Manchester Urology Associates Professional Association, DAB CR6997 (2026)

DECISION

Petitioner, Manchester Urology Associates Professional Association, a supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), appeals the Centers for Medicare & Medicaid Services’ (CMS’s) determination revoking its Medicare enrollment and billing privileges for alleged noncompliance with 42 C.F.R. § 424.57(c)(10).  CMS also imposed a one-year bar on reenrollment.

For the reasons explained below, I reverse the reconsidered determination.  CMS may not revoke a supplier’s Medicare enrollment when the supplier has complied with all the requirements set forth in the regulation, nor may CMS rely solely on sub-regulatory guidance as the basis for revocation.

I.  Background

Petitioner is a DMEPOS supplier located in Manchester, New Hampshire.  In a notice dated February 2, 2026, the Medicare contractor, Novitas Solutions, advised Petitioner that its Medicare supplier number, enrollment, and billing privileges were being revoked, effective July 1, 2021, pursuant to 42 C.F.R. §§ 405.800, 424.57(e), 424.535(g), and

Page 2

424.535(a)(1).  CMS Ex. 1.  The contractor based its determination on noncompliance with three supplier standards:

• 42 C.F.R. § 424.57(c)(7) (maintaining a physical facility on an appropriate site) – stating that a site visit revealed Petitioner’s hours of operation were not posted;
• 42 C.F.R. § 424.57(c)(10) (maintaining a comprehensive liability insurance policy) – stating that the general liability policy on file with NPEAST had expired; and
• 42 C.F.R. § 424.57(c)(21) (providing information required by Medicare statute or regulations) – stating that Petitioner failed to provide a requested photograph showing posted hours of operation.

Id. at 1-4.  The contractor also imposed a one‑year reenrollment bar, effective 30 days after the postmark date of the revocation notice.  Id. at 4.

Petitioner submitted a Corrective Action Plan (CAP) and requested reconsideration.  P. Ex. 2; CMS Ex. 2.  In an April 21, 2026 reconsidered determination, a Project Manager for Chags Health Information Technology, LLC (C‑HIT), a Medicare contractor, partially accepted the CAP.  CMS Ex. 3.  The contractor agreed that Petitioner had corrected the deficiencies related to posted hours and the provision of requested information, as required by 42 C.F.R. §§ 424.57(c)(7) and (c)(21), by submitting a photograph demonstrating compliance, and revocation under these standards were overturned.  Id. at 4, 5.

The contractor, however, upheld the revocation under 42 C.F.R. § 424.57(c)(10).  Id. at 4-5.  Although Petitioner submitted certificates of liability insurance showing continuous coverage, C‑HIT concluded the certificates were noncompliant because they listed the Medicare National Supplier Clearinghouse (Medicare NSC) as the policy holder.  Id. at 4.  The contractor explained that Medicare NSC was the proper entity until November 7, 2022, but after that date NPE East was required to be listed.  Id.  Relying on section 10.6.21(A)(2) of the Medicare Program Integrity Manual (MPIM), the contractor determined that only the certificates covering July 1, 2020, through July 1, 2023, were compliant and that Petitioner remained noncompliant from July 2, 2023, through the present.  Id. at 5.  The contractor therefore rejected the CAP in part and affirmed the revocation but revised the effective date of revocation to July 2, 2023, pursuant to 42 C.F.R. § 424.535(g)(2)(xiv).  Id. at 5-6.

Petitioner submitted a response to the reconsideration decision, proffering that 42 C.F.R. § 424.57(c)(10) does not require suppliers to list a particular policy holder on their certificates of insurance.  P. Ex. 5 at 2.  In addition, Petitioner stated that it should have been given an opportunity to correct the alleged deficiency under section 424.535(a)(1), explaining that the initial determination stated the insurance had “lapsed,” not that the

Page 3

policy holder information was outdated.  Id. at 2-3.  Petitioner also submitted updated certificates listing the correct contractor.  Id. at 15-19.  C‑HIT did not respond to Petitioner’s submission, and Petitioner timely appealed the reconsidered determination.

