Retina Specialists of Alabama in Montgomery LLC, DAB CR6625 (2025)

DECISION

Petitioner, Retina Specialists of Alabama in Montgomery LLC, challenges the Centers for Medicare & Medicaid Services’ (CMS’s) determination of its effective date of reactivation as a biller to the Medicare program following a period of deactivation resulting from its failure to revalidate.  As explained below, I find Respondent, CMS, properly determined November 27, 2023, as the effective date of Petitioner’s reactivation, as that is the date Petitioner filed a reactivation application that was subsequently approved.

I.      Background

Petitioner is a multi-specialty clinic that has been enrolled as a Medicare supplier since May 1, 2001.  CMS Ex. 8.  Dr. Edward Scott Parma, the owner and an authorized official of Petitioner, has been a Medicare supplier since December 1, 2002.  CMS Ex. 4.

By a letter dated July 29, 2022, CMS contractor Palmetto GBA (Palmetto) advised Petitioner that it was obligated to revalidate its Medicare enrollment record by October 31, 2022.  CMS Ex. 5.  In response to this letter, Petitioner submitted its CMS-855B

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revalidation application, which was received by Palmetto on October 28, 2022.  CMS Ex. 16.  Palmetto notified Petitioner in a letter dated November 8, 2022, that additional documents were required to complete processing of the application.  CMS Ex. 11.  The letter requested Petitioner to submit CMS Form 588 – Authorization for Electronic Funds Transfer (EFT) – and a voided check or letter on bank letterhead which verified its routing and account number.  Id.  On November 21, 2022, Petitioner submitted additional documents in response to Palmetto’s request.  See Petitioner’s Brief (P. Br.) at 2-3.

On April 5, 2023, while the application was still pending, Petitioner submitted further documentation, including CMS Form 588.  P. Br. at 3 (citing P. Ex. 3).  Petitioner describes this submission as “a separate, and unrelated request” to update its EFT information after a bank account change.  P. Br. at 3 (citing P. Ex. 3 at 2-9).  On April 19, 2023, Palmetto sent Petitioner an Additional Development Request letter again requesting banking documentation in response to CMS Form 588.  CMS Ex. 12.  On April 27, 2023, Petitioner sent documentation responsive to this request to Palmetto.  P. Br. at 3 (citing P. Ex. 4).  However, on August 15, 2023, Petitioner called Palmetto and advised that it was withdrawing its pending application.  CMS Ex. 19.

On August 16, 2023, Petitioner submitted a new application for revalidation.  CMS Ex. 6.

In a letter dated October 2, 2023, Palmetto advised Petitioner that a CMS-855I application to revalidate Dr. Parma’s enrollment also needed to be submitted within 30 days.  CMS Ex. 13.  On November 8, 2023, Palmetto rejected the August 16, 2023, revalidation application because Petitioner failed to submit the requested documentation.  CMS Ex. 9.  The Provider Transaction Access Number (PTAN) was deactivated November 8, 2023.  CMS Ex. 1 at 2.

On November 27, 2023, Petitioner resubmitted its application, including the requested CMS-855I for Dr. Parma.  CMS Ex. 20.  Palmetto subsequently approved Petitioner’s reactivation application with a reactivation date of November 27, 2023.  CMS Ex. 8.  CMS further advised that there would be a gap in billing privileges from November 8, 2023, to November 26, 2023.  Id.

Petitioner thereafter filed a request for reconsideration of the effective date, the deactivation, and the gap in billing privileges.  CMS Ex. 3 at 1, 5.  In a reconsidered determination dated February 29, 2024, Palmetto found no error in reactivating Petitioner’s Medicare billing privileges as of November 27, 2023, with a billing gap from November 8, 2023, to November 26, 2023.  CMS Ex. 1.

