(September 16, 2014): Consider the following scenario. You own a durable medical equipment (DME) company that you run out of a leased location in a local office building. Your customers are a mix of privately insured and Medicare/Medicaid beneficiaries. You've been in business for about 10 years, but money is tight and you need to reduce expenses. You decide to move your business to your home for the time being. You make all the arrangements to move, and prepare a CMS-Form 855S informing the National Supplier Clearinghouse (NSC) that you are relocating in 10 days. No one helps you fill out the form, no one reviews it for you, and no one goes with you when you take the signed CMS-Form 855S to the local post office in a manila envelope that you have hand addressed to the NSC. Because it's only a few dollars, you pay for first-class postage for the envelope with the $5 bill you had in your pocket, hand the envelope to the postal clerk and leave.
Fast-forward six weeks...you receive an envelope from the NSC that is forwarded to you from your old business address. The letter inside informs you that Medicare revocation action has been initiated. Your Medicare DME supplier number is being revoked because a site inspector visited your old address 5 days after you relocated and found the location empty. You frantically call the NSC and ask why you've received this letter. They confirm what the letter says. You ask the representative to confirm what the NSC has on file as your location, and the customer service representative reads back your old address. You ask if the NSC has any record of receiving the CMS-Form 855S you sent 10 days before you moved and the representative says it does not.Cue full on panic...
I. Appealing a Medicare Revocation Action:
What are your options at this point? The Medicare revocation notice letter says you have the right to seek reconsideration of the termination of your participation. Surely you can send a letter to the appeal address explaining what happened and they'll stop the termination? Surely they'll believe you when you say you sent the CMS-Form 855S notifying the NSC of your address change well before it was due (which was within 30 days after you moved since you are a DME provider), and they'll let you resend it? Surely the NSC will be reasonable? Sadly, that's not how Medicare's rules work. You have to appeal, and you have to do it quickly...within 60 days, or you'll lose your right to do so. There are two steps to consider at this point...one is optional, and one is mandatory if you want to maintain your appeal rights.
II. Corrective Action Plans to Address a Medicare Revocation Action:
First, consider filing a corrective action plan (CAP). Federal regulations give most providers the opportunity to do so within 30 days of receiving notice of Medicare revocation. It's optional, but can sometimes result in a reversal of a termination much quicker than a request for reconsideration. Be forewarned, however, that filing a CAP is NOT the same as filing a request for reconsideration and WON'T preserve your appeal rights.
III. Challenging a Medicare Revocation Action -- Reconsideration Requests.
Second, to maintain your appeal rights, you must file an official request for reconsideration within 60 days of receiving a revocation notice letter. Many of our clients elect to file a CAP, and if they don't receive a decision before the 60 day reconsideration deadline, file the reconsideration also. The good news is that, when we prepare a CAP, it can serve as the foundation for the reconsideration request so that any duplication of effort is minimized.
IV. Things to Know about CAPs and Reconsideration Requests.
First, a few notes on CAPs. They really aren't what they sound like in the context of a Medicare revocation appeal. You can't use a CAP to fix a problem that existed on the effective date of termination. For example, if you moved and didn't file the necessary CMS Form-855 to tell the Medicare program on time, and were then terminated because a site inspector visited your old location and found you weren't in business, you can't use the CAP to fix the fact that you didn't send the necessary forms on time. CAPs are most effective when a site inspector obviously made a mistake when they visited a location of record, or you can prove with objective evidence that you submitted required paperwork on time.
Let me illustrate...consider a home health agency client that received a revocation letter after a site inspector visited what they were told was the agency's current practice location. The agency had concrete proof in the form of correspondence from the Medicare contractor that the contractor's provider enrollment department had its correct address, but for some reason, the database used by the site inspector did not. The agency submitted a CAP that explained the apparent mismatch between the agency's CMS provider enrollment record and the site inspector's records and successfully reversed the revocation without ever having to file a request for reconsideration. Another example might also be useful here. Many providers that receive revocation notices tell us they submitted necessary CMS-Form 855 updates on time, but they can't provide any proof of delivery to the Medicare enrollment contractor such as Federal Express, UPS or USPS Priority Mail or Certified Mail tracking information. CMS and the provider community have long disagreed about exactly what a provider must do to satisfy its "duty to report" changes to its provider enrollment record. The relevant regulation applicable to our DME provider case described above is found at 42 CFR §424.57(c)(2); that regulation states in part that ". . . [t]he supplier must provide complete and accurate information in response to questions on its application for billing privileges. The supplier must report to CMS any changes in information supplied on the application within 30 days of the change." (Emphasis added.)
