Pulmonary Critical Care and Sleep Associates, DAB CR6590 (2024)

DECISION

The Centers for Medicare & Medicaid Services (CMS), acting through National Government Services (NGS), a Medicare administrative contractor, deactivated the Medicare billing privileges of Petitioner, Pulmonary Critical Care and Sleep Associates, LLC, previously known as Pulmonary Critical Care and Allergy Associates, PC.  According to Petitioner, on April 20, 2022, it submitted an initial reactivation enrollment application, which was rejected by NGS.  On May 4, 2022, NGS received a second reactivation enrollment application from Petitioner, which NGS approved.  CMS determined that the effective date of the reactivation was May 4, 2022.  Petitioner requested a hearing challenging CMS’s determination of the effective date of reactivation of Petitioner’s Medicare billing privileges.

I affirm NGS’s determination that Petitioner’s effective date for reactivation of Medicare billing privileges is May 4, 2022, because that is the date NGS received Petitioner’s reactivation application and NGS approved that application.  My jurisdiction in this matter is limited to determining whether NGS assigned the correct date for reactivation under the law.  Of the actions taken on behalf of CMS in this matter, I am only permitted

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to review the legitimacy of the effective date of reactivation of billing privileges.  I conclude that NGS’s decision comports with the law.

I have no authority to review CMS’s determination to deactivate Petitioner’s Medicare billing privileges or CMS’s determination to reject an application.  42 C.F.R. § 424.525(d)1; Michael B. Zafrani, M.D., DAB No. 3075 at 8 (2022); Tosan Fregene, M.D. & Oncology Clinics, Inc., DAB No. 3018 at 7 (2020); Howard M. Sokoloff, DPM, MS, Inc., DAB No. 2972 at 6 (2019); Ark. Health Grp., DAB No. 2929 at 7-9 (2019); see 42 C.F.R. §§ 424.540, 498.3.

I.      Procedural History

On August 16, 2022, NGS issued an unfavorable reconsidered determination related to the effective date of reactivation of Petitioner’s Medicare billing privileges.  On September 29, 2022, Petitioner timely requested a hearing (RFH) to dispute the reconsidered determination.  On September 30, 2022, Administrative Law Judge (ALJ) Bill Thomas was designated to hear and decide this case.  That same day, the Civil Remedies Division (CRD) acknowledged the hearing request and issued ALJ Thomas’s Standing Pre-hearing Order (Standing Order).  Among other things, the Standing Order instructed the parties to file prehearing exchanges by specified dates.  On November 3, 2022, CMS timely filed a prehearing brief (CMS Br.), which included a motion for summary judgment, and 11 proposed exhibits (CMS Exs. 1-11).  After ALJ Thomas granted a request for an extension of Petitioner’s prehearing exchange deadline, Petitioner timely filed a prehearing brief (P. Br.) and two unmarked exhibits.  On October 25, 2024, this case was transferred to the undersigned for adjudication.

II.      Admission of Evidence and Decision on the Written Record

Petitioner did not object to CMS Exs. 1 through 11.  In the absence of objection, I admit CMS Exs. 1 through 11 into the record.

Petitioner submitted two unmarked exhibits.  Although CMS did not object to Petitioner’s exhibits, I “must exclude ‘new documentary evidence’ – that is, documentary evidence that a provider did not previously submit to CMS at the reconsideration stage (or earlier) – unless [I] determine[] that ‘the provider or supplier has good cause for submitting the evidence for the first time at the ALJ level.’”  Care Pro Home Health, Inc., DAB No. 2723 at 11 (2016) (citing 42 C.F.R. § 498.56(e)(1)).

The first unmarked exhibit is an affidavit of three individuals stating that “Medicare” did not contact them or the practice regarding the “required proceedings” after the death of

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Dennis Beer, who was identified as a managing employee, partner, and authorized official.  In the absence of objection from CMS and although Petitioner did not mark the declaration as an exhibit and failed to list the three individuals as witnesses, I admit the affidavit into evidence as the individuals’ written direct testimony and will refer to it as P. Ex. 1.  Arkady B. Stern, M.D., DAB No. 2329 at 4 n.4 (2010) (“Testimonial evidence that is submitted in written form in lieu of live in-person testimony is not ‘documentary evidence’ within the meaning of 42 C.F.R. § 498.56(e), which requires good cause for submitting new documentary evidence to the ALJ.”).

