Late last month the federal Centers for Medicare and Medicaid Services (CMS) passed a final rule that will increase the regulatory burden on suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). The new rule establishes four additional supplier enrollment safeguards that all DMEPOS suppliers must meet in order to establish and maintain Medicare billing privileges.

Effective September 27, 2010, CMS added four new standards to the current list of 26 supplier standards that all DMEPOS suppliers must continuously satisfy. The rule also amends five of the existing supplier standards by expanding the scope or clarifying the language of the standards.

CMS continues to scrutinize DMEPOS suppliers for fraud. To that end, the new and amended standards focus on physical facility and licensing requirements. These new burdens will likely increase the costs and expenses to legitimate DMEPOS suppliers, with the hardest hit to small or new suppliers.

Important Changes to Existing Supplier Standards.

Standard #1: Licensing. Supplier Standard #1 has been revised to increase requirements regarding licensing. Under the revised standard, DMEPOS suppliers must now possess and maintain any required license required for an entity to provide a licensed service or must employ licensed individuals to provide licensed services and may not contract with any entity or individual. This change means that DMEPOS supplier cannot use independent contractors or contracted entities to meet licensure requirements. (42 CFR §424.57(c)(1))

Standard #7: Site Requirements. CMS revised Supplier Standard #7 to clarify what qualifies as an “appropriate site” for DMEPOS suppliers and now requires the DMEPOS suppliers to maintain a site with a minimum of 200 square feet. Also, CMS clarified that the “appropriate site” requirements applies to all DMEPOS suppliers even those that operate “closed door” businesses (i.e. pharmacies and those providing DMEPOS within a nursing home). (42 CFR §424.57(c)(7)).

Standard #9: Telephone Number. Standard #9 now clarifies that each DMEPOS supplier must maintain a primary business telephone at its site. CMS prohibits the use of cellular phones or pager or the exclusive use of voicemail, answering services and fax machines as the DMEPOS supplier’s primary telephone number. It also prohibits forwarding calls from the primary business telephone number to a cellular phone or pager during the DMEPOS supplier’s posted business hours. Forwarding services may be used when the site is not open. (42 CFR §424.57(c)(9))

New Supplier Standards.

New Standard #27: Oxygen. DMEPOS suppliers of oxygen must now obtain oxygen from state licensed oxygen suppliers in states where oxygen suppliers are required to be licensed. (42 CFR §424.57(c)(27))

New Standard #28: Documentation DMEPOS suppliers must now maintain ordering and referring documentation, including the national provider identification (NPI) number of the physician or non-physician practitioner. These records must be maintained for 7 years. (42 CFR §424.57(c)(28))

New Standard #29: No Shared Locations. DMEPOS suppliers are now prohibited from sharing a practice location. The standard permits DMEPOS suppliers to be located in the same building so long as each supplier has a separate postal address, including separate suite number if applicable. CMS provides a number of exceptions to this shared practice location standard. The separate location rule does not apply to: (a) physicians, non-physician practitioners, occupational therapists or physical therapists, each of whom furnish items to his or her patients as part of his or her professional practice; and (b) DMEPOS suppliers located within the facility of another Medicare enrolled provider so long as the DMEPOS supplier is operated in a separate unit and meets the Medicare Supplier Standards. (42 CFR §424.57(c)(29))

New Standard #30: Public Hours. DMEPOS suppliers must now be open to the public a minimum of thirty (30) hours per week. This does not apply physicians and non-physician providers who furnish items directly to their patients or suppliers working with custom made orthotics and prosthetics. (42 CFR §424.57(c)(30))

Final Rule available at: