Health Law Daily Wrap Up, CONDITIONS OF PARTICIPATION—DAB DECISIONS: ALJs uphold revocations over missteps on conditions of participation, (Jul 22, 2016)

By Bryant Storm, J.D.

Medicare enrollment and billing privileges depend upon compliance with Medicare conditions of participation (CoPs). In three cases, administrative law judges (ALJs) upheld the revocations of a supplier, a pharmacy, and a physician’s Medicare enrollment and billing privileges because the providers either were not accessible during posted hours of operation, failed to submit the fingerprints of an owner, or did not timely report the suspension of a medical license.

Posted hours of operation. CMS revoked the Medicare enrollment and billing privileges of Advanced Clinical Solutions, Inc., a supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS), after a site inspection revealed that the supplier was not accessible and staffed during posted hours of operation. In addition to violating 42 C.F.R. Sec. 424.57(c)(7) by not remaining accessible during posted hours, CMS based the revocation on its conclusion that the supplier was not operational and failed to provide updated enrollment information. An ALJ disagreed on two points, concluding that the supplier was still operational and did not fail to provide updated enrollment information. However, the ALJ agreed that, because the supplier failed to be accessible during posted hours of operation, revocation was appropriate (Advanced Clinical Solutions, Inc. v. CMS, Docket No. C-16-405, Decision No. CR4621, May 31, 2016).

Fingerprinting of owners. A Medicare contractor revoked Diplomat Pharmacy, Inc.’s Medicare billing privileges because the pharmacy failed, in violation of 42 C.F.R. Sec. 424.518(c)(2)(B), to submit fingerprints for two individuals with five percent or greater ownership interests in the pharmacy. An ALJ determined that although the Medicare contractor erroneously determined that the pharmacy had two owners, when in fact it only had one, the pharmacy nevertheless failed to provide fingerprints for the owner. As a result, because the pharmacy refused to provide the requested fingerprints, the ALJ held that the revocation was mandatory. The ALJ rejected the pharmacy’s assertion that the fingerprint request was invalid because it was sent to the wrong National Provider Identifier. The ALJ reasoned that the request was clear and that the revocation was not based upon the error but upon the pharmacy’s failure to comply with Medicare CoPs (Diplomat Pharmacy, Inc. v CMS, Docket No. C-16-87, Decision No. CR4610, May 17, 2016).

Adverse legal action. CMS revoked a physician’s Medicare enrollment and billing privileges because the physician failed to timely report to CMS that his license to practice medicine in Nevada was suspended from September 2014 to December 2014 as a result of substance abuse. The physician requested a hearing before an ALJ to challenge the revocation, asserting that the suspension was temporary and that he was only required to notify CMS of final adverse action. The ALJ disagreed and held that 42 C.F.R. Sec. 424.535(a)(9) requires physicians to report any adverse legal action, including temporary license suspensions. As a result, the ALJ upheld the revocation, holding that it was not in dispute that the physician failed to report his suspension in violation of Medicare CoPs (Marks v. CMS, Docket No. C-16-163, Decision No. CR4616, May 23, 2016).

Companies: Advanced Clinical Solutions, Inc.; Diplomat Pharmacy, Inc.

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