Moving the HME Industry Forward


Keep Compliant and Bill On

April 10, 2017

AMARILLO, TX – Let’s be honest. Nobody really likes surprises unless it’s your birthday. And even then, some of us would rather know what to expect. So, when the surprise is an unannounced site visit from the National Supplier Clearinghouse (NSC), the surprise could cost you your provider transaction access number (PTAN) and a substantial part of your livelihood. But if you are compliant, these surprise visits do not have to distract you from more important things, like taking care of your patients.

The NSC, as the “single organizational entity responsible for issuing or revoking Medicare supplier billing privileges for DMEPOS suppliers,” is tasked with conducting site inspections to ensure suppliers are complying with CMS Supplier Standards. These Standards are minimum requirements for suppliers to keep their PTANs; and while they may mostly seem insignificant, violating even one Supplier Standard can be grounds for revocation of the supplier’s Medicare billing privileges. Today, we will focus on a few that seem to cause issues for suppliers. The full list of Standards can be found at 42 C.F.R. §424.57(c)(1)-(30).

Let’s look at Supplier Standard No. 7. This is the largest Supplier Standard, at least in the sheer number of words. But, it also seems to be one that trips up suppliers regularly. For instance, Standard No. 7 requires a supplier to “post hours of operation” on a “permanent visible sign in plain view” and be “accessible and staffed during posted hours.” While this may not seem like a difficult Standard to follow, it is the one that is most often cited as a reason for revocation.

Let’s consider the following scenarios for ABC Medical Equipment Inc. (“ABC”). Two years ago, ABC told CMS in its 855S enrollment application that its hours of operation were 8:00 a.m. to 5:30 p.m., Monday through Friday. ABC also posted these hours near its main entrance. It’s now two years later; and ABC’s receptionist, Jon, the one that usually arrived just before 8:00 a.m. to open the location, now has a family obligation that keeps him from arriving until 8:20 or 8:30 most mornings.

Also, Sara, ABC’s manager, the one that usually stayed until closing and sometimes afterwards taking care of the day’s last customers, now has to leave no later than 5:05 p.m. for evening classes. Similarly, Sara and Jon occasionally shut down the office on slow days and take an hour lunch, usually between 11:30 and 12:30.

While these few minutes may seem insignificant to most people, especially in other lines of business, not being open during posted hours is grounds for revoking ABC’s billing privileges. While this seems rather harsh, remember, neither CMS nor the NSC set ABC’s hours—ABC did.  The NSC is just ensuring that ABC is doing what it said it would. So, if ABC wants to or needs to now open at 8:30 a.m. and close at 5:00 p.m., and keep its Medicare billing privileges, all it needs to do is update its 855S application and its posted hours of operation at its location.  A supplier must only be open a posted 30 hours per week.

We’ve recently seen a similar scenario play out under Standard No. 7 dealing with locked entry doors. Picture this scenario, ABC sees an opportunity to acquire a location in what may be the next up-and-coming area of the city. But, currently, the location’s neighborhood has rather high crime. Not wanting to miss out on the opportunity, ABC purchases the location, immediately opens up shop, and obtains a Medicare PTAN for the location. Unlike its other locations, ABC elects to keep its main entry doors locked and manually open the door for its customers for safety concerns. While not an uncommon business practice in high crime areas, this action could cause ABC to lose its billing privileges if a site inspector cannot gain access for an inspection.

In a 2014 Departmental Appeals Board (“DAB”) decision (Decision No. 2572), the DAB noted that a locked door is not the deciding factor as to whether the location is accessible, as required by the Supplier Standards. However, if knocking on the door does not result in prompt entry to the location, the supplier needs to have posted instructions on how to go about gaining entry.

According to the DAB, simply posting the location’s telephone number is not enough. The customer must be instructed how to proceed when encountering a locked door during posted business hours. A telephone number may be insufficient because, as the DAB noted, “listed telephone numbers would have been of dubious help to a customer who was not carrying a mobile phone.”

So, if ABC locks its doors for safety reasons, it should post clear instructions for its customers, and the occasional NSC inspector, on how to gain prompt access. ABC should also consider installing a door bell system that is audible throughout the location, keeping in mind that not being able to hear the bell because you were in the back stockroom will not hold up on appeal and may leave the location in violation of Standard No. 7.

Similarly, Standard No. 7 poses risks to suppliers that choose to close for various holidays throughout the year. While CMS does not require a list of holidays the supplier will observe by closing its location, the supplier should take appropriate steps to notify the public, and a potential site inspector, that the location is closed temporarily and will reopen on a certain date. This will likely involve posting clear signage at the location’s entrances. For example, “This location will be closed on Monday, January 2, 2017, for the New Year Holiday and will resume normal business hours on Tuesday, January 3, 2017. Thank You.”

Another Standard that poses easily avoidable issues for suppliers is Standard No. 30. Under this Standard, suppliers, with a few notable exceptions, are required to remain open to the public a minimum of 30 hours per week. The notable exceptions are (i) physicians, physical therapists, and occupational therapists that furnish items to their patients as part of their professional services and (ii) suppliers that work with custom-made orthotics and prosthetics.

Again, like Standard No. 7, the NSC and CMS do not dictate specifically which 30-hour period the supplier must be open; but they do expect the supplier to be open during whatever 30-hour period the supplier says it will be open.
It is important to note that while suppliers that work with custom-made orthotics and prosthetics are exempt from the minimum hour requirements under Standard No. 30, they are not exempt from the requirement that suppliers must post their hours of operation and be open and accessible during those hours under Standard No. 7. This can cause confusion when dealing with “by appointment only” locations, so let’s clear that up.

