, 2023. 

8. After Petitioner complied with the requested development of its April 10, 2023 application, WPS approved Petitioner’s reactivated billing privileges.  

9. Pursuant to 42 C.F.R. § 424.520(d), the effective date of Petitioner’s reactivated billing privileges is April 10, 2023, which is the date of receipt of the Medicare enrollment application that WPS was able to process to approval. 

10. Pursuant to 42 C.F.R. § 424.540(e), a supplier may not receive payment for services or items furnished while deactivated, and therefore, retrospective billing privileges are not authorized. 

As a clinic/group practice, Petitioner is a “supplier” for purposes of the Medicare program.  See CMS Ex. 8 at 1; see also 42 U.S.C. § 1395x(d); 42 C.F.R. §§ 400.202 (definition of supplier); 498.2.  A “supplier” furnishes items or services under Medicare and the term applies to physicians or other practitioners who are not included within the definition of the phrase “provider of services.”  42 U.S.C. § 1395x(d).  A supplier must enroll in the Medicare program to receive payment for covered Medicare items or services.  42 C.F.R. § 424.505.  The regulations at 42 C.F.R. Part 424, subpart P, establish the requirements for a supplier to enroll in the Medicare program.  42 C.F.R. §§ 424.510-

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424.516; see also 42 U.S.C. § 1395cc(j)(1)(A) (authorizing the Secretary of the U.S. Department of Health and Human Services to establish regulations addressing the enrollment of providers and suppliers in the Medicare program).  A supplier that seeks billing privileges under Medicare “must submit enrollment information on the applicable enrollment application.”  42 C.F.R. § 424.510(a)(1).  “Once the provider or supplier successfully completes the enrollment process . . . CMS enrolls the provider or supplier into the Medicare program.”  Id.; see also 42 C.F.R. § 424.510(d) (listing enrollment requirements).  When the contractor approves an enrollment application, it sets the effective date for approval of billing privileges.  See Alexander C. Gatzimos, MD, JD, LLC,DAB No. 2730 at 2 (2016).  “The effective date of a physician’s or physician organization’s enrollment in Medicare is ‘the later of the date of filing of a Medicare enrollment application that was subsequently approved by a Medicare contractor or the date [the supplier] first began furnishing services at a new practice location.’”  Id. at 2-3 (citing 42 C.F.R. § 424.520(d) (Oct. 1, 2012)).⁴ 

WPS deactivated Petitioner’s billing privileges as a clinic/group practice effective February 27, 2023, after it did not timely update its enrollment record following the deaths of several managing employees.  CMS Exs. 2, 3.  Petitioner has not claimed that it updated its enrollment record prior to the deactivation of its billing privileges on February 27, 2023, nor has it disputed that WPS properly deactivated its billing privileges.  See Frederick Brodeur, M.D., DAB No. 2857 at 12 (2018) (“A contractor’s deactivation decision is not an initial determination subject to ALJ or Board review.”).  Rather, Petitioner disputes the effective date of its reactivated billing privileges, claiming that March 1, 2023, is the date of submission of the enrollment application that was processed to approval.  P. Br. at 4.  

The pertinent regulation with respect to the effective date of reactivation is 42 C.F.R. § 424.520(d).  Urology Grp. of NJ, LLC,DAB No. 2860 at 7 (2018) (“The governing authority to determine the effective date for reactivation of Petitioner’s Medicare billing privileges is 42 C.F.R. § 424.520(d)” (italics omitted).).  Section 424.520(d)(1) states that “The effective date of billing privileges for the provider and supplier types identified in paragraph (d)(2) of this section is the later of – (i) The date of filing of a Medicare enrollment application that was subsequently approved by a Medicare contractor; or (ii) The date that the provider or supplier first began furnishing services at a new practice location.”  The Departmental Appeals Board (DAB) has explained that the “date of filing” is the date “that an application, however sent to a contractor, is actually received.”  Gatzimos, DAB No. 2730 at 5 (emphasis omitted).  WPS deactivated Petitioner’s billing

