Standard No. 29: What the Changes Could Mean for You

By all accounts, the effects of CMS’ proposed revision and
expansion of supplier standards for DMEPOS will be far-reaching. 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 several provisions of the
draft rule. This week, Caesar’s comments are directed to proposed
Standard No. 29, which deals with supplier practice
locations.

New Standard 29 specifies that a supplier would be “prohibited
from sharing a practice location with another Medicare supplier.”
This is actually a strangely worded supplier standard. National
Supplier Clearinghouse policy already prohibits two DMEPOS
suppliers from commingling their space or operations, so it is
possible that CMS is simply trying to formalize … what has been
implicit in the standards as part of the NSC’s ongoing enforcement
policy.

On the other hand, much of the commentary to the standard
suggests a broader application. For example, in discussing the
scope of the new rule, CMS notes that a supplier is not allowed to
share a practice location with others “including a
physician/physician group.”

Further, CMS elaborates: “Since we are aware that physicians and
other licensed non-physician practitioners may obtain their own
DMEPOS supplier number and furnish DMEPOS from their office, we are
soliciting comments on whether we should establish an exception to
this space-sharing proposal for physicians and non-physician
practitioners and the circumstances which warrant an
exception.”

This language suggests that CMS intends the new standard to do
no more than capture the existing NSC policy; mainly, that two
suppliers may not commingle their practice locations, operations,
staff, inventory and other aspects of supplier operations.

I have often worked with suppliers to negotiate with the NSC an
operational sharing of certain resources between suppliers, often
suppliers with related ownership. Closed-door pharmacies, for
example, sometimes share personnel or real estate. If the
operations and records are sufficiently segregated to enable the
NSC to evaluate compliance by each supplier with all of the
standards, then that should satisfy CMS’ concerns.

In the past, subcontracts have been negotiated successfully to
allow the efficient utilization of specialized personnel, such as
knowledgeable billing staffers. When a subcontract for use of such
personnel has been drafted to segregate the time spent on behalf of
each supplier–so that work is not being done for both suppliers at
the same time–that has typically been sufficient to placate the
NSC. It remains to be seen whether such efficiencies will be
permitted under the new standard.

To view the proposed supplier standards rule,
click here.

Comments are due by March 25. Electronic comments can be
submitted at
http://www.regulations.gov. Follow the instructions under the
“Comment or Submission” tab and enter the file code
CMS-6036-P.