James Ormiston and Issaquah Physical Therapy, Inc., DAB CR6654 (2025)

DECISION

I affirm the determination of the Centers for Medicare & Medicaid Services (CMS) that the effective date for the reactivation of the Medicare billing privileges for Petitioners, James Ormiston and Issaquah Physical Therapy, Inc. (Issaquah), is July 24, 2024.1

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I.     Procedural History

On December 30, 2024, Petitioners requested a hearing before an administrative law judge to dispute the reactivation effective date for their Medicare billing privileges.

On January 6, 2025, the Civil Remedies Division (CRD) acknowledged receipt of Petitioners’ hearing request, provided the parties with a prehearing submission schedule, and issued copies of my Standing Order and the Civil Remedies Division Procedures (CRDP).  Consistent with the Standing Order, on February 10, 2025, CMS filed a brief/motion for summary judgment and eight proposed exhibits (CMS Exs. 1-8).  Petitioners did not file either a prehearing exchange or a response to the summary judgment motion.

II.     Admission of Evidence

I admit all of CMS’s proposed exhibits into the record without objection.  See 42 C.F.R. § 498.61.

III.     Decision on the Written Record

I directed the parties to submit written direct testimony for any witnesses they wanted to offer, and I informed the parties as follows:

If the parties either do not file any written direct testimony or the parties do not request to cross-examine any of the witnesses from whom written direct testimony has been submitted, I will consider such actions by the parties to serve as a constructive request for a decision on the written record because there will be no reason to hold an in-person hearing.

Standing Order ¶¶ 7(g)(iii), 11; see also CRDP §§ 16(b), 19(b).  I further advised:  “Unless a hearing is required for cross-examination of a witness or witnesses, the record will be closed and the case will be ready for a decision after all the submission deadlines have passed.”  Standing Order ¶ 14.

Neither party submitted written direct testimony from any witnesses and all submission deadlines have passed.  Therefore, this case is ready for decision based on the written record.  Anil Hanuman, D.O., DAB No. 3080 at 11-12 (2022); CRDP § 19(d).

IV.     Issue

Whether July 24, 2024, is the correct effective date for the reactivation of Petitioners’ Medicare billing privileges.

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V.     Jurisdiction

I have jurisdiction to decide the issue in this case.  42 C.F.R. § 498.3(b)(15).

VI.     Findings of Fact

1. Petitioners have been enrolled in the Medicare program as suppliers since 2009.  See CMS Ex. 4 at 1; CMS Ex. 6 at 1.  Mr. Ormiston is enrolled as a physical therapist in private practice.  CMS Ex. 4 at 1.
2. In a November 29, 2023 notice, a CMS contractor advised Petitioners that every five years they must revalidate the information in their Medicare enrollment records.  The notice warned Petitioners that a failure to revalidate their enrollment information by February 29, 2024, may result in deactivation of their Medicare billing privileges.  The notice further explained that Petitioner would not be paid for services rendered during the period of deactivation and that this will “cause a gap in your reimbursement.”  CMS Ex. 1 at 1.
3. In a May 13, 2024 notice, the CMS contractor informed Petitioners that their Medicare billing privileges were deactivated as of May 3, 2024, because Petitioners did not revalidate their Medicare enrollment records.  The notice advised Petitioners that they could submit a rebuttal if Petitioners thought CMS imposed the deactivation incorrectly.  The notice also advised that Petitioners could recover their Medicare billing privileges if they filed an enrollment application to revalidate their Medicare enrollment records.  CMS Ex. 2 at 1-2.
4. From May through July 2024, Petitioners had to learn how to file the revalidation/ reactivation enrollment applications, and they communicated with the CMS contractor for assistance.  CMS Ex. 3; CMS Ex. 6.
5. CMS received Petitioners’ revalidation/reactivation enrollment application on July 24, 2024.  CMS Ex. 8 at 2; Hearing Req.
6. In an August 22, 2024 notice of initial determination, a CMS contractor approved Petitioners’ revalidation/reactivation enrollment application and stated that Petitioners “will have a gap in billing privileges from May 03, 2024 through July 24, 2024 for failing to fully revalidate during a previous revalidation cycle.  [Petitioners] will not be reimbursed for services provided to Medicare beneficiaries during this time period since [Petitioners were] not in compliance with Medicare requirements.”  CMS Ex. 4 at 1.

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7. On September 20, 2024, Petitioners requested reconsideration of the gap period in their Medicare billing privileges.  CMS Exs. 5-7.
8. In two nearly identical unfavorable reconsidered determinations issued on November 13, 2024, the CMS contractor upheld the reactivation effective date of July 24, 2024.  CMS Ex. 8; E-File Doc. No. 1a.
9. The reconsidered determinations stated that “[Petitioners] will have a gap in billing privileges from May 03, 2024, through July 23, 2024, for failing to fully revalidate during a previous revalidation cycle.  [Petitioners] will not be reimbursed for services provided to Medicare beneficiaries during this time period since [Petitioners] were not in compliance with Medicare requirements.”  CMS Ex. 8 at 4; E-File Doc. No. 1a at 4.

VII.     Conclusion of Law

1. The effective date of reactivation for Petitioners’ Medicare billing privileges is July 24, 2024, because CMS received Petitioners’ revalidation/reactivation enrollment application on July 24, 2024, and a CMS contractor was able to process that application to approval.  42 C.F.R. § 424.540(d)(2).

VIII.     Analysis

The Social Security Act (Act) authorizes the Secretary of Health and Human Services (Secretary) to promulgate regulations governing the enrollment process for providers and suppliers in the Medicare program.  42 U.S.C. §§ 1302, 1395cc(j).  A “supplier” includes “a physician or other practitioner, a facility, or other entity (other than a provider of services) that furnishes items or services” under the Medicare provisions of the Act.  42 U.S.C. § 1395x(d).  Physical therapists are suppliers.  42 C.F.R. §§ 410.60(c), 498.2 (subsection (6) in the definition of “Supplier”); see also 42 U.S.C. § 1395x(p).

