Take the time to review your enrollment with PECOS and your AO to save headaches and possible reimbursement holds on equipment or products that you have distributed.
Make your list and check it (at least) twice
by Tim Safley

Since 2008, accreditation has been required for new durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) organizations seeking to enroll for payment by Medicare. Existing suppliers came under the mandate in the fall of 2009. In the intervening years, the complexity of the regulations has grown along with the list of stakeholder participants, and the alphabet soup of acronyms just gets more and more crowded.

A few months ago, the enrollment and ongoing validation process that had been managed by the National Supplier Clearinghouse (NSC) shifted to two national provider enrollment (NPE) contractors: NPE East is handled by Novitas and NPE West by Palmetto GBA. While this particular adjustment was purely administrative and had little direct impact on suppliers, change often has the potential to introduce uncertainty. And uncertainty can lead to process errors or inaction—either of which can result in unintended regulatory noncompliance.

Know Your Products

One cautionary tale of minor confusion that can produce major headaches comes from an example frequently seen from the perspective of an accreditation organization (AO). The Centers for Medicare & Medicaid Services (CMS) mandate for accreditation includes AO verification of the specific DMEPOS products the supplier is providing to patients, specifically to Medicare Part B beneficiaries but also to those covered by private payers. (There are those additional stakeholders again!) This verification takes place at the time of survey through a review of product codes in a document that ACHC calls an addendum, because CMS may not be the only payer monitoring the codes for products you are accredited to provide. As a result, you should consider identifying product codes on your addendum list for Healthcare Common Procedure Coding System (HCPCS) codes you are billing to other payers but not to CMS.

The surveyer will ensure that the supplier meets requirements to provide all of the product codes they identify, including state licensure and the use of credentialed personnel when indicated by law or regulation.

It is critical to the DMEPOS supplier that an individual with extensive knowledge of the products and services currently being offered and billed participates in the product code verification with the surveyor. The surveyor will be providing the audited list confirming codes and categories to the AO office, where it will be maintained and reported on a weekly basis to CMS. That weekly report will be a fresh audit only once every three years, at the time of your accreditation survey.

When a supplier intends to change product codes during their term of accreditation, it is important to notify the AO immediately. By communicating promptly, the supplier can help reduce the risk of claim denials for products delivered to patients but not covered by the supplier’s accreditation. Any changed or additional product codes you communicate will be added to the report based on the information you provide.

Documenting Shipping

With all of the different products provided under Medicare Part B, it is very difficult for suppliers to keep every product in their inventory. We are often asked whether a supplier can be approved to deliver supplies or equipment that are drop-shipped to the patient. The short answer is yes, but the supplier must ensure that there is proper documentation of delivery and training before billing. Additionally, a contract between the supplier and the distributor must be in place to obtain the item in a timely manner; that contract will be reviewed as part of the accreditation survey verification. Medicare DMEPOS supplier standard No.4 addresses this issue:

“A supplier must fill orders from its own inventory, or contract with other companies for the purchase of items necessary to fill orders. A supplier may not contract with any entity that is currently excluded from the Medicare program, any state health care programs, or any other federal procurement or non-procurement programs.”

This standard does allow a company to have a contract with a distributer for certain items provided to Medicare beneficiaries. As with inventory, any item under a distribution contract must be reported to the AO and listed in the online Provider Enrollment, Chain, and Ownership System (PECOS).

Getting this right is important because AO-reported codes must match exactly with PECOS. Your AO does not have access to your information in this database. That means suppliers must also remember to update their 855S in PECOS when product codes are added. Having the AO report the new product code will not guarantee payment.

Stay Updated

A HCPCS-to-Product-Code Crosswalk tool was created to aid suppliers in determining the HCPCS contained within each product code. HCPCS is updated quarterly by CMS along with the crosswalk tool so it is important to use the currently effective versions.

Any discrepancies between the 855S and the AO report will appear on a remittance advice when you bill for a HCPCS code that is missing from one of these documents. An N790 remittance advice remark indicates that the supplier is not accredited for the product or service. If this remittance advice is received, it is important to investigate the reason for the remark. This would include making sure that the product code tied to the HCPCS is the actual product provided, that the product code is found in PECOS (and accurately entered) and that you’ve provided your AO with that same product code.

CMS has begun tying those remittance advice remarks to payment. As a result, some suppliers have received letters from CMS regarding potential deactivation of provider transaction access numbers (PTANs). If you receive a deactivation letter, your first action should be to call the NPE within the deadline for response, which may be as few as 15 days. Speak with the NPE about revising your PECOS enrollment information. Remove any product codes that are not currently accredited by your AO.

In conclusion, when uncertainty leads to lapses in compliance with regulatory requirements—especially those related to required processes—it can result in denials of claims. No one wants to face a loss of income; neither do suppliers want to expend valuable time unraveling clerical errors that could have been avoided from the beginning.

Take the time to review your enrollment with PECOS and your AO to save headaches and possible reimbursement holds on equipment or products that you have distributed.



Tim Safley, MBA, speaks and presents regularly on topics related to accreditation in his capacity as the ACHC program director for DMEPOS and sleep. Tim came to ACHC as a surveyor for DMEPOS with 30 years in the HME and pharmacy industries and 25 years in sleep medicine. Tim joined the management team in 2006. Vist achc.org.