Let’s assume that ABC works with custom orthotics and has elected on its 855S to be open by appointment only.  This would mean that on its 855S, ABC simply checked the “By Appointment Only (no fixed days or hours)” box and did NOT list any specific days or hours that the location would be open to the public. Although ABC has elected “by appointment only” status, ABC is still required to post its hours of operation at its location under Standard No. 7. Sounds confusing, we know, but it simply means that ABC must post that its hours of operation are “By Appointment Only. To schedule an appointment call 1-800-123-4567 or email”

Simply posting “By Appointment Only” without any directions on how to schedule an appointment would not only be bad for ABC’s business, but it could also result in a loss of billing privileges if the NSC inspector does not know how to schedule an appointment. Similarly, attempting to post days and hours that ABC will accept appointments can complicate things. For instance, ABC posts the following sign: “Tuesdays and Thursdays; 10:00 a.m. to 2:00 p.m.; By Appointment Only; Call 1-800-123-4567.” While this may not seem confusing, it could lead a customer, or the NSC inspector, to believe that ABC is open to the public from 10:00 2:00 p.m. on Tuesdays and Thursdays when, in actuality, it was ABC’s intent to only accept appointments on those days and between those times. As a rule of thumb, be clear, concise, and keep it simple.

In summary, all Medicare suppliers are required to meet all Supplier Standards at all times to retain billing privileges. We have only discussed a few of these Standards, but they are the ones we have seen cause issues for suppliers recently. The NSC can and will show up on your doorstep unannounced eventually. Make sure you are compliant when they do.

Jeff Baird and Lisa Smith will be presenting the following webinar:
Billing Non-Assigned, Using ABNs, and Selling at Retail: The Counter to Medicare Cuts
Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C. & Lisa K. Smith, Esq., Brown & Fortunato, P.C.
Wednesday, April 12, 2017
2:30-4:00 p.m. EASTERN TIME
On June 23, 2016, CMS published the July Fee Schedule for DME suppliers … and it is ugly. The rates encompass the expansion of competitive bid rates to non-CBAs. The cuts range between 45%-59% on common respiratory products, but reach 82% on TENS units and Enteral IV Poles. The bottom line is that Medicare will pay as little as possible for DME. In response, suppliers need to distance themselves from Medicare fee-for-service. This webinar will discuss ways that the DME supplier can accomplish this. For example, the supplier can elect to be nonparticipating and provide DME on a non-assigned basis. Doing so raises a number of questions. For example: (i) What does it mean to bill non-assigned? (ii) If the supplier bills an item non-assigned, then can the supplier set the price without limitations? (iii) Can a supplier bill a rental item non-assigned? Additionally, the supplier can work with hospitals to reduce the incidences of readmissions of patients soon after discharge; to accomplish this, the supplier and a hospital can jointly own a DME operation … or the supplier and the hospital can enter into a collaborative agreement. And yet another approach the supplier can take is to furnish DME that provides a higher profit and discontinue furnishing DME that is unprofitable.

Register for Billing Non-Assigned, Using ABNs, and Selling at Retail: The Counter to Medicare Cuts on Wednesday, April 12, 2017, 2:30-4:00 pm ET, with Jeffrey S. Baird, Esq., and Lisa K. Smith, Esq., of  Brown & Fortunato, PC.

Please contact Ika Sukh at if you experience any difficulties registering.
Member: $99.00    
Non-Member: $129.00

Jeff Baird will be presenting the following webinar: Webinar sponsored by Mediware Information Systems, Inc.
Waiver or Reduction of Medicare and Commercial Co-Payments: What DME Providers Can and Can’t Do
Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.
Thursday, April 20, 2017
1:00 p.m. CENTRAL TIME
When every dollar counts in the DME industry, it is vital that suppliers make every effort to collect copayments and deductibles. In many cases, it is challenging when patients do not have supplemental insurance, and the supplier gets in the habit of routinely waiving co-payments. This is why DME suppliers need to understand that this behavior can result in an investigation from the OIG for potential fraud. Join Jeffrey S. Baird, Esq., Chairman of the Health Care Group of Brown & Fortunato, P.C., to learn the latest DME requirements regarding co-payments from Medicare beneficiaries and commercial patients, and the steps that the supplier should take before waiving a co-payment.

This presentation will help attendees:
• Learn why the collection of copayments and deductibles is critical to the success of a business
• Analyze when it is legally acceptable to waive copayments and deductibles
• Understand what the OIG considers to be a kickback, inducement, or false claim

Register for “Waiver or Reduction of Medicare and Commercial Co-Payments:  What DME Providers Can and Can’t Do” on Thursday, April 20, 2017, 1:00 p.m. CT, with Jeffrey S. Baird, Esq., of  Brown & Fortunato, PC.
Please contact Kolby Wegener at if you experience any difficulties registering.

This webinar is FREE for attendees.

Denise M. Leard, Esq., and Bradley A. Cook, Esq., are attorneys with the Health Care Group at Brown & Fortunato, P.C., a law firm based in Amarillo, Texas. They represent pharmacies, infusion companies, HME companies, and other health care providers throughout the United States and Puerto Rico. Leard is Board Certified in Health Law by the Texas Board of Legal Specialization. Leard can be reached at (806) 345-6318 or and Cook can be reached at (806) 345-6372 or