CMS issues final rule revising DMEPOS supplier safeguards

The Centers for Medicare & Medicaid Services (CMS) last week published its final rule in the Federal Register revising DMEPOS supplier safeguards involving direct solicitation, licensure and local code/zoning requirements.

The rule:
• Removes the definition of “direct solicitation” from DMEPOS supplier standards.
• Requires that suppliers—and subcontractors operating under competitive bidding agreements—hold necessary state licenses.
• Removes the requirement for compliance with local zoning laws and shifts responsibility for that to the states.

The definition of “direct solicitation” was removed because it had become overly broad and encompassed marketing activities like e-mail and messaging, which were not intended to be covered by the term, CMS said.

The revised rule eliminates the term “direct solicitation” and focuses on conditions that must be met for telephone contact of beneficiaries.

They include:
• The beneficiary has given written permission to the supplier to contact them by telephone concerning the furnishing of a Medicare-covered item that is to be rented or purchased.
• The supplier has furnished a Medicare-covered item to the individual and the supplier is contacting the individual to coordinate the delivery of the item.
• If the contact concerns the furnishing of a Medicare-covered item other than a covered item already furnished to the individual, the supplier has furnished at least one covered item to the individual in a 15-month period before the date on which the supplier makes such contact.
The new rule also adds clarifying language about licensing DMEPOS suppliers and subcontractors who may be operating under agreements spawned by the Competitive Bidding Program.

The rule states that if a state requires licensing, the DMEPOS supplier must meet that requirement, and must employ professionals who also meet the requirement. The rule provides an exception for suppliers who are awarded competitive bidding contracts and are using subcontractors who are operating within a state’s licensing requirements—if such a subcontracting agreement is allowed under state law.

The final rule also eliminated requirements that suppliers meet all municipal codes and zoning laws. CMS said that requirement was intended to ensure that suppliers were not working out of their homes, which is usually prohibited by codes and zoning laws. However, there is such a wide variance in codes and zoning laws that it would be impossible for CMS to verify they are all being met.

Instead, CMS said the state should take this responsibility as part of its business licensing process.

The American Association for Homecare noted that numerous comments submitted to CMS asked for assurance that contacting beneficiaries to coordinate the delivery of doctor-ordered DME would not constitute an improper, unsolicited telephone communication. The rule does not do that, but CMS said it will engage in outreach and update its FAQs on the issue.