Mail-order requirements offer Tennessee waltz

Tuesday, September 13, 2011

Providers who wish to bid for a national mail-order diabetes contract could be required to set up shop in Tennessee, say industry attorneys.

That's because to meet state licensure requirements to provide diabetes supplies in Tennessee, providers must have a physical location in that state.

"There are a number of large national companies, that, to my knowledge, don't have locations in Tennessee," said Denise Fletcher, an attorney with Brown & Fortunato in Amarillo, Texas. "Certainly, a number of regional companies that might be interested in playing with competitive bidding won't be allowed to do so unless they have a location there in Tennessee."

In its Aug. 19 announcement, CMS stated that providers who wish to bid in the mail order category must meet all licensure requirements in all parts of the United States. Thankfully, only a handful of states have licensure requirements for diabetes supplies, but those vary by state. Tennessee is the only state that requires a physical location, something Fletcher's afraid most providers don't even know. 

The National Supplier Clearinghouse has a list of general state licensure requirements posted on its website. It warns that providers are responsible for identifying and obtaining all licenses.

"It says you need a license but I don't think it goes into detail about what you have to do to obtain the license," said Elizabeth Jepson, an attorney with Brown & Fortunato.

Even if they do understand the requirement, providers could still find themselves scrambling to meet other requirements in time to submit a bid.

"Let's say I am in Texas and I want to do the national bid," said Fletcher. "I might get a license in time to bid in Tennessee but I am still not going to have a supplier number (for that location)."

CMS needs to take another look at the requirement, said Fletcher.

"Maybe we need to be talking to CMS and congressmen and making them aware of this," she said. "Maybe there needs to be some sort of carve out for Tennessee."