SUBJECT:

Ocean Medical Equipment & Rental Corp.,

Petitioner,

Palmetto GBA and the National Supplier Clearinghouse

I reverse the determination of the Carrier Hearing Officer (Hearing Officer) upholding the revocation of Ocean Medical Equipment & Rental Corp.'s (Petitioner) Medicare Supplier Number: 4303790001. The Hearing Officer, in his decision, determined that Petitioner failed to meet Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Supplier Standard 10. I find that Petitioner has demonstrated it was in compliance with Medicare DMEPOS Supplier Standard 10 as of April 26, 2005, and I conclude, therefore that Petitioner's Medicare supplier enrollment number (supplier number) must be reinstated.

I. Background

By letter dated March 8, 2005, Palmetto GBA and The National Supplier Clearinghouse (NSC) notified Petitioner that its DMEPOS supplier number would be revoked effective 15 days from the postmarked date of the letter because Petitioner failed to meet, inter alia, Supplier Standard 10 of 42 C.F.R. � 424.57(c). Petitioner submitted a corrective action plan dated March 31, 2005, which was rejected by NSC in a letter dated April 15, 2005, insofar as the plan purported to correct the failure to meet Supplier Standard 10. By letter dated April 22, 2005, Petitioner appealed the revocation and requested a hearing by a Hearing Officer. The Hearing Officer conducted a hearing on May 25, 2005. The Hearing Officer's decision was issued on June 24, 2005. The Hearing Officer decided that the revocation of the supplier number assigned to Petitioner, Supplier Number 43037900001, was appropriate because Supplier Standard 10 was not met. Petitioner appealed the decision of the Hearing Officer to the Departmental Appeals Board by letter dated July 8, 2005. Petitioner attached to its appeal Supplier Exhibits (Petitioner (P.) Exs.) 1 - 7. The NSC submitted NSC Exhibits (Exs.) 1-13. Neither party objected to the proposed exhibits of the other. I admit P. Exs. 1-7 and NSC Exs. 1-13 into the record.

II. Issue, findings of fact and conclusions of law

A. Issue

The issue in this case is whether Petitioner's supplier number must be reinstated.

B. Findings of fact and conclusions of law

Petitioner is in compliance with all 21 Medicare supplier standards, and its Medicare supplier number must be reinstated.

To qualify for a DMEPOS supplier number, a supplier must meet 21 standards specified at 42 C.F.R. � 424.57(c)(1) through (21). At issue in the instant matter is whether Petitioner met Supplier Standard 10 of 42 C.F.R. � 424.57(c). Supplier Standard 10 requires that the supplier:

Has a comprehensive liability insurance policy in the amount of at least $300,000 that covers both the supplier's place of business and all customers and employees of the supplier. In the case of a supplier that manufactures its own items, this insurance must also cover product liability and completed operations. Failure to maintain required insurance at all times will result in revocation of the supplier's billing privileges retroactive to the date the insurance lapsed.

42 C.F.R. � 424.57(c).

In a letter to the Departmental Appeals Board, dated August 18, 2005, Shanna Goldsborough, Project Specialist, Palmetto GBA, wrote:

This letter is to inform you that the National Supplier Clearinghouse (NSC) is aware of the Administrative Review for Ocean Medical Equipment & Rental Corp. The NSC received a copy of the insurance policy that Ocean Medical Equipment & Rental Corp submitted to the ALJ (Exhibit 2) [NSC Ex. 2]. On August 10, 2005 the NSC verified the supplier's insurance coverage with Scottsdale Insurance Company's underwriting department (Exhibit 3) [NSC Ex. 3]. Therefore, the NSC has determined that the supplier has met compliance with CMS Medicare DMEPOS Supplier Standard 10 (Exhibit 1) [NSC Ex. 1].

In its letter requesting a hearing, Petitioner wrote: "[t]he issue with regard to non-compliance with Supplier Standard Number Ten (10) and the lack of a comprehensive liability insurance policy is moot due to the supplier's renewed insurance policy dated April 26^th, 2005 . . . ."

In their filings, the parties both refer me to a copy of a Certificate of Liability Insurance (NSC Ex. 2 and P. Ex. 5) which putatively shows that Petitioner had in place a Commercial General Liability insurance policy with an effective date of April 26, 2005. Evidently, the parties agree that Petitioner had an appropriate liability policy in place effective April 26, 2005.

In light of the parties' compatible positions and the evidence, I find that Petitioner meets Supplier Standard 10. Moreover, because the parties agree that Supplier Standard 10 is the only standard at issue, I conclude that Petitioner met all Supplier Standards as of April 26, 2005. I conclude, therefore, that Petitioner must be issued a Medicare supplier number.

Marion T. Silva

Chief Administrative Law Judge