On Aug. 27, the Centers for Medicare and Medicaid Services published a final rule on Medicare enrollment standards for DMEPOS providers. The new rule expands on existing standards that providers must meet to establish and maintain billing privileges in the Medicare program — and those standards took effect Sept. 27.
"CMS' significant revisions to the supplier standards will push some suppliers out of compliance immediately. Nonetheless, CMS expected suppliers to be in immediate compliance with all the new rules, effective Sept. 27," said health care attorney Neil Caesar, president of the Health Law Center, Greenville, S.C. "It is imperative for all suppliers to assess their compliance with all changes as soon as possible. I recommend that suppliers consult immediately with their accreditation agencies, attorneys, consultants or other advisors with any questions they may have. CMS intends for the National Supplier Clearinghouse (NSC) to investigate violations promptly and to immediately enforce the new rules."
In a special series for HomeCare Monday, Caesar provides clarification and insight on several of the new standards. This week, his comments are directed toward Supplier Standard No. 7, one of several revised standards that focus on a supplier's facility and physical operations:
Standard No. 7 focuses on a supplier's obligation to maintain a physical facility at an "appropriate site." CMS now requires that this site must be at least 200 square feet in size. In 2008, CMS' proposed changes to this standard would have required 500 square feet, so CMS has reduced this obligation. However, CMS is adamant that the minimum square footage requirement is necessary, and is part of CMS' stated intent "to ensure that DMEPOS suppliers conform to generally accepted business practices employed by quality suppliers."
Many suppliers commented on these changes, and more than one asked why CMS felt it important to "micromanage" supplier operations, especially when a supplier satisfies all Medicare and accreditation requirements. CMS' consistent response is that these changes are "necessary to ensure that the facility can meet its obligations to a beneficiary …." including "an area for the beneficiary to sit, or room for a wheelchair and room for it to turn/move around, as well as room for stock and for the equipment necessary for running a business."
The 200-square-foot requirement reflects CMS' belief that this is the minimum space necessary for those activities. CMS also believes 200 square feet to be a minimum size necessary to accommodate "space for inventory, storage, including patient records, a desk and chairs, and in most cases a restroom for employees and customers."
CMS has carved out an exception to this minimum square footage requirement for orthotic and prosthetic suppliers. The lab area for such suppliers is "separate from the patient area and is often located off site." And while patient interaction is important, the area required for such interaction "can be as small as 80 square feet …."
Several commenters asked whether they could handle certain operational activities off site. CMS emphasized that the primary obligation is to have "prompt access to delivery, maintenance, and beneficiary records at the supplier's facility where the beneficiary receives services." However, CMS acknowledged that a centralized business center could make sense for housing records. This acknowledgement should also apply to off-site storage, maintenance, billing activities, etc.
CMS' requirement, though, is that such off-site information be quickly accessible at the supplier location via computer terminal. Thus, any suppliers who wish to create efficiencies among multiple locations must ensure that such centralization or consolidation does not impair each location's ability to obtain information and to serve customers promptly.
CMS is not requiring DMEPOS suppliers to maintain a storefront, so closed-door operations, pharmacy activities, etc., are still permitted. However, CMS requires that all suppliers be easily found by beneficiaries and inspectors, and that they be easily accessible to those people. Thus, part of CMS' requirement for "an appropriate site" is that the site be accessible to the disabled and that there be permanent signage identifying the supplier's location.
If the supplier is in a commercial building, CMS notes that the sign can be posted at the entrance of the building. Regardless, the sign must be "readily visible to the general public." CMS acknowledges that the sign may be inside the building. However, the sign would need to be posted somewhere visible from the main lobby entrance, and even then only if access to the lobby is available to the general public. Those suppliers whose lease or location logistics do not allow for signage immediately visible from the building entrance must seek to negotiate a change to this deficiency with their landlords. If the landlord refuses to accommodate, suppliers must evaluate whether they can fall into the "phase-in" exception for leasing difficulties, discussed below.
One commenter wrote that certain signage requirements might conflict with local zoning ordinances. CMS acknowledged the problem, but was unpersuaded that it required a change to policy. "For example," CMS notes, "if the owner of a prospective supplier of DMEPOS knows or should have known local zoning ordinances preclude the establishment of home business in a residential neighborhood, then the prospective supplier of DMEPOS should make the business decision to: 1) obtain a waiver to the local zoning ordinance in advance of submitting their enrollment application to the NSC; or 2) select a different practice location that will ensure the supplier's compliance …."
There are many suppliers who operate businesses out of their homes, or out of other locations that may not be compliant under state and local rules in light of CMS' new requirements. A supplier may have been able to fly under the radar operating out of these locations in the past, but will now find it difficult because of the new requirements.
As mentioned, CMS acknowledges that some suppliers may have problems in complying with these changes because of their existing leases. Accordingly, CMS is establishing a limited three-year phase-in period for existing suppliers who signed long-term leases on or before Sept. 27. CMS is not allowing a phase-in for prospective suppliers, even if they have already pursued a lease. Further, there is no exception for suppliers who have a pending enrollment with the NSC, nor for existing suppliers who seek to move to a new location. For all such entities, CMS expects immediate compliance.
For existing suppliers who are locked into a lease that prohibits some of these changes, CMS will allow DME suppliers whose leases end within a year to come into compliance with Standard No. 7 at the end of their current lease. Similarly, suppliers who have a lease with more than one but less than three years remaining must come into compliance with the standard at the end of their leases. Any supplier with a lease that extends more than three years must negotiate a change to the lease to come into compliance with this standard by Sept. 27, 2013.
Neil B. Caesar is president of the Health Law Center (Neil B. Caesar Law Associates, PA), a national health law practice in Greenville, S.C. He also is a principal with Caesar Cohen Ltd., which offers compliance training, outsourcing and consulting and the author of the Home Care Compliance Answer Book. You can reach him at 864/676-9075 or ncaesar@healthlawcenter.com.
