CMS Delays Consignment Closet Rules until March 2010
BALTIMORE—On Aug. 7, CMS unexpectedly added a section to
its Program Integrity Manual revising the rules governing
consignment closets, or “stock-and-bill” arrangements,
as the agency called them. The new provisions were to take effect
Sept. 8. But CMS has now pushed the compliance date out to March 1,
2010.
The consignment closet provisions were included in a CMS change
request (Transmittal 297), which the agency rescinded yesterday and
replaced with Transmittal 300, which moves the date. However, the
document said, “All other information remains the
same.”
While nothing has changed about the new rules except their
effective date, health care attorney Jeff Baird said that change
“is very welcome news.”
According to Baird, chairman of the Health Care Group at Brown and
Fortunato, Amarillo, Texas, the date change “will allow
suppliers with consignment closet/stock-and-bill arrangements
adequate time to revise such arrangements to comply with the new
requirements. Given that the only change in the
revised transmittal is a delay in the effective date, there are
still a lot of open questions—but now there is time to seek,
and hopefully obtain, answers from CMS.”
In addition, Baird pointed out, “It also makes sense to
extend the effective date since the new provisions require the
physician/practitioner office to bill the DME MAC for the
consignment closet items provided to Medicare patients and most
physician/practitioner offices do not already have a DMEPOS
supplier number, and it would be impossible for them to obtain one
prior to the earlier Sept. 8 deadline.”
Attorney Neil Caesar of the Health Law Center, Greenville, S.C.,
also hailed the date delay as good news.
“I hope that during this interim period the industry will
step forward and challenge this substantial change regarding loan
closets as being handled through a technical rule change when, in
fact, it is a substantive regulatory change and not a technical
wording change,” said Caesar.
“The difference is that proposed regulatory changes require
notice, justification and an opportunity for
comment.”
The new provisions substantially narrow a provider’s
participation in closet arrangements by limiting billing for items
only to the physician or non-physician practitioner. Under the new
rules:
- Title to the DMEPOS is transferred to the practitioner at the
time the item is furnished to the patient; - The practitioner bills Medicare for furnishing the item under
his, her, or its own DMEPOS billing number; - All services concerning fitting or use of the item are
performed by individuals being paid by the practitioner, and not by
any other DMEPOS supplier; and - The patient is advised to contact the practitioner concerning
problems or questions regarding the DMEPOS item.
Caesar said he thinks the terms “consignment closet”
and “stock-and-bill” suggest that CMS doesn’t
understand how such arrangements actually work.
“CMS’ brief and cryptic language justifying [the new
provisions] suggests a misunderstanding about the way loan closets
typically work,” he said. “When handled correctly they
are a temporary loan. Unless there is an interaction at that time
between the patient and the supplier, the loan closets do not
immediately establish the patient-supplier relationship.
“I’m glad CMS had a moment of clarity and rethought
their position on this dramatic change,” Caesar
continued.
“This industry gets beat up in nickel-and-dime fashion
because we don’t have the resources or coordination to fight
the big fights, the expensive fights, the fights that create
precendent. Until we do that, CMS can treat us as their laboratory
for experimentation on how far they can push.”
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