Pursuant to my Standing Order, CMS timely submitted a motion for summary judgment and brief, and three exhibits (CMS Exs. 1-3).  On September 4, 2026, CMS submitted an Amended Brief as well as an explanation of the revisions.  Petitioner did not object to CMS’s amended submission; therefore, I rely on CMS’s Amended Brief (CMS Br.) for purposes of making my decision.  Petitioner also did not object to any of CMS’s proposed exhibits; therefore, I admit into evidence CMS Exs. 1-3.

Petitioner responded with a cross-motion for summary judgment and opposition to CMS’s motion (P. Br.), and five exhibits (P. Exs. 1-5), four of which are duplicative of evidence already in the record and/or materials submitted at reconsideration.  Petitioner’s proposed exhibit 5 is new.  CMS did not object to Petitioner’s submission of new evidence; however, the governing regulation requires me to examine any new documentary evidence offered for the first time at the ALJ level and to determine whether Petitioner had good cause for not submitting it earlier.  42 C.F.R. § 498.56(e); see also Standing 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.”).  Because Petitioner’s proposed exhibit 5 responds to a new ground that was not raised before the reconsideration decision, and therefore previously unavailable, I find good cause to admit it.  Accordingly, P. Exs. 1–5 are admitted into evidence.

CMS replied to Petitioner’s motion (CMS Reply).  Petitioner also filed a Motion for Leave to File a Reply and Reply, as well as an Amended Motion for Leave to File a Reply and Reply (P. Reply) to correct administrative errors.  Finding good cause, I admit Petitioner’s Reply into the record.  Standing Order ¶ 7(d).

The parties have filed cross-motions for summary judgment.  However, neither party proposes any witnesses.  Because there are no witnesses to be examined or cross-examined, an in-person hearing would serve no purpose.  Standing Order ¶¶ 7(g)(iii), 13.  I therefore decide this case based on the written record, without considering whether the standards for summary judgment are satisfied.  See Civil Remedies Division Procedures ¶ 19(b), (d); Vandalia Park, DAB No. 1940 (2004).  The parties’ motions for summary judgment are denied as moot.

II.  Discussion

1. Because Petitioner’s comprehensive liability insurance policy met the explicit requirements of 42 C.F.R. § 424.57(c)(10), CMS may not revoke its Medicare enrollment based solely on sub-regulatory authority.

Page 4

To receive Medicare payments for items furnished to a Medicare-eligible beneficiary, a supplier of medical equipment and supplies must have a supplier number issued by the Secretary of Health and Human Services.  Social Security Act (Act) § 1834(j)(1)(A), 42 U.S.C. § 1395m(j)(1)(A); 42 C.F.R, § 424.505.  To obtain and retain its supplier number, a DMEPOS supplier must meet the standards set forth in 42 C.F.R. § 424.57(c), and CMS may revoke its billing privileges if it fails to do so.  Act § 1834(j)(1)(B), 42 U.S.C. § 1395m(j)(1)(B); 42 C.F.R. § 424.57(c), (e)(1); 42 C.F.R. § 424.535(a)(1).  If CMS establishes one regulatory basis, I must uphold the revocation.  Global MD Systems, Inc., DAB No. 3103 at 2 (2023); Wassim Younesm M.D. and Wassim Younes, M.D., P.L.C., DAB No. 2861 at 8 (2018), citing Patrick Brueggeman, D.P.M., DAB No. 2725 at 15 (2016).

Supplier standard 10 requires a supplier to maintain a comprehensive liability insurance policy of at least $300,000 that covers both the supplier’s place of business as well as all customers and employees.  42 C.F.R. § 424.57(c)(10); Act § 1834(j)(1)(B)(ii)(III), 42 U.S.C. § 1395m(j)(1)(B)(ii)(III) (requiring that DMEPOS standards include the requirement that the supplier “have proof of appropriate liability insurance”).  The regulation further states that “[f]ailure to maintain required insurance at all times will result in revocation of the supplier’s billing privileges retroactive to the date the insurance lapsed.”  42 C.F.R. § 424.57(c)(10).

Here, Petitioner has demonstrated that, throughout the relevant period (beginning July 2, 2023), it had in place a comprehensive liability insurance policy that substantially exceeded the $300,000 minimum.  P. Ex. 2 at 21-27.  The policy covered Petitioner’s place of business and all customers and employees, and fully satisfied the regulatory requirements.

