BALTIMORE — Some 11,000 DMEPOS providers have had their Medicare numbers revoked as a result of new accreditation and surety bond requirements, according to CMS. Thousands more withdrew from the program voluntarily.
"Starting with a universe of about 105,000 suppliers and pharmacies in October, as of Dec. 15, about 3,400 voluntarily terminated their numbers, another 1,200 deactivated their numbers, but we don't know why, and about 11,000 were revoked," a spokesman for the agency told HomeCare. "But that number may change because there are some in the accreditation queue and others in appeal, so the numbers are still pretty fluid."
What is concrete, however, is that approximately 15,600 providers — about 15 percent of the universe, going by CMS' figures — are currently no longer eligible to do Medicare business.
CMS required DMEPOS providers to be accredited by Oct. 1, 2009 (some pharmacies received an extension until Dec. 31), and to have $50,000-per-location surety bonds in place by Oct. 2 or forfeit their right to bill Medicare.
In the weeks before those deadlines, the National Supplier Clearinghouse was deluged with calls as providers tried to find out whether their accreditation and bonding information had been received — or asked to withdraw their Medicare billing numbers voluntarily. Under CMS rules, unaccredited providers who did not voluntarily end their Medicare enrollment before the deadline risked not only revocation but also a one-year reenrollment bar. Those who voluntarily withdrew their numbers can apply for reenrollment once they meet the requirements.
In the weeks following the deadlines, non-compliant providers received letters notifying them of pending revocation. Some who got the notices said they were still waiting for onsite surveys months after completing accreditation preparation, while others who obtained accreditation after the deadline said they were having problems getting billing privileges reinstated retroactive to their accreditation date. Still others had their surety bonds returned because of a missing signature from the company principal.
Whatever the reasons, the anticipated provider fallout led home care advocates to question beneficiary access.
"If you look just at the small pharmacy-based suppliers, I am aware of close to a dozen in a rural area of Virginia that have pulled their numbers," said Wayne Stanfield, president and CEO of the National Association of Independent Medical Equipment Suppliers, after the accreditation deadline.
In an Oct. 30 email, a CMS employee seemed to confirm the worry, warning that in "areas within Montana, a Medicare beneficiary may experience supplier access issues" in obtaining oxygen, enteral and parenteral nutrition and power wheelchairs. The reason: a shortage of providers meeting the agency's new requirements. (For more, see Montana Beneficiaries Could Lose Access, Nov. 4, 2009.)
"I think we could start seeing spotty access issues in places like Montana because there is a low population and a lot of territory to cover, and if you have a small population, as a provider you're likely to have smaller revenue," said industry consultant Wallace Weeks of Weeks Group, Melbourne, Fla., about the recent revocations. "In spite of the fact they may never have to participate in competitive bidding, the burden of accreditation and a surety bond becomes a very significant part of a very small company's revenues."
Weeks said he sees more widespread access issues "farther down the road. I think three years from now we are really going to see some access issues as a result of competitive bidding."
Under the current bidding program, thousands more HME businesses, many of them small, are expected to go under. CMS has estimated that when competitive bidding is fully implemented, only half of the providers existing at its outset will remain. The American Association for Homecare has said bidding could put as many as 90 percent of providers out of business.
Round 1 of the bid program is set to go live in January 2011 in nine cities; Round 2 could expand the bid to an additional 91 cities should a provision in the Senate's health care reform bill become law.
While industry consolidation is inevitable, Weeks believes, he noted many of the current revocations could be for businesses that "only have a few thousand dollars a year coming in from DME, like a grocery-based pharmacy that had a provider number under Part B." For such companies, he said, "it would be ludicrous for them to get accredited and get a surety bond for their DME operations.
"How many of those there are I don't know," Weeks continued, "but I think we can expect that a majority of the revocations could be attributed to non-traditional DME operations that are ancillary and/or insignificant to the company."
