New DMEPOS Suppliers: Jurisdiction B & C Announces 6 Areas For Ongoing Pre-Payment Claims Review

Widespread Pre-Payment Reviews In DMEPOS

CGS announced on March 26, 2006, via its website, that it will conduct prepayment medical record claims reviews for new suppliers in six DMEPOS categories throughout Jurisdictions B and C.

These six policy groups rank highest in Comprehensive Error Rate Testing (CERT) errors.

Orthotics (lower limb, upper limb, and spinal)
Continuous Positive Airway Pressure (CPAP)
Surgical Dressings
Glucose Monitors
Diabetic Shoes
Ostomy Supplies

If the supplier location is established and is solely an independent mastectomy fitting boutique, it most likely does not apply.

What to do?

It is important to respond to ADR letters. Federal law (Social Security Act, Sections 1815(a), 1833(e), and 1862(a)(1)(A)) authorizes the collection of this information.

Suppliers violate Supplier Standard #28 when, upon request, they fail to provide the requested documentation to a requesting Medicare contractor.

Medicare DMEPOS Supplier Standards

The Supplier Standards can be found in 42 C.F.R. 424.57(c).

1. A supplier must comply with all applicable federal and state licensure and regulatory requirements.
2. A supplier must provide complete and accurate information on the DMEPOS supplier application. Any changes to this information must be reported to the contractor within 30 days.
3. A supplier must have an authorized individual whose signature is binding to sign the enrollment application for billing privileges.
4. A supplier must fill orders from its own inventory or contract with other companies for the purchase of items necessary to fill orders. A supplier cannot contract with any entity that is currently excluded from the Medicare program, any state health care programs, or any other federal procurement or non-procurement programs.
5. A supplier must advise beneficiaries that they may rent or purchase inexpensive or routinely purchased durable medical equipment, and of the purchase option for capped rental equipment.
6. A supplier must notify beneficiaries of warranty coverage and honor all warranties under applicable state law, and repair or replace free of charge Medicare-covered items that are under warranty.
7. A supplier must maintain a physical facility on an appropriate site and must maintain a visible sign with posted hours of operation. The location must be accessible to the public and staffed during posted hours of business. The location must be at least 200 square feet and contain space for storing records.
8. A supplier must permit CMS or its agents to conduct on-site inspections to ascertain the supplier’s compliance with these standards.
9. A supplier must maintain a primary business telephone listed under the name of the business in a local directory or a toll-free number available through directory assistance. The exclusive use of a beeper, answering machine, answering service, or cell phone during posted business hours is prohibited.
10. A supplier must have comprehensive liability insurance for at least $300,000 that covers both the supplier’s place of business and all customers and employees of the supplier. If the supplier manufactures its own items, this insurance must also cover product liability and completed operations.
11. A supplier is prohibited from direct solicitation to Medicare beneficiaries. For complete details on this prohibition, see 42 C.F.R. section 424.57(c)(11).
12. A supplier is responsible for the delivery of and must instruct beneficiaries on the use of Medicare-covered items and maintain proof of delivery and beneficiary instruction.
13. A supplier must answer questions and respond to complaints of beneficiaries and maintain documentation of such contacts.
14. A supplier must maintain and replace at no charge or repair cost, either directly or through a service contract with another company, any Medicare-covered items it has rented to beneficiaries.
15. A supplier must accept returns of substandard (less than full quality for the particular item) or unsuitable items (inappropriate for the beneficiary at the time it was fitted and rented or sold) from beneficiaries.
16. A supplier must disclose these standards to each beneficiary it supplies a Medicare-covered item.
17. A supplier must disclose any person having ownership, financial, or control interest in the supplier.
18. A supplier must not convey or reassign a supplier number; i.e., the supplier may not sell or allow another entity to use its Medicare billing number.
19. A supplier must have a complaint resolution protocol established to address beneficiary complaints that relate to these standards. A record of these complaints must be maintained at the physical facility.
20. Complaint records must include: the name, address, telephone number, and Medicare Beneficiary Identifier of the beneficiary, a summary of the complaint, and any actions taken to resolve it.
21. A supplier must agree to furnish CMS any information required by the Medicare statute and regulations.
22. A supplier must be accredited by a CMS-approved accreditation organization to receive and retain a supplier billing number. The accreditation must indicate the specific products and services for which the supplier is accredited in order for the supplier to receive payment for those specific products and services (unless an exception applies).
23. A supplier must notify their accreditation organization when a new DMEPOS location is opened.
24. All supplier locations, whether owned or subcontracted, must meet the DMEPOS quality standards and be separately accredited to bill Medicare.
25. A supplier must disclose upon enrollment all products and services, including the addition of new product lines for which they are seeking accreditation.
26. A supplier must meet the surety bond requirements specified in 42 C.F.R. section 424.57(d) (unless an exception applies).
27. A supplier must obtain oxygen from a state-licensed oxygen supplier.
28. A supplier must maintain ordering and referring documentation consistent with provisions found in 42 C.F.R. section 424.516(f).
29. A supplier is prohibited from sharing a practice location with other Medicare providers and suppliers.
30. A supplier must remain open to the public for a minimum of 30 hours per week except physicians (as defined in section 1848(j) (3) of the Act), physical and occupational therapists, or DMEPOS suppliers working with custom-made orthotics and prosthetics.

Consequences of Non-Response

Failure to provide records may result in a claim denial and referral to the National Provider Enrollment (NPE) contractor and/or Unified Program Integrity Contractors (UPICs).

This could result in additional audits, claim denials, or revocation of Medicare Supplier Numbers.

What Types of Documentation Are Included in an ADR?

CGS will send Additional Documentation Requests (ADR) for all chosen claims. The ADR letter will request any combination of the following information to support payment of the claim:

A treating practitioner’s written order.
Relevant medical records that support the item(s) prescribed are medically necessary.
Any other pertinent documentation.
Proof of Delivery
Copy of signed Advance Beneficiary Notice (ABN) if one was obtained.

How Does This Apply to Post-Mastectomy Providers?

If the supplier location is established and is solely an independent mastectomy boutique, it most likely does not apply.

But over 25% of AABCP members combine post-mastectomy fitting with other services and may fall under the pre-payment review requirements.

Time For A Bit of Spring Cleaning

This is a good time to spot check your records – performing an internal audit to make sure your forms are current and that you are collecting the proper information. It is always better to catch errors and correct them, rather than wait until a payment audit occurs, where more stringent explanations are required, and financial consequences may occur.