CMS tightens loan closet rules

Thursday, August 13, 2009

BALTIMORE – Loan closet arrangements could become a thing of the past, under the terms of a memo issued by CMS on Aug. 7.

The memo seeks to define and prohibit certain loan closet arrangements between HME providers and other practitioners, such as physicians or labs. Effective Sept. 8, such arrangements, including consignment closets and stock and bill arrangements must meet current quality standards. Most do not, it says.

In addition to existing supplies standards, the memo outlines additional standards:

• The title to the DMEPOS shall be transferred to the enrolled physician, non-physician practitioner practice at the time the DMEPOS is furnished to the beneficiary;

• The physician or non-physician practitioner shall bill for the DMEPOS supplies and services using their own enrolled DMEPOS billing number;

• All services provided to a Medicare beneficiary concerning fitting or use of the DMEPOS shall be performed by individuals being paid by the physician or non-physician practitioner’s practice, and not by any other DMEPOS supplier; and

• The beneficiary shall be advised that if he or she has a problem or

question regarding the DMEPOS, then the beneficiary should contact the physician or non-physician practitioner, and not the DMEPOS supplier who placed the DMEPOS at the physician or non-physician practitioner’s practice.