Texas Home Physicians, DAB CR6664 (2025)

DECISION

The Centers for Medicare & Medicaid Services (CMS), acting through its administrative contractor, Palmetto GBA (Palmetto),1 revoked the enrollment of Texas Home Physicians (Petitioner) in the Medicare program as a supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).  Palmetto concluded, based on three attempted site inspections of Petitioner's offices, that Petitioner was not operational during the hours of operation identified by Petitioner on its Medicare revalidation application.

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As explained below, I affirm the revocation of Petitioner's Medicare enrollment as a DMEPOS supplier because the inspectors confirmed that Petitioner's qualified practice location (i.e., the physical office location Petitioner identified on its Medicare revalidation application) was not open to the public on days and at times when Petitioner was to be open to the public (as indicated on a Medicare revalidation application).  As a result, Petitioner's Medicare enrollment was subject to revocation because Petitioner was not considered "operational" under the regulations.

I.  Background

Petitioner was enrolled in the Medicare program as a DMEPOS supplier.  In a July 13, 2023, notice of initial determination, Palmetto revoked Petitioner's Medicare enrollment retroactive to April 14, 2023.  CMS Exhibit (Ex.) 3 at 1-3.  Palmetto based its revocation on the following basis:

42 CFR §[]424.535(a)(5)(i) – On Site Review.  Upon on-site review or other reliable evidence, CMS determines that the provider or supplier is either of the following:

(i) No longer operational to furnish Medicare-covered items or services.
(ii) Otherwise fails to satisfy any Medicare enrollment requirement.

Texas Home Physicians is no longer operational to furnish Medicare covered items or services.  Site visits conducted on April 14, 2023, and July 5, 2023, at 1125 Cypress Station Dr., Suite A-4, Houston, TX 77090-3055, revealed a vacant facility with no business posted signs.  Thus, you are considered to be in violation of all supplier standards defined in 42 CFR 424.57(c) and pursuant to 424.535(g), the revocation is effective the date CMS determined that you were no longer operational.

CMS Ex. 3 at 1.  Palmetto also barred Petitioner from reenrollment in the Medicare program for a period of one year, effective 30 days from the postmark date on the letter.  CMS Ex. 3 at 2.

Petitioner requested that Palmetto reconsider the revocation, stating in part:

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It is true that this practice moved locations and has limited times of operation.  However, it is not true that they were not operational.  After review of [Petitioner's] statement, it will be very clear that the location of Texas Home Physicians has changed.  While there was a delay in posting visible signage regarding hours of operation, this has since been corrected.  The facility's name is now posted outside the building along with the DMEPOS Supplier Standard.

CMS Ex. 4 at 1.  Petitioner also submitted a letter and photographs in support of its request.  Id. at 6-11.

On December 7, 2023, Palmetto issued an unfavorable reconsidered determination upholding the revocation of Petitioner's Medicare enrollment.  CMS Ex. 5.  After summarizing the facts and Petitioner's reconsideration request, Palmetto decided the following:

Based on the failed site visits attempted on April 13, 2023, April 14, 2023 and July 5, 2023, [Palmetto] finds that Texas Home Physicians' Medicare enrollment was properly revoked pursuant [to] § 424.535(a)(5).  Texas Home Physicians has not provided a verifiable explanation for their noncompliance with 42 C.F.R. § 424.535(a)(5) as the site visit attempt[s] were unsuccessful and [Palmetto] was not able to verify compliance with the supplier standards and consequently, determined that the facility was not operational during attempted visit[s] to furnish Medicare covered items and services.  Therefore, [Palmetto] upholds the revocation of [Petitioner's] enrollment and the corresponding re-enrollment bar, pursuant to 42 C.F.R. § 424.535(a)(5).

CMS Ex. 5 at 4.

On February 2, 2024, Petitioner requested a hearing by an administrative law judge to dispute the reconsidered determination.  On February 5, 2024, the Civil Remedies Division acknowledged receipt of the hearing request and issued Administrative Law Judge Scott Anderson's Standing Prehearing Order (SPO), which provides the parties with procedures and dates for the filing of prehearing exchanges.

