CMS Tightens the Screws on Supplier Standards

WASHINGTON--For years, home medical equipment providers have been asking for further guidance on what many have called vaguely written supplier standards with inconsistent interpretation among inspectors and lax oversight. On Friday morning they got a response from CMS--in spades plus some.

In an 11-page draft rule published in the Federal Register, CMS proposed clarification and expansion of existing standards along with the addition of others that all HME providers must meet to participate in Medicare and retain billing privileges.

"For many years, concern about easy entry into the Medicare program by unqualified or even fraudulent providers or suppliers has led us to increase our efforts to establish more stringent controls," CMS said in explaining the proposal. The agency said the additions and modifications are necessary "to ensure that legitimate DMEPOS suppliers are furnishing items of DMEPOS to Medicare beneficiaries."

"These changes are substantive and dramatic in many respects, and they will alter the way many suppliers do business," said industry attorney Neil Caesar, who runs the Columbia, S.C.-based Health Law Center. Caesar added he thinks "it is likely that most of these proposals will become law."

Following are some among the proposed rule's changes to existing standards:

--A change to standard No. 1, which deals with state and federal licensure and regulatory requirements, would require that suppliers providing licensed services not contract out those services. In order words, personnel furnishing licensed services (in states that require licensing of any aspect of a provider's business) must be "W-2 employees, not 1099 independent contractors," Caesar said. "A huge number of suppliers have their nurses and respiratory therapists working on a contract basis," Caesar pointed out. "That's a major change that will affect not just a lot of suppliers, but a whole lot of suppliers."

--CMS would expand existing standard No. 7 regarding physical facilities and appropriate sites. The agency is proposing that hours of operation be posted on permanent signage at the main entrance to the supplier location, even if the business is in a building complex where it is not the only tenant. "That means everything showing who you are, where you are and when you are open" has to be posted at the main entrance, Caesar said. "That's going to be a problem with a lot of buildings because the landlords don't do this for any of their tenants. It may be contrary to the signage options that are available."