AMARILLO, Texas — In the current Round 1 rebid of Medicare's DMEPOS competitive bidding program, CMS' Competitive Bidding Implementation Contractor has issued several announcements regarding subcontracting and accreditation. The following Q&A on the topic from health care attorneys Jeff Baird and Phuong D. Nguyen of Brown & Fortunato is based on current guidance from the CBIC (as of Oct. 1), but Baird cautions it may be subject to change.
Q: What services may a subcontractor perform?
A: Under current guidance, a subcontractor may perform the following services: (i) purchase of inventory; (ii) delivery and instruction; and (iii) maintenance and repair of rented equipment. The CBIC has stated that a supplier may not subcontract for the following services: (i) intake and assessment; (ii) coordination of care with physicians; (iii) submission of claims on behalf of beneficiaries; (iv) ownership and responsibility for equipment furnished to beneficiaries; and (v) ensuring product safety. A supplier may not subcontract with an entity or person that is excluded from Medicare, a state health care program, or any federal government executive branch procurement program or activity.
Q: May a supplier use a billing contractor to submit claims?
A: Yes. A supplier may use a billing contractor to submit claims on behalf of the supplier. Also, when a beneficiary requests that the supplier submit a claim on behalf of the beneficiary, the supplier may use its billing contractor to submit the claim. The CBIC has stated that a billing contractor is not considered a subcontractor under its subcontracting guidelines.
Q: Do subcontractors need to be accredited?
A: A subcontractor that only performs the "purchase of inventory" service need not be accredited. A subcontractor that only delivers the item (such as UPS or FedEx) need not be accredited. Similarly, a subcontractor that only repairs equipment that a supplier is renting to a beneficiary need not be accredited.
However, a subcontractor that performs equipment setup or patient instruction must be accredited unless the subcontractor is exempt from accreditation under Medicare rules or guidelines. Also, a supplier that is enrolled in Medicare as a DMEPOS supplier and performs subcontracted services must be accredited, unless the supplier is exempt from accreditation. All suppliers enrolled in Medicare as a DMEPOS supplier are required to be accredited (the deadline was Sept. 30).
Q: Do subcontractors need to have surety bonds?
A: A subcontractor need not have a DMEPOS surety bond, unless it is enrolled in Medicare as a DMEPOS supplier. All DMEPOS suppliers are required to submit a valid surety bond to the NSC (the deadline was Oct. 2). Medicare requires a DMEPOS supplier to have a surety bond in an amount of at least $50,000 for each supplier location.
Q: Is a supplier responsible for services performed by a subcontractor?
A: Yes. The CBIC has stated, "The primary suppliers are accountable for ensuring that all of the services associated with furnishing the item, including subcontracted services, are performed in compliance with the physician's order and Medicare rules and guidelines." The "primary supplier" is the supplier that is enrolled in Medicare as a DMEPOS supplier and bills Medicare for reimbursement of the item or service furnished to the beneficiary.
Jeffrey S. Baird, Esq., is chairman of the Health Care Group, and Phuong D. Nguyen, Esq., is an attorney at Brown & Fortunato, P.C., a law firm based in Amarillo, Texas. The firm represents pharmacies, infusion companies, home medical equipment companies and other health care providers throughout the United States. Baird can be reached at 806/345-6320 or jbaird@bf-law.com. Nguyen can be reached at 806/345-6308 or pnguyen@bf-law.com.
Baird will present several sessions at Medtrade next week, including: "Marketing and Joint Ventures: Within Legal Guidelines You Are Limited Only by Your Imagination," Oct. 13; "Dealing with the Crazy Aunt in the Attic: Understanding and Successfully Navigating the Revised Competitive Bidding Rules" with co-presenter Mark Higley of VGM, Oct. 14; and "Post-Cap Oxygen Payment Rules: Understanding These Ill-Conceived Rules and Proactive Steps to Survive under Them," Oct. 15. For more information, visit www.medtrade.com.