Access PT Pennsylvania, DAB CR6768 (2025)

DECISION

Petitioner, Access PT Pennsylvania, challenges the September 9, 2024 effective date of enrollment assigned by the Centers for Medicare & Medicaid Services (CMS), through its Medicare administrative contractor Novitas Solutions, Inc. (Novitas), for three of its locations.  For the reasons that follow, I affirm because the effective dates of September 9, 2024, assigned by CMS, are permissible under the applicable statutory and regulatory provisions.

I. Background and Procedural History

On December 4, 2023, Petitioner submitted internet-based applications to enroll as a durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) supplier in the Medicare program for three of its locations.  CMS Exhibits (Exs.) 9 (Carlisle location), 17 (Flowers location), 25 (Cumberland location).  Petitioner requested an effective date of January 1, 2024, in each of its applications.  CMS Ex. 9 at 3; CMS Ex. 17 at 3; CMS Ex. 25 at 3.

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On July 31, 2024, Novitas sent requests to Petitioner to further develop its applications.  CMS Exs. 8, 16, 24.  Novitas instructed Petitioner to provide the following information for each of the locations:

• A valid legal business name, explaining the name on the application did not match the legal business name shown on the IRS document;
• Copies of all applicable contracts Petitioner has with other companies for purchase of items necessary to fulfill orders, specifically requesting copies of invoices;
• A valid certificate of liability insurance that identifies Novitas in the certificate holder box; and
• A title that reflects the authority of C.A. to serve as an Authorized Official in the Ownership Interest/Managing Control Individuals section.

CMS Exs. 8 at 1, 16 at 1, 24 at 1.  The requests also notified Petitioner that unannounced site visits would be conducted at each of its locations.  See, e.g., CMS Ex. 8 at 2.  Upon completion of the corrections, Petitioner was instructed to re-sign, using the current date to sign the applications.  Id.

On August 7 and 12, 2024, site visits were conducted.  CMS Ex. 7 (August 7 site visit report for Carlisle location); CMS Ex. 15 (August 12 site visit report for Flowers location); CMS Ex. 23 (August 12 site visit report for Cumberland location).  In response to Novitas’s development requests, Petitioner submitted multiple responses for each of its locations, with the final corrections submitted on September 3, 2024.  CMS Ex. 5 at 1 (submission history for Carlisle location); CMS Ex. 14 at 1 (Flowers location); CMS Ex. 22 at 1 (Cumberland location).  By notice dated September 12, 2024, Novitas approved Petitioner’s Medicare enrollment applications with an effective date of September 9, 2024, for each location.  CMS Exs. 3, 12, 21.

On October 4, 2024, Petitioner submitted reconsideration requests, seeking effective dates of January 1, 2024.  CMS Exs. 2, 11, 19.  In separate, but substantively similar, reconsidered determinations, Chags Health Information Technology, LLC (C-HIT), another Medicare contractor, issued unfavorable decisions upholding the September 9, 2024 effective dates.  CMS Ex. 1 (January 10, 2025 Reconsidered Determination for Carlisle location); CMS Ex. 10 (January 10, 2025 Reconsidered Determination for Flowers location); CMS Ex. 18 (March 7, 2025 Reconsidered Determination for Cumberland location).

Petitioner timely filed hearing requests for all three locations, which were assigned to me for hearing and decision.  The hearing request for the Carlisle location was docketed as C-25-418, the Flowers location as C-25-419, and the Cumberland location as C-25-432.  Because the cases involved the same parties and counsel, and consideration of the same issues and similar documentary evidence, I consolidated the cases under docket number

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C-25-432 without objections from the parties.  Order Consolidating C-25-418, C-25-419, and C-25-432, and Dismissing C-25-418 and C-25-419.

Pursuant to my Standing Pre-hearing Order, CMS filed a motion for summary judgment (CMS Brief (Br.)) and 25 exhibits.  Petitioner also timely filed its response to CMS’s motion (P. Br.) and 22 exhibits.  Petitioner also reserved the right to submit additional evidence.  P. Ex. List at 2.

