Total Body Therapy & Wellness, LLC, DAB CR6570 (2024)

DECISION

Petitioner, Total Body Therapy & Wellness LLC, is a supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), located in Lillington, North Carolina.  Until May 4, 2024, Petitioner participated in the Medicare program as a supplier of services.  The Centers for Medicare & Medicaid Services (CMS) revoked its Medicare supplier number, pursuant to 42 C.F.R. §§ 424.57(c)(10), (c)(21), and 424.535(a)(1).  CMS determined that the supplier did not establish that it had the required comprehensive liability insurance and did not timely respond to the Medicare contractor’s request that it establish that it had the insurance.

Petitioner appeals.

For the reasons discussed below, I find that CMS is authorized to revoke Petitioner’s supplier number, pursuant to section 424.57(c)(10), because, despite given multiple opportunities, Petitioner did not establish that it had comprehensive liability insurance.  I also find that CMS is authorized to revoke Petitioner’s supplier number, pursuant to section 424.57(c)(21), because Petitioner did not respond to the Medicare contractor’s request for information.

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Background

Petitioner participated in the Medicare program as a DMEPOS supplier.  See 42 C.F.R. § 424.57; CMS Ex. 2.  On August 16, 2023, it submitted, by means of CMS’s electronic filing system (referred to as PECOS – Provider Enrollment, Chain, and Ownership System), an application updating its enrollment information.1  CMS Ex. 2.  The application directed the supplier to submit comprehensive liability insurance information.  In response, the supplier listed information about its professional malpractice insurance, but not about comprehensive liability insurance.  CMS Ex. 2 at 7.

In an email dated February 22, 2024, CMS asked the supplier to correct its application by submitting the required liability insurance policy.  CMS Ex. 3 at 1.  The email warned that “we may reject your application if you do not furnish the complete information within 30 days from the date of this letter pursuant to 42 C.F.R. § 424.525.”  Id.  CMS sent the email to the two email addresses listed on the supplier’s application.  See CMS Ex. 2 at 2.

Petitioner did not respond.

In a letter dated March 27, 2024, the Medicare contractor, Novitas Solutions, advised Petitioner that it was rejecting the supplier’s Medicare enrollment application because the supplier failed to provide the requested certificate of liability insurance.  CMS Ex. 4 at 2.  I have no authority to review a rejected application.  42 C.F.R. § 424.525(d); see Wishon Radiological Med. Grp., Inc., DAB No. 2941 at 6 (2019); James Shepard, M.D., DAB No. 2793 at 8 (2017).

In a letter dated April 4, 2024, the contractor advised Petitioner that, pursuant to 42 C.F.R. §§ 405.800, 424.57(e), 424.535(a)(1), and 424.535(g), its Medicare supplier number would be revoked, effective 30 days after the postmark date of the letter.  The letter explained that the supplier did not meet two supplier standards:  42 C.F.R. § 424.57(c)(10), which requires suppliers to maintain a comprehensive liability insurance policy, and 42 C.F.R. § 424.57(c)(21), which requires them to provide CMS “any information required by the Medicare statute and regulations.”  CMS Ex. 5 at 1.

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CMS also advised Petitioner that, pursuant to 42 C.F.R. § 424.535(c), CMS was establishing a one-year re-enrollment bar, effective 30 days after the postmark date of the letter.  Id.

Petitioner sought reconsideration.  In a reconsidered determination, dated June 13, 2024, CMS affirmed the revocation.  CMS Ex. 1.

Petitioner appeals the reconsidered determination.

CMS moves for summary judgment.

Exhibits.  With its motion and brief (CMS Br.), CMS submits six exhibits (CMS Exs. 1-6).  In the absence of any objections, I admit into evidence CMS Exs. 1-6.

Petitioner’s exchange was due no later than September 26, 2024.  Because it failed to submit anything, on September 27, 2024, I issued an order to show cause why the case should not be dismissed for abandonment.

On October 1, 2024, Petitioner responded with submissions labeled P. Exs. 1-2, along with a brief (P. Br.).  CMS has not objected to my admitting these documents.  However, the applicable regulation directs me to “examine any new documentary evidence” submitted for the first time at the ALJ level of review and to determine whether the supplier had good cause for submitting the evidence, for the first time, at this level.  42 C.F.R. § 498.56(e).  Unless I find good cause, I must exclude the evidence and may not consider it in reaching a decision.  42 C.F.R. § 498.56(e)(2)(ii); see 42 C.F.R. § 405.803(e).