The second unmarked exhibit filed by Petitioner is an undated spreadsheet of unreimbursed visits from March 4, 2022 to May 4, 2022.  Unlike P. Ex. 1, I am required to exclude this proposed exhibit pursuant to 42 C.F.R. § 498.56(e)(1)-(2).  Petitioner has not shown good cause for submitting this proposed exhibit for the first time at the ALJ level.  Petitioner could have submitted this document with its June 7, 2024 request for reconsideration.  Also, based on the record, I am unable to find good reason as to why Petitioner filed this document for the first time at the ALJ level.  In its request for reconsideration, Petitioner already knew that claims from March 4, 2022 to May 4, 2022 “are still being denied.”  CMS Ex. 8 at 1.  Presumably, Petitioner already had this information at the time of requesting reconsideration.  Thus, I decline to admit this proposed exhibit into evidence.

If the parties wanted an in-person hearing, the parties had to submit written direct testimony from the witnesses and the opposing party had to request to cross-examine one or more of those witnesses.  Standing Order ¶¶ 16-19; CRDP §§ 16(b), 19(b).

Because CMS did not offer any written direct testimony from witnesses and CMS did not request to cross-examine any of the individuals who signed the affidavit offered by Petitioner, I do not need to hold a hearing and may issue a decision based on the written record.  Vandalia Park, DAB No. 1940 (2004).  Therefore, I deny CMS’s motion for summary judgment as moot.  In rendering this decision on the record, I address the matters raised by Petitioner in its hearing request.

III.      Legal Background

Petitioner participates in the Medicare program as a supplier of services.  Social Security Act (Act) § 1861(d); 42 C.F.R. § 498.2.  To receive Medicare payments for the services it furnishes to program beneficiaries, a prospective supplier must enroll in the program.  42 C.F.R. § 424.505.  “Enrollment” means “the process that Medicare uses to establish eligibility to submit claims for Medicare-covered items and services, and the process that Medicare uses to establish eligibility to order or certify Medicare-covered items and services.”  42 C.F.R. § 424.502.  The enrollment process includes identifying the supplier, validating the supplier’s eligibility to provide items or services to Medicare beneficiaries, identifying the supplier’s practice location and owners, and granting the

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supplier Medicare billing privileges.  Id.  To enroll, the supplier must “submit a complete enrollment application and supporting documentation to the designated” Medicare contractor.  42 C.F.R. § 424.510(a),(d)(1).

When CMS determines that a prospective supplier meets the applicable enrollment requirements, it grants Medicare billing privileges, which means that the supplier can submit claims and receive payments from Medicare for covered services provided to program beneficiaries.  The effective date for its billing privileges “is the later of the date of filing of a Medicare enrollment application that was subsequently approved” or “the date that the supplier first began furnishing services at a new practice location.”  42 C.F.R. § 424.520(d) (emphasis added).  If a supplier satisfies certain requirements, CMS will allow a supplier to bill retrospectively for up to 30 days prior to the effective date, or 90 days prior to the effective date if a presidentially declared disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act precluded enrollment.  42 C.F.R. § 424.521(a)(1).

The regulations authorize CMS to reject an enrollment application and to deactivate a supplier’s billing privileges.  CMS may reject an enrollment application for several reasons.  42 C.F.R. § 424.525.  Applications “that are rejected are not afforded appeal rights.”  42 C.F.R. § 424.525(d).  CMS may also deactivate a supplier’s billing privileges if, among other things, the “supplier does not report a change to the information supplied on the enrollment application within the applicable time period required under this title.”  42 C.F.R. § 424.540(a)(2).  Suppliers must inform CMS of changes to enrollment information, such as notifying the Medicare contractor within 90 days regarding changes in enrollment.  42 C.F.R. § 424.516(d)(2).  If CMS deactivates a supplier’s Medicare billing privileges, “[n]o payment may be made for otherwise Medicare covered items or services furnished to a Medicare beneficiary.”  42 C.F.R. § 424.555(b).  “A provider or supplier may not receive payment for services or items furnished while deactivated under this section.”  42 C.F.R. § 424.540(e).  The regulations grant a supplier the right to file a rebuttal with the contractor.  42 C.F.R. § 424.545(b).  However, “[t]he regulations do not grant suppliers the right to appeal deactivations.”  Urology Grp. of NJ, LLC, DAB No. 2860 at 6 (2018) (citing William Goffney, Jr., M.D., DAB No. 2763 at 5 (2017)).