Petitioner did not object to any of CMS’s proposed exhibits; therefore, I admit CMS Exs. 1-25 into the evidentiary record.  Although CMS did not object to the admission of Petitioner’s proposed exhibits, the applicable regulation requires me to “examine any new documentary evidence” submitted for the first time at the administrative law judge (ALJ) level of review and to determine whether Petitioner had good cause for submitting the evidence for the first time at this level.  42 C.F.R. § 498.56(e); see also Pre-hearing Order ¶ 9 (explaining that “Petitioner may not offer new documentary evidence absent a showing of good cause for failing to present that evidence previously to CMS.”); see also CMS Ex. 3 at 2 (instructing suppliers that it may submit additional information with its reconsideration and warning that any evidence it would like an ALJ to consider during a hearing must be submitted with its reconsideration request).  Unless I find good cause, I must exclude the evidence and may not consider it in reaching a decision.  42 C.F.R. § 498.56(e)(2)(ii).

Petitioner fails to identify which of its proposed exhibits are duplicative of what was previously submitted with its reconsideration requests or are new evidence.  P. Br.  Nor does Petitioner proffer good cause for the submission of newly-submitted evidence.  Id.  I need not admit evidence that is duplicative of evidence already in the record.  Furthermore, in the absence of any explanation, I find Petitioner has not shown good cause for failing to submit the proposed exhibits at the reconsideration stage.  As such, I exclude Petitioner’s exhibits 1-22 and will not consider them in reaching my decision.  I also deny Petitioner’s request to reserve the right to submit additional evidence.

Neither party offered the written direct testimony of a witness as part of its pre-hearing exchange, and as such, an in-person hearing is not necessary in this matter.  Pre-hearing Order ¶¶ 11-13.  Therefore, I will decide this case on the record, meaning the parties’ written submissions and arguments.  Civ. Remedies Div. P. § 19(d).  CMS’s motion for summary judgment is denied as moot.

I consider the record in this case to be closed, and the matter is ready for a decision on the merits.

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II. Issue

Whether the Medicare administrative contractor, acting on behalf of CMS, properly established Petitioner’s effective dates of Medicare enrollment and billing privileges as September 9, 2024.

III. Jurisdiction

I have jurisdiction to hear and decide this case.  Social Security Act (Act) § 1866(j)(8) (codified at 42 U.S.C. § 1395cc(j)(8)); 42 C.F.R. § 498.3(b)(15); Victor Alvarez, M.D., DAB No. 2325 at 8-12 (2010).

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

1. On December 4, 2023, Petitioner submitted internet-based applications to enroll in the Medicare program as a durable medical equipment (DME) supplier for three of its locations.
2. On July 31, 2024, Novitas requested corrections for Petitioner’s applications, including correction of its legal business name and further information reflecting the authority of the Authorized Official.  In addition, Petitioner was required to submit additional documentation, including copies of invoices for all applicable contracts with other companies for purchase of items necessary to fill orders and a copy of the certificate of liability insurance, identifying Novitas in the certificate holder box.
3. On August 7 and 12, 2024, site visits were conducted at each of the locations.
4. On August 21 and 29, 2024, and September 3, 2024, Petitioner submitted corrections to each of its applications.
5. On September 12, 2024, Novitas informed Petitioner that its enrollment applications were approved and issued supplier numbers, effective September 9, 2024.2
6. Pursuant to 42 C.F.R. § 424.520(c), the effective date of billing privileges for DMEPOS suppliers is specified in 42 C.F.R. § 424.57(b) and 42 U.S.C. § 1395m(j)(1)(A).

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7. Pursuant to 42 C.F.R. § 424.57(b), as referenced by 42 C.F.R. § 424.520(c), a supplier is eligible to receive payment for Medicare-covered items only after it has, inter alia, submitted a completed application and been issued a supplier number by CMS.
8. Because Petitioner’s December 4, 2023 applications were not complete as of January 1, 2024, the effective date requested by Petitioner, it has not demonstrated that it was entitled to Medicare enrollment on January 1, 2024.
9. Under the applicable statutory and regulatory authorities, CMS was permitted to assign the effective dates of September 9, 2024.

Petitioner is a “supplier” for purposes of the Medicare program.  Act § 1861(d) (42 U.S.C. § 1395x(d)); 42 C.F.R. §§ 400.202 (definition of supplier), 498.2 (definition of supplier).  A supplier must enroll in the Medicare program to receive payment for Medicare-covered items or services.  42 C.F.R. § 424.505.  The regulations at 42 C.F.R. Part 424, subpart P establish the requirements for a supplier to enroll in the Medicare program.  See also Act § 1866(j)(1)(A) (42 U.S.C. § 1395cc(j)(1)(A)) (authorizing the Secretary of the U.S. Department of Health & Human Services (Secretary) to establish regulations addressing the enrollment of providers and suppliers in the Medicare program).

