"DME Suppliers"

Published on: November 13, 2012

CMS Releases DME Face-to-Face Encounter Final Rule

On November 1, 2012, the Centers for Medicare and Medicaid Services (CMS) published its final rule detailing the durable medical equipment (DME) face-to-face encounter requirements. In response to the various comments submitted, CMS made several key revisions to the proposed rule that was released on July 6, 2012.

The DME face-to-face encounter final rule requires that a physician, physician assistant, nurse practitioner or clinical nurse specialist perform a face-to-face encounter as a condition of payment for certain DME items. Even though the face-to-face encounter may be performed by any of these practitioners, the encounter must be documented by the physician in order for the supplier to receive payment.

In its final rule, CMS states that the requirements contained in the final rule will only apply to new orders written on or after the effective date (i.e. the rule will not be applied retroactively to orders already written). The effective date for this provision is July 1, 2013, which CMS believes will give suppliers sufficient time to implement the new policy.
In addition, the final rule also made changes to the face-to-face timing requirements, which include: (1) the face-to-face encounter must occur within the 6 months preceding the written order, which is an expansion from the original requirement of 3 months; and (2) the option to perform the face-to-face encounter 30 days after the written order has been removed from the rule. Furthermore, Medicare beneficiaries discharged from a hospital do not need to receive a separate face-to-face encounter, so long as the physician or treating practitioner issues the DME order within 6 months after the date in which beneficiary was discharged from the hospital.

The final rule also states that for DME items that do not require written orders before delivery, verbal orders are sufficient for the supplier to dispense DME; however, the supplier must obtain written orders prior to submitting a claim for payment. In contrast, for DME items that do require written orders before delivery, the supplier must have the written order, including the face-to-face documentation, prior to delivery when submitting a claim for payment.

Finally, CMS removed the proposed requirement that DME orders include “necessary and proper usage instructions” and the diagnosis. However, CMS still expects to see related diagnoses included in the beneficiary’s medical records and expects suppliers to continue to provide instructions to the beneficiary or care giver for proper usage of the DME item.
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Published on: March 20, 2012

CMS Adopts Final Rule for DMEPOS Standards

by Wachler & Associates, P.C.

The Centers for Medicare and Medicaid Services (CMS) has published a final rule for standards regarding Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers. The rule, published March 14, 2012 in the Federal Register, revises and specifies the definition of “direct solicitation” as it applies to DMEPOS suppliers. The rule also eliminates the requirement that DMEPOS suppliers comply with local zoning ordinances. In the official comments, CMS indicated that all zoning issues are better left to the states.

The rule limits the contact a DMEPOS supplier can make with a beneficiary. Previously, “direct solicitation” had been broadly defined as telephonic contact. The August 27, 2010 final rule broadened the definition of “direct solicitation” to include not only telephonic contact, but also in-person contact, email, and instant messaging. The new adopted rule, which will be effective April 13, 2012, eliminates the prohibition on “direct solicitation” and only restricts direct contact with the beneficiary by telephone. The new adopted rule further requires that a DMEPOS supplier must have written permission from the beneficiary to contact the beneficiary by telephone.

The new rule also allows DMEPOS suppliers to contract with a third party to provide licensed services, provided the third party is appropriately licensed under applicable state laws. The prior rule prohibited DMEPOS suppliers from contracting licensed services.
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Published on: January 27, 2012

CMS Clarifies Procedure for MAC Claims Against DMEPOS Suppliers’ Surety Bonds

by Wachler & Associates, P.C.

All Medicare suppliers of Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) must obtain and maintain a surety bond of at least $50,000 to participate in the Medicare program. A Centers for Medicare and Medicaid Services (CMS) recent transmittal, effective February 21, clarifies this requirement and describes the procedures that DME Medicare Administrative Contractors (MACs) must follow when making claims against a provider’s surety bond.

Under 42 CFR § 424.57(d)(5)(i), a surety is liable to CMS for 1) the amount of any unpaid claim, plus accrued interest, for which the supplier of DMEPOS is responsible, and 2) the amount of any unpaid claim, civil monetary penalty (CMP) or assessment imposed by CMS or the Office of Inspector General (OIG) on the DMEPOS supplier, plus interest.

