Competitive Bidding Just Tip of the Iceberg for HME

Atlanta While DMEPOS competitive bidding has garnered the industry’s most recent headlines, a slew of other changes has emerged for home medical equipment providers that may have gotten lost in the chaotic competitive bidding shuffle.

Industry stakeholders marshalled all their muscle this year to halt the Medicare bidding program that, in fact, went into effect July 1. It was finally rescinded July 15 when Congress overrode the president’s veto of H.R. 6331 — which includes a delay of the program — and the measure became law.

Competitive bidding, however, is just the tip of the iceberg. Since the beginning of the year, CMS and its contractors have issued several proposals and directives that will change the way providers do business. To help keep track, here’s a roundup that includes some of them.

• Supplier Standards: For years, providers had asked for further guidance and clarification of what many called vaguely written supplier standards. In January, CMS responded, publishing an 11-page draft rule in the Federal Register clarifying and expanding existing supplier standards and adding others that all HME providers must meet to participate in Medicare and retain billing privileges. Comments on the proposed standards were taken until March 25. At press time, a final rule had not been released. Among the proposed rule’s changes to existing standards:
  • A change to Standard No. 1, which deals with state and federal licensure and regulatory requirements, would require that suppliers providing licensed services not contract out those services. In other words, personnel furnishing licensed services (in states that require licensing of any aspect of a provider’s business) must be W-2 employees, not 1099 independent contractors.
  • CMS would expand existing Standard No. 7 regarding physical facilities and appropriate sites. The agency proposed that hours of operation be posted on permanent signage at the main entrance to the supplier location, even if the business is in a building complex where it is not the only tenant. In addition, the location must be staffed during posted hours and must be accessible “regardless of whether beneficiaries routinely visit the facility,” according to the proposal. The requirement also would apply to “closed door” businesses, such as pharmacies or suppliers providing services only to beneficiaries in a nursing home. “A supplier is not in compliance with this standard if no one is available during the posted hours of operation,” CMS said.
  • Standard No. 9 would be revised to prohibit answering machines, answering services or fax machines as the primary business phone during operating hours and would also prohibit forwarding incoming calls to a cell phone or beeper.

  Among new supplier standards, CMS proposed:

  • That suppliers obtain oxygen from state-licensed oxygen suppliers. The standard would apply in states that license oxygen suppliers, but when an HME company is located in a state that requires such licensing, the company must obtain oxygen from a licensed supplier, regardless of the state where the oxygen supplier is licensed.
  • That suppliers be prohibited from sharing a location with other Medicare suppliers, including physicians.
  • That suppliers must be open to the public a minimum of 30 hours per week (either six hours a day, five days a week or five hours a day, six days a week).

  To read the proposed rule in full, check the Jan. 25 Federal Register.

• CEDI: Rather than four DME MACs processing claims, CMS announced in January that a single entity would take on that responsibility. National Government Services was awarded the Common Electronic Data Interchange contract and, by mid-year, had transitioned all four jurisdictions to the CEDI program. While there were significant hold-ups in claims processing, NGS said as of Aug. 5, it was working to catch up and was processing paperwork that was received on June 26.

  For updates, check the CEDI Web site at www.ngscedi.com.

• CPAP Therapy: On March 13, CMS issued a National Coverage Determination that changed policy to allow coverage of CPAP therapy for obstructive sleep apnea if a positive diagnosis is made from a home sleep test. The decision was to take effect Aug. 4. However, in a recent ruling, the DME MACs refused to allow HME providers to administer those tests. (For more, see “Home Sleep Testing” below.)
• NPI and PTAN: As of May 23, CMS required that all Medicare claims be submitted with a National Provider Identification number or be rejected. As well, the agency is requiring that all providers applying for their NPI number prior to March 1, 2008, be accredited by Jan. 1, 2009; those seeking enrollment after March 1, 2008, must already be accredited.

  Also effective May 23, providers are required to have a Provider Transaction Access Number to authenticate identification when they phone or submit written inquiries to a Medicare fee-for-service contractor. (The PTAN was formerly referred to as a supplier number, NSC number, Medicare provider Identifier Number or legacy Medicare Identifier.)

  For providers enrolled in Medicare before May 23, the PTAN is their legacy number. For providers enrolling on or after May 23, a PTAN is assigned.

  For information on the NPI, visit the CMS NPI Web page at www.cms.hhs.gov/NationalProvIdentStand.

• Accreditation Deadlines: On the heels of the suspension of competitive bidding, CMS announced it was rescinding previously set accreditation deadlines for round two: July 21 for providers who wished to submit a bid; and Jan. 14, 2009, for those who wanted to be considered for a contract. CMS did, however, retain the deadline by which all Medicare providers must be accredited: Sept. 30, 2009.
• Home Sleep Testing: Providers were blindsided in July when the four regional DME MACs issued a revised Local Coverage Determination for CPAP policy prohibiting HME providers from conducting home sleep tests — or even delivering or picking them up. The industry had anticipated a different outcome since CMS’ NCD opened the door to home testing with type II, III and IV devices.

  But the MAC medical directors decided differently. “No aspect of a HST including but not limited to delivery and/or pickup of the device, may be performed by a DME supplier,” the LCD said.

  In a proposed rule published in the July 7 Federal Register, CMS would prohibit CPAP reimbursement if a supplier or its affiliate performs the sleep test used to diagnose a beneficiary with OSA. The comment period for the proposed rule is open until Aug. 29.

  To submit electronic comments, go to www.regulations.gov/search/index.jsp and enter CMS-1403-P in the “Comment or Submission” bar.

• SADMERC Change: Effective Aug. 18, the SADMERC transitions to a new carrier, according to CMS.

  Noridian Administrative Services will be the new Pricing, Data Analysis and Coding Contractor, taking over the duties of Palmetto GBA, the Statistical Analysis DME Regional Carrier. Under the contract, the PDAC will be responsible for:

  • Providing data analysis support to the DME Program Safety Contractors;
  • Guiding manufacturers and suppliers on the proper use of HCPCS codes for Medicare billing purposes through product reviews and decisions;
  • The DME coding system and the HCPCS Helpline;
  • Conducting national pricing functions for DMEPOS services; and
  • Assisting CMS with DMEPOS fee schedules.

  The new PDAC Web site will be launched at www.dmepdac.com.