DME – 10 Global Xpress, Inc. d/b/a Cost Plus Medical Supply, DAB CR6501

DECISION

The Medicare enrollment and billing privileges of Petitioner are revoked pursuant to 42 C.F.R. §§ 424.57(e)(1) and 424.535(a)(1),² effective April 27, 2023, based on violation of 42 C.F.R. § 424.57(c)(22) (Supplier Standard 22).

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I.     Background

On March 28, 2023,³ Palmetto GBA, a Medicare administrative contractor (MAC) for CMS, notified Petitioner that its Medicare enrollment and billing privileges under NPI 1316393507 and PTAN 7591470001, was being revoked effective 30 days from the postmark date of the letter.  The MAC cited violations of 42 C.F.R. § 424.57(c)(10) (Supplier Standard 10) and (c)(22) (Supplier Standard 22) as the bases for revocation.  The MAC cited 42 C.F.R. §§ 424.57(e) and 424.535(a)(1) as the authority for the revocation.  CMS Ex. 1 at 44-45.  The MAC advised Petitioner that, pursuant to 42 C.F.R. § 424.535(c), it was subject to a one-year bar to reenrollment beginning 30 days from the postmark of the letter.  CMS Ex. 1 at 45.  The MAC advised Petitioner it had 35 calendar days to provide a corrective action plan (CAP) to show it complied with the supplier standards and 65 days to request reconsideration.  CMS Ex. 1 at 45-46. 

Petitioner submitted its CAP on April 13, 2023.  On May 10, 2023, the MAC issued a partially unfavorable decision on Petitioner’s CAP.  CMS Ex. 1 at 24-28.  The MAC concluded that it made no error in revoking Petitioner’s Medicare enrollment and billing number for not being accredited as required by 42 C.F.R. § 424.57(c)(22) (Supplier Standard 22).  However, the MAC concluded that there was no violation of 42 C.F.R. § 424.57(c)(10) (Supplier Standard 10), because Petitioner provided a copy of its active certificate of insurance.  CMS Ex. 1 at 25-28.  The MAC accepted the certificate of liability insurance submitted by Petitioner even though the insured is listed as Duncan Medical Equipment, LLC⁴ at 3110 Nogalitos, Suite 109, San Antonio, Texas, rather than Petitioner DME – 10 Global Xpress, Inc.  CMS Ex. 1 at 27, 40. 

On May 15, 2023, Petitioner submitted a request for reconsideration.  CMS Ex. 1 at 9-14.  On August 7, 2023, a MAC hearing officer upheld the revocation of Petitioner’s Medicare enrollment and billing privileges based on the violation of 42 C.F.R. § 424.57(c)(22) (Supplier Standard 22).  CMS Ex. 1 at 2-8.

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On August 31, 2023, Petitioner filed a request for hearing before an administrative law judge (ALJ).  On September 5, 2023, this case was assigned to me for hearing and decision, and my Standing Order was issued. 

On October 5, 2023, CMS filed a combined prehearing brief and motion for summary judgment with CMS Exs. 1 through 5.  Petitioner did not object to CMS’s exhibits, and they are admitted as evidence. 

On November 5, 2023, Petitioner filed a combined prehearing brief and opposition to CMS’s motion for summary judgment (P. Br.)⁵ with Petitioner’s Exs. 1 and 2.  On November 16, 2023, CMS filed a reply brief (CMS Reply) and an objection to P. Ex. 1 (CMS Objection).  P. Ex. 2 is admitted and considered as evidence. 

CMS objects to my consideration of P. Ex. 1 on the grounds that it is untimely, irrelevant, and Petitioner has not shown good cause for presenting new evidence for the first time before me as required by 42 C.F.R. § 498.56(e).  CMS Objection at 1.  In provider and supplier appeals, 42 C.F.R. § 498.56(e) requires that I determine whether good cause exists to admit new documentary evidence not submitted at the time of reconsideration.  If I conclude good cause exists I “must include” the evidence.  42 C.F.R. § 498.56(e)(2)(i).  There is no question that P. Ex. 1 is documentary evidence that Petitioner failed to present on reconsideration.  However, Petitioner admits in its brief that the accreditation service was not contacted to change the accreditation to name Petitioner until after the MAC denied the plan of correction and issued the reconsidered determination.  P. Br. at 3.  Therefore, P. Ex. 1 did not exist at the time of reconsideration and could not have been submitted by Petitioner at that time.  I conclude that the nonexistence of P. Ex. 1 was good cause for it not being submitted on reconsideration.  Therefore, I conclude that P. Ex. 1 is not subject to exclusion under 42 C.F.R. § 498.56(e)(2)(ii).  However, the CMS objection that P. Ex. 1 is not relevant has merit.  Evidence is relevant if the evidence tends to make the existence of a fact of consequence, i.e., a material fact, more or less probable than it would be without the evidence.  Fed. R. Evid. 401.  The narrow issue before me is whether CMS has a basis to revoke Petitioner’s Medicare enrollment and billing privileges.  Dinesh Patel, M.D., DAB No. 2551 at 10-11 (2013); Fady Fayad, M.D., DAB No. 2266 at 16 (2009), aff’d, Fayad v. Sebelius, 803 F. Supp. 2d 699 (E.D. Mich. 2011); Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 16-17, 19 (2009), aff’d, Ahmed v. Sebelius, 710 F. Supp. 2d 167 (D. Mass. 2010).  I am limited to determining whether CMS or the MAC had a basis for revocation at the time of