CMS does not dispute the adequacy or scope of this insurance coverage.  Instead, CMS relies on section 10.6.21(A)(2) of the MPIM, which instructs DMEPOS suppliers to list the Medicare contractor as the certificate holder on the liability policy.  CMS contends that, because Petitioner’s policy does not list the active contractor as the certificate holder, Petitioner failed to comply with section 424.57(c)(10), and CMS may therefore revoke its enrollment.  CMS further observes that it may revoke a supplier’s participation for failure to meet even a single standard.

I agree that CMS may revoke a supplier’s Medicare participation if it fails to meet any of the standards listed in section 424.57(c).  42 C.F.R. § 424.57(e)(1); 42 C.F.R. § 424.535(a)(1); Keller Orthotics, DAB No. 2588 at 7 (2014); 1866ICPayday.com, L.L.C., DAB No. 2289 (2009).  However, in this case, I do not find that Petitioner failed to satisfy any of the section 424.57(c) standards, including section 424.57(c)(10).

The Act provides that all rules, requirements, and statements of policy that establish or change a substantive legal standard governing (among other factors) an entity’s eligibility

Page 5

to furnish Medicare services must be promulgated through notice-and-comment rulemaking:

No rule, requirement, or other statement of policy (other than a national coverage determination) that establishes or changes a substantive legal standard governing the scope of benefits, the payment for services, or the eligibility of individuals, entities or organizations to furnish or receive services, or benefits under this title shall take effect unless it is promulgated by the Secretary by regulation.

Act § 1871(a)(2), 42 U.S.C. § 1395hh(a)(2); see Azar v. Allina, 139 S. Ct. 1804, 1810-14 (2019) (rejecting agency efforts to change reimbursement rules through sub-regulatory guidance).

Consistent with the Act and the Court’s decision in Allina, the Board has likewise declined to treat program manual guidance as binding or enforceable when they alter the plain language of the regulations.  Manual guidance may be “instructive,” but it cannot impose mandatory obligations not found in the regulations themselves.  Consulate Healthcare of Jacksonville, DAB No. 3119 at 17 (2023); Kindred Transitional Care and Rehab. – Greenfield, DAB No. 2792 at 19-20 (2017); Miss. Care Ctr. of Greenville, DAB No. 2450 at 15–16 (2012); Foxwood Springs Living Ctr., DAB No. 2294 at 9 (2009); Oakwood Community Ctr., DAB No. 2214 at 16 (2008); Aase Haugen Homes, Inc., DAB No. 2013 at 15 (2006); Alden-Princeton Rehab. & Health Care Ctr., DAB No. 1873; Beverly Health and Rehab. Ctr. – Williamsburg, DAB No. 1748 at 8 (2000), aff’d, Beverly Health and Rehabilitation Services v. Thompson, 223 F. Supp. 2d 73, 99–106 (D.D.C. 2002).

Significantly, as Petitioner points out, CMS proposed requiring a DMEPOS supplier to list the contractor as the certificate holder on its liability insurance policy, making it easier for the contractor to verify coverage in promulgating the regulations.  73 Fed. Reg. 4,503, 4,507, 4,513 (Jan. 25, 2008); P. Br. at 7.  If CMS had adopted this proposal in the final rule, it could now enforce such a requirement.  But CMS did not.  The final rule omitted the proposed revision, though the agency noted that it might consider adding such a requirement in future rulemaking.  75 Fed. Reg. 52,629, 52,638 (Aug. 27, 2010).  Because CMS declined to incorporate the certificate-holder requirement into the regulation, it cannot now rely on a manual provision to impose that requirement or to revoke a supplier’s enrollment.1  Act § 1871(a)(2), 42 U.S.C. § 1395hh(a)(2).

Page 6

If CMS revokes a supplier’s billing privileges, it must impose a re-enrollment bar of at least one year and no more than ten years.  42 C.F.R. § 424.535(c)(1)(i).  Here, because CMS may not revoke Petitioner’s billing privileges, it also may not impose any re-enrollment bar.

III.  Conclusion

I reverse CMS’s reconsidered determination.  Petitioner complied with the explicit requirements of 42 C.F.R. § 424.57(c)(10), and CMS may not revoke its Medicare enrollment, supplier number, and billing privileges based solely on sub-regulatory authority.