The reactivation of an enrolled supplier’s billing privileges is governed by 42 C.F.R. § 424.540(b).  The process for reactivation is contingent on the reason for deactivation.  If CMS deactivates a supplier’s billing privileges due to a reason other than non-submission of a claim, the supplier must apply for CMS to reactivate its Medicare billing privileges by completing and submitting the appropriate enrollment application(s) or recertifying its enrollment information, if deemed appropriate.  42 C.F.R. § 424.540(a)(3), (b)(1).  Pursuant to 42 C.F.R. § 424.540(d)(2), the “effective date of a reactivation of billing privileges under this section is the date on which the Medicare contractor received the provider’s or supplier's reactivation submission that was processed to approval by the Medicare contractor.”  The regulations prohibit a supplier to

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receive “payment for services or items furnished while deactivated . . . .”  42 C.F.R. § 424.540(e).

42 C.F.R. § 498.3(b)(15) provides that “[t]he effective date of a Medicare provider agreement or supplier approval” is an initial determination subject to ALJ review.  The Departmental Appeals Board (Board) has given an expansive interpretation to 42 C.F.R. § 498.3(b)(15) and found a right to ALJ review of the effective date of the reactivation of billing privileges.  Michael B. Zafrani, M.D., DAB No. 3075 at 3 (2022); see Urology Grp. of NJ, LLC, DAB No. 2860 at 6 (2018) (stating that there is no right to review of a determination to deactivate billing privileges but is a right to review of a determination of the effective date of reactivation); Victor Alvarez, M.D., DAB No. 2325 at 3-10 (2010).

Determination of the effective date of a supplier’s billing privileges is an “initial determination” subject to ALJ review under 42 C.F.R. Part 498.  See 42 C.F.R. §§ 498.3(a)(1), (b)(15), 498.5(l); Victor Alvarez, M.D., DAB No. 2325 at 3 (2010).  A supplier dissatisfied with the designated effective date may request a “reconsidered determination” from CMS and may thereafter request a hearing before an ALJ on the reconsidered determination.  42 C.F.R. § 498.5(l)(1)-(2).

IV.      Issue

Whether NGS, acting on CMS’s behalf, had a legitimate basis to assign May 4, 2022, as the effective date for the reactivation of Petitioner’s Medicare billing privileges.

V.      Jurisdiction

I have jurisdiction to hear and decide this case.  42 C.F.R §§ 498.3(b)(15), 498.5(l)(2); see also 42 U.S.C. § 1395cc(j)(8).

VI.      Findings of Fact

1. Petitioner is a group practice that is enrolled in the Medicare program.  CMS Ex. 4.  Dr. Dennis Beer had been identified as a managing employee, partner, and authorized official in Petitioner’s Medicare enrollment since 2005.  CMS Ex. 2 at 1.
2. Dr. Beer died on August 18, 2021, and Petitioner failed to notify NGS or CMS of Dr. Beer’s death.  CMS Ex. 2.
3. Petitioner was renamed from “Pulmonary Critical Care and Allergy Associates” to “Pulmonary Critical Care and Sleep Associates” because Dr. Beer was the only allergist in the practice.  RFH; CMS Br. at 1 n.1.