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privileges because it did not timely update its enrollment record, and Petitioner did not submit an enrollment application that was processed to approval until April 10, 2023.  Based on the April 10, 2023 receipt date of the enrollment application, WPS did not err in assigning an April 10, 2023 effective date for reactivated billing privileges.  42 C.F.R. § 424.520(d); see Urology Grp.,DAB No. 2860 at 9 (“Moreover, the fact that a supplier must file a new enrollment application in order to reactivate its billing privileges is consistent with the language of section 424.520(d) and compelling evidence that the provision should apply to reactivations.”); Willie Goffney, Jr., M.D.,DAB No. 2763 at 6 (2017) (“It is certainly true that [the petitioner] may not receive payment for claims for services during any period when his billing privileges were deactivated.”); Brodeur,DAB No. 2857 at 16 (“Petitioner remained enrolled in Medicare, but his deactivated status made [him] ineligible for payment for any covered services he furnished to otherwise eligible Medicare beneficiaries, pursuant to section 424.555(b), until he provided the information necessary to reactivate his billing privileges.”).

Petitioner claims it “submitted one application to CMS” on March 1, 2023, and that the April 10, 2023 application “was not a new application, rather, it was a supplement to the prior application.”  P. Br. at 4, 6.  Petitioner is mistaken.  On April 4, 2023, WPS unambiguously rejected Petitioner’s March 1, 2023 enrollment application.  CMS Ex. 8 at 1 (“We received your Medicare enrollment application(s) on March 01, 2023.  We are rejecting your applications for the following reason(s) . . . development was not completed.”); see 42 C.F.R. § 424.525(a)(1) (stating that CMS may reject an enrollment application when a provider or supplier “fails to furnish complete information on the provider/supplier enrollment application within 30 calendar days from the date of the Medicare contractor’s request for the missing information”).  At that time, WPS plainly informed Petitioner that “[i]f you would like to resubmit an application, you must complete a new Medicare enrollment application(s).”  CMS Ex. 8 at 1.  To the extent Petitioner argues that the tracking number on the April 10, 2023 application was the same as the tracking number on the March 1, 2023 application (P. Br. at 4), even if true, the tracking number is not dispositive.  WPS provided written notice that it had rejected the March 1, 2023 application and that Petitioner needed to submit “a new Medicare enrollment application(s),” and therefore, Petitioner’s April 10, 2023 application was a new Medicare application to reactivate its billing privileges.  42 C.F.R. § 424.525(c) (entitled, “Resubmission after rejection,” stating:  “To enroll in Medicare and obtain Medicare billing privileges after notification of a rejected enrollment application, the provider or supplier must complete and submit a new enrollment application and submit all supporting documentation for CMS review and approval.”). 

Petitioner argues a WPS employee informed it that its March 1, 2023 application could be reopened.  P. Br. at 2, 4 (citing CMS Ex. 9).  Inasmuch as WPS initially provided erroneous information, the record demonstrates that WPS, through a voicemail message that same day, subsequently provided the correct information to Petitioner.  CMS Ex. 10 (“left a [voicemail] advising application has been rejected for non response to

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development and that a new app will need to be submitted”).  Petitioner does not cite any authority supporting that a statement by a Medicare contractor can create a binding right that is inconsistent with law, presumably because there is no such authority.  Regardless, WPS promptly corrected any misinformation the same day (CMS Ex. 10), and Petitioner did not file a new enrollment application to reactivate its enrollment until April 10, 2023.  CMS Ex. 11 (April 10, 2023 enrollment application reporting that it had been submitted for the reason of “reactivating a deactivated Medicare billing number”). 

WPS rejected the incomplete March 1, 2023 application, and therefore, the first application that WPS processed to approval was the April 10, 2023 application.  Pursuant to 42 C.F.R. § 424.520(d), the effective date of Petitioner’s Medicare enrollment and billing privileges is April 10, 2023.  There is simply no provision under law that allows for an effective date of reactivated billing privileges prior to a supplier’s submission of the required enrollment application that is processed to approval.  42 C.F.R. § 424.520(d)(1)(i).  See Michael B. Zafrani, M.D., DAB No. 3075 at 10 (2022) (“Deactivation means that a supplier’s billing privileges ‘can be restored upon,’ not before, ‘the submission of updated information.’ 42 C.F.R. § 424.502 (emphasis added).”).  

