The Centers for Medicare & Medicaid Services (CMS) has announced changes to the compliance standard for consignment closets and stock-and-bill arrangements. In such arrangements, “an enrolled supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) maintains inventory at a practice location which is not owned by the enrolled DMEPOS supplier, but rather, owned by a physician, non-physician practitioner or other health care professional for the purpose of distribution,” according to CMS.
The changes are effective March 1, 2010, and have been posted to the Medicare Program Integrity Manual, chapter 10, Medicare Provider/Supplier Enrollment, part 21.8, “Consignment Closets and Stock and Bill Arrangements.” To view the entire chapter including the original provisions, visit www.cms.hhs.gov/transmittals/downloads/r297pi.pdf. The revised provisions are shown in edited form below.
As mandated by Section1834(j)(1)(B) of the Act, in order for a DMEPOS supplier to obtain and maintain Medicare billing privileges, that supplier must satisfy certain DMEPOS supplier standards, which are set forth at 42 CFR, Section 424.57.
Although most consignment closet or stock-and-bill arrangements do not satisfy the DMEPOS supplier standards, CMS has identified a limited arrangement that may be permissible. This scenario involves a DMEPOS supplier selling DMEPOS items to the practice of the physician or other non-physician practitioner (as defined in §1842(b)(18)(c) of the Social Security Act, and the billing and furnishing of a DMEPOS item(s) would be done by the physician or non-physician practitioner Each arrangement will be evaluated on a case-by-case basis.
The CMS wants to ensure that beneficiaries are aware that the enrolled supplier who has billed Medicare on their behalf has furnished their DMEPOS item(s).
The National Supplier Clearinghouse-Medicare Administrative Contractor (NSC-MAC) may allow Medicare enrolled DMEPOS suppliers to maintain inventory at a practice location owned by a physician or a non-physician practitioner for the purpose of DMEPOS distribution only when the DMEPOS supplier meets the following conditions as verified by the NSC-MAC:
- The title to the DMEPOS shall be transferred to the enrolled physician, non-physician practitioner practice at the time the DMEPOS is furnished to the beneficiary;
- The physician or non-physician practitioner shall bill for the DMEPOS supplies and services using their own enrolled DMEPOS billing number;
- All services provided to a Medicare beneficiary concerning fitting or use of the DMEPOS shall be performed by individuals being paid by the physician or non-physician practitioner’s practice, and not by any other DMEPOS supplier; and
- The beneficiary shall be advised that if he or she has a problem or question regarding the DMEPOS, then the beneficiary should contact the physician or non-physician practitioner, and not the DMEPOS supplier who placed the DMEPOS at the physician or non-physician practitioner’s practice.
In addition, the NSC-MAC shall verify that two or more enrolled DMEPOS suppliers shall not be enrolled and/or located at the same practice location. A practice location shall have a separate entrance and separate post office address, as recognized by the United States Postal Service.
The NSC-MAC customer service personnel shall respond to direct supplier questions concerning compliance with this policy. The responsibility for compliance with these provisions is placed upon the DMEPOS supplier, physician, or non-physician practitioner.
