City of Broken Arrow, DAB CR6649 (2025)

DECISION

Petitioner, City of Broken Arrow, is an ambulance service that operates in Broken Arrow, Oklahoma.  After the Medicare contractor deactivated the service's Medicare billing privileges, Petitioner submitted a new application.  Acting on behalf of the Centers for Medicare & Medicaid Services (CMS), the contractor approved the application, with an effective billing date of March 15, 2024.  As a result, Petitioner's Medicare billing privileges lapsed from February 22 through March 14, 2024.

Petitioner has challenged the deactivation, claiming that it made good-faith efforts to comply with Medicare revalidation requirements.

Because Petitioner filed its subsequently-approved reactivation application on March 15, 2024, March 15 is the earliest possible effective date for its Medicare reactivation.  See 42 C.F.R. § 424.540(d)(2).

I have no authority to review the deactivation nor to order retrospective reimbursement for services provided during the period of deactivation.

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Background

The Medicare contractor, Novitas Solutions, has approved Petitioner's reactivation enrollment application with an effective date of March 15, 2024.  CMS Ex. 9.  Petitioner requested reconsideration.  CMS Ex. 10.  In a reconsidered determination, dated October 10, 2024, a Medicare hearing officer affirmed the March 15, 2024 effective date.  CMS Ex. 11 at 4.

Petitioner appeals, and the matter is now before me.

CMS moves for summary judgment.  However, because neither party proposes any witnesses, an in-person hearing would serve no purpose.  See Acknowledgment and Pre-hearing Order at 4, 6 (¶¶ 4(c)(iv), 10) (Dec. 9, 2024).  I may therefore decide this case based on the written record, without considering whether the standards for summary judgment are satisfied.

CMS submits its motion and brief (CMS Br.) with 11 exhibits (CMS Exs. 1-11).  Petitioner submits its own brief (P. Br.) and a separate legal summary with nine exhibits (P. Exs. 1-9).  In the absence of any objections, I admit into evidence CMS Exs. 1-11 and P. Exs. 1-9.  See Acknowledgment and Pre-hearing Order at 5 (¶ 7).

Discussion

1. On March 15, 2024, Petitioner filed its subsequently-approved Medicare reactivation application, and the effective date of its reactivation can be no earlier than that date.  42 C.F.R. § 424.540(d)(2). 1

Enrollment.  Petitioner Broken Arrow participates in the Medicare program as a "supplier" of services.  See Social Security Act § 1861(d); 42 C.F.R. § 498.2.  To receive Medicare payments for the services furnished to program beneficiaries, a supplier must enroll in the program.  Act § 1834(j); 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.

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

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Management and Budget.  42 C.F.R. § 424.502.2  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.  For ambulance suppliers submitting a new enrollment application, the effective date for 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).  However, because this case involves reactivation after a deactivation, additional regulations apply.

Reactivation following deactivation.  To maintain its billing privileges, a supplier must resubmit and recertify the accuracy of its enrollment information every five years.  42 C.F.R. § 424.515.  CMS may also perform off-cycle revalidations at any time.  42 C.F.R. § 425.515(d).  Within 60 days of receiving CMS's notice, the supplier must submit the applicable enrollment application and supporting documentation.  42 C.F.R. § 424.515(a)(2).  CMS may deactivate a supplier's billing privileges if the supplier does not furnish complete and accurate information and all supporting documentation within 90 calendar days of receiving CMS's request that it do so.  42 C.F.R. § 424.540(a)(3); see 42 C.F.R. § 424.540(a)(2) (authorizing deactivation if the supplier fails to report a change of information within 90 days of the time a change occurred).

The regulations governing reactivation after a deactivation differ in significant ways from the enrollment regulations.  See 86 Fed. Reg. 62,240, 62,359-60 (Nov. 9, 2021).  To reactivate its billing privileges, the supplier must recertify that its enrollment information currently on file with Medicare is correct, furnish any missing information, as appropriate, and comply with all applicable enrollment requirements.  42 C.F.R. § 424.540(b)(1).  CMS may also require that a deactivated supplier submit a complete enrollment application.  42 C.F.R. § 424.540(b)(2).  The effective date of reactivation of billing privileges is the date on which the Medicare contractor received the supplier's submissions that were processed to approval.  42 C.F.R. § 424.540(d)(2).

Here, in a letter dated September 30, 2022, CMS directed Petitioner Broken Arrow to revalidate its Medicare enrollment no later than December 31, 2022.  CMS Ex. 1 at 1.  Although Petitioner did not respond, the contractor did not deactivate its billing privileges.

On January 8, 2024, Petitioner Broken Arrow submitted a Change-of-Information application, which the Medicare contractor treated as the supplier's revalidation application.  CMS Ex. 2; see CMS Ex. 3 at 1.  In a letter dated January 23, 2024, the

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contractor acknowledged receiving the application but directed Petitioner to submit additional information.  The letter cautioned that the contractor might reject the application if Petitioner did not furnish complete information within 30 calendar days from the postmarked/emailed date of the letter.  CMS Ex. 3.  The contractor mailed the letter to the supplier's practice location.  See CMS Ex. 2 at 3; CMS Ex. 3 at 1.  The contractor also emailed a copy of the letter to the email address that Petitioner provided in its application.  CMS Ex. 4; see CMS Ex. 2 at 1.

Petitioner did not respond.

In a letter dated February 26, 2024, the contractor advised Petitioner that, because it had not timely revalidated its enrollment, its Medicare billing privileges were deactivated, effective February 22, 2024, pursuant to 42 C.F.R. § 424.540(a)(3).  CMS Ex. 5.  Section 424.540(a)(3) authorizes the contractor to deactivate a supplier's Medicare billing privileges if the supplier does not timely respond to the contractor's request for more information.

On March 15, 2024, the Medicare contractor received Petitioner's reactivation submission that it processed to approval.  CMS Ex. 6.  March 15, 2024 is therefore the effective date for reactivating its billing privileges.  See 42 C.F.R. § 424.540(d)(2).

Petitioner complains that it made good-faith efforts to comply with revalidation requirements, but was not able to because:  the September 30, 2022 letter was addressed to an individual who died in 2017;3 the contractor processed the supplier's January 8, 2024 application as a revalidation instead of an update to existing enrollment records, which "impacted how subsequent communications were handled"; and the contractor's January 23, 2024 email was misidentified as spam, because of the supplier's security protocols, so Petitioner was unaware of the contractor's request for additional information.  P. Br. at 1-2.

Notwithstanding the merits of Petitioner's position, I have no authority to review a deactivation or grant Petitioner an earlier effective date based on any equitable or policy arguments.  Howard M. Sokoloff, DPM, MS, Inc., DAB No. 2972 at 6, 9 (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).

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

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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 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).

Conclusion

Because Petitioner filed its subsequently-approved reactivation application on March 15, 2024, March 15 is the earliest possible effective date.  See 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).