New Supplier Standards Could be Costly

ATLANTA — Providers beware: There are a few sizeable stumbling blocks within the new supplier standards final rule issued by the Centers for Medicare and Medicaid Services on Thursday, according to industry experts.

Under the new provisions, which take effect Sept. 27, 2010, home medical equipment providers serving Medicare beneficiaries will no longer be able to contract for such services as respiratory therapy but instead must employ personnel on a full- or part-time basis. They must be open a minimum of 30 hours a week, have a facility of at least 200 square feet and cannot use pagers or cell phones as their primary business phones.

They also cannot make any direct solicitation of a Medicare beneficiary, either by phone, Internet or visit. (See CMS Issues Final Rule on Supplier Standards for a bullet-point summary of the new rule.)

"I had predicted two years ago — nearly three years ago now — that these things were likely to become law. I am sorry to say my prognostication was on point," said health care attorney Neil Caesar, president of the Health Law Center in Greenville, S.C.

Caesar said that in the final rule, CMS has apparently taken into consideration the reams of industry comments made during the comment period after the proposed rule was issued Jan. 25, 2008. Yet there are still enough "substantial and dramatic requirements that in many respects will alter the way some providers do business," Caesar observed.

"The pattern I had noticed last time … is that [CMS] is trying to push suppliers to operate in a traditional retail context when that is really not the kind of work they are doing," Caesar said.

Although CMS in the final rule said it expected "a minimal impact, if any on small entities," Caesar was not nearly so complacent.

"Certainly the very small suppliers will find this to have some economic burden," he said. Caesar pointed out that small HME companies often must double up when it comes to job descriptions; with few employees, it isn't always possible to man the business and make deliveries, too. Under CMS' new standards, however, every HME facility must be staffed during business hours.

"There is no wiggle room as it is currently laid out," Caesar said.

Mary Ellen Conway, president of Capital Healthcare Group in Bethesda, Md., said the no-contracting rule was especially troublesome.