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4. By notice dated November 17, 2021, NGS informed Petitioner that “an update or change to the enrollment record is required for an individual associated with” Petitioner.  CMS Ex. 1.  In order to comply, Petitioner was required to “submit a CMS-855 change request that deletes the individual listed as an owner, officer, director, authorized or delegated official, partner, or managing employee from [Petitioner’s] enrollment record.”  Id.  The notice also informed Petitioner that failure to respond to the request within 90 days of the date of the notice may result in the deactivation of Petitioner’s Medicare enrollment and billing privileges.  Id.
5. By letter dated March 14, 2022, NGS issued a notice that it was deactivating, pursuant to 42 C.F.R. § 424.540(a)(2), Petitioner’s Medicare billing privileges, due to Petitioner’s failure to report a change in the ownership of Petitioner, i.e., Dr. Beer’s death.2  CMS Ex. 2 at 1.  NGS advised Petitioner of its right to file a rebuttal if it did not believe the deactivation determination was correct.  Id.
6. On April 20, 2022, Petitioner filed an initial application seeking reactivation of its Medicare billing privileges.  CMS Ex. 11 at 2; CMS Br. at 4 n.4.  It is unclear from the record if the application was rejected by NGS or voluntarily withdrawn by Petitioner before NGS completed the review of the application.  Compare CMS Ex. 11 at 2, with CMS Br. at 4 n.4.  Regardless, the application was not processed to approval.
7. On May 4, 2022, Petitioner submitted a second reactivation of enrollment application, which NGS received that same day.  CMS Exs. 4, 5.  The application contained a request for an August 3, 2000 effective date for the reactivation.  CMS Ex. 4 at 3.  By letter dated May 13, 2022, NGS notified Petitioner that it had approved Petitioner’s reactivation enrollment application, with an effective date of May 4, 2022.  CMS Ex. 6 at 1.
8. On June 7, 2022, Petitioner requested reconsideration of NGS’s initial determination.  CMS Exs. 7, 8.  In its request for reconsideration, Petitioner requested a reactivation date of March 4, 2022, because Petitioner “filed a reactivation for the practice and providers on 5/4, listing 5/4/2022 as the effective date, as it was our understanding that claims would process retroactively for 90 days prior to the effective date.”  CMS Ex. 8 at 1.
9. On August 16, 2022, NGS issued an unfavorable reconsidered determination in which NGS concluded that the reactivation effective date of Petitioner’s Medicare billing privileges was May 4, 2022.  CMS Ex. 10 at 3.

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VII.      Analysis and Conclusions of Law3

1. Based on the reactivation enrollment application that NGS approved in this case, the effective date for reactivation of Petitioner’s Medicare billing privileges is the date on which NGS received Petitioner’s reactivation application that was processed to approval, i.e., May 4, 2022.  42 C.F.R. § 424.540(d)(2).

Pursuant to 42 C.F.R. § 424.540(d)(2), “[t]he effective date of a reactivation of billing privileges under this section is the date on which the Medicare contractor received the provider's or supplier’s reactivation submission that was processed to approval by the Medicare contractor.”  Petitioner submitted a reactivation application that was received by NGS on May 4, 2022, which was processed to approval.  CMS Ex. 4 at 1; CMS Ex. 6.  Consistent with the regulation, NGS granted Petitioner the correct effective date for the reactivation of Petitioner’s Medicare billing privileges.

Petitioner does not contend that other reactivation applications were submitted and processed to approval.  See RFH.  However, in its request for reconsideration, Petitioner explained that it originally requested the effective date of the reactivation to be May 4, 2022 because it was its “understanding that claims would process retroactively for 90 days prior to the effective date.”  CMS Ex. 8 at 1.  Moreover, after noticing that the claims were still being denied, Petitioner requested in its request for hearing that I “make an allowance for [Petitioner’s] unique situation and change [Petitioner’s] activation date to March 4, 2022 . . . .”  RFH at 3.  I construe Petitioner’s request as Petitioner seeking retrospective billing privileges to cover the period of deactivation.

When CMS assigns an effective date, CMS may permit a retrospective billing period of up to 30 days “if circumstances precluded enrollment in advance of providing services to Medicare beneficiaries” and up to 90 days if a presidentially declared disaster precluded enrollment in advance of providing services to Medicare beneficiaries.  42 C.F.R. § 424.521.  However, when a supplier is seeking to reactivate billing privileges, the effective date provision for reactivation does not provide for a retrospective period of billing.  Not only does the regulation not provide for a retrospective period of billing, but also the regulations prohibit CMS from paying a supplier for items or services furnished to Medicare beneficiaries during the period of deactivation.  42 C.F.R. §§ 424.540(e), 424.555(b); 86 Fed. Reg. 62,240, 62,359-60 (Nov. 9, 2021); see also Goffney v. Becerra, 995 F.3d 737, 743 (9th Cir. 2021).  Therefore, I am unable to grant Petitioner a retrospective billing period since the regulations do not permit me to do so and doing so would annul regulatory provisions that must be followed.

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2. The only reviewable issue before me is whether NGS assigned the correct effective date for Petitioner’s reactivated Medicare billing privileges.  Neither the deactivation of Petitioner’s billing privileges nor the alleged rejection of Petitioner’s April 20, 2022 enrollment reactivation application is an initial determination subject to ALJ review.