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the reconsidered determination.  Neb Group of Ariz. LLC, DAB No. 2573 at 7 (2014).  Petitioner admits that P. Ex. 1 did not exist at the time of the reconsidered determination.  Therefore, P. Ex. 1 cannot be relevant to an issue that I may decide and must be excluded as evidence. 

However, for purposes of summary judgment, I treat the information contained in both P. Exs. 1 and 2 and Petitioner’s assertions in its brief regarding P. Ex. 1 as true, drawing all favorable inferences for Petitioner. 

II.    Discussion

1. Applicable Law

Section 1831 of the Social Security Act (the Act) (42 U.S.C. § 1395j) establishes the supplementary medical insurance benefits program for the aged and disabled known as Medicare Part B.  Payment under the program for services rendered to Medicare-eligible beneficiaries may only be made to eligible providers of services and suppliers.⁶  Act §§ 1835(a) (42 U.S.C. § 1395n(a)), 1842(h)(1) (42 U.S.C. § 1395u(h)(1)).  Petitioner is a Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) supplier. 

The Act requires the Secretary of Health and Human Services (Secretary) to issue regulations that establish a process for the enrollment in Medicare of providers and suppliers, including the right to a hearing and judicial review of certain enrollment determinations, such as revocation of enrollment and billing privileges.  Act § 1866(j) (42 U.S.C. § 1395cc(j)).  Pursuant to 42 C.F.R. § 424.505, a supplier such as Petitioner must be enrolled in the Medicare program and be issued a billing number to have billing privileges and to be eligible to receive payment for services rendered to a Medicare-eligible beneficiary.

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Pursuant to 42 C.F.R. §§ 424.57(b) and 424.505, a DMEPOS supplier such as Petitioner must be enrolled in the Medicare program to be reimbursed for durable medical equipment, prosthetics, orthotics, or supplies sold or rented to Medicare beneficiaries.  The regulations establish detailed requirements that suppliers must meet and maintain to enroll in Medicare and to receive and maintain Medicare billing privileges.  42 C.F.R. pt. 424, subpt. P.  DMEPOS suppliers have additional requirements imposed by 42 C.F.R. § 424.57(b) and (c).  To receive direct-billing privileges, a DMEPOS supplier must meet and maintain the Medicare application certification standards set forth in 42 C.F.R. § 424.57(c), the Supplier Standards.  A DMEPOS supplier must operate and furnish Medicare-covered items in compliance with all applicable federal and state licensure and regulatory requirements.  42 C.F.R. § 424.57(c)(1).  Among other requirements, a DMEPOS supplier must be accredited by a CMS-approved accreditation organization and the accreditation must indicate the products and services for which the supplier is accredited.  42 C.F.R. § 424.57(c)(22) (Supplier Standard 22).

The Secretary has delegated the authority to revoke enrollment and billing privileges to CMS.  42 C.F.R. §§ 424.57(e)(1), 424.535.  CMS or a MAC may revoke an enrolled supplier’s Medicare enrollment and billing privileges and supplier agreement for any of the reasons listed in 42 C.F.R. § 424.535.  Noncompliance with DMEPOS specific enrollment requirements established by 42 C.F.R. § 424.57(b) and (c) for DMEPOS suppliers is also a basis for revocation of Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.57(e)(1).  When Medicare enrollment and billing privileges are revoked pursuant to 42 C.F.R. § 424.57(e)(1), revocation is effective 30 days after the DMEPOS supplier is sent notice of the revocation.  If a supplier’s Medicare enrollment and billing privileges are revoked, the supplier is barred from reenrolling in the Medicare program for one to 10 years.  42 C.F.R. § 424.535(c).

