Optimum Medical Supply Inc d/b/a Optimum Medical Supply Inc LLC, DAB CR6969 (2026)

DECISION

The Centers for Medicare & Medicaid Services (CMS) revoked the enrollment and billing privileges of Optimum Medical Supply Inc d/b/a Optimum Medical Supply Inc LLC, (Petitioner), a supplier of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS), pursuant to 42 C.F.R. § 424.535(a)(5).  This decision affirms CMS’s revocation of Petitioner’s enrollment and billing privileges because Petitioner did not meet the conditions of enrollment. 

I. Background and Procedural History

Petitioner is a DMEPOS supplier located in Las Vegas, Nevada.  Petitioner’s Brief (P. Br.) at 2.

On February 21, 2025, Palmetto GBA, a Medicare Administrative Contractor (MAC), issued notice informing Petitioner that its Medicare enrollment issued by National Provider Enrollment Western Region (NPWest), and Medicare DMEPOS billing privileges were revoked.  CMS Exhibit (Ex.) 4. 

Petitioner timely requested reconsideration on March 7, 2025.  CMS Ex. 5. 

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On April 2, 2025, Chags Health Information Technology, LLC (C-HIT), a CMS contractor, issued an unfavorable reconsideration determination upholding the revocation of Petitioner’s Medicare billing privileges.  CMS Ex. 6. 

On April 3, 2024, Petitioner timely requested a hearing before an Administrative Law Judge (ALJ) to contest the revocation of its Medicare enrollment and billing privileges. 

On April 4, 2024, at my direction, the Civil Remedies Division (CRD) issued an acknowledgment letter and my standing prehearing order (Standing Order), in addition to the Civil Remedies Division Procedures (CRDP).   

On May 8, 2025, CMS filed a combined Motion for Summary Judgment and supporting memorandum (CMS Br.) along with nine exhibits (CMS Exs. 1-9).  CMS proposed one witness.  On May 15, 2025, Petitioner filed a combined prehearing brief and motion to settle (P. Br.).  Petitioner did not file any exhibits or propose any witnesses. 

II. Jurisdiction

I have the authority to hear and decide this matter.  42 U.S.C. § 1395cc(j)(8); 42 C.F.R. §§ 424.545(a), 498.1(g), 498.3(b)(17), 498.5(l)(2). 

III. Admission of Evidence and Decision on the Written Record

Absent objection, CMS Exs. 1-9 are admitted into evidence.  Petitioner filed three exhibits along with its request for hearing.  These exhibits will be referred to by docket number (Docket Nos. 1b-1d).  CMS objected to these exhibits because they were not submitted at the reconsideration level.  CMS Br. at 11.  However, CMS’s objection is overruled.  The exhibits will be admitted and given the proper weight and consideration. 

Petitioner did not request to cross-examine CMS’s witness.  Therefore, there is no need to hold a hearing in this matter.  Because there is no need to conduct a hearing in this case, I will issue a decision based on the written record.  Standing Order ¶ 13; CRDP ¶ 19d.  CMS’s motion for summary judgment is denied as moot. 

IV. Issue

The issue to be decided is whether CMS had a legitimate basis to revoke Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(5). 

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V. Legal Authorities

The Secretary of Health and Human Services must issue a billing number for a DMEPOS supplier to receive Medicare payments for items furnished to a Medicare-eligible beneficiary.  Social Security Act § 1834(j)(1)(A) (42 U.S.C. § 1395m(j)(1)(A)).  To receive direct billing privileges, a DMEPOS supplier must meet and maintain compliance with the supplier enrollment standards set forth in 42 C.F.R. § 424.57(c).  Among other standards, a DMEPOS supplier must maintain a physical facility on an appropriate site, in a location that is accessible to the public and staffed during posted hours of operation, with a visible sign and posted hours of operation.  42 C.F.R. § 424.57(c)(7)(i).  The supplier must be open to the public for a minimum of 30 hours per week.  42 C.F.R. § 424.57(c)(30)(i). 

CMS will revoke a currently enrolled Medicare supplier’s billing privileges if CMS or its agent determines that the supplier is not in compliance with any supplier enrollment standard.  42 C.F.R. § 424.57(e). 

If CMS revokes a supplier’s Medicare billing privileges because CMS or one of its contractors determined the supplier not to be operational, the revocation becomes effective on the date that CMS or its contractor determined the supplier to be nonoperational.  42 C.F.R. § 424.535(g).  After a supplier’s Medicare enrollment and billing privileges are revoked, the supplier is barred from reenrolling in the Medicare program for a minimum of one year, and up to 10 years, for a first-time revocation.  42 C.F.R. § 424.535(c)(1). 

VI. Findings of Fact

At all times relevant to this decision, Petitioner was enrolled as a DMEPOS supplier in the Medicare program. 

