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From Health Law Daily, April 20, 2017

Prosthetic eye supplier stares down end of case over Medicare billing privileges

By Sheila Lynch-Afryl, J.D., M.A.

The revocation of a durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) supplier’s Medicare billing privileges did not violate due process because the supplier failed to establish a constitutionally protected property or liberty interest. The district court granted HHS’ motion for summary judgment and dismissed with prejudice the remaining defendants on jurisdictional grounds (Hindley v. HHS, April 19, 2017, James, M.).

The supplier was the sole proprietor of Sonoma Prosthetic Eyes. At 10 a.m. October 1, 2013, and 1 p.m. October 4, 2013, an inspector attempted to conduct an onsite inspection of Sonoma, only to find the doors locked and lights off and the business’s hours not posted. Accordingly, CMS revoked Sonoma’s DMEPOS supplier billing privileges for violating the supplier standards of 42 C.F.R. Sec. 424.57(c)(7) and barred it from reenrolling for two years.

The Medicare hearing officer, administrative law judge, and Departmental Appeals Board (DAB) upheld CMS’ revocation (see Inspections by appointment only, but no one’s home, January 28, 2015; Prosthetic eye supplier sees revocation after failing to post hours of operation, March 10, 2015). The supplier filed suit in federal court and her claims were twice dismissed on jurisdictional grounds (see Case dismissed after supplier drops only claim surviving jurisdictional bar, December 6, 2015; Still not seeing the point: court’s jurisdiction is only under SSA, February 8, 2016). Her final attempt was a fifth amended complaint alleging a due process violation and requesting judicial review of the DAB’s decision and compensatory and punitive damages.

Substantial evidence supported the DAB’s finding that the supplier did not post her hours of operation in accordance with 42 C.F.R. Sec. 424.57(c)(7)(i)(D). The Site Verification Survey Form stated that while the facility had a sign that indicated the business name, it did not have its hours posted. Photographs of the facility confirmed these facts.

The supplier’s procedural due process claims also lacked merit because she failed to establish a constitutionally protected property or liberty interest, a threshold requirement to a procedural due process claim. She did not hold a property interest in a DMEPOS supplier number or other Medicare privileges. Further, the revocation of her supplier number did not amount to a denial of her liberty interest in pursuing her chosen occupation, since the revocation did not completely exclude her from the medical profession or the prosthetic eye business. The Secretary’s decision prevented the supplier from participating in the Medicare program, and only temporarily.

The case is No. 15-cv-01973-MEJ.

Attorneys: Reginald Regan Hindley (Law Offices of Hindley & Henderson) for Julie Hindley. Erica Blachman Hitchings, U.S. Attorney's Office, for U.S. Department of Health and Human Services, Commissioner of Social Security and The Centers for Medicare and Medicaid Services.

Companies: U.S. Department of Health and Human Services; The Centers for Medicare and Medicaid Services; Sonoma Prosthetic Eyes

MainStory: TopStory CaseDecisions CMSNews CoPNews DMENews MedicareContractorNews PartBNews ProviderNews CaliforniaNews

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