A supplier whose enrollment and billing privileges are revoked may request reconsideration and review as provided by 42 C.F.R. pt. 498.  42 C.F.R. § 424.545(a).  A supplier submits a written request for reconsideration to CMS or the MAC.  42 C.F.R. § 498.22(a).  CMS or the MAC must give notice of its reconsidered determination to the supplier, giving the reasons for its determination, specifying the conditions or requirements the supplier failed to meet, and advising the supplier of its right to an ALJ hearing.  42 C.F.R. § 498.25.  If the decision on reconsideration is unfavorable to the supplier, the supplier has the right to request a hearing by an ALJ and further review by the Departmental Appeals Board (the Board).  Act § 1866(j)(8) (42 U.S.C. § 1395cc(j)(8)); 42 C.F.R. §§ 424.545, 498.3(b)(17), 498.5.  A hearing on the record, also known as an oral hearing, is required under the Act.  Crestview Parke Care Ctr. v. Thompson, 373 F.3d 743, 748-51 (6th Cir. 2004).  The supplier bears the burden to demonstrate that it meets enrollment requirement with documents and records.  42 C.F.R. § 424.545(c).

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2. Issues

Whether there was a basis for the revocation of Petitioner’s billing privileges and enrollment in Medicare.

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

My conclusions of law are set forth in bold followed by the undisputed facts and analysis. 

1.  Summary judgment is appropriate.

CMS filed a motion for summary judgment.  Petitioner requests a favorable decision on the documentary record but states that if a decision in his favor on the record is not possible, he does not waive his right to an oral hearing.  P. Br. at 1.  Accordingly, I consider whether summary judgment is appropriate or whether an oral hearing is necessary to receive evidence to resolve any genuine disputes of material fact. 

A supplier whose enrollment has been revoked has a right to a hearing and judicial review, and a hearing on the record is required under the Act.  Act §§ 205(b) (42 U.S.C. § 405(b)), 1866(h)(1), (j) (42 U.S.C. §§ 1395cc(h)(1), (j)); 42 C.F.R. §§ 498.3(b)(17), 498.5; Crestview Parke Care Ctr, 373 F.3d 743, 748-51 (6th Cir. 2004).  A party may waive appearance at an oral hearing but must do so affirmatively in writing.  42 C.F.R. § 498.66(a).  In this case, I conclude that Petitioner did not waive the right to an oral hearing because he specified that the waiver was contingent on receiving a favorable decision on the merits. 

Summary judgment is not automatic upon request but is limited to certain specific conditions.  The Secretary’s regulations that establish the procedure to be followed in adjudicating Petitioner’s case are at 42 C.F.R. pt. 498.  42 C.F.R. §§ 405.800; 405.803(a); 424.545(a); 498.3(b)(17), (20).  The regulations do not establish a summary judgment procedure or recognize such a procedure.  However, the Board has long accepted that summary judgment is an acceptable procedural device in cases adjudicated pursuant to 42 C.F.R. pt. 498.  See, e.g., Ill. Knights Templar Home, DAB No. 2274 at 3-4 (2009); Garden City Med. Clinic, DAB No. 1763 (2001); Everett Rehab. & Med. Ctr., DAB No. 1628 at 3 (1997).  The Board also has recognized that the Federal Rules of Civil Procedure (Fed. R. Civ. Pro.) do not apply in administrative adjudications such as this.  However, the Board has accepted that Fed. R. Civ. Pro. 56 and related cases provide useful guidance for determining whether summary judgment is appropriate.  Furthermore, a summary judgment procedure was adopted as a matter of judicial economy within my authority to regulate the course of proceedings and made available to the parties in the litigation of this case by my Standing Order.  The parties were given notice by the Standing Order that summary judgment is an available procedural device and that the law

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as it has developed related to Fed. R. Civ. Pro. 56 will be applied.  Standing Order ¶¶ D, G. 

Summary judgment is appropriate when there is no genuine dispute as to any issue of material fact for adjudication and/or the moving party is entitled to judgment as a matter of law.  The party requesting summary judgment bears the burden of showing that there are no genuine issues of material fact for trial and/or that it is entitled to judgment as a matter of law.  In determining whether there are genuine issues of material fact for trial, the reviewer must view the evidence in the light most favorable to the non-moving party, drawing all reasonable inferences in that party’s favor.  Generally, the non-movant may not defeat an adequately supported summary judgment motion by relying upon the denials in its pleadings or briefs but must furnish evidence of a dispute concerning a material fact, i.e., a fact that, if proven, would affect the outcome of the case.  Mission Hosp. Reg’l Med. Ctr., DAB No. 2459 at 4 (2012) (and cases cited therein); Experts Are Us, Inc., DAB No. 2452 at 4 (2012) (and cases cited therein); Senior Rehab. & Skilled Nursing Ctr., DAB No. 2300 at 3 (2010) (and cases cited therein); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 

