Health Law Daily Wrap Up, ADMINISTRATION OF MEDICARE/MEDICAID PROGRAMS—DAB DECISIONS: DMEPOS Supplier had no right to review duration of CMS revocation, (May 30, 2025)

By Jeffrey H. Brochin, J.D.

Issue of whether a basis for revocation existed did not turn on the number of beneficiaries whose DMEPOS records CMS requested, rather on whether Supplier failed to comply with the UPIC’s records request in at least one instance.

The Department of Health and Human Services Departmental Appeals Board (DAB or Board) Appellate Division has affirmed that portion of the ALJ’s decision revoking the Supplier’s Medicare enrollment and billing privileges, but vacated that portion which reviewed CMS’s 10-year re-enrollment bar and substituted a 3-year bar, which the ALJ did not have authority to do (Frank B. Lee, M.D., DAB No. 3170 Doc. No. A-22-27 (Jan. 21, 2025)).

DMEPOS Supplier requirements. A supplier of durable medical equipment, prosthetics, orthotics, and/or supplies (DMEPOS) to Medicare beneficiaries (‘supplier’ being a term that includes the ordering physician) is required to both maintain records regarding the ordering of DMEPOS and, provide access to such records when requested by CMS. If such physician or supplier fails to maintain and, upon request of the Secretary, provide access to documentation relating to written orders or requests for payment for DMEPOS, the supplier’s Medicare enrollment and billing privileges may be revoked. The duration of revocation is one year for each act of noncompliance.

Dr. Lee (Physician or Supplier) was enrolled in Medicare as a supplier until the revocation from which the instant appeal arose. By letter dated January 27, 2020, Qlarant Integrity Solutions, LLC (Qlarant), a CMS unified program integrity contractor (UPIC), asked Dr. Lee to produce, within 45 days, records concerning 20 Medicare beneficiaries for whom he had ordered DMEPOS items on various dates of service for the period from January 3, 2018 to February 16, 2018. The letter further identified Dr. Lee as the ordering physician, and informed him that if certain records supporting the services rendered were at another facility, as the ordering provider he was responsible for obtaining those records for review.

Telemedicine arrangements. The Supplier responded that he had contracts with several telemedicine companies to provide telemedicine services for their patients, and that patient encounters represented by the requested records were all via telemedicine, arranged by the telemedicine companies. He determined that he did not have possession or control of any records responsive to the UPIC’s request, but made efforts to obtain them by contacting the four telemedicine companies.

On August 18, 2020, Novitas Solutions, (a CMS Medicare Administrative Contractor, or MAC) notified Dr. Lee that his Medicare billing privileges would be revoked under 42 C.F.R. § 424.535(a)(10)(i), effective September 17, 2020, because he did not submit any of the requested records and thereby failed to comply with 42 C.F.R. § 424.516(f). Novitas further informed him that he would be barred from re-enrollment for 10 years, beginning 30 days after the postmark date of Novitas’s letter. Dr. Lee sought reconsideration, acknowledging receipt of Qlarant’s letters but disputing that he failed to respond to them, stating instead that he had no records of any of the 20 beneficiaries, but had endeavored to obtain them. He also made the argument that unless CMS first established that the patients in question were actually his patients, CMS could not revoke his billing privileges. By determination dated October 9, 2020, CMS upheld the revocation.

ALJ’s ruling. Dr. Lee timely requested a hearing before an ALJ which resulted in a decision upholding the revocation under 42 C.F.R. § 424.535(a)(10)(i) for failure to comply with 42 C.F.R. § 424.516(f)(2); however, the decision reduced the re-enrollment bar to three years. The ALJ had found that in January 2018, the Supplier electronically signed written orders (which could only be applied with a unique login password) for back and wrist braces for three Medicare beneficiaries, and that the orders had Dr. Lee’s name and NPI number on them. The ALJ further found that CMS made a prima facie showing that the Supplier ordered DMEPOS for three Medicare beneficiaries for which he did not maintain records nor provide same to the UPIC upon request. CMS then took the instant appeal to the Board.

No right to review duration. CMS argued that the Supplier had no right to have the length of the re-enrollment bar reviewed, and the Board agreed. The Board referenced regulations pursuant to which, where a re-enrollment bar must be imposed, in general, the bar lasts from one year to 10 years, depending on the severity of the revocation basis, and that bar is not reviewable. Accordingly, the Board concluded that the ALJ erred in reaching the issue of the length of the re-enrollment bar and they vacated the ALJ’s conclusion that CMS could only impose a maximum three-year re-enrollment bar. The Board therefore left intact CMS’s imposition of the 10-year re-enrollment bar.

Number of beneficiaries irrelevant. The Board also considered Dr. Lee’s contention that if only three Medicare beneficiaries could be established as patients of his, then the maximum period of re-enrollment bar had to be limited to three years (i.e., one year for each beneficiary.) The Board in fact determined that CMS showed that Dr. Lee ordered DMEPOS for all 20 beneficiaries; however, the number of beneficiaries was not the issue, rather, it was only necessary for CMS to show that Dr. Lee failed to maintain and provide access for at least one beneficiary in order for him to be in non-compliance with the records maintenance and access requirements necessary to avoid enrollment and billing revocation. Because he could not overcome CMS’s prima facia case as to just one beneficiary, the revocation was upheld.

Based on the foregoing, the Board upheld the ALJ’s decision as to revocation but vacated that portion of the ALJ’s decision which imposed a three-year re-enrollment bar, replacing it with CMS’s original 10-year bar.

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