Suppliers are expected to understand the regulatory requirements, including this one.  In addition, the contractor’s April 4, 2024 notice letter explicitly warned Petitioner:

[I]f you have additional information that you would like a Hearing Officer to consider during the reconsideration or, if necessary, an Administrative Law Judge (ALJ) to consider during a hearing, you must submit that information with your request for reconsideration.  This is your only opportunity to submit information during the administrative appeals process unless an ALJ allows additional information to be submitted.

CMS Ex. 5 at 4 (emphasis added).

Petitioner concedes that it did not submit, at the reconsideration level, P. Exs. 1 and 2, which purport to be liability insurance policies.  P. Br. at 1-2.  According to Petitioner, at reconsideration, it “mistakenly sent over our Workers Compensation Insurance instead of

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the Comprehensive General Liability Insurance.”  Id.  I do not consider this good cause.  The documents submitted as P. Exs. 1 and 2 were presumably in Petitioner’s possession and could have been submitted.  A Medicare supplier should be able to distinguish between its comprehensive general liability insurance policy and its workers compensation policy.  See discussion below.

Because no good cause justifies Petitioner’s failing to submit the documents at the reconsideration stage, I must exclude them and may not consider them in reaching my decision.  Mohammad Nawaz, M.D., & Mohammad Zaim, M.D., PA, DAB No. 2687 at 12-13 (2016), aff’d, Nawaz v. Price, No. 4:16cv386, 2017 WL 2798230 (E.D. Tex. June 28, 2017) (finding that the ALJ did not abuse his discretion when he did not find good cause to admit documents not offered at reconsideration because the regulation itself provided notice of the requirement to provide all documents at that level of review).

I decline to admit into evidence P. Exs. 1-2.

Decision on the written record.  CMS has moved for summary judgment.  However, neither party proposes any witnesses.  Because there are no witnesses to be examined or cross-examined, an in-person hearing would serve no purpose.  See Acknowledgment and Pre-hearing Order at 4, 6 (¶¶ 8, 10) (July 8, 2024); Civil Remedies Division Procedures § 16(b); Vandalia Park, DAB No. 1940 (2004).  The matter may therefore be decided based on the written record, without considering whether the standards for summary judgment are satisfied.2

Discussion

1. CMS is authorized to revoke Petitioner’s Medicare supplier number pursuant to 42 C.F.R. §§ 424.57(c)(10) and (c)(21) because the supplier did not establish that it had a comprehensive liability insurance policy and did not respond to the Medicare contractor’s request for the required liability insurance policy.3

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To receive Medicare payments for items furnished to a Medicare-eligible beneficiary, a supplier of medical equipment and supplies must have a supplier number issued by the Secretary of Health and Human Services.  Social Security Act (Act) § 1834(j)(1)(A); 42 C.F.R. § 424.505.  To obtain and retain its supplier number, a Medicare supplier must meet the standards set forth in 42 C.F.R. § 424.57(c), and CMS may revoke its billing privileges if it fails to do so.  Act § 1834(j)(1)(B); 42 C.F.R. § 424.57(c)(1), (d), (e)(1); 42 C.F.R. § 424.535(a)(1).  So long as CMS establishes one regulatory basis, I must uphold the revocation.  Global MD Systems, Inc., DAB No. 3103 at 2 (2023); Wassim Younes, M.D. & Wassim Younes, M.D., P.L.C., DAB No. 2861 at 8 (2018) (citing Patrick Brueggeman, D.P.M., DAB No. 2725 at 15 (2016)).

Among the section 424.57(c) standards, are the two that CMS cite in this case.  The supplier must:

• have a comprehensive liability insurance policy in the amount of at least $300,000 that covers both the supplier’s place of business and all customers and employees.  42 C.F.R. § 424.57(c)(10); Act § 1834(j)(1)(B)(ii)(III)) (requiring that DMEPOS standards include the requirement that the supplier “have proof of appropriate liability insurance”); and
• provide to CMS, upon request, any information required by the Medicare statute and implementing regulations.  42 C.F.R. § 424.57(c)(21).

Section 424.57(c)(10).  Here, notwithstanding multiple opportunities to provide the policy, Petitioner did not establish that it had the required comprehensive liability insurance.  When it submitted its application, it responded to the request for liability insurance with evidence of professional malpractice insurance.  CMS Ex. 2 at 7.  The Medicare contractor pointed out the error and gave Petitioner the opportunity to correct it by submitting the appropriate policy.  CMS Ex. 3 at 1.  Petitioner did not respond.  Petitioner had a third opportunity to establish that it had comprehensive liability insurance by submitting the evidence to CMS at the reconsideration stage.  Instead, it re-submitted its professional liability insurance policy and submitted evidence of its workers compensation policy.  CMS Ex. 1 at 2; P. Ex. 2 at 1. 