The standard for deciding a case on summary judgment and an ALJ’s decision-making in deciding a summary judgment motion differs from that used in resolving a case on the merits after a hearing or when hearing is waived.  On summary judgment, the ALJ does not make credibility determinations, weigh the evidence, or decide which inferences to draw from the evidence, as would be done when finding facts after a hearing on the record.  Rather, on summary judgment, the ALJ construes the evidence in a light most favorable to the non-movant and avoids deciding which version of the facts is more likely true.  Holy Cross Vill. at Notre Dame, Inc., DAB No. 2291 at 5 (2009).  The Board also has recognized that on summary judgment it is appropriate for the ALJ to consider whether a rational trier of fact could find that the party’s evidence would be sufficient to meet that party’s evidentiary burden.  Dumas Nursing & Rehab., L.P., DAB No. 2347 at 5 (2010).  The Secretary has not provided in 42 C.F.R. pt. 498 for the allocation of the burden of persuasion or the quantum of evidence required to satisfy the burden.  However, the Board has provided some persuasive analysis regarding the allocation of the burden of persuasion in cases subject to 42 C.F.R. pt. 498.  Batavia Nursing & Conv. Ctr., DAB No. 1904 (2004), aff’d, 129 Fed. App’x 181 (6th Cir. 2005). 

Viewing the evidence before me in a light most favorable to Petitioner and drawing all inferences in Petitioner’s favor, I conclude as discussed in the following analysis that there are no genuine disputes as to any material fact relevant to revocation under 42 C.F.R. §§ 424.57(e)(1) and 424.535(a)(1).  CMS is entitled to judgment as a matter of law.  Accordingly, summary judgment is appropriate.

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2.  Petitioner was not in compliance with 42 C.F.R. § 424.57(c)(22) (Supplier Standard 22) because the MAC was unable to verify an active accreditation for DME – 10 Global Xpress, Inc. by a CMS-approved accreditation organization at the time of the reconsidered determination.  

3.  There is a basis for revocation of Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. §§ 424.57(e)(1) and 424.535(a)(1)⁷ based on Petitioner’s violation of 42 C.F.R. § 424.57(c)(22) (Supplier Standard 22). 

4.  The effective date of revocation of Petitioner’s Medicare enrollment and billing privileges is April 27, 2023, 30 days after March 28, 2023, the date the MAC mailed the notice of the initial determination to revoke.  42 C.F.R. §§ 424.57(e)(1), 424.535(g)(1). 

a.  Undisputed Facts

As already noted, John Duncan, Jr. was the owner of Duncan Medical Equipment, LLC and Petitioner DME – 10 Global Xpress, Inc.  CMS Ex. 1 at 9-10, 13, 29, 37, 61-62; CMS Ex. 5; P. Br. at 2.  There is no dispute about this fact. 

It will be helpful to briefly discuss how CMS and the MAC identify providers and suppliers, including DMEPOS suppliers like Petitioner.  The National Provider Identifier (NPI) is a unique 10-digit identifier obtained by providers and suppliers to identify themselves in the Medicare system.  42 C.F.R. § 424.502; 45 C.F.R. §§ 162.404-.414; 69 Fed. Reg. 3434 (Jan. 23, 2004).  A single NPI is issued to a health care provider or supplier.  45 C.F.R. § 162.408(a).  Pursuant to 42 C.F.R. § 424.505, suppliers such as Petitioner must be issued an NPI, enrolled in the Medicare program, and issued a billing number to have billing privileges and to be eligible to receive payment for services rendered to a Medicare-eligible beneficiary. 

CMS Pub. 100-08, Medicare Program Integrity Manual (MPIM), chap. 10, § 10.1.2 provides that the Provider Transaction Access Number (PTAN) is the Medicare

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identification number issued to suppliers such as Petitioner.  A PTAN is assigned to a supplier by a MAC.  A supplier may be issued more than one PTAN, but the MAC only assigns the minimum number of PTANs to ensure proper payment is made by Medicare.  MPIM, chap. 10, § 10.6.10B.  The PTAN is not a Medicare billing number but reflects that a supplier has been granted Medicare billing privileges for care and services rendered within the jurisdiction of a MAC. 