On April 26, 2024, Petitioner timely requested a hearing to dispute the reconsidered determination.  Departmental Appeals Board (DAB) Electronic Filing System (E-File) Doc. No. 1.  On April 29, 2024, Administrative Law Judge (ALJ) Jacinta L. Alves was designated to hear and decide this case.  DAB E-File Doc. No. 2.  That same day, the

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Civil Remedies Division (CRD) acknowledged the hearing request and issued ALJ Alves’ Standing Pre-hearing Order (Standing Order).  DAB E-File Doc. No. 2a.  Among other things, the Standing Order instructed the parties to file prehearing exchanges by specified dates.  Id.

On June 3, 2024, CMS filed a motion to dismiss or prehearing brief (CMS Br.), and 22 proposed exhibits (CMS Exs. 1-22).  DAB E-File Doc. Nos. 5a-8f.  That same day, CMS also filed a request for leave to file its motion to dismiss out of time.  DAB E-File Doc. No. 5.  On June 4, 2024, ALJ Alves granted CMS’s request for leave to file its motion to dismiss out of time and directed Petitioner to file its response.  DAB E-File at Doc. No. 9.  On July 8, 2024, Petitioner timely filed a prehearing brief in opposition to CMS’s motion to dismiss along with twenty-six exhibits (P. Exs. 1-26).  DAB E-File Doc. Nos. 11-11c.  On July 9, 2024, ALJ Alves issued an order advising Petitioner that its filings did not comport with the Standing Order.  DAB E-File Doc No. 12.  On July 15, 2024, Petitioner re-filed its brief and exhibits.  DAB E-File Doc. Nos. 13-13n.  On July 31, 2024, CMS filed a reply to Petitioner’s response to CMS’s motion to dismiss (CMS Rep. Br.).  DAB E-File Doc. No. 14.

On November 1, 2024, this case was transferred to the undersigned for adjudication.  DAB E-File Doc. No. 16.

II.    Admission of Exhibits

Petitioner did not object to CMS Exhibits 1 through 22, which consist of documents from the proceedings below.  In the absence of objection, I admit CMS Exhibits 1 through 22 into the record.

Petitioner submitted 26 proposed exhibits (P. Exs. 1-26).  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)).

It appears that most, if not all, of these proposed exhibits offered by Petitioner were previously submitted to CMS during the proceedings below.  Therefore, Petitioner’s exhibits are all admitted into the record.  However, to the extent Petitioner’s exhibits also include additional new documentary evidence, I am required to exclude these documents from evidence pursuant to 42 C.F.R. § 498.56(e)(1)-(2).  Petitioner has not shown good cause for submitting new documents for the first time at the ALJ level.  Thus, I decline to admit any new documents into the record and will not consider them here.  The new documents are retained in the administrative record, but this new evidence is not admitted to the record for decision.

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III.     Decision on the Written Record

Petitioner is entitled to a hearing on the record before an ALJ under the Social Security Act (Act).  Act §§ 205(b), 1866(h)(1), (j); Crestview Parke Care Center v. Thompson, 373 F.3d 743, 748-51 (6th Cir. 2004).  Petitioner may file a written waiver of the right to appear and present evidence at a hearing.  42 C.F.R. § 498.66(a).  If a Petitioner waives the right to appear and present evidence, no hearing is required unless the ALJ believes that testimony from witnesses is necessary to clarify facts at issue or if CMS shows good cause for requiring an in-person hearing.  42 C.F.R. § 498.66(b).

Petitioner affirmatively waived the right to an oral hearing, and I conclude that the waiver is acceptable.  P. Br. at 9.  CMS also agreed to a waiver of an oral hearing.  CMS Br. at 2.  Accordingly, no oral hearing is necessary and a decision on the documentary evidence and briefs is appropriate.  Moreover, I deny CMS’s motion to dismiss as I retain jurisdiction over the effective date determination and address the matters raised by Petitioner in its hearing request.  42 C.F.R. §§ 498.3(b)(15), 498.5(l)(2).

