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DMEPOS Medicare Coverage & Reimbursement

DME medicareBy: Michael Silverman

Providers need to comply with all the Medicare ‘red tape’ but need not let fear of non-compliance inhibit their practice from offering Durable Medical Equipment Prosthetics & Orthotics Supplies (“DMEPOS”) to Medicare beneficiaries.

Here’s an overview of the steps providers need to take to enroll as a supplier of DMEPOS with Medicare to be eligible for Part B coverage and reimbursement:

  • Meet State Licensure Requirements (see previous article on the DMEPOS Licensure Process);
  • Meet the DMEPOS Supplier Standards, codified at 42 C.F.R. section 424.57(c) and available HERE.
    • One of more arduous requirements outlined in the Supplier Standards is to become accredited by one of the ten Accreditation Organizations (“AOs”) approved by the Centers for Medicare and Medicaid Services (“CMS”) to accredit DMEPOS suppliers.
      • To enroll or maintain Medicare billing privileges all DMEPOS suppliers (unless they meet an exemption) must comply with the Medicare Program’s enrollment standards.
      • List of CMS approved AOs is available HERE.
      • The process to become accredited takes from several weeks to a few months, and culminates with an on-site visit by the AO to confirm compliance with the policies and procedures you submitted during the accreditation process.
    • Complete the Medicare Enrollment Application:
      • In addition to meeting the above requirements you must already have an NPI number issued, have received Accreditation from a CMS approved AO, have your surety bond in place, and have a certificate of insurance listing the NSC.
      • You can either (1) Physically mail in form 855s, available HERE ; or (2) Enroll electronically using the Medicare Provider Enrollment, Chain, and Ownership System (“PECOS”), available HERE.

Attention to detail through this entire process is of the utmost importance. Incorrectly filling out the state licensure application or Medicare Part B Enrollment Application will result in delays in processing the application, and could ultimately result in the denial of the application. Intentionally providing false or misleading information any enrollment application can subject the applicant to a variety of civil and/or criminal penalties. Additionally, depending on the specifics pertaining to the practice setting up and services being offered, there may be a variety of other Federal and State regulations that may have to be considered (Stark, Anti-Kickback, etc.).

When enrolling with Medicare to become a DMEPOS supplier, providers must be aware of CMS’ Competitive Bidding Program! In 2011, CMS began to implement a regional ‘competitive bidding program’ for certain areas of the country for specified DMEPOS. CMS’ goal was to lower the price that Medicare was reimbursing for DMEPOS by having Medicare Part B suppliers submit bids as to the lowest price they would accept for reimbursement on specified supplies. Medicare used these bids to set the amounts it pays for such equipment and supplies, and awarded contracts to qualified suppliers with the lowest bids. The Competitive Bidding Program was first rolled out for specified DMEPOS in certain regions of the country. As a Medicare Part B beneficiary, a patient residing in one of these regions would have to utilize a ‘bid winning’ supplier (or one who was ‘grandfathered’ in) for those supplies to be reimbursable by CMS.

In July 2013, Competitive Bidding went into effect for Mail Order Diabetic Testing Supplies at the national level. Prior to that date, thousands of Medicare enrolled DMEPOS providers were able to mail diabetic testing supplies and bill Medicare Part B beneficiaries all across the country. On July 1, 2013, the number of authorized providers able to do so went from thousands to less than two-dozen, causing many suppliers that had been focused on providing diabetic testing supplies via mail order and that did not win such a bid to go out of business. In July 2016 the second round of Competitive Bidding for National Mail Order Diabetic Testing Supplies went into effect. A non-bid winning DMEPOS supplier enrolled with CMS could still provide diabetic testing supplies from a store front location, they just could not engage in mail order delivery.

While diabetic testing supplies are the only DMEPOS that have been restricted by CMS on a nationwide level for mail order purposes, many items such as CPAP devices, Nebulizer supplies, TENS units, and Oxygen equipment have continuously been subject to competitive bidding at the regional level. A Medicare Part B beneficiary residing in one of those regions looking to receive DMEPOS subject to the Competitive Bid Program must utilize one of those bid winning suppliers to be eligible for Medicare reimbursement, regardless as to whether they wish to receive such supplies via mail or in a retail store front location.

Despite CMS’ Competitive Bid Program, there is still a wide variety of profitable DMEPOS providers can offer to Medicare Part B beneficiaries at both the walk-in and mail order levels. In preparing to become a DMEPOS supplier enrolled with CMS, it is imperative to take note of the Competitive Bidding Program as it effects what DMEPOS supplies can be offered to Medicare Part B beneficiaries.