The NPI must be listed on all Medicare claims.  The PTAN is used to authenticate the provider or supplier when communicating with Medicare.  A provider or supplier should have only one NPI but multiple PTANs may be issued based on the provider’s or supplier’s relationships with more than one medical group or practice or based on the delivery of care and services in the jurisdictions of multiple MACs.  MLN (Medicare Learning Network) Matters, No. SE1216 (rev.) Sep. 5, 2014 available at https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/SE1216.pdf.⁸

“[A] DMEPOS supplier number conveying billing privileges” is referred to in 42 C.F.R. § 424.57(b)(2), which seems equivalent to, or the same as, the PTAN.  The reconsidered determination and the partial denial of the CAP list Petitioner’s PTAN but no separate supplier number.  CMS Ex. 1 at 3, 25.  The initial determination refers to Medicare supplier number 7591470001 (CMS Ex. 1 at 44), which is the same number as Petitioner’s PTAN listed in the reconsidered determination.⁹  CMS Ex. 1 at 3. 

Petitioner DME – 10 Global Xpress, Inc. 

Petitioner was issued NPI 1316393507 on May 6, 2016.  John Duncan, Jr., was listed as the chief executive officer.  CMS Ex. 2 at 2.  The evidence shows that Petitioner enrolled in Medicare on April 17, 2017, with NPI 1316393507, doing business as Cost Plus Medical Supply.¹⁰  The address provided was 3110 Nogalitos, Suite 109, San Antonio,

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Texas.  CMS Ex. 1 at 57-58.  Petitioner had multiple accreditations listed in its enrollment record from the American Board for Certification (ABC) effective October 28, 2016, with expiration dates of October 28, 2019.  CMS Ex. 1 at 58-59.  Petitioner was enrolled in the Medicare program as a pharmacy and supplier of DMEPOS.  CMS Ex. 2 at 3; CMS Ex. 1 at 44; CMS Ex. 4.  Petitioner’s Medicare billing privileges under NPI 1316393507 and PTAN 7591470001 were deactivated effective November 30, 2018, reactivated effective March 1,2020.  CMS Ex. 1 at 57; CMS Ex. 4. 

Petitioner was formed in Texas on August 17, 2009.  Petitioner’s mailing address was 3110 Nogalitos, Suite 109, San Antonio, Texas.  Petitioner’s Texas Taxpayer Number was 32040091244.  John Duncan, Jr. was listed as Petitioner’s registered agent.  CMS Ex. 2 at 4. 

Duncan Medical Equipment, LLC

The evidence shows that Duncan Medical Equipment, LLC was issued NPI 1790335941 on September 18, 2019.  The mailing and practice address was 3110 Nogalitos, Suite 107, San Antonio, Texas.  John Duncan, Jr., was listed as the owner.  CMS Ex. 3 at 1. 

Duncan Medical Equipment, LLC was formed in Texas on August 21, 2019, 10 years after Petitioner.  Duncan Medical Equipment, LLC’s mailing address was 2 Saxby Glen, San Antonio, Texas.  Duncan Medical Equipment, LLC was issued Texas Taxpayer Number 32071706801.  John Duncan, Jr. was listed as the registered agent.  CMS Ex. 3 at 3. 

Other evidence in the record reflecting the existence of Duncan Medical Equipment, LLC includes: 

The request for reconsideration and plan of correction (CMS Ex. 1 at 10);

The May 15, 2023 letter requesting reconsideration signed by John Duncan, Jr., owner and authorized official for “Duncan Medical Equipment – 10 Global Xpress, Inc. (CMS Ex. 1 at 12-13);

The ABC Directory listing Duncan Medical Equipment, LLC, at 3110 Nogalitos, Suite 109, San Antonio, Texas as being accredited for DMEPOS for the period August 24, 2020 through December 31, 2023 (CMS Ex. 1 at 14, 19);

Emails from John Duncan, Jr., reflecting he was authorized official for Duncan Medical Equipment – 10 Global Xpress at 3110 Nogalitos, Suite 109, San Antonio, Texas (CMS Ex. 1 at 9, 29);

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ABC certificates issued to Duncan Medical Equipment, LLC, 3110 Nogalitos, Suite 107, San Antonio, Texas (CMS Ex. 1 at 30, 38);

A letter dated May 1, 2023, signed by John Duncan, Jr. as owner and authorized official for Duncan Medical Equipment – 10 Global Xpress, Inc., submitting a copy of the ABC accreditation to the MAC (CMS Ex. 1 at 37); and

The certificate of liability insurance accepted by the MAC as correcting alleged noncompliance under Supplier Standard 10 (42 C.F.R. § 424.57(c)(10)), listing Duncan Medical Equipment, LLC, at 3110 Nogalitos, Suite 109, San Antonio, Texas as the insured (CMS Ex. 1 at 40).  

