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General Healthcare

Constructive Delivery of Negative Pressure Wound Therapy Pump

January 20, 2018

AMARILLO, TX – Assume that a Medicare patient, covered by Medicare fee-for-service, is an inpatient at a hospital. Assume that as an inpatient, he is using a Negative Pressure Wound Therapy Pump (“NPWTP”) manufactured by ABC and owned by the hospital (“ABC Pump”).  Now assume that the patient is about to be discharged and his physician has ordered an NPWTP to be used by the patient in his home.  The question is this: “Can the patient take the ABC Pump home or must the patient obtain a different NPWTP after he goes home?”  A credible argument can be made that if certain steps are followed, the patient can take the ABC Pump home.

If the discharging physician orders a home use NPWTP for the patient, and the order is not specifically for a pump other than the ABC Pump used in the hospital, the discharge planner can work with the patient to determine whether the patient has a preferred DME supplier or a preferred type of pump.  Assume that the patient expresses a desire to continue using the ABC Pump. The discharge planner can work with the patient to select a DME supplier.  If the patient elects to use XYZ Medical Equipment, Inc., and if the patient elects to retain the ABC Pump, then the hospital will arrange for the ABC Pump to be removed from its inpatient inventory and will sell the pump to XYZ.

Written Order Prior to Delivery

In order for Medicare to cover a NPWTP, a prescribing physician must issue a written order prior to delivery of the pump (“WOPD”).  This means that “the supplier must have received a written order that has been both signed and dated by the treating physician before dispensing the item.”  Here, the written order for a home use NPWTP is issued by the discharging physician before the patient leaves the hospital.  Because the patient, before the discharge order is issued, will possess the exact pump for which XYZ will bill Medicare following discharge, the WOPD requirement, on its face, would appear to be an obstacle. So it is important to understand how Medicare determines what constitutes “delivery” and whether XYZ can effectuate a constructive delivery of the ABC Pump following issuance of the written discharge order.

The requirement for a DME supplier to deliver an item to a Medicare beneficiary comes from Medicare Supplier Standard 12.  This Standard states that a DME supplier “[m]ust be responsible for the delivery of Medicare covered items to beneficiaries and maintain proof of delivery.”  In the Final Rule implementing this requirement, CMS included the following commentary about what is necessary to effectuate a delivery:

This proposed standard [requires] that a supplier must be responsible for the delivery of Medicare covered items to beneficiaries.  A supplier must provide beneficiaries with necessary information and instructions on how to use Medicare covered items safely and effectively.

It is our intention that all beneficiaries . . . always receive the necessary information to safely and effectively use the items they receive.  We recognize that this may be accomplished through different means.  This requirement can be satisfied as long as the supplier can establish that the necessary training/instructions have been delivered at an appropriate time and in an appropriate manner.

This guidance suggests that, other than ensuring a patient physically receives an item of DME, the key purpose of the delivery requirement is to ensure that a patient receives training and instruction on the device.  Based on this, there is a credible argument that a DME supplier can effectuate a constructive “delivery” of an item already in a patient’s possession by providing the patient with the training and instruction necessary for the patient to use the item in his home.

This argument is supported by CMS’s acknowledgment that the delivery and instruction requirement can be accomplished through different means and when the time is appropriate.  In other words, even if a patient has physical possession of a NPWTP at the hospital before the discharging physician writes an order for a home use pump, a credible argument can be made that providing the patient with the necessary training and instructions after issuance of the written order for the NPWTP amounts to a satisfaction of the delivery requirement by alternative means at a time that is most appropriate for the patient.

Based on the DMEPOS Quality Standards, during the constructive delivery the DME supplier should provide any additional items necessary to operate the equipment at home and perform applicable adjustments to the equipment.  The supplier should provide, and document the provisions of, appropriate information about the setup, features, routine use, troubleshooting, cleaning, infection control practices, and maintenance of the equipment.  In addition, the supplier should ensure that the patient or his or her caregiver is capable of using the equipment safely and effectively based on the equipment settings for that patient.

Pre-Discharge Delivery

Assuming that a DME supplier may, after issuance of a written order for a NPWTP, constructively deliver the NPWTP to a patient already in possession of it, consideration must be given to Medicare’s requirements for delivering an item of DME to a patient before discharge from the hospital.  A DME supplier must meet the following nine conditions in order for CMS to presume that a pre-discharge delivery is appropriate:

  1. The item must be medically necessary for use in the patient’s home;
  2. The item must be medically necessary on the date of discharge. In other words, a physician must issue a written order for the item with an initial date of need on or before the date of discharge;
  3. The supplier must deliver the item while the patient is in the hospital for the sole purpose of fitting the patient for the item or training the patient in the use of the item;
  4. The supplier must deliver the item no more than two days before discharge;
  5. The supplier must ensure that either:
    1. the patient takes the item home; or
    2. the supplier picks the item up at the hospital and delivers it to the patient’s home on the date of discharge;
  6. The supplier must not furnish the item before discharge in order to relieve the hospital of its responsibility to provide the item;
  7. The supplier may not submit claims for payment for dates of service before the discharge date;
  8. The supplier may not claim payment for additional costs it incurs to ensure the item is delivered to the patient’s home on the discharge date, and the supplier may not bill the patient for redelivery; and
  9. The hospital must discharge the patient to a qualified place of service that qualifies as the patient’s home.

