On August 27, 2010, the Centers for Medicare & Medicaid Services (CMS) published a final rule that clarifies and expands the requirements that suppliers of durable medical equipment and prosthetics, orthotics, and supplies (DMEPOS) must meet to establish and maintain Medicare billing privileges. Among other things, the rule prohibits suppliers from sharing a practice location with any other Medicare supplier or provider, unless the practice location is: (1) where certain physicians or nonphysician practitioners furnish items to their own patients as part of their professional service; (2) where a physical or occupational therapists furnishes items to their own patients as part of their professional service; or (3) where a hospital, home health agency, skilled nursing facility, or other Part A provider that is enrolled in Medicare co-locates with a DMEPOS supplier that meets all other supplier standards and that is owned by that Part A provider and is a separate unit. The rule also imposes new physical facility requirements on suppliers, including square footage, accessibility, signage, and storage requirements (these rules also apply to “closed door” businesses such as a pharmacy or supplier providing services only to beneficiaries residing in a nursing home). Among other things, the rule also:

  • Clarifies the prohibition on the direct solicitation of Medicare beneficiaries.
  • Defines adverse final action and allows CMS to reopen all Medicare claims paid on or after the date of a final adverse action in order to establish an overpayment determination.
  • Prohibits suppliers from contracting with another individual to perform licensed services, with certain exceptions.
  • Requires the use of a primary business telephone, and prohibits the use of cellular phones, beepers, pagers, or answering machines/answering services as the primary business telephone.
  • Mandates that suppliers obtain oxygen from a state-licensed oxygen supplier (as applicable in the state).
  • Requires suppliers to maintain ordering and referring documentation consistent with regulations.
  • Establishes minimum hours of operation (with certain exceptions).
  • Permits CMS to revoke a supplier's billing privileges if it is found not to meet certain supplier standards.

The effective date is September 27, 2010 (although there are separate deadlines for compliance with the physical facility standards for existing suppliers with leases that expire after that date).