Modern Medical Equipment and Supplies, DAB CR6776 (2025)

DECISION

Petitioner, Modern Medical Equipment and Supplies, is a Pennsylvania-based company that sells durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).  It applied to enroll in the Medicare program as a supplier of services.  On behalf of the Centers for Medicare and Medicaid Services (CMS), the Medicare contractor, Novitas Solutions, denied its enrollment application, and CMS upheld that denial.  Petitioner has appealed.

For the reasons discussed below, I find that CMS properly denied Petitioner’s Medicare enrollment.  The facility did not ensure that its premises were accessible to the disabled, as required by 42 C.F.R. § 424.57(c)(1)(i).

Background

On March 11, 2024, Petitioner applied to enroll in the Medicare program as a DMEPOS supplier, using CMS’s electronic process (PECOS).1  CMS Ex. 1.  In a letter dated December 26, 2024, the Medicare contractor advised Petitioner that its application was denied pursuant to 42 C.F.R. §§ 405.800, 424.57, and 498.22.  The letter explained that

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site visits, conducted on October 25 and November 11, 2024, revealed that, among other problems, the facility was not accessible to the disabled.  CMS Ex. 4.2  Petitioner sought reconsideration.  CMS Ex. 5.

In a reconsidered determination, dated April 16, 2025, a project manager for Chags Health Information Technology, LLC (which adjudicates reconsideration requests for CMS) affirmed the denial of enrollment, finding that Petitioner had not demonstrated its compliance with section 424.57(c)(1)(i).  CMS Ex. 6 at 6.  Petitioner now appeals that determination pursuant to 42 C.F.R. § 424.545.

CMS has moved for summary judgment.  However, because neither party has any witnesses, an in-person hearing would serve no purpose.  See Acknowledgment and Pre-Hearing Order at 5-6 (¶¶ 8-10) (June 4, 2025).  This matter may therefore be decided based on the written record, without considering whether the standards for summary judgment are satisfied.  See Anil Hanuman, D.O., DAB No. 3080 at 12 (2022) (citations omitted).3 

With its motion and brief (CMS Br.), CMS submits six exhibits (CMS Exs. 1-6).  Petitioner submits a prehearing brief and response to CMS’s motion (P. Br.) with three exhibits (P. Exs. 1-3).

In the absence of any objections, I admit into evidence CMS Exs. 1-6 and P. Exs. 1-3.

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Discussion

1. CMS properly denied Petitioner’s Medicare enrollment because the prospective supplier’s premises were not accessible to disabled persons, as required by 42 C.F.R. § 424.57(c)(1)(i).4

Requirements for a DMEPOS supplier’s Medicare participation.  To receive Medicare payments for items furnished to a Medicare-eligible beneficiary, a supplier of medical equipment and supplies must enroll and have a supplier number issued by the Secretary of Health and Human Services.  Social Security Act (Act) § 1834(j)(1)(A); 42 C.F.R. § 424.505.  To obtain that number, a DMEPOS supplier must, among other requirements, “ensure accessibility for the disabled.”  42 C.F.R. § 424.57(c)(1)(i).

The supplier must permit CMS or its agents to conduct on-site inspections to determine compliance with the governing regulations.  42 C.F.R. §§ 424.57(c)(8), 424.517.  CMS may deny the supplier’s enrollment in the Medicare program when, upon on-site review, it determines that the supplier fails to satisfy any Medicare enrollment requirement.  42 C.F.R. § 424.530(a)(5)(2); see also 42 C.F.R. § 424.530(a)(1).

The on-site visit.  On October 25, 2024, and November 11, 2024, a site investigator visited the facility and determined that it was not accessible to the disabled.  CMS Ex. 3 at 1, 9.  Photographs, taken October 25, October 30, and November 4, 2024, show the facility’s sole means of access and egress:  a set of steep metal stairs – resembling a fire escape – that is attached to the outside of the building.  CMS Ex. 3 at 9, 13, 18.  Even a relatively able-bodied person might have difficulty navigating them.  No ramp, wheelchair lift, or elevator is in place to assist a disabled person.

Petitioner concedes that its premises are not physically accessible to the disabled but argues, without support, that the regulations allow for “alternate methods of service” when structural modifications are not feasible.  P. Br. at 2-3.  Petitioner is somewhat vague about its “alternate methods of service.”  It apparently installed a doorbell camera and “ADA-compliant signage” and employed “staff trained to provide curbside service.”  Id.  However, Petitioner does not identify any remotely appropriate area where a disabled person could transact business outside the facility.  The investigator took multiple pictures of the premises’ outdoors, and the building appears to be surrounded by a parking lot.  I see no appropriate space for meeting disabled customers, particularly in inclement weather.  CMS Ex. 3 at 7-9, 11-13, 16-18, 20-22.  Nor does Petitioner explain what its “curbside service” entails.

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In any event, the regulations do not allow alternatives to the supplier’s providing an appropriate space that meets the requirements of section 424.57.  The regulation’s drafters repeatedly and decisively rejected suggestions that CMS allow DMEPOS suppliers flexibility with respect to their office space, emphasizing that, if the necessary structural modifications were not feasible, the supplier had to find a more appropriate space.

Commenters pointed out various problems that could prevent DMEPOS suppliers from complying with the requirements of section 424.57:  the requirement for external signage conflicts with local zoning ordinances; the building owner does not allow the supplier to post the required signage; suppliers might already occupy sites that cannot comply with size or access requirements.  The drafters were unmoved: 

We believe that prospective suppliers of DMEPOS and existing suppliers of DMEPOS must understand and comply with the supplier standards found in this section.  Accordingly, prospective suppliers of DMEPOS should ensure that their practice location meets the requirements found in . . . the . . . supplier standards . . . prior to buying or entering into a leasing arrangement for a given practice location.

75 Fed. Reg. 52,629, 52,635 (Aug. 27, 2010) (emphasis added).  The drafters suggested that a prospective DMEPOS supplier make “the business decision” to 1) obtain a waiver to the local zoning ordinance before submitting its enrollment application or 2) select a different practice location.  Id. at 52,635-36.

The drafters acknowledged the problems that existing suppliers could have in bringing themselves into compliance and established a three-year phase-in period “for those existing suppliers of DMEPOS who have signed leases,” giving them time to find a more suitable practice location.  Prospective suppliers, however, even those with pending applications, were expected to comply with the requirements as of the effective date of the regulation – September 27, 2010.  Id. at 52,636; see id. at 52,637 (explaining that a facility’s obligations to a beneficiary include providing a seating area or room for a wheelchair, including room to turn/move around); id. at 52,637 (explaining that enrolled suppliers must provide reasonable access for Medicare beneficiaries in case a beneficiary has a problem or requires prompt service).

Thus, the regulations explicitly preclude the Medicare enrollment of a prospective DMEPOS supplier whose premises are not physically accessible to the disabled.  They do not allow for “alternative methods of service.”  CMS has therefore appropriately denied Petitioner’s enrollment application.

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2. CMS determines whether a prospective supplier complies with program requirements and is not bound by the accrediting agency’s opinions or representations.

The statute and regulations mandate that prospective DMEPOS suppliers be accredited by a CMS-approved accrediting organization.  Act § 1834(a)(20)(A); 42 C.F.R. § 424.57(c)(22).  However, notwithstanding its accreditation status, CMS may deny enrollment or a supplier’s enrollment may be revoked if (as here) CMS determines that it does not comply with DMEPOS standards.  42 C.F.R. § 424.57(c)(24).

For reasons that it did not explain (and which I find inexplicable), the accrediting organization here – “The Compliance Team” – determined that Petitioner complied with DMEPOS requirements.  P. Exs. 1, 2.  The accreditation report does not say much about the means of access and egress nor does it say that the premises are accessible to the disabled.  It says that the business is “located upstairs of an office building” and has “an intercom with instructions” for patients who cannot climb the stairs and adds, parenthetically, that “an employee will come downstairs to service the patient.”  P. Ex. 1 at 1.

For the reasons discussed above, the business plainly did not comply with the DMEPOS regulatory requirements, and CMS could not allow it to enroll in the Medicare program.  The accrediting organization cannot change or eliminate those regulatory requirements by reaching erroneous conclusions.  See Heckler v. Cmty. Health Servs. of Crawford Cnty., Inc., 467 U.S. 51, 60 (1984) (“When the Government is unable to enforce the law because the conduct of its agents has given rise to an estoppel, the interest of the citizenry as a whole in obedience to the rule of law is undermined.”).

Moreover, it is well-settled that a prospective DMEPOS supplier has “constructive notice of the statute and regulations that govern” Medicare participation.  Pepper Hill Nursing & Rehab. Ctr., LLC, DAB No. 2395 at 8 (2011), and cases cited therein.  Petitioner cannot claim to have been misled where, as here, it could have acquired the relevant program knowledge by exercising “reasonable diligence.”  Wade Pediatrics, DAB No. 2153 at 23 (2008) (citing Cmty. Health Servs. of Crawford Cnty., Inc., 467 U.S. at 61 n.10); accord, Regency on the Lake, DAB No. 2205 at 5 (2008) (finding a provider’s reliance on statements of state employees “particularly unreasonable” because it should have known that neither a state agency nor its employees are empowered to find a facility eligible to participate in the Medicare program; only the Secretary has the final authority to make that determination).

I note, finally, that Petitioner has not lost any legal right or suffered any adverse change in its status because the accreditation organization reached the wrong conclusion.  It has simply been denied enrollment (and thus access to Medicare funds), to which it is not

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entitled.  See Crawford Cnty., 467 U.S. at 61 (finding that the traditional elements of estoppel were not met where the respondent health center was not allowed to retain money that it never should have received in the first place).

Conclusion

For the reasons discussed above, I affirm CMS’s determination to deny Petitioner’s Medicare enrollment.  The prospective supplier was not accessible to disabled persons, as required by 42 C.F.R. § 424.57(c)(1)(i).