Medicare Revises Standards for Medical Equipment Suppliers

September 17, 2010

42 CFR–PART 424.57 New and Revised Supplier Standards Summary
Effective September 27, 2010

Because we are committed to keeping our stakeholders updated regarding changing regulations, BOC is sharing the following update. On August 27th, 2010, the federal register was updated to include the amendments listed below. The amendments include new and revised supplier standards for all providers of DMEPOS. All accredited suppliers will be required to be compliant with all new standards as of September 27th, 2010 with the exception of the revised supplier standard #7 in which the Center for Medicare/Medicaid Services (CMS) allows for time to comply based on leasing expirations.

This final rule clarifies and expands on the existing enrollment requirements that DMEPOS suppliers must meet to establish and maintain billing privileges in the Medicare program. The Center for Medicare/Medicaid Services (CMS) believes that these additions and revisions will help to ensure that only legitimate DMEPOS suppliers participate in the Medicare program and are furnishing items of DMEPOS to Medicare beneficiaries.

Revisions to current standards: (click each standard to view current and revised versions)

Supplier Standard #1

Summary: Amended to further define requirements for compliance with applicable laws. Suppliers must be in compliance with state licensure regulations and local zoning ordinances. The supplier’s facility must be accessible to the disabled.Refer to Electronic Code of Federal Regulations for exemptions in regards to subcontractors.

Supplier Standard #7

Summary: Further defines requirements for an appropriate site for a physical facility. This includes the definition of a site maintaining at least 200 sq ft, except for state-licensed O&P personnel. Suppliers with less than 200 sq ft have additional time to be in compliance with this change (see revised standards for details).

Supplier Standard #9

Summary: Expands requirements for business telephone. During posted operating hours the supplier will be required to have a member of staff answering the telephone.

Supplier Standard #11

Summary: Amended/Expanded to further define the meaning of “Direct Solicitation” to include but is not limited to, telephone, computer, e-mail, instant messaging or in-person contact, by a DMEPOS supplier or its agents to a Medicare beneficiary without his or her consent for the purpose of marketing the DMEPOS supplier’s health care products or services or both. The supplier must agree not to make a direct solicitation as stated above.

New standards added: (click each standard to view current and revised versions)

Supplier Standard #27

Summary: All suppliers who supply oxygen to Medicare beneficiaries must obtain a state license when required by state law.

Supplier Standard #28

Summary: All suppliers are required to maintain all documentation in regards to the referral and delivery of a DMEPOS product to a Medicare beneficiary.

Supplier Standard #29

Summary: Suppliers may not share a location with other Medicare providers. Exemptions to this standard are listed below.

Supplier Standard #30

Summary: Suppliers location must be open and available to Medicare beneficiaries at the minimum of 30 hours per week. Exemptions for this standard are listed below.

 


Revised Standards

Supplier Standard #1
Current standardOperates its business and furnishes Medicare-covered items in compliance with all applicable Federal and State licensure and regulatory requirements. Revised standardOperates its business and furnishes Medicare-covered items in compliance with the following applicable laws:

  1. Federal regulatory requirements that specify requirements for the provision of DMEPOS and ensure accessibility for the disabled.
  2. State licensure and regulatory requirements. If a State requires licensure to furnish certain items or services, a DMEPOS supplier—
    1. Must be licensed to provide the item or service;
    2. Must employ the licensed professional on a full-time or part-time basis, except for DMEPOS suppliers who are—
      1. Awarded competitive bid contracts using subcontractors to meet this standard; or
      2. Allowed by the State to contract licensed services as described in paragraph (c)(1)(ii)(C) of this section.
    3. Must not contract with an individual or other entity to provide the licensed services, unless allowed by the State where the licensed services are being performed; and
  3. Local zoning requirements.
Supplier Standard #7:
Current standardMaintains a physical facility on an appropriate site. The physical facility must contain space for storing business records including the supplier’s delivery, maintenance, and beneficiary communication records. For purposes of this standard, a post office box or commercial mailbox is not considered a physical facility. In the case of a multi-site supplier, records may be maintained at a centralized location. Revised standardExcept for State-licensed orthotic and prosthetic personnel providing custom fabricated orthotics or prosthetics in private practice, maintain a practice location that is at least 200 square feet beginning-

  1. September 27, 2010 for a prospective DMEPOS supplier;
  2. The first day after termination of an expiring lease for an existing DMEPOS supplier with a lease that expires on or after September 27, 2010 and before September 27, 2013; or
  3. September 27, 2013, for an existing DMEPOS supplier with a lease that expires on or after September 27, 2013.

Is in a location that is accessible to the public, Medicare beneficiaries, CMS, the NSC, and its agents. (The location must not be in a gated community or other area where access is restricted.)

Is accessible and staffed during posted hours of operation.

Maintains a permanent visible sign in plain view and posts hours of operation. If the supplier’s place of business is located within a building complex, the sign must be visible at the main entrance of the building or the hours can be posted at the entrance of the supplier.