A similar "duty to report" changes in enrollment information exists and is applicable to other providers. Physicians, non-physician practitioners and their organizations are required to report changes of ownership, adverse legal actions and changes in practice location within 30 days, and all other changes to information on their enrollment forms within 90 days. See 42 C.F.R. § 424.516(d). All other providers must report a change of ownership or control, a change of authorized or delegated official, or the revocation or suspension of a Federal or State license or certification within 30 days, and all other changes, including a change in practice location within 90 days. See id. at § 424.516(e).So the question remains...is proof of mailing to the correct Medicare enrollment contractor address enough to meet a provider's or supplier's duty to report under the above regulations, or do you also have to prove delivery? Is testimony that something was mailed enough to convince a hearing officer or administrative law judge that the duty to report was met, or must the provider have objective proof of delivery also? The regulations and the accompanying federal register notices promulgating them are silent on what "report" actually means. See, e.g., Potomac Medical Equipment, Inc. v. Centers for Medicare & Medicaid Services, DAB Decision CR3268, p. 8-9 (June 20, 2014). In spite of provider arguments to the contrary and the fact that the regulation does not require providers to submit enrollment applications via trackable mail, recent CMS Departmental Appeals Board decisions have interpreted the duty to report to require objective evidence that an application was delivered to the NSC. See id. In the Potomac case, the ALJ admitted that CMS regulations "do not required providers and suppliers [to] send documents by certified mail . . . ." Id. at p. 9. In the same sentence, the ALJ then states the following: ". . . however, if they fail to do so, they will be deprived of evidence they need to prove NSC received those documents." Id. In spite of all arguments to the contrary and the admitted ambiguity in the regulations, the decision makers in Medicare revocation appeal cases seem to have found the duty to report to require objective proof of delivery.Based on the above, we all providers should do the following:
- Send all initial applications and time-sensitive, required updates to your Medicare provider enrollment contractor using a tracked delivery services. If you have proof of delivery from one of these services, it is much likelier that we will be able to reverse a revocation with a CAP than if you don't have this proof.
- Always make a complete copy of everything you submit, along with the outside of the envelope showing the address information or a copy of the completed shipping label.
- Don't wait to the last minute. Send your provider enrollment update forms to the contractor early enough so that if they don't arrive at the contractor's location when they should, you'll have the time to re-send them before your deadline expires.
- Use the buddy system. Have someone on your staff or even a friend review an application with you before you send it, verify that it is signed and dated, watch you make a copy and put the original application in the mailing envelope, review any shipping invoice or mailing envelope for accuracy, and watch you deliver the finished envelope to the mailing service. We know it sounds over the top, but if called on to testify to what happened, having a buddy with a clear and complete recollection of your actions to submit an application or update will go a long way toward convincing a hearing officer or ALJ that what you say happened actually did.
Also, providers should be aware of the evidentiary rules for reconsideration requests and the next level of appeal. A provider can send almost anything along with a written request for reconsideration...documents, photos, witness affidavits, etc. The reconsideration process is intended to allow the provider to make their case to the reconsideration hearing officer in whatever fashion they'd like. Be aware, however, that the rules are entirely different if a provider loses at reconsideration and moves on to the next appeal level.
If a provider loses at reconsideration, they have the option to appeal the decision to an Administrative Law Judge (ALJ) with the Department of Health & Human Services, Departmental Appeals Board (DAB). DAB appeals have specific procedural and evidentiary regulations, one of which states that a provider will not be permitted to submit new documentary evidence at the DAB level of appeal absent a showing of good cause. See 42 C.F.R. § 498.56(e). What this rule means is that a provider can submit all the testimony they like with a DAB appeal, but they generally won't be permitted to submit any new documents that they didn't submit at reconsideration. For this reason, it is very important that providers carefully and thoroughly collect and submit all the documents that they think are relevant to their case with their reconsideration request. Assistance for experienced legal counsel with identifying those documents that might be helpful and developing legal arguments that may help your reconsideration request be successful can be invaluable at this stage. Having handled a number of both reconsideration requests and DAB appeals, our Firm is well-equipped to assist providers with identifying critical documents and other evidence and developing effective legal arguments to submit with a reconsideration request.
V. Revocation and Reimbursement.
When a provider receives a revocation letter, the effective date of revocation may be a few days or weeks later, or may even pre-date it. Providers need to understand that they won't receive payment for any services provided to Medicare beneficiaries after the revocation effective date unless they are successful in an appeal. This can mean a 60 day disruption in payment, a 4 month disruption, a 12 month disruption or a two or three year period where the provider can't participate in the Medicare program. That can be very challenging to downright impossible for some providers to survive.
When considering your appeal options, keep in mind that CAPs typically are processed in 30 to 60 days after they are submitted. Reconsideration appeal decisions similarly take somewhere between 30 to 60 days after all documents are submitted to the hearing officer by the provider. Finally, DAB appeals typically take 180 days from the date of filing to receive a decision. If a provider were to pursue an appeal all the way through the DAB stage, it is not uncommon for the entire multi-level appeal process to take a year. If successful, the provider's billing rights are typically reinstated back to the date of revocation. Be aware, however, that the reinstatement process can often take a month or more.
If a provider chooses not to appeal, they will ordinarily be subjected to a re-enrollment bar of between 1 and 3 years, depending on the reason or reasons for the Medicare revocation action. It is important to take these time frames and the nature of a provider's business, payor mix, overhead costs, reserves, chances of success and other factors into consideration when deciding whether a CAP, a reconsideration, and if necessary, a DAB appeal makes sense. Because we have handled a number of these cases, Liles Parker can help you weigh your options and make the best decision for your business.
VI. We Can Help.
The attorneys at Liles Parker have extensive experience handling Medicare revocation appeals at all levels. If you have received a revocation notice and want help, please contact us. Our goal is to help our clients have the best possible chance of success in any appeal.