Petitioner does not claim that it filed a reactivation application that was processed to approval prior to May 4, 2022.  Instead, Petitioner challenges the deactivation of its billing privileges, noting that it never received notice of deactivation.  It explains that Petitioner would have complied with the requirements set forth in the notice requiring Petitioner to remove Dr. Beer from the enrollment record within the 90-day deadline.  RFH at 1; P. Br. at 1.  Petitioner further explains that Gail Yazbek, the recipient of the email request, was incorrectly listed as the practice’s contact.  P. Br. at 1.  Gail Yazbek used to work for Petitioner but no longer does.  Id.  Petitioner also argues that it filed a reactivation application on April 20, 2022 that was rejected by NGS.  RFH at 2.  According to Petitioner, its name was changed from Pulmonary Critical Care and Allergy Associates to Pulmonary Critical Care and Sleep Associates.  Id.  Petitioner alleges that the April 20, 2022 application was rejected because “the new name was not yet on file with the IRS.”  Id.  Petitioner “discovered that the IRS has a two[-]year delay in processing names changes.”  Id.

Regarding Petitioner’s deactivation, “whether or not Petitioner was notified of the deactivation of its Medicare billing privileges is outside” my authority to review.  See Urology, DAB No. 2860 at 7.  The regulations do not grant Petitioner the right to appeal the deactivation since a deactivation is not an initial determination.  Id. at 9; 42 C.F.R. § 498.3.  “Petitioner may not now challenge the effectuation of the deactivation through an appeal that solely concerns the effective date of reactivation.”  Urology, DAB No. 2860 at 7.

In regard to the alleged rejection of the April 20, 2022 application, there is no evidence in the record that establishes that NGS rejected the April 20, 2022 reactivation application submitted by Petitioner.  Although both parties concede that an April 20, 2022 reactivation application was submitted to NGS, the parties dispute whether the application was rejected.  Petitioner contends that, in fact, it was rejected by NGS, and CMS contends that Petitioner voluntarily withdrew the application before NGS completed its review.  Compare RFH, with CMS Br. at 4 n.4.

Nevertheless, whether the April 20, 2022 application was rejected is irrelevant to the outcome of this case.  Even if I were to assume that the April 20, 2022 reactivation application was rejected, rejection of a supplier’s enrollment application is not mentioned on the list of initial determinations by CMS that a supplier may appeal to an ALJ.  See 42 C.F.R. § 498.3.  Furthermore, applications that are rejected are not afforded appeal rights.  42 C.F.R. § 424.525(d).  As the Board stated, there is “no applicable authority allowing a

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supplier to seek review of an unappealable rejection of an incomplete application by the ‘back door’ route of challenging the effective date of a later application which was processed to approval.”  Wishon Radiological Med. Grp., Inc., DAB No. 2941 at 8 (2019).

Thus, I do not have the authority to review the deactivation of Petitioner’s Medicare billing privileges nor the alleged rejection of the April 20, 2020 reactivation application.

3. Equitable considerations do not provide me with the basis to grant Petitioner an earlier reactivation date.

Petitioner’s arguments may be construed as requests for equitable relief.  See, e.g., RFH at 1 (“As pulmonary and critical care physicians, the unexpected death of the head of the practice occurred during the COVID pandemic, where we had already made significant sacrifices to spend an inordinate amount of time in the ICU at the expense of our outpatient practice . . . .”); see also id at 2 (“[w]e understand that this is a unique situation.”).  However, I have no authority to grant Petitioner equitable relief and have no authority to grant Petitioner an earlier effective date based on equitable considerations.  US Ultrasound, DAB No. 2302 at 8 (2010); Howard M. Sokoloff, DAB No. 2972 at 9 (2019).  I am also required to follow the Act and regulations and have no authority to declare invalid or refuse to follow statutes or regulations.  1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (2009).

I am sympathetic to Petitioner’s inability to receive Medicare reimbursement for services rendered while deactivated.  However, while I have jurisdiction to review whether NGS properly established the effective date for reactivation, I do not have authority to add a period of retrospective or retroactive billing.  See 42 C.F.R. § 498.3(b)(15).

VIII.      Conclusion

The reactivation effective date for Petitioner’s Medicare billing privileges is May 4, 2022.