First US Clinic PA, DAB CR6739 (2025)

DECISION

First US Clinic PA (Petitioner) 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 due to its failure to revalidate.  As explained below, I find CMS properly determined November 29, 2024 as the reactivation effective date of Petitioner’s Medicare enrollment, as that is the date the Medicare administrative contractor received Petitioner’s revalidation application that was processed to approval. 

I. Background

On April 30, 2024, CMS contractor Novitas Solutions (Novitas) advised Petitioner that it was obligated to revalidate its Medicare enrollment by July 31, 2024.  CMS Ex. 6.  The letter informed Petitioner that it could submit its revalidation application either online through the Medicare Provider Enrollment, Chain, and Ownership System (PECOS) or by mail.  Id.  The letter, which was mailed to Petitioner, further warned Petitioner that “[i]f we don’t receive your response by then, we may stop your Medicare billing privileges.”  Id.  

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On October 23, 2024, Novitas sent another notice to Petitioner advising that it was “placing a stay on your Medicare enrollment record effective October 23, 2024 because you have not responded to our revalidation request of April 30, 2024.”  CMS Ex. 5.  The letter further warned that “[f]ailure to submit a revalidation application within 30 days of this notice may result in a deactivation of your Medicare enrollment.”  Id. at 1.  Novitas also informed Petitioner of its right to file a rebuttal if Petitioner believed the stay determination was incorrect.  Id. at 2.  

On November 25, 2024, Novitas deactivated Petitioner’s Medicare billing privileges effective August 1, 2024.  CMS Ex. 4.  As the basis for the deactivation, Novitas stated that Petitioner failed to submit a timely revalidation application.  Id. (citing 42 C.F.R. § 424.540(a)(3)).  Novitas again advised Petitioner of its right to file a rebuttal if Petitioner believed the deactivation was incorrect.  Id. 

On November 29, 2024, Novitas received a revalidation application from Petitioner.  See CMS Ex. 3.  Novitas subsequently approved Petitioner’s application with an effective date of November 29, 2024.  Id.  Novitas also advised Petitioner that there would be a gap in billing privileges from August 1, 2024 to November 28, 2024.  Id. 

Petitioner thereafter filed a request for reconsideration of the deactivation and the gap in billing privileges.  CMS Ex. 2.  On February 26, 2025, Novitas issued a reconsidered determination and found no error in reactivating Petitioner’s Medicare billing privileges as of November 29, 2024, with a billing gap from August 1, 2024 to November 28, 2024.  CMS Ex. 1 at 3. 

On March 25, 2025, Petitioner timely requested a hearing to dispute the reconsidered determination.  DAB E-File Doc. Nos. 1-1a.  That same day, the undersigned Administrative Law Judge (ALJ) was designated to hear and decide this case and the Civil Remedies Division (CRD) acknowledged the hearing request and issued my Standing Pre-hearing Order (Standing Order).  Id. at Doc. No. 2-2c.  Among other things, the Standing Order instructed the parties to file pre-hearing exchanges by specified dates.  Id. at 2a.  

On April 29, 2025, CMS timely filed a motion for summary judgment and pre-hearing brief (CMS Br.) and six proposed exhibits (CMS Exs. 1-6).  Id. at Doc. Nos. 4-4g.  On June 3, 2025, Petitioner timely filed a pre-hearing brief and response to CMS’s motion for summary judgement (P. Br.) along with notice of its intent to proffer the testimony of one proposed witness.  Id. at Doc. No. 7.  Petitioner did not submit any proposed exhibits. See P. Br. at 8.  On July 3, 2025, CMS filed its rebuttal to Petitioner’s pre-hearing brief.  Id. at Doc. No. 8. 

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II. Admission of Exhibits and Decision on the Record

Petitioner did not object to CMS Exs. 1 through 6.  In the absence of objections, I admit CMS Exs. 1 through 6 into the record. 

The Standing Order advised the parties that an in-person hearing would only be necessary if a party submitted the written direct testimony of a proposed witness, and the opposing party requested an opportunity to cross-examine the witness.  Standing Order ¶¶ 11-13; see Vandalia Park, DAB No. 1940 (2004); Pac. Regency Arvin, DAB No. 1823 at 8 (2002) (holding that the use of written direct testimony for witnesses is permissible so long as the opposing party has the opportunity to cross-examine those witnesses).  

CMS has not submitted any proposed witnesses.  Petitioner has submitted a list of one proposed witness but has not submitted any sworn direct testimony for that witness.  See P. Br. at 8.  As such, a hearing in this case is unnecessary and I decide this case based on the written record.  CRDP §§ 16(b), 19(b), (d).  The motion for summary judgment is therefore moot. 

III. Issue

Whether CMS had a legitimate basis to establish November 29, 2024, as the effective date of Petitioner’s reactivated Medicare billing privileges.  

IV. Jurisdiction

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

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

A. Applicable Law

1. Enrollment

Petitioner participates in the Medicare program as a “supplier” of services.  Social Security Act (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.  42 C.F.R. § 424.505. 

The effective date for its billing privileges “is the later of the date of filing” a subsequently approved enrollment application or “[t]he date that the . . . supplier first began furnishing services at a new practice location.”  42 C.F.R. § 424.520(d)(1) (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 7-8 (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 “deactivation [of Medicare billing privileges] is intended to protect the provider or supplier from the misuse of its billing number and to protect the Medicare Trust Funds from unnecessary overpayments.”   86 Fed. Reg. 62,240, 62,359 (Nov. 9, 2021).  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); see also 42 C.F.R. § 424.540(e). 

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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 nonsubmission 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); 71 Fed. Reg. 20,754, 20,762 (Apr. 21, 2006).  The effective date of a reactivation of billing privileges, following a period of deactivation, is the date on which the Medicare contractor received the supplier’s submission that was processed to approval.  42 C.F.R. § 424.540(d)(2). 

B. Analysis

1. Novitas received Petitioner’s revalidation enrollment application on November 29, 2024 that was processed to approval, which is the effective date of its Medicare reactivated enrollment. 

As discussed above, the effective date of a reactivation of Medicare billing privileges is the date on which the Medicare contractor received the supplier’s submission that was subsequently processed to approval.  Id. 

In this case, Novitas received a revalidation enrollment application from Petitioner on November 29, 2024, and this application was processed to approval.  CMS Exs. 1, 2.  Novitas thus appropriately found the effective date of Medicare billing privileges for Petitioner to be November 29, 2024, the date of receipt of the Medicare application that was subsequently approved by the contractor with a gap in billing privileges from August 1, 2024 to November 28, 2024.  Id.  Moreover, Petitioner does not claim that it submitted an earlier application than the one submitted on November 29, 2024, that Novitas received and subsequently approved. 

Therefore, pursuant to 42 C.F.R. § 424.540(d)(2), the date Novitas received Petitioner’s subsequently-approved enrollment application – November 29, 2024 – is the correct reactivation effective date of enrollment.  Michael B. Zafrani, M.D., DAB No. 3075 at 2 n.1 (2022).  

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

In its brief, Petitioner generally contends that Novitas erred in deactivating its Medicare billing privileges, which resulted in a gap of billing privileges from August 1, 2024 to November 28, 2024.  P. Br. at 1-8.  Petitioner specifically states:

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CMS has not proven that First US Clinic PA received actual notice of its revalidation obligation. While CMS produced copies of alleged correspondence there is no evidence of delivery, receipt, or processing. Petitioner consistently maintains under oath it never received the revalidation notice. 

Id. at 4 (internal citations omitted). 

While I acknowledge Petitioner’s argument, I have no authority to review Novitas deactivation of Petitioner’s Medicare billing privileges.  CMS Ex. 3; Howard M. Sokoloff, DPM, MS, Inc., DAB No. 2972 at 6 (2019); Ark. Health Grp. d/b/a Baptist Health Family Clinic Lakewood, DAB No. 2929 at 7-9 (2019).  Here, the lack of notice is only relevant, if at all, to whether Novitas acted properly in deactivating Petitioner’s billing privileges (see e.g. P. Br. at 6, “CMS’s failure to ensure that Petitioner had effective notice and an opportunity to respond before deactivation undermines the integrity of the revalidation framework.”).  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), 424.546.  Petitioner concedes that it did not file a rebuttal through this process due to the lack of notice.  P. Br. at 3.  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). 

Even if Petitioner never received notice, this would not be a basis to grant an earlier effective date.  As the Departmental Appeals Board (the Board) observed in James Shepard, M.D., DAB No. 2793 (2017), providers and suppliers may not challenge indirectly an action for which the regulations prohibit direct administrative review.  Id. at 8.  In Shepard, the Board held that the supplier could not obtain review of a CMS contractor’s rejection of a previous enrollment application by challenging the effective date of enrollment based on a later approved application.  Id.  For the same reasons articulated by the panel in Shepard, Petitioner’s arguments in the present case amount to a backdoor challenge to a contractor determination—here, deactivation—for which there are no administrative appeal rights.  See id.  

Nor may I direct the contractor to allow retrospective reimbursement during the gap in billing privileges from August 1, 2024 through November 28, 2024.  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

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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. 

Lastly, 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 10-11 (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., d/b/a Accessible Home Health Care, DAB No. 2632 at 19 (2015) (providing the Board may not overturn the denial of provider enrollment in Medicare on equitable grounds).  While I am mindful and sympathetic to the fact that the practice’s physician encountered significant health and family issues and also suffered a significant loss of income while rendering services to the Medicare program, I have no authority under the law to revise the effective date of reactivation determined by CMS.

VI. Conclusion

Because Novitas received the revalidation application that was processed to approval on November 29, 2024, that same date is the earliest possible reactivation 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).