AMARILLO, TX – Assume that ABC desires to close its “Main Street” location and transfer the Main Street patients to ABC’s “Elm Street” location. In order to close the Main Street location, ABC must submit the required paperwork to the various licensing and registration entities and notify patients of the location’s closing. ABC must notify and submit any required paperwork to:
• the National Supplier Clearinghouse (“NSC”);
• its liability insurance carrier;
• its surety bond issuer;
• its accrediting organization;
• the state agency that issues DME licenses;
• if applicable, the state Board of Pharmacy;
• the state Medicaid program; and
• any third party payors that require such notice (this would be governed by the individual payor agreements).
The NSC requires the submission of a Medicare Form 855S application (“855S”) whenever a supplier makes any changes to the information provided on the 855S or decides to close a location. In closing its Main Street location, ABC will be voluntarily terminating its Medicare enrollment for that location. ABC should complete page 5 of the 855S, check the appropriate box on page 6, and complete sections 1, 2A, 4B, 4D, 11 (optional), and 14 or 15. ABC must submit the 855S within 30 days of the closure.
ABC will be required to list the effective date of the termination for the Main Street location’s enrollment. As of that date, ABC will no longer be able to bill Medicare for items and services provided through the Main Street location, and any Medicare claims submitted with dates of service after the effective date of termination will be denied.
Although ABC will voluntarily terminate its enrollment with Medicare (for the Main Street location) as of a specific date, ABC may continue processing claims and responding to claims audits for dates of service before the effective date of the termination. Payment and claims for such dates of service will continue to be processed through the Main Street location’s PTAN. EFT deposits will also continue during this period. If the bank account associated with the Main Street location will also be closed, then ABC can designate a different remittance address in section 4D of the Application.
If ABC opts to transfer the Main Street location’s patients to the Elm Street location, then (as a best practice) ABC should provide notice to its patients at least 30 days before the anticipated closing date and should give patients the opportunity to “opt out” of transferring to the Elm Street location. The notice should inform the patient that if he or she opts out, then he or she must notify ABC which supplier to transfer the patient’s file to. In order to ensure continuity of care, the notice should also inform the patient that if he or she does not provide reasonably prompt notice (e.g., within 10 days) ABC will transfer the patient’s file to its Elm Street location.
Because the Main Street and Elm Street locations have separate PTANs, CMS will consider the Elm Street location to be a “new location.” Up until recently, the Medicare Program Integrity Manual (“MPIM”), Chapter 5, § 5.2.7 required a new physician order “when there is a change in the supplier.”
Fortunately, on March 24, 2017, CMS issued Change Request 9886 with an April 24, 2017 effective date. It says, in part:
• Summary of Changes: “The purpose of this change request (CR) is to instruct contractors to accept timely orders and medical documentation, regardless of whether the supplier received the documentation directly from the beneficiary’s eligible practitioner or from another, transferring supplier.”
• Background: “The DMEPOS Competitive Bidding Program uses competition amongst suppliers to improve the effectiveness of the Medicare methodology for setting DMEPOS payment amounts, while ensuring beneficiary access to quality items and services. Industry has suggested that competition may be bolstered and provider burden limited by allowing suppliers to accept medical documentation from other suppliers who previously held responsibility for that beneficiary. This change in the Center for Medicare & Medicaid Services (CMS) instruction would permit contractors to accept timely orders and medical documentation, regardless of whether the supplier received the documentation directly from the beneficiary’s eligible practitioner for from a transferring supplier.”
• Requirement: “Contractors shall accept documentation of the beneficiary’s need for an item, regardless of whether the supplier received the documentation directly from the beneficiary’s treating physician/practitioner or as transferred from their previous supplier.”
• Requirement: “Contractors shall, in those instances in which the documentation is not transferred, continue to require a new order/documentation be received by the supplier from the treating physician/practitioner.”
• Medicare Program Integrity Manual, Chapter 5, § 5.2.7. is amended to read as follows: “A new order is required in the following situations:
* There is a change in the order for the accessory, supply, drug, etc.;
* On a regular basis (even if there is no change in the order) only if it is so specified in the documentation section of a particular medical policy;
* When an item is replaced; and
* When there is a change in the supplier, if the recipient supplier did not obtain a valid order for the DMEPOS item from the transferring supplier.
This Change Request is good news for ABC. When a Medicare beneficiary switches from Main Street to Elm Street, then if Elm Street can secure a valid physician’s order from Main Street, Elm Street does not have to obtain a new physician’s order.
If ABC opts not to service the former Main Street patients from the Elm Street location (or from any other ABC location), then ABC must still provide notice to the Main Street patients at least 30 days from the anticipated closing date. With regard to patients renting oxygen or oxygen equipment, CMS has issued guidance stating that a new rental period may be available for a supplier that assumes responsibility for oxygen patients received from a supplier that has elected to voluntarily exit the Medicare oxygen business. This is important to be aware of because other suppliers picking up ABC’s former Main Street oxygen patients may seek to obtain a new rental period. In order for this to occur, the guidance states that the supplier voluntarily exiting the Medicare oxygen business must provide affected beneficiaries a 90 day notice.
The guidance, however, is not entirely clear on what constitutes a voluntary exit from the Medicare oxygen business sufficient to allow another supplier to restart the rental period. Because ABC will not be going out of business or entirely exiting the Medicare oxygen business, it is likely that CMS will not allow other suppliers picking up ABC’s Main Street oxygen patients to restart the rental period. Because CMS guidance states that a supplier abandoning oxygen patients is not in compliance with the supplier standards, ABC should not take steps that would be construed as “abandonment.”
Jeff Baird and Bradley Smith will present the following webinar:
AAHOMECARE’S EDUCATIONAL WEBINAR
Buying and Selling a DME Supplier
Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C. & Bradley M. Smith, ATP, CMAA, Vertess
Tuesday, September 26, 2017
2:30-4:00 p.m. EASTERN TIME
When a person intends to buy … or sell … a DME supplier, there are a number of documentation and regulatory issues that must be addressed. First, the seller must take a number of steps to make itself more “attractive.” The buyer and seller need to decide whether the transaction will be an “asset” sale or a “stock” sale. The parties will need to engage in the normal transactional steps: mutual nondisclosure agreement, letter of intent, stock purchase agreement/asset purchase agreement, and other closing documents. The buyer will need to engage in three types of due diligence: financial, corporate and regulatory. And the parties will need to meet a number of regulatory requirements such as submitting change of ownership notifications. This program will discuss all of these (and other) issues associated with the purchase and sale of a supplier.
Register for Buying and Selling a DME Supplier on Tuesday, September 26, 2017, 2:30-4:00 pm ET, with Jeffrey S. Baird, Esq., Brown & Fortunato, P.C., and Bradley M. Smith, ATP, CMAA, Vertess.
Please contact Ika Sukh at email@example.com if you experience any difficulties registering.
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 firstname.lastname@example.org.