First, the DME MACs will notify the surety that payment of a claim must be made to CMS within 30 days. The letter must 1) identify the specific amount to be paid, 2) be accompanied by “sufficient evidence” of the unpaid claim, 3) state that payment shall be made via check or money order and that the Payee shall be the DME MAC, and 4) identify the address to which payment shall be sent. The DME MAC will notify the supplier when payment has been made.

DMEPOS suppliers must then obtain an additional surety bond within 30 calendar days of that letter, and submit to the National Supplier Clearinghouse (NSC) additional coverage of an amount that equals or, in the case of a final adverse action, exceeds $50,000. Suppliers must be aware that failure to submit such additional surety bond coverage within 30 days may result in the NSC revoking the supplier’s Medicare billing privileges.

If the DMEPOS supplier successfully appeals, CMS will notify the surety via letter and repay the surety within 30 days. Although a supplier may want to avoid the necessity of securing an additional surety bond, the DMEPOS appeals process may take longer than 30 days and prudent DMEPOS suppliers should obtain additional coverage to ensure continued Medicare billing privileges.

Published on: September 27, 2011

DMEPOS Competitive Bidding Round 2 Update

by Wachler & Associates, P.C.

The Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Process was mandated by Congress through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which replaced the current fee schedule payment procedure for DMEPOS items with a competitive bidding process. The purpose of the statute is to set DMEPOS payment amounts in a more effective manner, which will result in saving the Medicare program money and reducing beneficiary out-of-pocket expenses.

Bids closed for Round 1 of the DMEPOS competitive bidding program on December 21, 2009. In November of 2010 CMS announced the winners of Round 1 and in January of this year implemented the contracts.

This past summer, the Centers for Medicare and Medicaid Services (CMS) began its pre-bidding supplier awareness program. For this fall, CMS will announce the bidding schedule, begin the bidder education program, and commence the bidder registration period to obtain user ID and passwords. The bidding will begin in winter 2012.

Published on: September 15, 2010

CMS Publishes a New Rule Affecting DME Providers

by Wachler & Associates, P.C.

The Centers for Medicare and Medicaid Services (CMS) recently published a new rule affecting Durable Medical Equipment (DME) providers. The rule, effective September 27, 2010, strengthens Medicare’s standards for marketing and solicitations and expands enrollment requirements for DMEPOS providers.

Important highlights from the rule include:

– DME providers will be required to remain open to the public for at least 30 hours per week, except for physicians or licensed non-physician practitioners furnishing services to their own patients as part of their professional service and DME providers working with custom orthotics and prosthetics.

Published on: August 18, 2010

OIG Publishes Report Showing Overpayments to DME Suppliers

by Wachler & Associates, P.C.

The OIG recently published a report showing that from 2006 to 2008, Medicare allowed $2.2 million for routine maintenance and servicing of capped rental durable medical equipment (DME) with rental periods. These payments were erroneously made because the Deficit Reduction Act of 2005 (DRA) dramatically limited, if not eliminated, routine maintenance and servicing for beneficiary-owned DME with rental periods that began after January 1, 2006. During the same time period, OIG found that Medicare allowed nearly $4.4 million for repairs for beneficiary-rented capped rental DME. Medicare has never allowed payments for repairs of beneficiary-rented capped dental DME as the cost for repairs are already included in the monthly rental payments to suppliers.

As a result of its discoveries, the OIG is recommending that the Centers for Medicare and Medicaid Services (CMS) establish an edit to deny claims for routine maintenance and services of capped rental DME periods beginning after January 1, 2006 and for claims for repair of beneficiary-rented capped rental DME. In addition, the OIG urges CMS to enhance the enforcement of existing payment requirements for beneficiary-owned capped rental DME, to begin to track repair costs for capped rental DME and to take appropriate action on erroneously allowed claims for maintenance and servicing, repair and payment errors.

DME suppliers should expect to see audit activity from CMS contractors on this issue and may want to consider conducting self-audits as part of their compliance programs.