While CMS normally requires the date of service on a DME supplier’s initial claim to be the date the item is delivered, for items delivered pre-discharge in accordance with the nine listed conditions, CMS considers the delivery to occur, and the initial date of service to be, on the date of discharge.  And so the most important of the nine conditions is ensuring that constructive delivery by the DME supplier (i.e., the training and instruction on home use) happens no more than two days before discharge.  By following this timeline, CMS should view the DME supplier’s delivery as having occurred on the day of discharge.

Anti-Kickback Statute

The Federal Anti-Kickback Statute (“AKS”) prohibits a person from soliciting, receiving, offering, or paying anything of value in return for, or in order to induce referrals or the arrangement of referrals of individuals covered by a Federal health care program.  Here, because the DME supplier will purchase the NPWTP from the hospital, the potential AKS risk associated with the arrangement would primarily stem from the hospital’s role in assisting with the referral to the DME supplier.  There is a risk that “one purpose” for the money paid by the DME supplier to the hospital is to induce the hospital to arrange for the referral.

In order to reduce the risk of violating the AKS, it will be important that the price paid by the supplier for the NPWTP be fair market value.  If the price is greater than fair market value, then there is a risk that an assertion could be made that the inflated price is meant to reward the hospital for generating business for the supplier.



How to Contest a Drastic Reimbursement Cut by a Medicaid Managed Care Plan

Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C. & Pam F. Colbert, Esq., Brown & Fortunato, P.C.

Monday, January 22, 2018

2:30-3:30 p.m. EASTERN TIME

It is the proverbial “Irresistible Force Meeting the Immovable Object:” State Medicaid rolls are continuing to expand…but Medicaid programs are constrained by limited money. In an attempt to contain costs, State Medicaid programs are contracting with Medicaid Managed Care Plans (“Plans”). The State contracts with the Plan to provide health care services and products to beneficiaries under a capitation payment (fee per member per month).  The Plan then contracts with providers and suppliers to provide the products and services to Medicaid beneficiaries. Plans focus on profits. In order to generate profits, Plans are (i) cutting reimbursement and (ii) contracting with a small number of providers and suppliers…and in some cases, Plans contract with only one provider/supplier. If a DME supplier is facing drastically reduced reimbursement and/or being bumped off of Plan’s panel, the supplier needs to know what responsive steps to take.  This program will (i) discuss what a Plan is and how a state Medicaid program will contract with it; (ii) examples of Plans drastically reducing reimbursement and limiting the number of DME suppliers on their panels; and (iii) steps that the supplier can take to respond to the Plan’s actions. These steps include (i) utilizing the Plan’s appeal/grievance process; (ii) determining if the state has an applicable “any willing provider” statute; (iii) filing a complaint with the State Insurance Commission; (iv) lobbying the State Medicaid program; (v) lobbying the state legislature; and (vi) contacting Medicaid beneficiaries directly.

Register for How to Contest a Drastic Reimbursement Cut by a Medicaid Managed Care Plan on Monday, January 22, 2018, 2:30-3:30 pm ET, with Jeffrey S. Baird, Esq., and Pam F. Colbert, Esq., Brown & Fortunato, P.C.

Please contact Cherie Newell at if you experience any difficulties registering.

FEES: Member: $99.00   Non-Member: $129.00

Jeff Baird and Denise Leard will be presenting the following webinar:

Webinar Sponsored by PAMS

Targeted Probe and Education Review: What it is and How to Respond

Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C. & Denise M. Leard, Esq., Brown & Fortunato, P.C.

Wednesday, January 24, 2018

2:00 pm – 3:30 pm EASTERN TIME

Over the past 10 years, DME suppliers have been subjected to aggressive post-payment audits and prepayment reviews. In responding to a post-payment audit, the supplier is required to justify claims that were submitted years earlier. With a prepayment review, even though the supplier has furnished the equipment to the patient, Medicare will not pay the supplier until the supplier submits documentation that, in the eyes of Medicare, supports the claim. A frustrating byproduct of all of this is the three to four year ALJ backlog. Fortunately, Medicare has taken a step in the right direction by implementing the Targeted Probe and Educate (“TPE”) program. Under the TPE program, the supplier will not be subjected to unlimited requests for documentation…followed by vague denials. Rather, under the program the DME MAC will (i) request a limited number of patient files, (ii) review the files, (iii) explain any denials, and (iv) provide education to the supplier that addresses the denials. This webinar will discuss what the TPE program is and how the DME supplier should respond to a TPE request. Equally as important, this webinar will talk about the steps the supplier should take to ensure that its documentation will pass TPE review.

Register now for “Targeted Probe and Education Review: What it is and How to Respond” on Wednesday, January 24, 2018, 2:00-3:30 pm ET, with Jeffrey S. Baird, Esq., and Denise M. Leard, Esq., of  Brown & Fortunato, PC.

FEES:  Member: $59.00 

Non-Member:  $89.00

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. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or