Health Law Daily Wrap Up, ADMINISTRATION OF MEDICARE/MEDICAID PROGRAMS—DAB DECISIONS: Hospice enrollment denied after it failed to demonstrate operational status, (Jun 1, 2026)

By WK Editorial Staff

An HHS administrative law judge upheld CMS’s denial of a hospice provider’s Medicare enrollment application, finding that the provider failed to demonstrate it was operational as required by federal regulations.

An HHS Departmental Appeals Board (DAB) Administrative Law Judge (ALJ) found that CMS properly denied a hospice provider’s Medicare enrollment application on the ground that the provider was not “operational” within the meaning of 42 C.F.R. § 424.530(a)(5). The ALJ upheld the denial, emphasizing that the regulatory definition of “operational” requires more than mere physical presence or formal establishment as a business entity. Instead, a provider must be “open to the public,” staffed, and actively furnishing or ready to furnish services (Constellation Health Services NJ, LLC, DAB No. CR6873, Doc. No. C-26-182 (Apr. 8, 2026)).

A hospice provider’s application for Medicare enrollment was denied after multiple site inspection attempts failed to confirm that the provider was operating at its listed practice location. Inspectors conducted several visits over a period of weeks, each time finding the premises closed, with no staff present and no response to phone calls or in-person inquiries. CMS concluded that provider was not operational and denied the application under its regulatory authority.

The ALJ rejected any suggestion that isolated or coincidental circumstances explained the failed inspections. Instead, the pattern of inaccessibility demonstrated a lack of ongoing operations at the site. The ALJ found that CMS reasonably relied on this evidence to conclude that the provider did not meet enrollment standards.

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