Until its appeal reached this level – and, even then, after its deadline for submitting evidence had passed – Petitioner had not submitted anything that resembled a comprehensive liability insurance policy.  I do not know whether CMS would have accepted Petitioner’s recent submissions (P. Exs. 1 and 2) as adequate evidence that it maintained the required insurance.  However, as discussed above, I cannot consider the new evidence.  Because Petitioner did not establish that it has a comprehensive liability insurance policy, CMS may revoke its supplier number.  42 C.F.R. §§ 424.57(10), 425.535(a)(1).

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Section 424.57(c)(21).  Even if Petitioner had eventually demonstrated that it had the insurance, CMS could justifiably revoke its supplier number pursuant to section 424.57(c)(21) because it did not respond to the Medicare contractor’s February 22, 2024 request for information.  See CMS Ex. 3.

Petitioner maintains that it did not receive the contractor’s request, and that it would have provided the requested documentation had it received the email.  P. Br. at 1.  CMS dismisses Petitioner’s contention as a “request for equitable relief,” which I am not able to grant.  CMS Br. at 2.  I do not agree with CMS’s characterization.  Petitioner’s argument suggests that the contractor did not properly request the information, which, if true, means that CMS may not revoke under section 424.57(c)(21).  The contention cannot be dismissed as an unreviewable request for equitable relief.4

Nevertheless, I reject Petitioner’s contention.

The Medicare contractor emailed the request for information, a method the Departmental Appeals Board has approved:  “The core question for due process is whether the transmission method is as capable of accomplishing the essential purpose of notice [as notice by U.S. mail].”  Fairway Med. Clinic & Shadow Creek Med. Clinic, DAB No. 2811 at 9 (2017); Christina Paylan, M.D., DAB No. 3112 at 7 (2023).  Here, the contractor’s “transmission method” – which was email – was “reasonably calculated, under the circumstances, to apprise” Petitioner of the contractor’s request and to afford Petitioner the opportunity to respond.  Fairway, DAB No. 2811 at 8 n.6 (citing Lehner v. United States, 685 F. 3d 1187, 1190-91 (9th Cir. 1982)).  Petitioner should have expected that CMS correspondence might be conveyed via email because the Medicare application asks for the email addresses of the supplier’s contact persons.  CMS Ex. 2 at 8.

The contractor sent the request to the addresses Petitioner provided, and Petitioner has not claimed that those addresses are incorrect nor offered any other evidence to establish that the request was not received.5  That Petitioner’s staff may not have read the request

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explains but does not justify its failure to respond.  The date that the email arrived in Petitioner’s office is the date of receipt, whether or not anyone read it.  Paylan, DAB No. 3112 at 7; see Ishtiaq A. Malik, M.D., DAB No. 2962 (2019) (finding that Petitioner received notice of his Medicare exclusion when the Inspector General emailed the notice to his attorney); Illini Heritage Rehab & Health Care, DAB No. 3125 at 7 (2023) (affirming the ALJ’s reasonable inference that the facility received two “correctly directed” faxes on their documented transmission dates).  

I also reject Petitioner’s claim that it would have provided the requested documentation had it received the request.  As noted above, Petitioner had at least one additional opportunity to supply the requested information, and it failed to do so.  Petitioner’s staff were simply unable to distinguish between comprehensive liability insurance and other forms of insurance. 

Re-enrollment bar.  If a supplier’s billing privileges have been revoked, CMS must bar its re-enrollment for a least one year, but for no more than 10 years, depending on the severity of the basis for revocation.  42 C.F.R. § 424.535(c)(1)(i).  I have no authority to review the duration of a re-enrollment bar (which, in any event, is for the minimum period).  Wheelchair City, Inc., DAB No. 3131 at 5 (2024); Heidi Woody, NP, DAB No. 3102 at 19 (2023); see 42 C.F.R. § 498.3(b) (listing the “initial determinations” that are reviewable).  

Conclusion

I affirm CMS’s determination.  CMS is authorized to revoke Petitioner’s supplier number pursuant to section 424.57(c)(10) because, despite given multiple opportunities, Petitioner did not establish that it had comprehensive liability insurance.  CMS is also authorized to revoke Petitioner’s supplier number pursuant to section 424.57(c)(21) because Petitioner did not respond to the Medicare contractor’s request for information.