• CMS Delays Implementation Date of Limitations on DMEPOS Consignment Closets
  • September 10, 2009 | Author: Christopher Strickland
  • Law Firm: King & Spalding LLP - Washington Office
  • On September 1, 2009, the Centers for Medicare & Medicaid Services (CMS) announced that it was revising Change Request (CR) 6528 in order to delay by six months the effective date for imposing limits on vendors of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) that sell items at offices of healthcare providers. The new effective date for CR 6528 is March 1, 2010. This delay should allow suppliers additional time to decide whether restructuring existing consignment closet or “stock and bill” arrangements is necessary, and also allow physicians and non-physician practitioners time to obtain supplier numbers from the National Supplier Clearinghouse (NSC).

    CR 6528 instructs the NSC that use of consignment closets and/or stock and bill arrangements must be in compliance with current Medicare supplier standards. In addition, the CR defines additional specific compliance standards for NSC validation for consignment closets and stock and bill arrangements added to the Medicare Program Integrity Manual (PIM), chapter 10, section 21.8. According to the CR, Medicare allows Medicare-enrolled DMEPOS suppliers to maintain inventory at a practice location owned by a physician or non-physician practitioner for the purpose of DMEPOS distribution when the following conditions are met by the DMEPOS supplier and verified by the NSC-MAC:

    • The title to the DMEPOS shall be transferred to the enrolled physician or non-physician practitioner’s practice at the time the DMEPOS is furnished to the beneficiary.
    • The physician or non-physician practitioner’s practice 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, not by any other DMEPOS supplier.
    • The beneficiary shall be advised that, if they have a problem or questions with the DMEPOS, they should contact the physician or non-physician practitioner’s practice, not the DMEPOS supplier who placed the DMEPOS at the physician or non-physician practitioner’s practice.

    The CR also states that the NSC-MAC shall verify that no more than one enrolled DMEPOS supplier shall be enrolled and/or located at the same practice location. (However, this prohibition does not exist for one or more physicians enrolled as DMEPOS suppliers at the same physical location.) The CR further requires that a practice location must have a separate entrance and separate post office address, recognized by the United States Postal Service.

    Suppliers and physicians will have to revisit their contractual arrangements regarding consignment closets prior to March 1, 2010 in order to determine whether their existing arrangements meet the requirements to be added to the Medicare Program Integrity Manual.