Proposed rule modifies DMEPOS supplier standards adopted in 2010

Medicare and Medicaid

Proposed rule modifies DMEPOS supplier standards adopted in 2010 CMS has issued a Proposed rule, applicable to all durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) suppliers, that would revise and clarify several DMEPOS supplier standards set forth in 42 C.F.R. §424.57(c)that were adopted in the Final rule published in the Federal Register on August 27, 2010 at 75 FR 52629. The Proposed rule would revise regulations governing (1) prohibitions on “direct solicitation,”(2) contracts with licensed agents, (3) compliance with local zoning laws, and (4) certain state licensing requirement exceptions.

Direct solicitation

CMS has discovered that implementation of the expanded rule on “direct solicitation” as written in the 2010 Final rule was not feasible and the definition was overly broad. CMS would remove the definition of “direct solicitation” at §424.54(a)and revert to restrictions on suppliers regarding “direct solicitation” effective before the publication of the August 27, 2010, Final rule (see §424.57(c)(11)). The Final rule enlarged the scope of the provision governing the “direct solicitation” of Medicare beneficiaries by DMEPOS suppliers extending the prohibition beyond prohibiting unsolicited telephone contacts to include in-person contacts, e-mail, and instant messaging. The intent of the Final rule was to limit the circumstances in which DMEPOS suppliers could directly contact suppliers thus inhibiting the direct, coercive, and targeted solicitation of seniors. Although CMS is concerned about the potential for abuse caused by “direct solicitation” by DMEPOS suppliers, it has concluded that further evaluation and investigation is need to determine how to address this concern.

Contractual arrangement issues

In the 2010 Final rule, the regulation at §424.57(c)(1)(ii)led to confusion among suppliers as to who they might contract with under the program. CMS has proposed to clarify who DMEPOS suppliers may contract with under the Medicare program by removing the reference to competitive bidding program contract suppliers stating that it is unnecessary and redundant. Instead, the Proposed rule specifies that DMEPOS suppliers may contract with an individual or entity for licensed services unless expressly prohibited by state law. CMS noted that as with other suppliers, contract suppliers may contract for licensed services unless prohibited by the state.

Local zoning laws

CMS also would remove the language at §424.57(c)(1)(iii)requiring DMEPOS suppliers to comply with all local zoning laws as part of supplier standards. CMS stated that state and municipal laws vary considerably and are often subject to frequent changes that are not readily accessible by Medicare contractors. CMS believes that the enforcement of zoning requirements is best left up to the states and local municipalities that would be most familiar with the requirements and would have jurisdiction over them.

State licensing requirement exceptions

Current regulations require DMEPOS suppliers to maintain a facility and meet certain square footage requirements. The regulations provide for an exception to the square footage requirement for state-licensed orthotic and prosthetic professionals providing custom fabricated orthotics and orthotics in private practice (see §424.57(c)(7)(i)(A)). The Proposed rule would add a provision to allow the exception to square footage requirements to apply to non-state licensed prosthetic and orthotic professionals in private practice when the state does not offer a license for such professionals.

Finally, current regulations require suppliers to be open to the public a minimum of 30 hours per week and provide an exception to the minimum hours of operations requirement for certain licensed nonphysician practitioners. CMS would modify the exception provision at §424.57(c)(30)(ii)(B)to clarify which nonphysician practitioners qualify for the minimum hours of operations exception by specifically referring to the applicable sections of the law.

Proposed rule, April 4, 2011, ¶220,827

For more information on this and related topics, consult the CCH® Medicare and Medicaid Guide.

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