ATLANTA — Changing policies regarding accreditation and
lawful Medicare billing are threatening the very existence of some
home medical equipment companies, stakeholders said this week.

HME providers who voluntarily
their Medicare numbers because they could not meet the
deadlines for mandatory accreditation and/or surety bonds are discovering they cannot
bill the program for services until the date their application for
reinstatement has been approved. Their billing numbers are not
retroactive to the date of accreditation, as providers and others
had been told.

"We hear this over and over and over and people are saying the
same thing: They only want to be retroactive to their accreditation
date — that's when they met the standards," said Mary
Nicholas, executive director of the Healthcare Quality Association
on Accreditation. "The accreditation organizations turn in the
reports that identify those acceditation dates, so the records show
that that is the case."

The time lapse between the accreditation date and when the NSC
approves the reinstatement application can be significant — a
matter of months even, stakeholders said, and that is creating
significant problems for the affected providers. (Despite requests
from various organizations, including HomeCare, CMS has
yet to release the number of those who voluntarily pulled their
Medicare numbers because of accreditation and/or surety bond

"Some of the stories that I've heard have been, 'My house in is
hock, my car is in hock, my relatives have loaned me money just so
I can stay in business,'" Nicholas recounted. "It's bad."

John Allen, C.Ped, president and CEO of Tyler, Texas-based
Allenmed Inc., a company specializing in mail-order diabetic
supplies, is one of the providers caught in the squeeze. In an
email to HomeCare, Allen said he had voluntarily withdrawn
his supplier number because it became apparent his company would
not be surveyed in time to meet the Oct. 1 accreditation deadline.
The company was subsequently surveyed and approved on Nov. 24.

About Nov. 1, Allen had contacted the NSC to determine when
Allenmed would be allowed to bill again after accreditation was

"I was told our number would be retroactive to the day we became
compliant with supplier standards, which, in our case, was the day
of accreditation," he said. "However, we would not be able to
submit those claims until our application for reinstatement was
approved, which would take the standard 45-60 days. This I could
live with and made business decisions accordingly."

Allen called the NSC again two weeks ago to make sure the agency
had received all the correct documentation for the company's
application for reinstatement.

"As an afterthought, I asked for reaffirmation of our number
being retroactive to the date of accreditation. I was told no, that
was not the case any longer and that Medicare recently sent the NSC
a policy revision that stipulated no providers applying for
reactivation will be retroactive. The billable date of service is
the day our application is approved," Allen said.

"I was also informed it was taking longer to complete this
process! In short, I have to now figure out a way to supply our
patients for an additional two months or longer with no
reimbursement. Obviously, had I been made aware of this policy from
the beginning it could have greatly impacted my decisions on how to
proceed, including the possibility of closing the door and
marketing our database."

The Midwest Association for Medical Equipment Suppliers also
noted the NSC's apparent change of policy in its Monday newsletter,
saying, "Per the NSC Web site and in meetings with the NSC,
suppliers were told that once they became compliant with the
standards, meaning they received their accreditation, the date they
were compliant would be the effective date of their

"This apparently has recently changed. Per recent CMS direction,
suppliers reactivated after voluntary termination due to
accreditation/surety bonds, will have the reactivation effective
the day the NSC completes processing (just like a new application).
Suppliers will be able to submit claims for dates of service on or
after the reactivation date."

The issue has become serious enough over the past few weeks that
Joan Cross, chair of the National Supplier Clearinghouse Advisory
Committee, requested a clarification of the change in the effective

CMS responded:

"Federal regulations found at 42 CFR 424.57(b) state that a
DMEPOS supplier must meet certain conditions in order to be
eligible to receive payment for a Medicare-covered item, and 42 CFR
424.57(b)(2) states, 'The item was furnished on or after the date
CMS issued to the supplier a DMEPOS supplier number conveying
billing privileges.' As such, the NSC is not able to establish a
retrospective billing date for those DMEPOS suppliers who made the
business decision to voluntarily terminate their Medicare supplier
billing privileges."

MAMES said since the CMS response did not explain why providers
were told that the effective date would be when they became
compliant with the standards, NSCAC "is exploring the options of
fighting this change by going back to CMS and possibly educating
members of Congress on this issue."

Allen said he has read the general rule and doesn't believe that
"there is any regulation that prevents making the number
retroactive to the date of compliance, including the one quoted in
their response."

He said he is contacting his federal legislators to alert them
to the issue, which became even more confused after he made two
more calls to the NSC. The third time he called, he was told that
"the determination about whether [the billing number] would be
retroactive or not would be made after the application was

A fourth call elicited the response from the NSC that providers
could only bill on or after the reactivation date — there was
no retroactivity.

"This is arbitrary," according to Cross, who said she knows of
some providers who were reinstated on the date they were accredited
— before CMS' policy change. "How can this be fair in any
way? I lay the blame at the feet of CMS," she said. "This is just
as confusing and messed up as how they have handled PECOS."

Cross said she and other volunteer members of the NSCAC have
worked to open the lines of communication with the NSC "so we can
get the necessary information to providers so they can do the right
things — but you have to know what the right thing is before
you can do it." She said she is also encouraging providers to
contact their members of Congress about the situation.

"Here's my issue with the whole thing," Allen said. "I know
there are a lot of people that have no knowledge of what's going
on, and they are billing right now with the thought that they are
going to get reimbursed. I can tell you the NSC is making no effort
to tell you anything different, and those people are going to be in
trouble. They were already in trouble, and now they are really in
trouble. [The NSC] has no empathy for that whatsoever. The people
on the phone were rude; they didn't really care one way or the

Allen said if he had been aware from the beginning that his
billing number would not be retroactive, he would have made
significantly different business decisions.

"I know few businesses that can survive four to five months
without any measurable revenue," he wrote in his email. "I might
have also considered focusing on developing other sources of
revenue, but considering our survey was imminent, [we] decided to
simply wait it out."

Was it the right decision? Allen doesn't yet know. What he does
believe is that the NSC and CMS are putting providers in

"They put up a gauntlet for everybody, and it's tough to make it
through," he said.