I find based on Petitioner and Duncan Medical Equipment having different dates of formation, different Texas Tax Numbers, different addresses registered with Texas, different dates of enumeration in Medicare, different NPIs, and different names, that the two are recognized as separate entities by the State of Texas and CMS. 

An investigator’s report shows that on February 20 and 21, 2023, at the request of the MAC, an investigator visited Cost Plus Medical Supply at 3110 Nogalitos, Suite 109, San Antonio, Texas.  During the visit on February 20, 2023, the investigator interviewed Christopher Cortinas who confirmed DME – 10 Global Xpress, Inc. was doing business as Cost Plus Medical Supply at 3110 Nogalitos Street, Suite 109.  CMS Ex. 1 at 52.  Christopher Cortinas was the manager for Cost Plus Medical Supply.  CMS Ex. 1 at 54.  Photographs submitted with the investigator’s report are consistent with Cost Plus Medical Supply operating at 3110 Nogalitos Street, Suite 109.  CMS Ex. 1 at 54-55. 

There is no dispute that ABC was a CMS-approved accreditation organization.¹¹

On May 8, 2023, the MAC contacted ABC by email.  The MAC advised ABC that it appeared that Petitioner had two businesses at 3110 Nogalitos, one in suite 107 and the other in suite 109.  In its email, the MAC noted “[t]his supplier appears to have two businesses at the same street address.  The spreadsheet indicates the business in suite 107 is accredited, but the business in suite 109 is not listed.  We would like to verify if the

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business in suite 109 is accredited.”  On May 8, 2023, ABC responded that they “do not have that location [suite 109] accredited with ABC.”  CMS Ex. 1 at 42. 

I accept as true, drawing favorable inferences for Petitioner, that John Duncan, Jr., considered and treated Duncan Medical Equipment and Petitioner DME – 10 Global Xpress as a single company.  This is indicated by his signature block that listed him as owner and authorized representative of “Duncan Medical Equipment – 10 Global Xpress, Inc.” and Petitioner’s CAP and request for reconsideration which also listed Petitioner as Duncan Medical Equipment – 10 Global Xpress, Inc.  CMS Ex. 1 at 9-10, 13, 29, 37.  

There is no dispute that Petitioner was not accredited by ABC at the time of the reconsidered determination even though Duncan Medical Equipment, LLC was accredited by ABC. 

I accept as true for purposes of summary judgment, that after the denial of Petitioner’s CAP and the adverse reconsidered determination, and at Petitioner’s request, ABC changed its directory to reflect that Petitioner, located at 3110 Nogalitos, Suite 109, San Antonio, Texas, was accredited by ABC for DMEPOS for the period August 24, 2020 through December 31, 2023.  P. Br.; P. Ex. 1 (not admitted). 

I accept as true for purposes of summary judgment, drawing all favorable inference for Petitioner, that John Duncan, Jr. may not have known that Petitioner was not accredited by ABC at the time of reconsideration, or he may have believed that accreditation of Duncan Medical Equipment, LLC was sufficient, even though he does not specifically allege either.  CMS Ex. 1 at 12-14, 29-30, 37-38. 

I accept as true for summary judgment that, as represented by John Duncan, Jr., he has one store, Cost Plus Medical Supply with two entrances, one designated suite 107 and the other suite 109.  CMS Ex. 1 at 12-14, 30, 38. 

b.  Analysis

It is well established that even a single violation of a supplier standard is a sufficient basis for revocation of Medicare enrollment and billing privileges under 42 C.F.R. § 424.57(e)(1).  1866ICPayday.com, L.L.C., DAB No. 2289 at 13 (2009).  Pursuant to 42 C.F.R. § 424.57(e)(1), CMS revokes a DMEPOS supplier’s enrollment and billing privileges if it is determined that the supplier does not meet the supplier standards established by 42 C.F.R. § 424.57(b) and (c).  Revocation is effective 30 days after the supplier is sent notice of the revocation.  42 C.F.R. § 424.57(e)(1) 

Supplier Standard 22 (42 C.F.R. § 424.57(c)(22)) requires that Petitioner, a DMEPOS supplier, be accredited by a CMS‑approved accreditation organization to maintain

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enrollment and receive and retain a supplier billing number.  The burden is upon a provider or supplier to show that it meets enrollment requirements and to produce the documents necessary to show it complies with enrollment requirements.  42 C.F.R. § 424.545(c).  