Finally, Petitioner, citing to 42 C.F.R. § 424.521(a)(1)(i), argues that it should be authorized 30 days of retrospective billing privileges and requests that I authorize it “to submit bills for the 30-day period prior to April 10, 2023.”  P. Br. at 5-6.  It appears that Petitioner is unaware that retrospective billing privileges during a period of deactivation can no longer be authorized by CMS or its administrative contractors.  42 C.F.R. § 424.540(e) (“A provider or supplier may not receive payment for services or items furnished while deactivated under this section.”); see Zafrani, DAB No. 3075 at 15 n.1 (2022) (“[E]ffective January 1, 2022, CMS adopted . . .  42 C.F.R. § 424.540(e), which . . . prohibit[s] retrospective billing privileges during a period of deactivation.”  See 86 Fed. Reg. [62,240,] 62,420-21 [(Nov. 9, 2021)].”).  Moreover, the authorization of retrospective billing is not an appealable “initial determination” that is subject to review by an ALJ.  42 C.F.R. §§ 424.521, 498.3(b).

I recognize that the deactivation of Petitioner’s billing privileges followed the passing of several of its managers.  However, I am not empowered with the discretion to grant an effective date of reactivated billing privileges earlier than the date Petitioner submitted the enrollment application that was processed to approval.  42 C.F.R. § 424.520(d)(1)(i).  To the extent that Petitioner’s request for relief is based on principles of equitable relief, I cannot grant such relief.  US Ultrasound, DAB No. 2302 at 8 (2010) (“Neither the ALJ nor the [DAB] is authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements.”).  Petitioner points to no authority by which I may grant it relief from the applicable regulatory requirements, and I have no authority to declare statutes or regulations invalid or ultra vires.  1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (2009) (“An ALJ is bound by

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applicable laws and regulations and may not invalidate either a law or regulation on any ground . . . .”).  WPS did not receive the reactivation enrollment application that it processed to approval until April 10, 2023; therefore, the pertinent regulation, 42 C.F.R. § 424.520(d)(1)(i), mandates that the effective date of Petitioner’s reactivated billing privileges is April 10, 2023. 

V.     Conclusion

For the foregoing reasons, I uphold the April 10, 2023, effective date of Petitioner’s reactivated Medicare billing privileges.  

Endnotes

¹  In an April 5, 2023 telephone call in response to a telephone inquiry by Petitioner, a WPS employee explained the reason for the application’s rejection.  CMS Ex. 9 at 1.  The employee documented the following;  “[T]old they can fax in the [electronic funds transfer] and voided check to be reopened if it is correct (she is 30 minutes from office), also told she can resubmit and upload the voided check/bank letter to start a new review if that is easier but would affect dates, helped start resubmission and new bank to be added since it is changing anyway.”  CMS Ex. 9 at 1; see CMS Ex. 1 at 3.  In a follow-up voicemail message that same day, a WPS analyst informed Petitioner that the application “has been rejected for non response to development and that a new app will need to be submitted.”  CMS Ex. 10; see CMS Ex. 1 at 3.

²  Because the parties have not submitted the written direct testimony of any witnesses, a hearing is unnecessary for purposes of cross-examination.  Pre-Hearing Order §§ 12-14 (directing the parties to submit the written direct testimony of proposed witnesses, and explaining that an in-person hearing will be held only if a party submits a request to cross-examine a witness for whom written direct testimony has been submitted).  Therefore, I need not rule on the parties’ motions for summary judgment.

³  Findings of fact and conclusions of law are in italics and bold font.

⁴  Effective January 1, 2022, this provision is found at 42 C.F.R. § 424.520(d)(1)(i),(ii).  See 86 Fed. Reg. 62,240, 62,419 (Nov. 9, 2021).  This provision applies to, inter alia, physicians, non-physican practitioners, and physician and non-physician practitioner organizations.  42 C.F.R. § 424.520(d)(2).