QSM-FL, Inc., DAB CR6666 (2025)

DECISION

Petitioner, QSM-FL, Inc., is a group practice clinic, located in Hollywood, Florida. After the Medicare contractor deactivated its Medicare billing privileges, Petitioner submitted a new application, seeking to reactivate its enrollment. Acting on behalf of the Centers for Medicare & Medicaid Services (CMS), the contractor approved the application, with an effective billing date of September 9, 2024. As a result, Petitioner’s billing privileges lapsed from August 26 through September 8, 2024.

Petitioner challenges the deactivation, claiming that it did not receive, from the Medicare contractor, notice that it was required to revalidate its Medicare enrollment. Petitioner asks that the lapse in billing privileges be rescinded.

Because Petitioner filed its subsequently-approved reactivation application on September 9, 2024, September 9 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, First Coast Service Options, approved Petitioner’s reactivation enrollment application, effective September 9, 2024. CMS Ex. 7. Petitioner requested reconsideration. CMS Ex. 2. In a reconsidered determination, dated December 5, 2024, a contractor representative affirmed the September 9, 2024 effective date. CMS Ex. 1.

Petitioner appealed, 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(d)(iv), 10) (January 6, 2025). 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 eight exhibits (CMS Exs. 1-8). Petitioner submits its argument in response (P. Br.) with six exhibits (P. Exs. 1-6). In the absence of any objections, I admit into evidence CMS Exs. 1-8 and P. Exs. 1-6. See Pre-Hearing Order at 5 (¶ 7).

Discussion

1. On September 9, 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 participates in the Medicare program as a “supplier” of services. CMS Ex. 6 at 1; CMS Ex. 8 at 1; see Social Security Act § 1861(d); 42 C.F.R. §§ 400.202, 498.2. To receive Medicare payments for the services furnished to program beneficiaries, a supplier must enroll in the program. Act §§ 1834(j), 1835(a); 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 privilege. 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 Management and Budget. 42 C.F.R. § 424.502.2 When CMS determines that a

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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 physician and non-physician practitioner organizations 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 re-enrollment after a deactivation, additional regulations apply.

Deactivation and reactivation. 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 perform off-cycle revalidations at any time. 42 C.F.R. § 424.515(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).

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 April 30, 2024, the contractor directed Petitioner to revalidate its Medicare enrollment no later than July 31, 2024. The letter cautioned that the contractor might stop Petitioner’s billing privileges if it didn’t receive a timely response. Petitioner would not be paid for services rendered during the period of deactivation. CMS Ex. 3.

Petitioner did not respond.

In a notice letter dated August 6, 2024, the contractor advised Petitioner that, because it had not timely responded to the revalidation request, the contractor was placing a stay on Petitioner’s enrollment record, effective August 6, 2024, pursuant to 42 C.F.R. § 424.541. Although Petitioner would remain enrolled in the Medicare program, the contractor would reject any claims submitted for services or items that Petitioner furnished. CMS Ex. 4 at 1. The letter also warned Petitioner that its failure to submit a revalidation application within 30 days of the notice letter could result in its Medicare billing privileges being deactivated. CMS Ex. 4. Again, Petitioner did not respond.

In a notice letter dated September 6, 2024, the contractor advised Petitioner that, because it had not timely revalidated its enrollment, the practice’s Medicare billing privileges

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were deactivated, effective August 6, 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 comply with all enrollment requirements.

On September 9, 2024, Medicare contractor received Petitioner’s Medicare application (Form CMS-855B), which it processed to approval. CMS Exs. 6, 7. September 9, 2024 is therefore the effective date for reactivating Petitioner’s billing privileges. See 42 C.F.R. § 424.540(d)(2).

Petitioner complains that it did not receive the contractor’s notice letters (CMS Exs. 3, 4) and learned of the deactivation only after multiple claims it submitted were denied. P. Br. at 1. Both letters are addressed to 3800 S. Ocean Drive, Hollywood, Florida. CMS Ex. 3 at 4; CMS Ex. 4 at 1.3 This is Petitioner’s correspondence address, as shown by its Medicare application, and, as Petitioner concedes. See CMS Ex. 8 at 2. In its reconsideration request, Petitioner wrote:

[W]e learned that a Revalidation Request Letter was sent to . . . 3800 South Ocean Dr. Ste. 209, Hollywood, FL 33019[,] though it was not received by our enrollment team, nor did we receive an email informing us of this revalidation. Due to the restructuring of the revalidation’s dates[,] this revalidation was off track and therefore overlooked.

CMS Ex. 2 at 3.

The parties disagree about the meaning of this statement, and Petitioner denies acknowledging that it received the notices. P. Br. at 5. But their dispute is irrelevant here because I have no authority to review a deactivation. Nor may I 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 retrospective billing after reactivation. In promulgating the new regulation, the Secretary explained the change:

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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, 62420-21 (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 September 9, 2024, September 9 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).