By: Susan St. John
So you are considering starting a home medical equipment aka durable medical equipment (HME or DME) business to provide products and services to patients in Florida (and perhaps in other states, but that’s a topic for another day). In addition to deciding what products and/or services you are going to provide and your physical location, there a few things you need to know, steps to be taken, and information to be collected, to apply for an HME/DME license in Florida to get up and going.
Florida defines an HME provider as “any person or entity that sells or rents or offers to sell or rent to or for consumers, any HME and service or HME that requires HME services.” Section 400.925(7), Florida Statutes. Further, HME “includes any product as defined by the Food and Drug Administration’s Federal Food, Drug, and Cosmetic Act, any products reimbursed under the Medicare Part B Durable Medical Equipment benefits, or any products reimbursed under the Florida Medicaid durable medical equipment program. HME includes oxygen and related respiratory equipment; manual, motorized, or customized wheelchairs and related seating and positioning, but does not include prosthetics or orthotics or any splints, braces, or aids custom fabricated by a licensed health care practitioner; motorized scooters; personal transfer systems; and specialty beds, for use by a person with a medical need.” Section 400.925(6), Florida Statutes.
Florida requires HME or DME businesses providing products and services to patients, whether physically located in or shipping products to patients in Florida (or shipping products out of Florida) to be licensed by the Agency for Health Care Administration. Additionally, if the HME/DME business desires to have multiple locations, each location must be separately licensed, even if the same management team is used. There are some health care providers that are exempt from HME licensure from AHCA, including, but not limited to, hospitals, assisted living facilities, home health agencies, and hospices. Licensed health care practitioners that use HME in the course of their practice (no sales or rentals) are also exempt from HME licensure. The application itself is very robust, somewhat lengthy, and requires multiple disclosures and financial details to pass scrutiny by AHCA for final approval for an HME license.
An applicant for an HME license must submit the application to AHCA at least 60 days but no more than 120 days before the requested effective date included on the application. A fee of $304.50 must accompany the completed licensure application, and if applicable, the applicant must also submit a $400 payment for AHCA to inspect the applicant’s location prior to issuing a license. In lieu of submitting to an AHCA inspection for initial licensure, the applicant may choose to have an accreditation agency such as Community Health Accreditation Partner (CHAP) provide the inspection and also issue an accreditation letter which may be submitted to AHCA along with the application. All applicable fees must accompany the application, otherwise, the application will not be processed by AHCA.
Once AHCA receives the application, it has 30 days to review the application for errors and request additional information from the applicant. This letter is referred to as the “omissions letter” and the applicant has 21 days from the date of the letter to provide a response and any additional requested documentation to AHCA. Failure to respond to the omissions letter, or responding inadequately to the omissions letter will result in AHCA issuing a Notice of Intent to Deny the license. While an applicant has the right to dispute a Notice of Intent to Deny, often times the application is denied because the applicant failed to follow the application instructions properly or did not provide adequate support to confirm financial wherewithal to operate. The basic information requested in the application, including financial statements, is set forth by statute and required for application approval. Almost all applicants, particularly first time applicants, receive an omissions letter from AHCA requesting additional information and explanation. And, it is not uncommon to receive a Notice of Intent to Deny for the applicant’s first application. If everything goes well and AHCA has received required information and considers the application complete, it will issue an approval or Notice of Intent to Deny within 60 days of when it deems the application complete.
A Few Other Things to Know
The applicant must provide proof to AHCA of its compliance with statutes and rules regulating HME business. This is generally done during the AHCA survey or other accreditation agency’s survey. Further, the application must include a list of equipment to be provided by category, distinguishing whether the equipment is provided directly by the applicant or through contractual arrangements with existing providers. The HME applicant must also include a list of services it will provide, identifying those services offered directly and those provided through contractual arrangements. A list of vendors or other providers the HME has contracts with must also accompany the application, and, the HME must provide proof of professional and commercial insurance of not less than $250,000 per claim. An HME contracted service provider must also carry the same amount of liability insurance and the HME license applicant must provide proof of the contracted service provider’s coverage. The HME license applicant will also need to submit level 2 background screening for all owners, employees and contractors known to the applicant at the time of application submittal.
The applicant will need to disclose the HME business’s location where HME will be provided or distributed from or where an intake person receives calls from consumers, as well as days of the week and hours of operation. Each HME provider must have a visible sign, including business name, phone number for contact during business hours, and business hours of operation. Business hours of operation must also be included in the application.
Timing is Everything
Completing the application comes towards the end of planning and ramp up in anticipation of operating an HME business. Prior to submitting the application, an HME applicant needs to have policies and procedures in place which support compliance with minimal standards set forth in Section 400.934, Florida Statutes or Chapter 59A-25, Florida Administrative Code, financial pro formas and adequate financing to support financial wherewithal to operate, and various policies and procedures such as educating practitioners regarding products and services to be provided and patient intake, assignment of insurance benefits, notice of patient responsibility, e.g., out-of-pocket costs for deductibles and coinsurance or non-covered items. Further, an HME business will need to decide if it will accept orders from telehealth or telemedicine businesses and associated practitioners, and may need to do some due diligence as to the reputation and integrity of a telehealth or telemedicine business.
If you are venturing into DME telemedicine, you need to be aware of changes in policy and regulations. The telehealth industry is booming and thousands of doctor’s and entrepreneurs are trying to take advantage of it. However, you have to make sure that if you are venturing into this area that you are aware of all the different regulations that are being enforced to ensure the quality of patient care. As these professionals order different medical supplies, they will rely on your services to fulfill the order. Because you are handling private information and supplying patients with medical supplies, you need to make sure that you are completely compliant with new regulations.
One example is commission based marketing compensation. How are you allowed to pay the doctors or medical professionals who are helping you place the orders? How are you or they allowed to market your products to the patients? These are all important questions that need to be answered before you get started. We can walk you through each step, each policy and law to ensure that your business is setup the right way, making the right connections and following the rules. Remember, because so much of your business is being conducted online, you want patients and medical professionals to know that you are a company that is doing everything by the book.
The Florida Healthcare Law Firm can ensure that you are doing everything by the book. Furthermore, we can assist you with any DME telemedicine needs you may have. If you are not in need of our legal services just yet, we invite you to sign up for our free monthly webinars that give you information about new services and options that are available to you, changes in policy or more. You can also check out our free blog that is written by our very own attorneys.
Getting ready to open an HME/DME business that will be licensed by AHCA takes careful planning and consideration. The application process, while somewhat tedious, should proceed relatively smoothly with adequate planning and adherence to the licensing application requirements. To learn more about the licensing process and planning for start-up, please join us for our webinar presentation February 21, 2018, DME Operation in Florida – A Legal Look by registering HERE.