On April 1, 2024, CMS filed a prehearing brief and motion for summary judgment (CMS Br.) along with five proposed exhibits.  On August 5, 2024, Petitioner filed a prehearing brief and opposition to summary judgment (P. Br.), five proposed exhibits, and a witness

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list.  On August 26, 2024, CMS filed an objection to two of Petitioner's proposed exhibits.2

II.  Admission of Evidence

I admit all of CMS's proposed exhibits, without objection.  See SPO ¶ 10; Civil Remedies Division (CRD) Procedures § 14(e).

Petitioner submitted five exhibits (P. Exs. 1-5).  These documents are as follows:  1) P. Ex. 1, an April 8, 2024 rescission correspondence; 2) P. Ex. 2, a June 27, 2024 correspondence regarding errant rescission; 3) P. Ex. 3, the Affidavit of Anand Balasubramanian, M.D.; 4) P. Ex. 4, the Affidavit of Riffat Nasir; and 5) P. Ex. 5, the Affidavit of Nasir Hameed.

CMS has objected to the admission of Petitioner's Exhibits 1 and 2.  See CMS's Objections.

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)).

At the outset, even though no objection is raised, I admit the three affidavits into evidence as the individuals' written direct testimony.  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.").

Petitioner's Exhibits 1 and 2 are not admitted because they are not relevant to the instant matter.  Evidence is relevant if "it has any tendency to make a fact [of consequence, i.e., material] more or less probable than it would be without the evidence."  Federal Rule of Evidence (Fed. R. Evid.) 401.  The narrow issue before me is whether CMS has a basis to revoke Petitioner's Medicare enrollment and billing privileges.  Dinesh Patel, M.D., DAB No. 2551 at 10-11 (2013); Fady Fayad, M.D., DAB No. 2266 at 16 (2009), aff'd, Fayad v. Sebelius, 803 F. Supp. 2d 699 (E.D. Mich. 2011); Abdul Razzaque Ahmed, M.D., DAB No. 2261 at 16-17, 19 (2009), aff'd, Ahmed v. Sebelius, 710 F. Supp. 2d 167 (D. Mass. 2010).  The only determination of CMS subject to my review in a provider and supplier enrollment case is the reconsidered determination.  42 C.F.R. § 498.5(l)(1)-(2);

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Neb Group of Ariz. LLC, DAB No. 2573 at 7 (2014).  Petitioner's Exhibits 1 and 2, involving a notice issued in error by the contractor, are not relevant to any issue I may decide.  Accordingly, Petitioner's Exhibits 1 and 2 are not admitted as evidence as they are not relevant, and no good cause has been shown.  42 C.F.R. §§ 498.60(b)(1) (ALJ receives only relevant evidence), 498.56(e)(1).

III.  Decision on the Record

Petitioner now appeals the reconsidered determination, and CMS has moved for summary judgment.  Although CMS has moved for summary judgment, I find that this matter may be decided on the written record, without considering whether the standards for summary judgment are satisfied.

In the SPO, the parties were instructed to list all proposed witnesses and to submit their written direct testimony.  SPO ¶ 11.  The SPO further advised that each party has the right to cross-examine any witness for whom the opposing party offers written direct testimony; however, the party must affirmatively indicate that it wishes to do so.  Id. ¶ 12.  Further, the Standing Order specified that a hearing would be necessary only if a party files admissible, written direct testimony, and, in compliance with the order, the opposing party asks to cross-examine the witness.  Id. ¶ 13.

CMS has not listed any witnesses.  Petitioner has listed three witnesses, Anand Balasubramanian, M.D., Riffat Nasir, and Nasir Hameed, and submitted their written direct testimony.  P. Exhibit List; P. Exs. 1-3.  However, there is no need to hold an in‑person hearing in this case.  The SPO stated that a hearing would be held only if a party files admissible written direct testimony and the opposing party requests to cross-examine the witness.  SPO ¶ 13; CRD Procedures § 19(b).  CMS has not requested to cross-examine any of Petitioner's witnesses.  See CMS's Notice of Non-Filing of Rebuttal Statement.  Therefore, I decide this case based on the written record.  SPO ¶ 14; CRD Procedures § 19(d).