A supplier must enroll in the Medicare program to receive payment for covered items or services.  42 U.S.C. §§ 1395n(a), 1395u(h)(1); 42 C.F.R. § 424.505.  To enroll, the supplier must submit an enrollment application and provide all required information.  42 C.F.R. § 424.510(a).  To maintain enrollment, a supplier must recertify the accuracy of its enrollment information every five years.  42 C.F.R. § 424.515.  To do this, a supplier “must submit to CMS the applicable enrollment application with complete and accurate information and applicable supporting documentation within 60 calendar days of [CMS’s] notification to resubmit and certify to the accuracy of its enrollment information.”  42 C.F.R. § 424.515(a)(2).  If a supplier fails to submit information required by CMS within 90 days of receiving notice from CMS to revalidate, then CMS may deactivate the supplier’s Medicare billing privileges.  42 C.F.R. § 424.540(a)(3).

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To reactivate billing privileges, the supplier must recertify that its reenrollment information currently on file with CMS is correct and furnish any missing information.  42 C.F.R. § 424.540(b)(1).  When a supplier seeks reactivation, “[t]he effective date of a reactivation of billing privileges under this section 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).

In the present case, Petitioners essentially request that I modify their effective date for reactivation from July 24, 2024 to May 13, 2024, so that there is no gap in Petitioners’ Medicare billing privileges.  Hearing Req.; CMS Ex. 6.  Petitioners assert that they never received notice that they needed to revalidate their Medicare enrollment record and, not having received the notice, CMS deactivated their billing privileges before Petitioners could revalidate their enrollment records.  Hearing Req.; CMS Ex. 6 at 1.  Further, Petitioners state they made diligent efforts to revalidate their Medicare enrollment records after the deactivation but encountered difficulties in doing so and received little assistance from CMS.  Hearing Req.; CMS Ex. 6 at 1.  Although Petitioners allege that they attempted to revalidate on May 24, 2024, Petitioners also state that this “initial submission was rejected for missing information.”  CMS Ex. 6 at 1.  Petitioners admit that their “final submission [to revalidate] was entered on 7/24/24.”  Hearing Req.

I am unable to modify the effective date for reactivation based on Petitioners’ arguments.  Although Petitioners state that CMS improperly deactivated their billing privileges because Petitioners never received the notice to revalidate their enrollment records, Petitioners admit to receiving the May 13, 2024 notice of deactivation.  CMS Ex. 6 at 1.  That notice informed Petitioners that deactivated suppliers may appeal a deactivation by filing a rebuttal with CMS.  CMS Ex. 2 at 1-2; 42 C.F.R. §§ 424.545(b), 424.546.  There is no evidence that Petitioners filed a rebuttal seeking reversal of the deactivation based on the non-receipt of the notice to revalidate.  Even if Petitioners had, I have no authority to reverse a deactivation or to review CMS’s decision not to reverse a deactivation.  42 C.F.R. § 424.546(f); Michael B. Zafrani, M.D., DAB No. 3075 at 3, 8 (2022).  Therefore, I cannot grant relief to Petitioners based on their assertion that they never received notice to revalidate their enrollment records.

Further, Petitioners argue that their revalidation/reactivation enrollment applications were first initiated on May 24, 2024, and eventually perfected and approved later in the year.  As a result, Petitioners argue that, under 42 C.F.R. § 424.540(d)(2), the effective date for reactivation should be May 24, 2024, because that is the date CMS received those applications, which were eventually approved.

Petitioners’ argument fails because, as Petitioner admits, CMS rejected the revalidation/ reactivation enrollment applications filed in May 2024 due to missing information.  CMS Ex. 6 at 1; 42 C.F.R. § 424.525(a)(2).  Those rejections are not subject to appeal.  42 C.F.R. § 424.525(d).  Because CMS never approved the May 2024 applications, they

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cannot serve as the basis for the effective date of reactivation.  Chaplin Liu, M.D., DAB No. 2976 at 8 (2019) (characterizing the holding in Wishon Radiological Med. Grp., Inc., DAB No. 2941 at 7-8 (2019) to mean that “the right to appeal a determination of the effective date does not permit a supplier to also challenge the rejection of an earlier application, and that the effective date cannot be determined by reference to the filing date of an application not subsequently approved by the contractor”).

The only revalidation/reactivation enrollment applications to be processed to approval were the ones that CMS received on July 24, 2024.  Therefore, the effective date for reactivation must be July 24, 2024.  42 C.F.R. § 424.540(d)(2).

I do not doubt the truth of Petitioners’ assertion that, “[a]s a small practice, the loss of billing privileges for the gap in time we were revalidating is substantially impactful for maintaining our ability to provide care to Medicare beneficiaries.”  CMS Ex. 6 at 2.  I also have no reason to doubt that Petitioners had difficulty “balancing treatment of patients while navigating the Medicare process.”  CMS Ex. 6 at 1.  However, Petitioners missed their opportunity to file a rebuttal to the deactivation that informed CMS that Petitioners never received the notice to revalidate their enrollment records.  Because Petitioners did not appeal the deactivation, CMS cannot reimburse Petitioners for any health care items or services provided 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).

I sympathize with Petitioner’s situation; however, my authority in this case is limited to determining if CMS properly set the date of reactivation.  See 42 C.F.R. § 498.3(b)(15). As explained above, CMS did so.2

IX.     Conclusion

The effective date for the reactivation of Petitioners’ Medicare billing privileges is July 24, 2024.