New DMEPOS Final Rule to be Published on August 27

CMS will publish the final rule: Medicare Program; Establishing Additional Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Supplier Enrollment Safeguards

According to CMS, the final rule, which is based on a proposed rule published on January 25, 2008, “will clarify, expand, and add to the existing enrollment requirements that Durable Medical Equipment and Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers must meet to establish and maintain billing privileges in the Medicare program.”

Competitive bidding issues addressed in the rule include:

*  “DMEPOS suppliers participating in competitive bidding must maintain all applicable State licenses for the products and services they are bidding on or furnishing in each competitive bidding area. In addition, we believe that it is the responsibility of DMEPOS suppliers participating in competitive bidding to ensure that any subcontractor obtains and maintains all appropriate State licenses in the area where they are providing services. We maintain that DMEPOS suppliers awarded a competitive bidding contract and that are subcontracting will be allowed on a phase-in basis for licenses services and licensed professionals participating in competitive bidding.”

*  “Comment: One commenter stated that they are opposed to the revisions in §424.57(c)(1) because it would prevent all but the largest DMEPOS suppliers from bidding on contracts under the DMEPOS competitive bidding program because smaller businesses would not be able to hire staff all the potential licensed professionals as W-2 employees.

Response: We want to clarify that the employment requirement will not apply to contract suppliers participating in the competitive bidding program and we have reflected this intention in §424.57(c)(1)(ii)(B).

Comment: Several commenters believe that the proposed rule conflicts with the rules for participation in the competitive bidding program, as the competitive bidding program itself allows items and services in a product category to be supplied directly or through a subcontractor and provides safeguards to allow subcontracting.

Response: We agree with these commenters, and have revised §424.57(c)(1)(ii)(B) to reflect that the employment requirement for the furnishing of licensed services does not apply to contract suppliers participating in the competitive bidding program.”

*  “Comment: One commenter asks how disallowing the contracting of licensed individuals could affect competitive bidding, given that a supplier is required to submit a bid for all of the oxygen modalities.

Response: When allowed under State law, we will permit contracting for licensed services, so long as the DMEPOS supplier complies with State licensure laws and is ultimately responsible for the services provided by a contractor. In order for a DMEPOS supplier to be able to participate in the DMEPOS competitive bidding program, the supplier must comply with all of the DMEPOS supplier standards and be enrolled in the Medicare program as a DMEPOS supplier.

Comment: One commenter asked if this rule is requiring all oxygen suppliers to directly provide liquid oxygen since CMS competitive bidding rules allow for contracting in certain areas.

Response: No, all oxygen suppliers do not need to directly provide liquid oxygen. A supplier can use a qualified subcontractor to deliver oxygen. If the supplier is not in a competitive bidding area and does not furnish liquid oxygen as part of their business model and the prescription specifically indicates that the physician is ordering liquid oxygen, the supplier would either need to get approval from the ordering physician to furnish a different modality or refer the beneficiary to another supplier. If a physician orders liquid oxygen in areas that fall under competitive bidding, then the oxygen supplier must supply liquid oxygen.”

*  “To ensure that Medicare is making correct payments to only legitimate DMEPOS suppliers, we implemented a comprehensive payment and enrollment strategy. This strategy includes developing and implementing the statutorily-mandated competitive bidding program, making revisions to the National Supplier Clearinghouse contract, implementing a DMEPOS demonstration project, and publishing a proposed rule that would require DMEPOS suppliers to obtain a surety bond.”

An advance copy of the final rule is available at http://thecre.com/pdf/2010-21354_PI.pdf