IV.     Issue

Whether CMS had a legitimate basis to establish November 27, 2023, as the effective date of Petitioner’s reactivated billing privileges.

V.       Jurisdiction

I have jurisdiction to decide this case.  42 C.F.R. §§ 498.3(b)(15), 498.5(l)(2).

VI.     Findings of Fact, Conclusions of Law, and Analysis1

1. Applicable Law
   1. Enrollment

Petitioner participates in the Medicare program as a “supplier” of services.  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” is the process by which CMS and its contractors:  (1) identify the prospective supplier; (2) validate the supplier’s eligibility to provide items or services to Medicare beneficiaries; (3) identify and confirm a supplier’s owners and practice location; and (4) grant the supplier Medicare billing privileges.  42 C.F.R. § 424.502.

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To enroll, a prospective supplier must complete and submit an enrollment application.  42 C.F.R. §§ 424.510(d)(1), 424.515(a).  An enrollment application is either a CMS‑approved paper application or an electronic process approved by the Office of Management and Budget.  42 C.F.R. § 424.502.  When CMS determines 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” a subsequently approved enrollment application or “the date that the supplier first began furnishing services at a new practice location.”  42 C.F.R. § 424.520(d) (emphasis added).  The “date of filing” is the date that the Medicare contractor “receives” a signed enrollment application that the Medicare contractor is able to process to approval.  73 Fed. Reg. 69,726, 69,769 (Nov. 19, 2008); Donald Dolce, M.D., DAB No. 2685 at 8 (2016).  If a supplier satisfies certain requirements, CMS may allow a supplier to bill retrospectively for up to 30 days prior to the effective date.  42 C.F.R. § 424.521(a)(1).

2. Revalidation

To maintain billing privileges, a supplier must resubmit and recertify the accuracy of its enrollment information at least every five years, a process referred to as “revalidation.”  42 C.F.R. § 424.515.  Beyond these periodic revalidations, CMS may, at other times and for its own reasons, ask a supplier to recertify the accuracy of its enrollment information.  42 C.F.R. § 424.515(d).  Within 60 days of receiving CMS’s notice to recertify, the supplier must submit an appropriate enrollment application with complete and accurate information and supporting documentation.  42 C.F.R. § 424.515(a)(2).

3. Deactivation

The regulation authorizing deactivation explains that “[d]eactivation of Medicare billing privileges is considered an action to protect the provider or supplier from misuse of its billing number and to protect the Medicare Trust Funds from unnecessary overpayments.”  42 C.F.R. § 424.540(c).  CMS is authorized to deactivate an enrolled supplier’s Medicare billing privileges if the enrollee does not “furnish complete and accurate information and all supporting documentation within 90 calendar days of receipt of notification from CMS to submit an enrollment application and supporting documentation, or resubmit and certify to the accuracy of its enrollment information.”  42 C.F.R. § 424.540(a)(3).  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).

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4. Reactivation

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).  The effective date of reactivation of billing privileges is the date on which the Medicare contractor received the supplier’s reactivation submission that was processed to approval.  42 C.F.R. § 424.540(d)(2).

2. Analysis
   1. Petitioner filed a subsequently approved application on November 27, 2023, which is the effective date of its Medicare reactivation.

The effective date of reactivation of billing privileges is the date on which the Medicare contractor received the supplier’s reactivation submission that was processed to approval by the Medicare contractor.  42 C.F.R. § 424.540(d)(2).2

In this case, Palmetto received a reactivation application from Petitioner on November 27, 2023, and this application was processed to approval.  CMS Exs. 8, 20.  Palmetto appropriately found the effective date of Medicare billing privileges for Petitioner to be November 27, 2023, the date that Palmetto received the Medicare application that was subsequently approved.  CMS Ex. 8.

