AMARILLO, TX – This article covers four very important topics for the DME supplier: (i) whether the competitive bid contract supplier can cease selling a product after its “capacity” has been met; (ii) face-to-face requirements; (iii) requirements regarding written orders prior to delivery; and (iv) written orders prior to claims submissions.

Meeting Capacity
In last week’s Medtrade Monday, I discussed the situation in which a competitive bid contract supplier meets the capacity (for a product category) set out in its CB bid submission and no longer has the financial resources to continue selling the product.

I mentioned that the industry had received conflicting signals from CMS/CBIC regarding whether the supplier can cease selling the products after the capacity has been reached. Since last week’s article was published, the CBIC informally addressed the issue. In short, the CBIC states that the contract supplier must continue to provide products to Medicare beneficiaries……even if the supplier has exceeded the capacity set out in its bid submission.

Face to Face and WOPD
Under regulations effective July 1, 2013, suppliers of respiratory equipment must obtain a detailed written order before the supplier delivers equipment to a beneficiary.[1]  These regulations also require that the supplier obtain documentation or assurance from the physician that the physician, a physician assistant, a nurse practitioner, or a clinical nurse specialist had a face-to-face encounter with the beneficiary within the six months prior to the date of the order.[2]   

Documentation demonstrating that the practitioner conducted an evaluation related to the beneficiary’s need for the covered item during the face-to-face encounter is required to justify Medicare reimbursement.

For example, for PAP suppliers, the requirements for face-to-face encounters and WOPD will apply when the supplier furnishes a CPAP (E0601) or a BiPAP (E0470 or E0471).  The requirements will not apply, however, when a supplier furnishes supplies for the equipment, for example tubing (A4604), masks (A7030), and headgear (A7035).[3]

To allow suppliers time to adopt policies and procedures for compliance with the face-to-face and WOPD requirements, CMS has indicated that it “will start actively enforcing and will expect full compliance . . . beginning by a date that will be announced in Calendar Year 2014.”[4]  However, the extension does not guarantee that, at a later date, an auditor will not seek recoupment from the supplier because the requirements for a face-to-face requirement and detailed written order were not met.[5]

Written Orders Prior to Claims Submission
When a beneficiary transitions from a non-contract supplier to a contract supplier, a new order is required.  CMS has issued guidance indicating that CMS would provide a grace period through October 31, 2013, during which a contract supplier is not required to obtain medical necessity documentation or a detailed written order before the supplier submits a claim to Medicare.[6] 

Beginning on November 1, 2013, however, CMS will expect contract suppliers to have such documentation before the supplier bills Medicare.

CMS’ guidance must be interpreted in conjunction with the regulations for face-to-encounters and WOPD. The DME MAC for Jurisdiction A addressed this issue in a webinar:

Q34: If a supplier takes on a beneficiary due to competitive bid, would the contract supplier need to obtain a new WOPD and face-to-face evaluation for the beneficiary or would they be able to use the information from the old supplier?
A34: Yes. A new WOPD and face-to-face evaluation would need to be obtained. Competitive bidding does not override this requirement. Since it is a new supplier, all requirements of MM8304 would need to be met.[7]

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato PC, a law firm based in Amarillo, Tex. He represents pharmacies, infusion companies, HME companies, and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or [email protected].