Final Rule Modifying DMEPOS Supplier Standards Is Now Effective

On March 14, 2012, the Centers for Medicare and Medicaid Services (“CMS”) published a final rule finalizing proposed revisions to the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (“DMEPOS”) supplier standards (“Final Rule”). An article summarizing the April 4, 2011 proposed rule can be found here.

The Final Rule modified some of the more restrictive DMEPOS supplier safeguards originally implemented on September 27, 2010 and, in so doing, eased the burden on DMEPOS suppliers while preserving standards protective of beneficiaries. The revisions are as follows:

1. The Final Rule Removes the Definition of “Direct Solicitation.” Under the regulations in place before April 13, 2012, DMEPOS suppliers were prohibited from directly soliciting Medicare beneficiaries in any way, whether by telephone, computer, e-mail, instant messaging or in person, unless:

The beneficiary has given written permission allowing the supplier to contact him/her concerning the furnishing of a covered item;
The supplier has furnished a covered item and is contacting the beneficiary to coordinate delivery of the item; or
The contact concerns a covered item other than one already furnished and the supplier has furnished at least one covered item to the beneficiary within the previous 15 months.

Under the Final Rule, the supplier still is prohibited from soliciting the beneficiary by telephone unless any of the above conditions apply; however, the prohibition against other types of contact, such as e-mail, has been removed. This change reflects CMS’s acknowledgement of the difficulties faced by DMEPOS suppliers under the more restrictive regulations.

2. DMEPOS Suppliers, Including DMEPOS Competitive Bidding Program Contract Suppliers, May Contract with Licensed Agents to Provide DMEPOS Services Unless Prohibited by State Law. The former regulations provided an extra layer of oversight, via state law, concerning the circumstances under which DMEPOS suppliers could subcontract out the provision of DMEPOS licensed services. The absence of specific state laws governing certain areas of DMEPOS supplier oversight created confusion as to whether and under what circumstances a DMEPOS supplier could contract with licensed agents for the provision of certain services. The Final Rule clarifies that if a state requires licensure to furnish certain items or services, the DMEPOS supplier must be licensed to provide the items or services and may contract with a licensed individual or other entity to provide the licensed services unless expressly prohibited by state law.

3. CMS Will Not Enforce Compliance with Local Zoning Requirements. Prior to April 13, 2012, the DMEPOS supplier regulations required suppliers to operate their businesses and furnish covered supplies in compliance with all local zoning requirements. This regulation originally was promulgated to help protect against suppliers operating DMEPOS businesses out of their homes. Upon further review, CMS has determined that, due to the wide variance in state and local laws and the resultant difficulty of enforcement of such laws by CMS contractors, the task of ensuring compliance with local zoning requirements is best left to the states. CMS also notes that suppliers’ compliance with state and local laws is in part accomplished by the state’s verification of the supplier’s licensure status, which the National Supplier Clearinghouse validates.

4. Facility Minimum Square Footage Exception Applies to Non-licensed Prosthetists/Orthotists if No Licensure Under State Law. The DMEPOS supplier standards require suppliers to maintain a physical facility of at least 200 square feet on an appropriate site. The former regulations articulated an exception to the minimum square footage requirement for state-licensed orthotic and prosthetic personnel providing custom fabricated orthotics or prosthetics in private practice (“Exception”). The Final Rule extends the Exception to unlicensed orthotic and prosthetic professionals if the state in which they practice does not offer licensure. However, CMS reiterates that the Exception applies only to licensed orthotic and prosthetic professionals if the state (in which they practice) does offer licensure.

5. Physical Therapist and Occupational Therapist Suppliers Need Not Comply with Minimum Open Hours Rule. The DMEPOS supplier standards require suppliers to be open to the public a minimum of 30 hours per week with certain exceptions. The former regulations stated one of the exceptions to this “minimum hours” requirement was for certain “licensed non-physician practitioners” furnishing items to their own patients as part of the provision of professional services. The Final Rule clarifies that the “minimum hours” requirement for this particular exception specifically applies only to physical and occupational therapists. The exceptions for physicians and the DMEPOS supplier working in custom orthotics and prosthetics remain otherwise unchanged.

Practical Takeaways

In light of the published final rule, DMEPOS suppliers may now want to:

Revisit their current policies and procedures regarding patient solicitation to ensure compliance with the newly revised standards. Suppliers should consider the implementation of a process to obtain written consent for the patient to be contacted by a DMEPOS supplier, if one is not already in place.
Review all licensed agent arrangements and opportunities to contract with licensed agents for the provision of certain permissible services.
Stay abreast of local zoning laws to ensure continued compliance.
For orthotic and prosthetic suppliers, verify they are in compliance with the newly revised minimum square footage requirement.
Revisit hours of operation to ensure compliance with the newly revised “minimum hours” requirement.

The Final Rule can be found here and became effective April 13, 2012.

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