Is in a location that contains space for storing businesses records (including the supplier’s delivery, maintenance, and beneficiary communication records. Except for business records that are stored in centralized location for multisite suppliers

May be a “closed door” business such as a pharmacy or supplier providing services only to beneficiaries residing in a nursing home that complies with all applicable federal, state and local laws and regulations.

Supplier standard #9:
Current standard #9Maintains a primary business telephone listed under the name of the business locally or toll-free for beneficiaries. The supplier must furnish information to beneficiaries at the time of delivery of items on how the beneficiary can contact the supplier by telephone. The exclusive use of a beeper number, answering service, pager, facsimile machine, car phone, or an answering machine may not be used as the primary business telephone for purposes of this regulation. Revised standard #9Maintains a primary business telephone that is operating at the appropriate site listed under the name of the business locally or toll-free for beneficiaries.

  1. Cellular phones, beepers, or pagers must not be used as the primary business telephone.
  2. Calls must not be exclusively forwarded from the primary business telephone listed under the name of the business to a cellular phone, beeper, or pager.
  3. Answering machines, answering services, facsimile machines or combination of these options must not be used exclusively as the primary business telephone during posted operating hours.
Supplier Standard #11:
Current standard #11Must agree not to contact a beneficiary by telephone when supplying a Medicare-covered item unless one of the following applies:

  1. The individual has given written permission to the supplier to contact them by telephone concerning the furnishing of a Medicare-covered item that is to be rented or purchased.
  2. The supplier has furnished a Medicare-covered item to the individual and the supplier is contacting the individual to coordinate the delivery of the item.
  3. If the contact concerns the furnishing of a Medicare-covered item other than a covered item already furnished to the individual, the supplier has furnished at least one covered item to the individual during the 15-month period preceding the date on which the supplier makes such contact.
Revised standard #11Agree not to make a direct solicitation (*as defined in §424.57(a)) of a Medicare beneficiary unless one or more of the following applies:

  1. The individual has given written permission to the supplier or the ordering physician or non-physician practitioner to contact them concerning the furnishing of a Medicare-covered item that is to be rented or purchased.
  2. The supplier has furnished a Medicare-covered item to the individual and the supplier is contacting the individual to coordinate the delivery of the item.
  3. If the contact concerns the furnishing of a Medicare-covered item other than a covered item already furnished to the individual, the supplier has furnished at least one covered item to the individual during the 15-month period preceding the date on which the supplier makes such contact.

 

New Standards

Supplier Standard #27:
Must obtain oxygen from a State-licensed oxygen supplier (applicable only to those suppliers in States that require oxygen licensure).
Supplier standard #28:
Is required to maintain ordering and referring documentation consistent with the provisions found in §424.516(f).
Supplier Standard #29:

  1. Except as specified in paragraph (c)(29)(ii) of this section, is prohibited from sharing a practice location with any other Medicare supplier or provider.
  2. The prohibition specified in paragraph (c)(29)(i) of this section is not applicable at a practice location that meets one of the following:
    1. Where a physician whose services are defined in section 1848(j)(3) of the Act or a nonphysician practitioner, as described in section 1842(b)(18)(C) of the Act, furnishes items to his or her own patient as part of his or her professional service.
    2. Where a physical or occupational therapist whose services are defined in sections 1861(p) and 1861(g) of the Act, furnishes items to his or her own patient as part of his or her professional service.
    3. Where a DMEPOS supplier is co-located with and owned by an enrolled Medicare provider (as described in §489.2(b) of this chapter). The DMEPOS supplier—
      1. Must operate as a separate unit; and
      2. Meet all other DMEPOS supplier standards.
Supplier Standard #30:

  1. Except as specified in paragraph (c)(30)(ii) of this section, is open to the public a minimum of 30 hours per week.
  2. The provision of paragraph (c)(30)(i) of this section is not applicable at a practice location where a—
    1. Physician whose services are defined in section 1848(j)(3) of the Act furnishes items to his or her own patient(s) as part of his or her professional service;
    2. Licensed non-physician practitioners whose services are defined in sections 1861(p) and 1861(g) of the Act furnishes items to his or her own patient(s) as part of his or her professional service; or
    3. DMEPOS supplier is working with custom made orthotics and prosthetics.

(e) Failure to meet standards —

  1. Revocation. CMS revokes a supplier’s billing privileges if it is found not to meet the standards in paragraphs (b) and (c) of this section. Except as otherwise provided in this section, the revocation is effective 30 days after the entity is sent notice of the revocation, as specified in §405.874 of this subchapter.
  2. Overpayments associated with final adverse actions. CMS or a CMS contractor may reopen (in accordance with §405.980 of this chapter) all Medicare claims paid on or after the date of a final adverse action (as defined in paragraph (a) of this section) in order to establish an overpayment determination.