IV.  Issue

Whether CMS had a legitimate basis to revoke Petitioner's Medicare billing privileges under 42 C.F.R. § 424.535(a)(5).

V.  Jurisdiction

I have jurisdiction to decide this issue.  42 C.F.R. §§ 498.3(b)(17), 498.5(l)(2), 424.545(a), 498.1(g); see also 42 U.S.C. § 1395cc(j)(8).

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VI.  Findings of Fact

1. On January 26, 2023, Palmetto received an electronically filed Medicare revalidation application from Petitioner.  CMS Ex. 1 at 2.
2. On February 24, 2023, Palmetto received Petitioner's corrections to the revalidation application.  Id.
3. The revalidation application stated that Petitioner's physical address as of January 1, 2023, was 1125 Cypress Station Dr., Suite A-4, Houston, TX 77090-3055.  Id. at 3.  
4. The revalidation application indicated that the "DME [Durable Medical Equipment] Hours of Operation" were 9:30 a.m. to 1:30 p.m. on Wednesdays and Fridays.  Id.  The hours of operation were listed as closed for all other days of the week.  Id.
5. On Thursday, April 13, 2023, at 2:30 p.m., a CMS-contracted inspector conducted a site visit of Petitioner's practice location at 1125 Cypress Station Dr., Suite A-4, Houston, TX 77090-3055.  CMS Ex. 2 at 8-14.  The inspector noted that the "business was closed.  The door was locked and no staff members were present" at the time of inspection.  Id. at 12.
6. On Friday, April 14, 2023, at 11:30 a.m., a CMS-contracted inspector conducted another site visit of Petitioner's practice location at 1125 Cypress Station Dr., Suite A-4, Houston, TX 77090-3055.  Id. at 8-14.  The inspector observed that "[t]he business was closed.  The door was locked and no staff members were present.  The street address number is confirmed as 1125.  Suite 4 is located in building A.  All photos are confirmed to clearly show the facility details."  Id. at 12.  The inspector also took photographs outside Petitioner's practice location.  Id. at 11-14.
7. On Wednesday, July 5, 2023, at 10:30 a.m., a CMS-contracted inspector conducted another site visit of Petitioner's practice location at 1125 Cypress Station Dr., Suite A-4, Houston, TX 77090-3055.  Id. at 2-7.  The inspector observed that the site was not open for business and "is closed with a master lock on the front door, indicating the site is vacant.  There is no sign indicating the business listed on the site visit.  I did witness the address at the bottom of the billboard sign that was cut off, but I confirm that I was at the correct address listed on the job order."  Id. at 5.  The inspector took photographs outside Petitioner's practice location.  Id. at 4-7.

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8. For all three office visits, the inspectors also observed that Petitioner's office was in an office building but did not appear to have staff present, had no business hours posted, did not have a sign indicating the business name, did not appear to have inventory, did not appear to have signs of customer activity, and did not appear to be operational (as defined in the regulations).  Id. at 2-3, 9-10.

VII.  Conclusions of Law

1. Based on the attempted site inspections, Petitioner's practice location was not "operational," as that term is defined in 42 C.F.R. § 424.502.
2. CMS had a legitimate basis to revoke Petitioner's Medicare enrollment because it was not operational to furnish Medicare-covered items or services under 42 C.F.R. § 424.535(a)(5)(i).

VIII.  Analysis

The Secretary of Health and Human Services (Secretary) has the authority to establish enrollment requirements for providers and suppliers.  42 U.S.C. § 1395cc(j).  In order to obtain and maintain Medicare billing privileges, a provider or supplier must file an enrollment application that discloses a variety of information to CMS, including its "practice location," and the provider or supplier must continue to report certain changes, including any changes to its "practice location."  42 C.F.R. §§ 424.505, 424.510, 424.516.

