Consignment Closets Stay Open

BALTIMORE—In an instruction to its contractors Feb. 3, CMS
rescinded a new consignment closet rule for further review. The
agency said it was considering rulemaking to address the issue in
the future. That means, according to AAHomecare, that the current
rules governing consignment closets are still in place.

In a report last week, the association said the new
consignment—or loan—closet policy, which had been
scheduled to take effect March 2, would have “essentially
prohibited” an HME company from maintaining inventory at a practice
location owned by a physician or other health care
professional.

According to the association, the rule would have required
physicians or non-physician practitioners to take possession of
DMEPOS items and then bill for the equipment using their own
billing number. “In addition to being impractical for physicians
and Medicare beneficiaries,” AAHomecare said, “such an arrangement
would have likely violated the physician ownership and referral
statute, known as the Stark law.”

The association said it had worked with CMS officials over the
past several months to explain why closing down the closet
arrangements would have created serious disruptions in services for
Medicare beneficiaries.