Supplier standards: What's new?

Friday, February 29, 2008

Small providers may ask why CMS appears to be tilting the playing field in favor of larger players
On Jan. 25, CMS published proposed revisions to several of the Medicare DMEPOS supplier standards, along with five proposed new standards. In its commentary, CMS stated that in the past it has been too easy for unqualified and unscrupulous HME suppliers to enroll in the Medicare program. The new standards, according to CMS, are intended to ensure that only legitimate and qualified suppliers are permitted to enroll.
If adopted as proposed, the new standards will require changes in some well-established business practices. Here is a summary of the most significant changes.
* Currently, standard 1 requires a supplier to comply with all federal and state licensure and regulatory requirements in operating its business. The proposed version would provide that if the state requires a license to furnish particular services, the supplier may not provide those services through a contract with another individual or entity. Only the owner or a W-2 employee of the supplier could provide services requiring a license. This change would mean, for example, that suppliers would no longer be permitted to engage respiratory therapists as independent contractors to provide services for which state law requires licensure; they would have to hire them as W-2 employees.
* The current standards require that a supplier maintain a visible sign with posted hours of operation. CMS is proposing to add a requirement that if a supplier's location is in a building complex, the sign must be visible at the main entrance of the building. This requirement will pose problems for suppliers that are located in buildings that do not permit tenant signage at the entrance.
* The proposed standards would also make closed-door suppliers subject to the same physical facility requirements as other suppliers. A supplier that serves only residents of a nursing home would nevertheless be required to post its hours of operation at the entrance to the building and to keep its facility accessible to the public during its posted business hours. All of the physical facility requirements would apply "regardless of whether beneficiaries routinely visit the facility."
* Standard 9 requires a supplier to maintain a locally-listed or toll-free primary business telephone number and prohibits the use of an answering service, answering machine or pager number as the primary business telephone number. CMS proposes to add a provision that the primary business telephone must operate at the supplier's location, prohibiting against forwarding calls from the primary business telephone to a cellular phone or pager during the supplier's hours of operation.
* Currently, standard 11 prohibits HME suppliers from soliciting beneficiaries by telephone. CMS's proposal would expand the prohibition to cover all solicitation, including telephone, e-mail or in-person contact. This provision could be interpreted to prohibit supplier participation in health fairs and similar events. The proposal would also prohibit "coercive response internet advertising," a term that is not defined.
The new standards that CMS proposes to add are as follows:
* If a provider is located in a state that licenses oxygen suppliers, it would be required to obtain its oxygen from a licensed supplier.
* Suppliers would have to retain ordering and referral documentation for seven years after payment of a claim.
* A supplier would not be permitted to share a practice location with any other Medicare supplier, including a physician.
* Supplier locations would be required to be open to the public at least 30 hours per week, except for suppliers of custom-made or custom-fitted orthotics and prosthetics. CMS also intends to require suppliers to notify the National Supplier Clearinghouse in advance of any change in hours of operation.
* A federal or state tax delinquency would be grounds for revocation of a supplier's billing privileges.
Although CMS says that its proposals are aimed at preventing fraudulent and unqualified suppliers from enrolling in the Medicare program, some of the changes will impose burdens on all suppliers, whether legitimate or not, and particularly on small suppliers. Most prominently, the proposal to prohibit suppliers from contracting for services requiring licensure would make it impractical for many small suppliers to provide any such services. Requiring suppliers to keep their locations staffed at least 30 hours per week would also affect small suppliers most heavily. Furthermore, one employee at a location would have to be available to answer phone calls at all times during operating hours, because phone coverage could not be provided by forwarding calls to a cellular phone. Since some of the proposed standards have only a tenuous connection to prevention of fraud, small suppliers may ask why CMS appears to be tilting the playing field in favor of the larger players. HME
Tim Webster is an attorney with Brown & Fortunato in Amarillo, Texas.