Moving the HME Industry Forward

General Healthcare

Sharing Space with a Non Provider

April 21, 2014

AMARILLO, TX – DME suppliers are now operating in the “new normal.” Long gone is the quaint notion of a supplier opening its doors, having a Medicare beneficiary walk in, selling or renting a Medicare-covered item, and getting paid reasonable reimbursement. The good news is the demand for DME is increasing. The challenge is that the DME supplier must push itself out of its comfort zone and find its niche.

One niche is for the DME supplier to offer products not covered by Medicare. This is similar to a pharmacy offering products and services over and beyond prescription drugs. One way for a DME supplier to offer non-Medicare products is to share space with a non-provider.

For example, assume that ABC Medical Equipment, Inc. has a rental showroom floor. Assume that ABC desires to share space with XYZ, Inc., a retailer of monitoring devices (detecting when a person falls) and related safety items. Is a proposed plan, by which ABC will share space with XYZ, consistent with the Medicare Supplier Standards? The answer is “yes” as long as XYZ is not a Medicare supplier or provider and ABC complies with the remainder of the Supplier Standards.

Specifically, assume that ABC plans to lease a portion of its showroom to XYZ which will sell its products for cash. Even though a portion of the showroom will be leased to XYZ, ABC will retain at least 200 square feet and continue business operations in accordance with the Supplier Standards. The two stores should be separated (e.g., by seven foot high grid walls), and each store should have its own cash register, telephone line, and sales representatives. On the front of the building, the logo and hours of operation for each store should be displayed. Also, the logo of each store should be displayed in the area of the showroom that is occupied by the applicable store.

In addition to the Supplier Standard that prohibits an enrolled supplier “from sharing a practice location with any other Medicare supplier or provider,” ABC must comply with the remainder of the Supplier Standards. Thus, ABC must certify that it:

[M]aintains a practice location that is at least 200 square feet . . . .
Is in a location that is accessible to the public, Medicare beneficiaries, CMS, NSC, and its agents. . . .
Is accessible and staffed during posted hours of operation.
Maintains a permanent visible sign in plain view and posts hours of operation. If the supplier’s place of business is located within a building complex, the sign must be visible at the main entrance of the building or the hours can be posted at the entrance of the supplier.
Is in a location that contains space for retaining the necessary ordering and referring documentation. . . .
Maintains a primary business telephone that is operating at the appropriate site listed under the name of the business locally or toll-free for beneficiaries.

The Supplier Standards also require enrolled suppliers to comply with the DMEPOS Quality Standards. Under the Quality Standards, “[t]he supplier shall have a physical location and display all licenses, certificates, and permits to operate. The licenses, certificates and permits must be displayed in an area accessible to customers and patients. The supplier shall provide copies, upon request, to government officials or their authorized agents.”

Because XYZ is not a Medicare supplier, the arrangement will not violate the Supplier Standard that prohibits “sharing a practice location with any other Medicare supplier.” Moreover, the description of the physical arrangement for the shared showroom is consistent with the Supplier Standards because ABC will have (1) a practice space that is at least 200 square feet, (2) a sign identifying the store and hours of operation, (3) staff working strictly for ABC during the posted business hours, (4) a telephone line assigned to ABC, and (5) an area that is reserved solely for ABC’ business operations.  As long as XYZ does not enroll in Medicare and ABC continues operations in accordance with its accreditation requirements and the Supplier and Quality Standards, the arrangement between XYZ and ABC will not violate the Supplier Standards.

Jeff Baird will be co-presenting two webinars for AAHomecare: one this week and one next week. One focuses on home sleep testing and oxygen patients and the other focuses on the retail sales market. Also, AAHomecare will be having its annual Washington Legislative Conference in May. See information listed below:

AAHomecare’s Educational Webinar
Prospective Oxygen Patient: Pre-Screens, Free Use of Concentrators, and Other Problem Areas

Presented by:
Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.
Kelly Riley, The MED Group

Thursday, April 24, 2014, from 2:30-4:00 p.m. EASTERN TIME

Sign up now for Prospective Oxygen Patient: Pre-Screens, Free Use of Concentrators, and Other Problem Areas on Thursday, April 24, 2014, 2:30-4:00 pm ET, with Jeffrey S. Baird, JD, of Brown & Fortunato, PC and noted respiratory expert Kelly Riley, CRT, RCP, Director, Clinical Networks with The MED Group.

Please note: There is a new online meeting registration system; please contact Ika Sukh at ikas@aahomecare.org if you experience any difficulties registering.

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

AAHomecare’s Educational Webinar
Retail Sales: A Critical Component of the Successful HME Company


Presented by:
Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.
Jack Evans, Global Media Marketing

Tuesday, April 29, 2014, from 2:30-4:00 p.m. EASTERN TIME

Sign up now for Retail Sales: A Critical Component of the Successful HME Company on Tuesday, April 29, 2014, 2:30-4:00 pm ET, with Jeffrey S. Baird, Esq., of Brown & Fortunato, PC and noted retail and marketing expert Jack Evans, President of Global Media Marketing.

Please note there is a new online meeting registration system; please contact Ika Sukh at ikas@aahomecare.org if you experience any difficulties registering.

FEES: Member: $99
Non-Member: $129

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato PC, a law firm based in Amarillo, Tex. He represents DME suppliers, pharmacies, infusion 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 jbaird@bf-law.com.