Moving the HME Industry Forward


You Can Call Medicare Beneficiaries, But Be Careful

July 15, 2013

AMARILLO, TX – Let me make this clear: CMS does not like it when DME
suppliers call Medicare beneficiaries. A CMS official once said to me:
“We don’t want DME suppliers calling our beneficiaries.” 

concern is that an elderly person, who does not feel well, can be taken
advantage of over the phone by an unscrupulous supplier using “boiler
room” tactics. I understand CMS’ concern.

My father (now
deceased) was a WWII vet, a college athlete, and a professional. Dad was
tough as nails—John Wayne and Clint Eastwood rolled into one.
Unfortunately, Dad got old and feeble, and during the last years of his
life, he would have been bulldozed by an aggressive marketer.

telephone solicitation statute and Supplier Standard # 11 are limited
to DME suppliers. They are meant to protect the elderly from getting
“cold called.”  The statute and standard essentially say the same thing:

Mrs. Smith, a 78-year-old Medicare beneficiary, sitting in her living
room watching television. ABC Medical Equipment Inc, directly, or
through an agent, may not call Mrs. Smith, unless one of three
conditions exist:

1) ABC has provided a Medicare-covered item to
Mrs. Smith any time in the past, and ABC is calling Mrs. Smith about
that particular item;
2) ABC has provided a Medicare-covered item to
Mrs. Smith within the past 15 months, and ABC is calling Mrs. Smith
about other products that ABC can provide. This second condition allows
ABC to cross-sell to Mrs. Smith if she has obtained a covered item from
ABC within the preceding 15 months.
3) ABC has never provided a
Medicare-covered item to Mrs. Smith. Mrs. Smith is a prospective
customer of ABC.  Mrs. Smith has given her consent (electronic or “blue
ink”) to be called by ABC. 

Let’s drill down on this a bit.
Under the guise of “if it looks like a duck, walks like a duck, and
sounds like a duck,” here is what cannot happen:
(i) ABC cannot call
Mrs. Smith and ask for permission to call her at a later time (don’t
laugh…..a client asked if it could do this);
(ii) a marketer cannot cold call Mrs. Smith and ask her if ABC can call her;
a “final expense” life insurance company cannot call its beneficiaries,
ask them a bunch of questions about their life insurance, and then ask
them if they are interested in DME, and if the answer is “yes,” transfer
their names to ABC; and
(iv) a marketer cannot call Mrs. Smith
under the guise of a “survey,” ask her questions about her house, her
dog, her flowers, and then ask her if she is interested in DME—and if
she says “yes,” then transfer her name to ABC. 

In law school, I
took Constitutional Law. In that class I learned that the definition of
pornography is that “you know it when you see it.” Likewise, “you know a
cold call when you see it.”

Let’s drill down on the third
condition a bit further. ABC can call Mrs. Smith if it is a “solicited”
call—that is, if Mrs. Smith has affirmatively taken action that reflects
her consent to be called. For example, let’s say that Mrs. Smith
watches a television commercial, or reads a newspaper ad, and calls

Mrs. Smith reaches ABC’s answering service or voicemail. 
Mrs. Smith leaves a message asking that ABC call her.  In response, ABC
calls Mrs. Smith.  It is unlikely that CMS will allege that the
telephone solicitation statute and Supplier Standard # 11 are violated. 
Look at another example. 

Mrs. Smith goes to a web landing page
for ABC. She fills out the consent-to-be-called box and then hits
“submit.”  In response, ABC calls Mrs. Smith.  This is a proper
electronic consent on condition that (i) ABC is the only company listed
on the web landing page, (ii) the consent is specific to ABC, and (iii)
the box that Mrs. Smith submits clearly states that she is giving ABC
permission to call her.

Unsolicited phone calls to Medicare
beneficiaries are a big deal to two of the most powerful CMS
contractors: the NSC and ZPICs. On several occasions, I have seen a ZPIC
instruct DME MACs to suspend payments to a DME supplier because the
supplier is allegedly violating the telephone solicitation statute. I
have also seen the NSC threaten to revoke a DME supplier’s Part B
supplier number because the supplier is allegedly violating Supplier
Standard # 11. For example, as I write this article I am staring at a
letter from the NSC to a DME supplier that states the following:

Supplier: This letter is official notice that the Supplier Audit and
Compliance Unit (SACU) of the National Supplier Clearinghouse (NSC) has
found the facility….to be in violation of one or more of the Durable
Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS)
supplier standards……More specifically, we would like to draw your
attention to [Supplier Standard # 11]. Our office has received
information that your company contacted a patient in order to solicit
their business. Under Section 1834(a)(17) of the Social Security Act,
DMEPOS suppliers are prohibited from making unsolicited telephone
contacts. Please provide proof of your compliance with this standard.
Please be advised that you are allowed 21 calendar days from the date of
this letter to provide the SACU with information that may allow us to
verify your full compliance with the DMEPOS supplier standards. If you
fail to comply with the 21-day deadline, the SACU may initiate actions
to revoke your Medicare DMEPOS supplier number.”

take away from this article is the “walks-like-a-duck” analogy. Pure and
simple, when Mrs. Smith is sitting in her rocking chair, her phone may
not ring—period—unless one of the three conditions discussed above are

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