This is a question that has been debated by the Brown &
Fortunato attorneys. While we recognize what the Competitive
Bidding Implementation Contractor and the National Supplier
Clearinghouse have said about this issue, there is not an
across-the-board consensus regarding how HME companies should
respond to the CBIC/NSC guidance. Let me explain.
Among other things, the CBIC/NSC guidance requires a
subcontractor of a Medicare-enrolled DMEPOS supplier to be
accredited when performing certain tasks. (For this article, I use
the term “subcontractor” to mean a person or entity
that is not a Medicare-enrolled DMEPOS supplier.) According to the
CBIC/NSC guidance, the subcontracting requirements stem from the
DMEPOS supplier standards. However, neither the CBIC nor the NSC
has identified a specific standard that requires subcontractor
accreditation.
The most relevant standard reads: “All suppliers of DMEPOS
… must be accredited by a CMS-approved accreditation
organization in order to receive and retain a supplier billing
number.” To me, this standard clearly does not apply to an
entity that is not seeking to “receive and retain a supplier
billing number.”
Another potential basis for requiring subcontractors to be
accredited is the Medicare Improvements for Patients and Providers
Act, the law that, among other things, delayed competitive bidding.
MIPPA requires “suppliers furnishing … [DMEPOS]
directly or as a subcontractor for another entity” to be
accredited. To be a “supplier” as the term is used in
the Medicare context, an entity must be enrolled in the Medicare
program. It is clear to me, therefore, that the MIPPA accreditation
requirement does not apply to non-suppliers acting as
subcontractors.
The CBIC/NSC guidance states that a DMEPOS supplier may
subcontract for the following services: purchase of inventory;
delivery and instruction (including patient set-up); and repair of
rental equipment. The guidance requires that a subcontractor
performing patient instruction (including patient set-up) be
accredited for the item for which the instruction or set-up is
provided, unless an exemption to the DMEPOS accreditation
requirement applies.
Under the CBIC/NSC guidance, a subcontractor will need to obtain
accreditation from one of the 10 deemed DMEPOS accreditation
organizations (AO). The NSC's guidance implies that full DMEPOS
accreditation is required, though there is no direct guidance on
this issue. I believe that a DME supplier (and its subcontractor)
may rely on an AO to use the appropriate criteria in accrediting
the subcontractor.
There are a number of subcontract arrangements that are affected
by the CBIC/NSC guidance. For example, a DME supplier may enter
into an equipment consignment/patient set-up arrangement with a
sleep lab, under which the sleep lab fits patients with CPAPs and
educates them regarding adjustments, cleaning and changing out
replacement parts.
Must the sleep lab be accredited by an AO? As mentioned, neither
the supplier standards nor MIPPA requires a subcontractor to be
accredited, and certainly it can be argued that a sleep lab or
other entity that has already satisfied its own Medicare enrollment
requirements should not have to be accredited as a DMEPOS supplier
as well.
An argument can be made that the CBIC/NSC subcontracting
guidelines are not a permissible interpretation of the supplier
standards but are, in effect, new regulations that must be issued
through the rulemaking process with an opportunity for public
comment. In addition, it can be argued that when CMS rescinded
Transmittals 297 and 300 (regarding consignment closets, or
“stock-and-bill” arrangements), it implicitly rescinded
the subcontracting guidelines as well.
For these reasons, and because there has been no guidance on how
or when CMS will enforce the requirements, some HME owners have
decided to move forward with subcontracting arrangements with
non-DMEPOS-accredited subcontractors and have assumed whatever risk
is associated. However, we cannot entirely ignore the guidance from
the CBIC and the NSC. At the end of the day, you must make a risk
assessment as to the decision your company will make.
Read more Law School
columns.
Jeffrey S. Baird, Esq. is chairman of the Health Care Group
at Brown &
Fortunato, P.C., a law firm based in Amarillo, Texas. He
represents pharmacies, infusion companies, home medical equipment
companies and other health care providers throughout the United
States. Baird is board-certified in health law by the Texas Board
of Legal Specialization. He can be reached at 806/345-6320 or
jbaird@bf-law.com.