The undisputed facts establish that at the time of the reconsidered determination, Petitioner was in violation of 42 C.F.R. § 424.57(c)(22) (Supplier Standard 22) because Petitioner could not show that it was accredited by a CMS-approved accreditation organization  Therefore, CMS and the MAC had a basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.57(e)(1) based on a violation of 42 C.F.R. § 424.57(c)(22) (Supplier Standard 22).  The MAC also notified Petitioner revocation was pursuant to 42 C.F.R. § 424.535(a)(1) and permitted Petitioner to submit a CAP as required by that section.  Arguably, the MAC had authority to revoke under either 42 C.F.R. § 424.57(e)(1) or 42 C.F.R. § 424.535(a)(1) and it was not necessary for the MAC to proceed under both.  The MAC did proceed under 42 C.F.R. § 424.535(a)(1) and favorably considered Petitioner’s CAP by eliminating the allegation of noncompliance based on a violation of Supplier Standard 10 (42 C.F.R. § 424.57(c)(10)) related to insurance.  As previously noted, the MAC found no noncompliance with Supplier Standard 10 based on receipt of a certificate of liability insurance from Petitioner with its plan of correction, even though the certificate of liability insurance named Duncan Medical Equipment, LLC as the insured.  CMS Ex. 1 at 27, 40.  Because the MAC accepted the certificate of liability insurance, one might infer that the MAC recognized the close factual connection between Petitioner and Duncan Medical Equipment, LLC.  If the inference is accepted, then one may question why the ABC accreditation certificates in the name of Duncan Medical Equipment, LLC, submitted with Petitioner’s CAP and reconsideration request (CMS Ex. 1 at 30, 38) were not sufficient to show Petitioner complied with Supplier Standard 22 (42 C.F.R. § 424.57(c)(22)).  CMS and the MAC clearly have the discretion not to revoke a supplier’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(1) which states “CMS may revoke.”  However, 42 C.F.R. § 424.57(e)(1), which applies specifically to DMEPOS suppliers, provides that CMS revokes the Medicare enrollment and billing privileges of a DMEPOS supplier for violation of supplier standards.  Therefore, 42 C.F.R. § 424.57(e)(1) seems to grant CMS or the MAC no discretion to not revoke once a supplier standard violation is found.  In either case, I have no authority to review the exercise of discretion by CMS to revoke a DMEPOS supplier’s Medicare enrollment and billing privileges once I have found that a basis for revocation exists, in this case, the violation of Supplier Standard 22.  The scope of my authority is limited to determining whether there is a legal basis for revocation of Petitioner’s Medicare enrollment and billing privileges.  Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 19, aff’d, Ahmed v. Sebelius, 710 F. Supp. 2d 167 (D. Mass. 2010).

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Petitioner has not rebutted the prima facie showing of a basis for revocation, established an affirmative defense, or shown any other grounds for relief from the revocation. 

John Duncan, Jr. argues on behalf of Petitioner that he initially misunderstood the reason for the revocation as being related to the fact that his business had two different suite numbers.  P. Br. at 3; CMS Ex. 1 at 12-13.  He explains that he began to change the name of his business for better brand recognition but stopped that effort.  P. Br. at 2.  Mr. Duncan states that he used an accreditation service to complete his accreditation and would do so for future renewals.  P. Br. at 1; CMS Ex. 1 at 13.  Mr. Duncan argues that under the CMS definition of accreditation, his company met accreditation requirements since 2016, even though ABC listed Duncan Medical Equipment, LLC in its directory rather than Petitioner.  P. Br. at 2; P. Ex. 2; CMS Ex. 1 at 37. 

None of Petitioner’s arguments or asserted facts, even accepted as true for summary judgment, negate the fact that Petitioner’s name was not listed by ABC as accredited at the time of the reconsidered determination.  Petitioner admits that the ABC accreditation was not changed to list Petitioner, rather than Duncan Medical Equipment, LLC until after the reconsidered determination.  Petitioner’s arguments and evidence fail to show that there is a genuine dispute as to a material fact regarding whether Petitioner DME – 10 Global Xpress, Inc., was accredited as required by 42 C.F.R. § 424.57(c)(22) (Supplier Standard 22).  Petitioner’s noncompliance with 42 C.F.R. § 424.57(c)(22) (Supplier Standard 22) is a sufficient legal basis for revocation of Petitioner’s Medicare enrollment and billing privileges.  1866ICPayday.com, L.L.C., DAB No. 2289 at 13. 

Mr. Duncan argues that he speaks Spanish and Petitioner serves a Spanish-speaking market, giving him a better understanding of Petitioner’s clients’ medical needs.  He argues that revocation of Petitioner’s Medicare enrollment and billing number will deprive his community of a resource and devastate him and his employees.  Petitioner’s arguments are for equitable relief that I have no authority to grant.  US Ultrasound, DAB No. 2302 at 8 (2010) (neither the ALJ nor the Board is authorized to provide equitable relief).  I am bound to follow the Act and regulations, and I have no authority to declare statutes or regulations invalid or ultra vires or ignore their application.  1866ICPayday.com, L.L.C., DAB No. 2289 at 14. 

Pursuant to 42 C.F.R. § 424.57(e)(1), revocation for noncompliance with the supplier standards established by 42 C.F.R. § 424.57(c) is effective 30 days after the supplier is sent notice of the revocation.  Pursuant to 42 C.F.R. § 424.535(g), revocation is effective 30 days after CMS or the MAC mails the notice of the initial determination to revoke.  Under either regulation the correct effective date for revocation of Petitioner’s Medicare enrollment and billing privileges is 30 days after the notice of the revocation was issued or mailed.  Accordingly, I conclude that the effective date of revocation of Petitioner’s

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Medicare enrollment and billing privileges was April 27, 2023, which is 30 days after the March 28, 2023 notice of revocation was issued. 

III.   Conclusion

For the foregoing reasons, I conclude that Petitioner’s Medicare enrollment and billing privileges are revoked pursuant to 42 C.F.R. §§ 424.57(e)(1) and 424.535(a)(1), effective April 27, 2023, for violation of 42 C.F.R. § 424.57(c)(22) (Supplier Standard 22).

Endnotes

¹  Petitioner was doing business under the name Cost Plus Medical Supply.  Centers for Medicare & Medicaid Services (CMS) exhibit (Ex.) 1 at 44, 49, 52, 54; CMS Ex. 5.

²  Citations are to the 2022 revision of the Code of Federal Regulations (C.F.R.), which was in effect at the time of the initial determination, unless otherwise indicated.  An appellate panel of the Departmental Appeals Board (Board) concluded in Mark A. Kabat, D.O., DAB No. 2875 at 9-11 (2018), that the applicable regulations are those in effect at the time of the initial determination.  The Board previously concluded that the only determination subject to my review in a provider and supplier enrollment case such as this is the reconsidered determination.  Neb Group of Ariz. LLC, DAB No. 2573 at 7 (2014).  In this case, the applicable regulations did not change between the issuance of the initial and reconsidered determinations.

³  Petitioner does not question or challenge that March 28, 2023, was the date of mailing of the MAC’s initial determination.

⁴  John Duncan, Jr. was the owner of both Duncan Medical Equipment, LLC and Petitioner, DME – 10 Global Xpress, Inc.  CMS Ex. 1 at 9-10, 13, 29, 37; P. Br. at 2.  This fact is discussed in greater detail in my findings of fact and analysis later in this decision.

⁵  Petitioner did not number the pages of its brief.  A page number included in a citation to P. Br. is based on the document page counter.

⁶  furnishes services under Medicare and includes physicians and other practitioners and facilities that are not included within the definition of the phrase “provider of services.”  Act § 1861(d) (42 U.S.C. § 1395x(d)).  A “provider of services,” commonly shortened to “provider,” includes hospitals, critical access hospitals, skilled nursing facilities, comprehensive outpatient rehabilitation facilities, home health agencies, hospice programs, and a fund as described in sections 1814(g) (42 U.S.C. § 1395f(g)) and 1835(e) (42 U.S.C. § 1395n(e)) of the Act.  Act § 1861(u) (42 U.S.C. § 1395(x)(u)).  The distinction between providers and suppliers is important because they are treated differently under the Act for some purposes.

⁷  Effective January 1, 2024, CMS amended 42 C.F.R. § 424.535 to add subsection (a)(23)(ii), which authorizes CMS or the MAC to revoke a DMEPOS supplier’s Medicare enrollment and billing privileges for noncompliance with any of the requirements of 42 C.F.R. § 424.57(c).  88 Fed. Reg. 79,541 (Nov. 16, 2023).

⁸  This MLN Matters article is not substantive evidence that effects the decision in this case and is cited only to provide explanatory information.

⁹  No explanation is readily available to explain why CMS refers to a supplier number rather than a PTAN.  The difference in name does not affect the outcome in this case.

¹⁰  The evidence includes a Texas Assumed Name Certificate dated in 2010 establishing Cost Plus Medical Supply as the assumed name (doing business as) for DME – 10 Global Xpress, Inc.  CMS Ex. 5.  I have received no evidence that Duncan Medical Equipment, LLC also filed for an assumed name in Texas.

¹¹  The complete listing of CMS-approved accreditation organizations dated April 27, 2020 as updated on September 14, 2022, is available at:  https://www.cms.gov/files/document/dmepos-accreditation-organizations.pdf (last checked June 25, 2024).