In a special series for HomeCare Monday leading up to the March 25 deadline for comments, health care attorney Neil B. Caesar, president of the Health Law Center, Greenville, S.C., will help provide clarification and insight on CMS' proposed revision and expansion of the DMEPOS supplier standards. This week, Caesar's comments are directed to changes in existing standard No. 11, which deals with methods of contact with Medicare patients:
This standard apparently deals with cold-calling, the circumstances under which sales reps may solicit new business from potential customers.
The current standard tracks long-standing policy and requires that sales reps only contact potential Medicare customers if: they have given written permission to be contacted; if the supplier has furnished a Medicare-covered item to them and is calling to coordinate delivery, etc.; or if the supplier has previously supplied a Medicare-covered item within the past 15 months and is now calling about a different purchase or rental.
CMS now proposes to extend the existing three exceptions to a broader array of contact methods to clarify that suppliers "cannot directly solicit patients, which includes, but is not limited to, a prohibition on telephone, computer email or instant messaging, coercive response internet advertising on sites unrelated to DME POS products, or in person contacts."
This change is significant in several respects. First, CMS characterizes the explicit expansion to most forms of communication as a "clarification" of the standard and not a "modification." That means CMS' position is that this rule is already in effect, though, arguably, not well-stated. This is important, because whenever CMS indicates an intent to revise one of its rules, it usually implies a particular concern with violations of that rule and abuse of the system. Thus, with CMS' emphasis on this standard, it is likely we may see an enforcement crackdown of this rule over the next year.
Second, in its commentary about the proposed revision, CMS emphasizes that violations will allow CMS or the National Supplier Clearinghouse to revoke the supplier's billing privileges and, further, to "determine if such billing may be for fraudulent or unnecessary supplies." Thus, it is clear that CMS views cold-calling abuses as evidence of potential fraud because of the potentially coercive message used.
Third, this proposed revision has significant ramifications for HME companies who lose key personnel to competitors. In many cases when an employee jumps ship, that person will try to take customers with whom he or she has had a relationship over to the competition. Often this is done in a manner that violates the employee's fiduciary obligations to the company by appropriating proprietary customer contact information. Too often, however, if an HME company tries to fight this misappropriation, the new employer will threaten to tie the fight up in expensive litigation so the previous employer backs away.
Under CMS' proposed revision, it is clear that the customer relationship belongs to the original supplier, the former employer. Therefore, if the departing employee communicates with previous customers, he or she will be engaging in cold-calling in violation of standard No. 11. Such a violation would subject the new employer to potential revocation of billing privileges and investigation for fraudulent billing. This revision thus gives employers who lose key personnel an important weapon to use when protecting their proprietary customer information.
Finally, because CMS has characterized this provision as a "revision," I believe this new weapon to use against misappropriation of customers is available immediately, regardless of whether or when the new standard takes effect.