After the provider or supplier submits the enrollment or revalidation application, CMS may conduct a site visit of the provider or supplier's practice location to verify compliance with Medicare enrollment requirements.  42 C.F.R. § 424.510(d)(8).  One purpose of a site visit is to determine whether a provider or supplier is "operational."  42 C.F.R. § 424.510(d)(8)(i)-(ii).  A failure to be operational is a basis to deny an enrollment application and to revoke a provider or supplier's enrollment.  42 C.F.R. §§ 424.530(a)(5)(i), 424.535(a)(5).  The term "operational" means:

the provider or supplier has a qualified physical practice location, is open to the public for the purpose of providing health care related services, is prepared to submit valid Medicare claims, and is properly staffed, equipped, and stocked (as applicable, based on the type of facility or organization, provider or supplier specialty, or the services or items being rendered), to furnish these items or services.

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42 C.F.R. § 424.502 (definition of Operational).  A qualified physical practice location is the supplier's address that is on file with CMS at the time of a site visit.  Foot Specialists of Northridge, DAB No. 2773 at 8-10 (2017).

CMS's contractors conduct site visits without notice to the providers or suppliers.  76 Fed. Reg. 5,862, 5,870 (Feb. 2, 2011) ("[T]he primary purpose of an unannounced and unscheduled site visit is to ensure that a provider or supplier is operational at the practice location found on the Medicare enrollment application.").

In addition to the general authority to establish provider and supplier enrollment requirements, the Secretary has the authority to establish supplier standards for DMEPOS suppliers.  42 U.S.C. § 1395m(j)(1)(B)(ii).  The Secretary must include in the supplier standards a requirement that all DMEPOS suppliers "maintain a physical facility on an appropriate site."  42 U.S.C. § 1395m(j)(1)(B)(ii)(II).  The Secretary promulgated DMEPOS supplier standards at 42 C.F.R. § 424.57(c).  The supplier standards state that a DMEPOS supplier must be "open to the public a minimum of 30 hours per week," post its hours of operation, and be "accessible and staffed during posted hours of operation."  42 C.F.R. §§ 424.57(c)(7)(i), (c)(30)(i).  However, a physician who furnishes "items to his or her own patient(s) as part of his or her professional services" is exempt from the requirement of being open to the public for a minimum of 30 hours per week.  42 C.F.R. § 424.57(c)(30)(ii)(A).

A DMEPOS supplier is subject to revocation of its Medicare billing privileges if it violates the DMEPOS supplier standards or the regulatory requirements applicable to all suppliers.  42 C.F.R. §§ 424.57(e), 424.535(a).  Relevant to the present case, CMS may revoke a supplier's enrollment if CMS determines, based on an on-site review or other reliable evidence, that the supplier is "no longer operational to furnish Medicare-covered items or services."  42 C.F.R. § 424.535(a)(5)(i).

In the present case, it is undisputed that the site inspectors, on three separate occasions, attempted to conduct a site visit of the practice location that Petitioner provided on its revalidation application form.  Moreover, two of the attempted site visits occurred during times in which Petitioner's business should have been open based on its Medicare revalidation application.  CMS Ex. 1 at 3; CMS Ex. 2 at 2, 9.  However, on all three occasions, the inspectors were unable to complete the site visit because Petitioner's practice location was locked and no staff members were present at the location.  CMS Ex. 2 at 2-3, 9-10.

Based on these facts, I conclude that Petitioner was not open to the public, and, therefore, not operational.  In making this conclusion, I am mindful "that the proper inquiry is to assess the supplier's operational status at the time of the onsite review because the intent of the applicable regulations 'is that a supplier must maintain, and be able to demonstrate, continued compliance with the requirements for receiving Medicare billing privileges.'"

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Viora Home Health, Inc., DAB No. 2690 at 7 n.7 (2016) (quoting A to Z DME, LLC, DAB No. 2303 at 7 (2010)).  Petitioner's failure to be open to the public on any of the days that the inspectors attempted site visits prevented the inspectors from determining whether Petitioner was compliant with enrollment requirements.

