Oxygen Licensure Is Issue for Some Bid Winners

NORTH MIAMI BEACH, Fla.–With less than 30 days before the
implementation of round one of competitive bidding, questions about
the status of some bid winners has added another concern to what
the industry already sees as a flawed process.

In a recent email, members of the Accredited Medical Equipment
Providers of America (AMEPA) noted that, to provide oxygen services
in many of the 10 round one competitive bidding areas, a provider
must be licensed in those states. But according to AMEPA President
Rob Brant, general manager of City Medical Services in North Miami
Beach, Fla., some of the companies that won bids in the Miami-Ft.
Lauderdale CBA are not licensed to provide oxygen services in
Florida.

“According to today’s records from Florida’s Department of
Health Web site, eight of the 44 oxygen bid winners in the Miami
competitive bidding area are not licensed by the state as medical
oxygen retailers,” the AMEPA message reads. “That is
nearly 20 percent of the bid winners that not only won the bid but
whose numbers had an effect on the overall bid price. Four of the
eight bid winners are from out of state. Three other bid winners
are not on the Web site but they are pharmacies and are exempt from
having the oxygen license.”

To address the question, Brant contacted the Department of
Health in Florida, which told him “if a company is out of
state they cannot get a Florida license.” According to Brant,
officials also said “it would take nine months for companies
to get their state oxygen license.”

This is not good news for beneficiaries in Miami, Brant said,
because it means that none of the out-of-state bid winners will be
able to supply equipment legally in the CBA.

“We’re losing 20 percent of the companies because they are
not licensed,” Brant said. “I think that these
[problems] are bullets to shoot down the [competitive bidding]
system. They show that [CMS] did a really bad job with this,”
he said.

During a CMS conference call May 27, Brant asked CMS’ Joel
Kaiser to clarify the issue.

“[The Department of Health] told me they could not receive
a license out of state, and they told me that it typically takes
nine months to get an oxygen license if they started an operation
in Florida,” Brant told Kaiser. “I was reading in ‘MLN
Matters’ dated April 1 and it discussed auto-denial information for
companies that don’t have their oxygen license in place with the
[National Supplier Clearinghouse].

“My question is, how could I subcontract with this company
that does not have an oxygen license? How could I get paid properly
from it? Is subcontracting possible with a company that does not
have an oxygen license in the state of Florida and the other states
that are involved in the first round?”

Kaiser responded that “contract suppliers were accredited to
furnish the items they have been awarded a contract for,” and told
Brant to send an email with questions about any specific suppliers
that won bids.

“It seems as though CMS is confusing accreditation with
licensure,” said industry consultant Sylvia Toscano of Professional
Medical Administrators, Boca Raton, Fla. “Every question that has
been asked about licensure has been answered from an accreditation
standpoint. A supplier may be accredited to provide oxygen in Texas
but it doesn’t mean that they have a license to practice in
Florida.”

According to Toscano, six of the states/territories represented
in the first 10 CBAs–Florida, Ohio, Texas, Kansas, Puerto Rico and
South Carolina–require oxygen licensure.

Toscano said she noticed the issue when several of the clients
she bills for began seeing their claims denied with the CO-172 code
(provider specialty code not valid for this type of service). The
denial was a result of CMS’ April 1 update, which placed
auto-denial edits into Medicare’s claims processing system when a
state license for oxygen is not on file.

Reimbursement consultant Sarah Hanna, vice president of ECS
Billing & Consulting in Tiffin, Ohio, also noted the increase
in the CO-172 denial. According to Hanna, 38 states require
licenses and/or certifications to provide oxygen and/or
oxygen-related equipment–a fact that could cause problems in many
of the next 70 MSAs targeted for bidding where out-of-state
providers submit bids.

View licensure/certification requirements on the
NSC Web site or call the NSC at 866/238-9652.