Tuesday, November 30, 2004

Get a new supplier number
with Kelly Pickens

Q. My HME company is expanding by purchasing small entities. If I purchase the stock of a DME/HME company, may I use the existing Medicare Supplier Number to avoid reimbursement delays?

A. Technically, the DMEPOS Supplier Standards prohibit a company or individual from allowing another company or individual to use its supplier number. The NSC has stated that even when a company is transferred via a stock sale, the buyer should not use the seller’s supplier number. Rather, services and supplies provided during the transition should be billed under a new supplier number, once received.

This position seems to be inconsistent with the motivators driving the stock transaction - to create a seamless transaction where reimbursements are not delayed. This also seems inconsistent with the existing requirements to update the Supplier Application within 30 days of a change in information. Thus, in reality, there currently seems to be little consequence of a new owner’s temporary use of the existing supplier number.

Nevertheless, until the Supplier Standards are revised or clarified, when purchasing an HME company, the previous owner should submit a request for an inactivation of the existing supplier number. The new buyer then must submit a change of information application along with the Stock Sale Agreement. A new site inspection will take place and the new number will be issued within 30-90 days. The buyer may then submit past claims under the new supplier number. It is therefore important for companies to consider this delay as well as NSC’s aggressive compliance enforcement activities when determining whether an asset or stock transaction is the best option.

Kelly Pickens is an attorney with the Health Law Center. Contact her at