Pursuant to 42 C.F.R. § 424.520(c), the effective date for billing privileges of a DMEPOS supplier is specified in 42 C.F.R. § 424.57(b) and section 1834(j)(1)(A) of the Act.  The Act requires DMEPOS suppliers to obtain a supplier number issued by the Secretary to receive Medicare payment for items furnished to Medicare beneficiaries.  Act § 1834(j)(1)(A) (42 U.S.C. § 1395m(j)(1)(A)); see also 42 C.F.R. § 424.57(b)(2).  Section 424.57(b) states, as pertinent here, “[a] DMEPOS supplier must meet the following conditions in order to be eligible to receive payment for a Medicare-covered item: (1) [t]he supplier has submitted a completed application to CMS to furnish Medicare-covered items including required enrollment forms.”  42 C.F.R.§ 424.57(b)(1).

On December 4, 2023, Petitioner, a supplier of diabetic footwear and orthotics, submitted initial enrollment applications for three locations in the Provider Enrollment, Chain, and Ownership System (PECOS), requesting January 1, 2024 effective dates.  CMS Ex. 5 at 1, 4.3  Petitioner’s applications were approved; however, each location was given a September 9, 2024 effective date.  CMS Exs. 3 at 1, 13 at 1, 21 at 1.

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In support of its request for January 1, 2024 effective dates, Petitioner proffers that it submitted its initial applications well in advance of the requested date and that Novitas failed to contact Petitioner for over eight months.  P. Br. at 2.  Petitioner further contends that Novitas did not conclude its initial applications were incomplete, but rather the requests were to confirm that certain DMEPOS supplier standards were satisfied.  Id. at 2-3.  CMS asserts that a supplier cannot be given an effective date earlier than the date CMS’s administrative contractor determines the supplier meets all the enrollment requirements, a site visit is completed, and a supplier number issued.  CMS Br. at 6-7.  Petitioner disagrees, stating CMS’s contentions are “contradicted by the plain language of 42 C.F.R. § 424.57, as well as by the practice of the [Medicare Administrative Contractors (MACs)], which routinely issue retroactive billing privileges to DMEPOS suppliers in change of ownership situations.”  P. Br. at 4.  Finally, Petitioner argues that CMS’s contention that suppliers cannot be given retroactive dates is not only contradicted by the plain language of the regulations, but also leads to absurd results leaving suppliers at the mercy of the MAC’s scheduling practices.  Id. at 8.

After careful consideration of the parties’ contentions and review of the entire record, I find that Petitioner has not demonstrated that its applications should have been approved effective January 1, 2024.  As to Petitioner’s contention that 42 C.F.R. § 424.57(d)(2)(ii) permits a supplier seeking enrollment as a DMEPOS supplier through a purchase or transfer of assets or ownership interest to exercise billing privileges as of the date of the purchase or transfer—provided the surety bond requirements are met—Petitioner has not established that this provision applies in the present case.  Petitioner explains that it was created as a “joint venture” between Mildin, Inc., an already Medicare-enrolled DMEPOS supplier, and Access Health, LLC.  P. Br. at 1-2.  This description alone is insufficient to demonstrate that the change of ownership provision applies in this case.  Petitioner has not offered any specific information or evidence that demonstrates, for example, that it purchased or transferred the assets of an existing DMEPOS supplier.  Moreover, even if the change of ownership provision applies, as C-HIT stated in its reconsidered determination, the new owner must still meet all the enrollment criteria found at section 424.57(b).  CMS Ex. 1 at 3.  Petitioner did not meet these criteria on January 1, 2024.

The applications Petitioner submitted on December 4, 2023, were incomplete.  The parties agree, and the record shows, that Novitas contacted Petitioner on July 31, 2024, requesting corrections be made to each of Petitioner’s applications.  CMS Ex. 8.  Petitioner’s application required four corrections, including, for example, the need to provide a title reflecting the authority to serve as an Authorized Official in the Ownership Interest/Managing Control Individual section for C.A., an individual listed in the Petitioner’s application.  Id. at 1.  Supplier standard 42 C.F.R. § 424.57(c)(3) requires an “application for billing privileges signed by an individual whose signature binds a supplier.”  Petitioner’s December 4, 2023 application did not include this information; therefore, the application was incomplete.  Compare CMS Ex. 9 at 8 (field for title of

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individual C.A. blank), with CMS Ex. 5 at 7 (C.A.’s title reflected as “Credentialing Supervisor”).  In addition, site visits had not been conducted by January 1, 2024, a requirement that Petitioner does not dispute is necessary for enrollment.