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While the record also contains prior enrollment applications from November 8, 2022, and August 16, 2023, there is no evidence in the record before me, including any claim by Petitioner, of an application submitted earlier than the one Petitioner submitted on November 27, 2023, that Palmetto received and subsequently approved.  Therefore, pursuant to 42 C.F.R. § 424.540(d), the date Petitioner filed its subsequently approved enrollment application – November 27, 2023 – is the correct effective date of reactivation.

2. I have no authority to review the rejection of Petitioner’s application or the deactivation of Petitioner’s billing privileges and cannot afford it equitable relief.

In its brief, Petitioner generally contends that Palmetto erred in deactivating its Medicare billing privileges which resulted in a gap of billing privileges from November 8, 2023, to November 26, 2023.  P. Br. at 7-9.  Petitioner specifically details the timeline of events from August 2022 through December 2023 when its reactivation application was ultimately approved.  See generally id.  While Petitioner does not deny that its previous applications were withdrawn or rejected, it contends that Palmetto provided it with both “erroneous instructions” and “insufficient notice” that led Petitioner to withdraw its initial application and for Palmetto to improperly reject its second application.  Id. at 3, 8.

Even assuming arguendo that Petitioner did receive incorrect information, I have no authority to review a deactivation or a rejection.  42 C.F.R. § 424.525(d); Howard M. Sokoloff, DPM, MS, Inc., DAB No. 2972 at 6 (2019); Wishon Radiological Med. Grp., Inc., DAB No. 2941 at 6-7 (2019); Ark. Health Grp., DAB No. 2929 at 7-9 (2019); James Shepard, M.D., DAB No. 2793 at 8 (2017).  Deactivation decisions in fact have an altogether separate review process that requires a provider or supplier dissatisfied with deactivation to file a rebuttal with CMS’s administrative contractor.  42 C.F.R. § 424.545(b).  It is not clear from the record whether Petitioner sought relief from Palmetto through this rebuttal process.  My jurisdiction in this case is limited to reviewing the effective date of the approval of Petitioner’s reactivation enrollment application.  42 C.F.R. § 498.3(b)(15).

Nor may I direct the contractor to allow retrospective reimbursement.  A supplier may not receive payment for services or items furnished while deactivated.  42 C.F.R. §§ 424.540(e), 424.555(b).  This represents a departure; CMS previously permitted retrospective billing after reactivation.  In promulgating the new regulation, the Secretary explained the change:

After careful reflection . . . the most sensible approach from a program integrity perspective is to prohibit such payments altogether.  In our view, a provider or supplier should not be effectively rewarded for its non-adherence to enrollment

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requirements (for example, failing to respond to a revalidation request or failing to timely report enrollment information changes) by receiving payment for services or items furnished while out of compliance.

86 Fed. Reg. 62,240, 62,359-60 (Nov. 9, 2021); see Michael B. Zafrani, M.D., DAB No. 3075 at 2 n.1 (2022).

Furthermore, I have no authority to review CMS’s revalidation process or otherwise grant Petitioner any form of equitable relief.  See, e.g., US Ultrasound, DAB No. 2302 at 8 (2010) (“Neither the ALJ nor the Board is authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements.”); Pepper Hill Nursing & Rehab. Ctr., LLC, DAB No. 2395 at 11 (2011) (holding that the ALJ and Board were not authorized to provide equitable relief by reimbursing or enrolling a supplier who does not meet statutory or regulatory requirements); UpturnCare Co., DAB No. 2632 at 19 (2015) (providing the Board may not overturn denial of provider enrollment in Medicare on equitable grounds).  While I am sympathetic to the fact that Petitioner has suffered a significant loss of income while rendering services to the Medicare program, I have no authority under the law to consider that to revise the effective date of reactivation determined by CMS.

VII.    Conclusion

Because Petitioner filed its subsequently approved reactivation application on November 27, 2023, that same date is the earliest possible effective date.  42 C.F.R. § 424.540(d)(2).

I may not review the deactivation.

Retrospective reimbursement is not available for those whose enrollment has been deactivated.  42 C.F.R. § 424.540(e).