On January 22, 2021, Petitioner submitted a CMS-855S Medicare enrollment application that identified its business location as 2797 South Maryland Parkway, Suite 13, Las Vegas, Nevada 89109.  CMS Ex. 1 at 11.  The application indicated that the business was in operation at this address since June 30, 2014, and that the business was open to the public from 9:00 a.m. to 5:00 p.m. Monday through Friday.  Id. 

On November 11, 2024, a postcard reminder regarding the Medicare open enrollment period was sent to Petitioner’s on-file address and returned to sender as “undeliverable.”  CMS Ex. 2. 

In response, an on-site survey was conducted at Petitioner’s location of record at 10:30 a.m. on January 17, 2025.  CMS Ex. 3.  The inspector found that Petitioner was no longer

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operating at the location, instead there was a dental office operating in the suite.  Id at 4. Petitioner does not dispute that it changed its practice location.  P. Br. at 2. 

Based on the site visit, NPWest revoked Petitioner’s Medicare enrollment and billing privileges effective January 17, 2025, the date of the inspection.  CMS Ex. 4 at 1.  CMS also imposed a one-year reenrollment bar.  Id. at 2. 

On March 7, 2025, Petitioner requested reconsideration.  Petitioner admitted relocating the business to 5650 W. Charleston Blvd., Las Vegas, Nevada, 89146 in August 2022.  Docket 1b; CMS Ex. 5. 

C-HIIT issued an unfavorable reconsideration determination on April 2, 2025.  CMS Ex. 6. 

VII. Analysis and Conclusions of Law

1. CMS had a legal basis to revoke Petitioner’s Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(5) because it was not operational at the practice location on file with CMS. 

CMS may revoke an enrolled supplier’s Medicare billing privileges and any corresponding supplier agreement for several reasons, including if, upon on-site review or other reliable evidence, CMS determines that the supplier is no longer operational to furnish Medicare-covered items or services or otherwise fails to satisfy any Medicare enrollment requirement.  42 C.F.R. § 424.535(a)(5). 

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.  42 C.F.R. § 424.502 (defining “operational”).  A supplier’s qualified physical practice location is the address that is on file with CMS at the time of a site visit.  Care Pro Home Health, Inc., DAB No. 2723 at 5-6 (2016).  The proper inquiry is to assess a 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.”  Viora Home Health, Inc., DAB No. 2690 at 7 n.7 (2016) (emphasis in original) (quoting A to Z DME, LLC, DAB No. 2303 at 7 (2010)). 

The evidence shows, and Petitioner admits, that it was not operational at the 2797 South Maryland Parkway address, the address on file with CMS, on January 17, 2025, the date of the CMS on-site inspection.  Petitioner admits that it changed practice locations on

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August 1, 2022, and was operating from a different location.  Request for Hearing; CMS Ex. 5. 

The regulations require DMEPOS suppliers to report to CMS any changes in information supplied on the application within 30 days of the change.  42 C.F.R. § 424.57(c)(2).  Petitioner argues that it complied with 42 CFR § 424.57(c)(2) by reporting the practice location change.  P. Br. at 2.  Petitioner claims to have sent a request letter and application on July 15, 2022, but was told that the address could not be updated until it updated records with the IRS.  CMS Ex. 5.  However, Petitioner has not provided proof of this interaction. 

CMS argues that DMEPOS suppliers are required to submit changes via the internet-based provider enrollment, chain, and ownership system (PECOS) or by submitting a paper CMS-855S enrollment application.  CMS Br. at 10; CMS Ex. 1 at 3.  However, Petitioner argues, without authority, that as long as the change is communicated to CMS, in any format, it is sufficient to meet regulatory obligations.  P. Br. at 3.  With its request for hearing, Petitioner included a Board of Certification (BOC) Facility Relocation Application with the updated address, a BOC accreditation certificate with the new address, and a change of address letter dated July 15, 2022, and addressed to “to whom it may concern.”  See Docket Nos. 1b-1d.  There is no proof that Petitioner filed any of these documents with CMS within 30 days of the address change taking effect, nor did Petitioner provide these documents at the reconsideration level.  Additionally, in the request for reconsideration Petitioner admits, “during the chaos of relocating site visits it (sic) our new location from BOC, and Nevada Board of Pharmacy and the everyday operations we failed to follow up to make sure the updates with Medicare were made.”  CMS Ex. 5. 

CMS has a valid legal basis to revoke a supplier’s enrollment when the supplier is not operational at the practice location listed on the enrollment application, regardless of whether the supplier is operating elsewhere.  Here, the hearing officer did not err in determining that CMS had a legal basis to revoke Petitioner’s DMEPOS enrollment and billing privileges under 42 C.F.R. § 424.535(a)(5). 

VIII. Conclusion

The revocation of Petitioner’s Medicare enrollment and billing privileges under 42 C.F.R. § 424.535(a)(5) is affirmed.