Standards of Behavior (Part 2)

The revised Medicare Supplier Enrollment Standards for DMEPOS have been in force for 10 months or so, since Sept. 27, 2010. Home medical equipment providers have implemented many of these revisions without much problem. But some significant changes have gone largely unnoticed, and these can present major problems for an unwary HME provider.

Further, misunderstandings and miscommunications about the revised rules can lead to real trouble. In these times of tightened compliance obligations and increased audits, home medical equipment companies must understand the changes and their implications.

Part 1 of this series (April 2011) examined the revisions to the existing supplier standards (1, 7, 8, 9 and 11). This article focuses on four brand new standards (27 through 30), an important new regulation regarding overpayments and some pertinent facts and opinions.

New Standard 27: Licensed Oxygen Suppliers

Standard 27 only applies to DMEPOS providers of respiratory services located in states that license oxygen suppliers. Such providers must obtain their oxygen from a state licensed supplier. CMS' stated rationale is "to ensure that oxygen suppliers promote quality in the furnishing oxygen or oxygen-related equipment." CMS presumably is concerned that a respiratory provider located in a state that licenses oxygen could obtain inferior product or service from a non-licensed supplier.

I have four observations. First, CMS' comments indicate the rule applies when a supplier must be either licensed or certified to distribute oxygen, even though the text of the regulation only mentions licensure. Second, CMS does not obligate a supplier to utilize an in-state licensed supplier; presumably, oxygen could be purchased from a supplier located in any other state requiring licensure.

Third, CMS states that it does not intend for this rule to impose any restrictions on a supplier's right to subcontract the pickup and delivery of liquid and gaseous oxygen cylinders. Fourth, this standard ties to the supplier's practice location. Thus, an entity which has practice locations in multiple states only needs to purchase oxygen from licensed suppliers in those states where licensure/certification is required.