I acknowledge Petitioner’s contention that Novitas failed to contact it for almost eight months is supported by the record.  I also find that there is no indication that the delay was caused by Petitioner.  However, I do not have the authority to grant the relief sought by Petitioner on this basis.

The regulations at 42 C.F.R. § 424.57(b), as incorporated by reference in 42 C.F.R. § 424.520(c), govern the effective dates for DMEPOS suppliers, and the regulations do not permit an ALJ to consider the length of time a contractor takes to process enrollment applications.  Compare, on the other hand, 42 C.F.R. § 424.520(d), which applies to certain other provider and supplier types and allows effective dates on the later of either the date the enrollment application was filed and subsequently processed to approval by the Medicare contractor, or the date the provider or supplier began furnishing services at a new location.  This provision explicitly applies only to the provider and supplier types listed in section 424.520(d)(2), which does not include DMEPOS suppliers.  Additionally, while 42 C.F.R. § 424.521(a) allows retrospective billing for certain providers and suppliers, DMEPOS suppliers are again excluded.  The fact that CMS has expressly provided more flexible effective date and billing provisions for other supplier and provider types—but not for DMEPOS suppliers—indicates a deliberate policy choice to treat DMEPOS suppliers differently in this regard.

Yet, I would be remiss not to acknowledge that the regulatory framework governing effective dates for DMEPOS suppliers is imprecise.  In contrast to section 424.520(c), and in addition to section 424.520(d) discussed above, the regulations provide specific and detailed provisions for determining effective dates for other provider and supplier types.  For example, independent diagnostic testing facilities (IDTFs) are governed by 42 C.F.R. § 410.33(i) (incorporated by reference at 42 C.F.R. § 424.520(b)), which states that the effective date is the later of the filing date of the application that is subsequently approved or the date the IDTF begins furnishing services at the new location.  Similarly, surveyed or certified providers and suppliers, such as hospitals or skilled nursing facilities, are subject to 42 C.F.R. § 489.13 (incorporated by reference at 42 C.F.R. § 424.520(a)), which ties the effective date of billing privileges to the date of a successful survey or accreditation.  That regulation further specifies that “the effective date . . . may not be earlier than the latest of the dates on which CMS determines that each applicable Federal requirement is met.”  See 42 C.F.R. § 489.13(b), (c).

By contrast, the effective date regulation for DMEPOS suppliers cross-references payment provisions rather than establishing a clear standard.  Unlike the IDTF regulation, it does not permit an effective date based on the filing of an application that is processed to approval.  On the other hand, it also does not, like the regulation for surveyed

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providers and suppliers, make the effective date contingent on CMS or its contractor’s review and verification.  Instead, the relevant payment regulation refers only to the date a supplier submits a completed application and a supplier number issued.  42 C.F.R. § 424.57(b).4  Absent a specific, regulatory requirement that CMS determine each requirement is met, like the regulations do for other surveyed providers and suppliers, the payment provisions could be interpreted to require CMS to issue a supplier number effective the date the completed application is submitted—assuming, of course, that a site visit has been completed—which in this case would have been September 3, 2024.

I need not resolve the ambiguity in this case because Petitioner has not raised the issue.  The effective date regulation for DMEPOS suppliers states that a DMEPOS supplier may only be paid for Medicare-covered items when certain conditions are met, including the submission of a completed application and a supplier number issued.  42 C.F.R. § 424.57(b).  Because those conditions were not met on January 1, 2024, I lack the authority to grant Petitioner’s request of an earlier effective date of enrollment.  42 C.F.R. §§ 424.57(b), 424.520(c).  To the extent that Petitioner’s request for relief is based on principles of equity, I cannot grant such relief.  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.”).

V. Conclusion

For the foregoing reasons, there is no basis to grant a January 1, 2024 effective date for Petitioner’s enrollment as a DMEPOS supplier.  CMS’s determination of a September 9, 2024 effective date is permissible under the statutory and regulatory authorities, as that is the date by which completed applications were submitted, site visits completed, and supplier numbers issued.