Petitioner disagrees that it was not operational but concedes that it was not open on the dates of the on-site inspections.  P. Br. at 3-4.  Petitioner argues as follows:

Regarding the on-site visits in question, Petitioner's office was only open on Wednesdays and Fridays from 9:30 a.m. to 1:30 p.m. during the timeframe in question.  April 13, 2023 was a Thursday, a day of the week that Petitioner was not normally open for business.  On Friday, April 14, 2023, the clinic's physician, Anand Balasubramanian, M.D. ("Dr. Balasubramanian") had to cancel clinic due to his hospital commitment.  There are times when Dr. Balasubramanian is out due to illness or his hospital commitment and he has to close the clinic for the day.  If this happens, Dr. Balasubramanian is still able to meet and see patients through telehealth visits.  Wednesday, July 5, 2023 was the day after the national Independence Day holiday, and Petitioner's office was closed in celebration of the holiday.3

I acknowledge that the first on-site inspection occurred at a time when Petitioner said it would not be open to the public and further acknowledge the reasons provided for why the business was not open at the time of the two subsequent on-site inspections.  However, I agree with CMS's argument that Petitioner was not operational because the site inspector attempted two visits during days and at times when Petitioner indicated, in its revalidation application, it would be open to the public.  Once Petitioner informed CMS that it would be open from 9:30 a.m. to 1:30 p.m., on Wednesdays and Fridays, Petitioner's offices were obligated to be open during those hours.  The Board's discussion in Ortho Rehab Designs Prosthetics and Orthotics, Inc. is instructive:

[A]lthough Supplier Standard 30 would have allowed Ortho to be open for less than 30 hours a week, Ortho chose to adopt Monday through Friday from 9 a.m. to 5 p.m. as its posted hours of operation (for a total of 40 hours per week).

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ALJ Decision at 5-6.  Even though these hours exceeded the requirements of Supplier Standard 30, under Supplier Standard 7, once Ortho posted those hours, it needed to be "staffed and accessible" during those hours.

DAB No. 2591 at 6 (2014).  Although the quote above relates to a case involving Supplier Standard 7, which requires that a DMEPOS supplier be open and accessible to the public, the essential reasoning is applicable to whether a supplier is "operational" under 42 C.F.R. § 424.502 as well.  Petitioner may not have posted its hours of operation, but it expressly informed CMS of the hours that it would be operational and open to the public on its revalidation application.  Finally, Petitioner's assertion that it was closed the day after Independence Day in celebration of the holiday is wholly unsupported by any contemporaneous evidence in the record.  The testimony Petitioner submitted in support is self-serving and otherwise not credible.  P. Ex. 3 (testifying that the "the clinic was closed in celebration of the holiday").

In the present case, Petitioner's "physical practice location" was not open to the public on the days and at the times specified in the revalidation application.  Therefore, CMS had a legitimate basis to revoke Petitioner's Medicare enrollment because the on-site inspections indicated that Petitioner was not operational.  42 C.F.R. § 424.535(a)(5)(i).

To the extent that Petitioner may be requesting equitable relief, I am unable to grant equitable relief.  P. Ex. 4 ("[H]is patients love him."); see P. Ex. 5 ("He is professional and very caring towards our patients and staff."); see also US Ultrasound, DAB No. 2302 at 8 (2010) (stating that an ALJ may not grant equitable relief in an instance where statutory or regulatory requirements are not met).  I am not authorized to grant Petitioner relief from applicable regulatory requirements.  1866ICPayday.com, L.L.C., DAB No. 2289 at 14 (2009) ("An ALJ is bound by applicable laws and regulations and may not invalidate either a law or regulation on any ground . . . .").

IX.  Conclusion

I affirm CMS's revocation of Petitioner's Medicare enrollment and billing privileges.  The regulation at 42 C.F.R. § 424.535(g) provides that when a revocation is authorized under 42 C.F.R. § 424.535(a)(5), the revocation of billing privileges is effective the date the location is determined by CMS or its contractor not to be operational.  Pursuant to section 424.535(g), Petitioner's revocation is effective April 14, 2023.