Published 7/1/2008
Robert S. Jasak, Esq; Marty Krawczyk

A guide to Medicare’s DMEPOS rules

Orthopaedic surgeons face increasing hurdles to provide DMEPOS to patients

Many orthopaedic surgeons provide durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) during the patient visit as a critical component of quality care. But on July 1, 2008, new rules went into effect that change how orthopaedic surgeons enroll in and bill for DMEPOS for Medicare patients.

To reduce Medicare spending and fraud in providing DMEPOS, Congress mandated the Centers for Medicare and Medicaid Services (CMS) to restructure the rules and requirements governing provider enrollment and to phase in a competitive bidding program, replacing the current fee-based payment methodology.

CMS currently requires physicians to obtain DMEPOS enrollment numbers and bill Medicare for products as a “DMEPOS supplier.” Physicians’ ability to provide these products to patients, however, is already limited by Stark self-referral regulations. Because some durable medical equipment (DME) is important to a patient’s ability to safely leave the physician’s office and to prevent further injury, an exception from the Stark prohibition was created at the request of the American Association of Ortho­paedic Surgeons (AAOS) and other groups.

Physicians may provide crutches, canes, walkers, and folding manual wheelchairs to their patients if the arrangement fits within the Stark in-office ancillary exception. Providing all other DME is prohibited.

Orthotics, prosthetics, and other non-DME items are treated differently under the law. According to the U.S. Code, orthotics include “leg, arm, back, and neck braces and artificial legs, arms, and eyes”; prosthetics are items that “replace all or part of an internal body organ.” To provide patients with orthotics, physicians must meet the Stark in-office ancillary exception.

New enrollment and requirements
A physician who provides and bills for DMEPOS must submit an enrollment application to the National Supplier Clearinghouse using form CMS-855S. Rules govern the renewal of DMEPOS enrollment numbers and the new regulations do not require that every supplier obtain a new number. (See “When to submit CMS-855S” below.)

In addition, more stringent DMEPOS ‘quality standards’ went into effect on July 1, directed at traditional DMEPOS suppliers. Recognizing this, the AAOS, in discussions with CMS, noted that physicians who are DMEPOS suppliers have fundamentally different training, expertise, and patient interactions, and thus should not be subject to the same quality standards as traditional DMEPOS suppliers. A new version of the quality standards is under development; the AAOS was successful in removing a provision to require physician certification as an orthotist or prosthetist by the American Board of Certification in Orthotics and Prosthetics (ABC) or the Board for Orthotist/Prosthetist Certification to provide and submit claims for certain DMEPOS products.

One size doesn’t fit all
The legislative language directing CMS to implement new quality standards also required the appointment of “recognized independent organizations” to apply the standards. In late 2006, CMS named several accreditation organizations. (See “CMS-designated accreditation organizations for DMEPOS suppliers” below.)

Physician practices will be charged approximately $3,000 per location for accreditation. Because only a portion of an orthopaedic practice is dedicated to providing DMEPOS, these requirements make it increasingly difficult for physicians to participate as DMEPOS suppliers. Although existing suppliers are not required to receive accreditation until Sept. 30, 2009, those currently seeking new supplier numbers or renewing existing numbers must begin the accreditation process immediately.

According to AAOS, the accreditation requirement duplicates other training that orthopaedic surgeons receive, is financially and administratively burdensome, and could adversely affect patient care.

The competitive bidding process
To submit a bid under the competitive bidding program for DME and medical supplies; enteral nutrients, equipment, and supplies; and off-the-shelf orthotics (defined under law as orthotics that “require minimal self adjustment for appropriate use and do not require expertise in trimming, bending, molding, assembling, or customizing to fit the individual),” suppliers must be accredited as meeting the quality standards.

In May, CMS awarded 3-year contracts to 325 suppliers in Round 1 of the competitive bidding program serving 10 communities, also referred to as competitive bidding areas (CBAs). CMS has not released the details of the next phase of the program, although an additional 70 CBAs will be in­cluded as the program is phased in.

The competitive bidding system limits the ability of orthopaedic surgeons to compete and adds to the surgeon’s costs, making participation as a DMEPOS supplier even more difficult. Recognizing this, the AAOS worked with CMS to craft a rule that exempted physicians from having to bid on certain DME items such as crutches, canes, walkers, and folding manual wheelchairs.

CMS also created a separate exception from the competitive bidding process for off-the-shelf orthotics, which extends only to occupational and physical therapists. Thus, CMS acknowledged that these items are integral to care, but—in what AAOS believes is a glaring omission—did not include physicians in the exception. Efforts to correct this omission are underway.

Advocacy in action
The AAOS office of government relations is meeting with CMS officials and responding to the federal rulemaking. It is also educating members of Congress to ensure that the program’s burdens do not interfere with a patient’s access to necessary DMEPOS items in a safe, timely, and efficient environment in consultation with her or his physician.

AAOS medical director, Robert H. Haralson III, MD, MBA, testified before the House Small Business Subcommittee on Rural and Urban Entrepreneurship. Congressional representatives—including committee chair Nydia Velázquez, D-N.Y.; subcommittee chair Heath Schuler, D-N.C.; and ranking member Jeff Fortenberry, R-Neb.—echoed Dr. Haralson’s concerns about the program and agreed that applying rules meant for traditional DMEPOS suppliers to physicians could have unintended results and a negative impact on patient access to care.

As this edition of AAOS Now went to press, several members of the House have proposed the Medicare DMEPOS Competitive Acquisition Reform Act of 2008, and similar legislation has been introduced in the Senate. The legislation would terminate the contracts awarded under Round 1 of the program and restart the process in 2009. More importantly, it would create a physician exception for off-the-shelf orthotics from the competitive bidding program and delay CMS application of the DMEPOS quality standards and accreditation process to physicians.

AAOS is continuing its efforts to establish a physicians exemption and ensure patient access to care. Watch for updates in AAOS Now, Advocacy Now, and Headline News Now. For more information, visit http://www.cms.hhs.gov/DMEPOSCompetitiveBid/

Robert S. Jasak, Esq. is the AAOS senior regulatory advisor and federal representative for the Board of Specialty Societies in the AAOS office of government relations; Marty Krawczyk is the practice management group coordinator in the AAOS practice management department.

CMS-designated accreditation organizations for DMEPOS suppliers

  • The Joint Commission
  • National Association of Boards of Pharmacy
  • Board of Orthotist/Prosthetist Certification
  • The Compliance Team, Inc.
  • American Board for Certification in Orthotics & Prosthetics, Inc.
  • The National Board of Accreditation for Orthotic Suppliers
  • Commission on Accreditation of Rehabilitation Facilities
  • Community Health Accreditation Program
  • HealthCare Quality Association on Accreditation
  • Accreditation Commission for Health Care, Inc.

Note: Contact these organizations directly for more information on accreditation. DMEPOS suppliers interested in the Round 2 Competitive Bidding Program must apply for accreditation to one of these organizations by July 21, 2008, and must receive accreditation no later than January 14, 2009. Orthopaedic surgeons are exempt from the bidding process related to crutches, canes, walkers, and folding manual wheelchairs.

When to submit CMS 855S
If you are currently a Medicare DMEPOS Supplier or are enrolling as a new Medicare DMEPOS Supplier, you will need to complete the “Medicare Enrollment Application for DMEPOS” (CMS-855S). You will also need to resubmit the CMS 855S to the National Supplier Clearinghouse (NCS) if any of the following situations apply:

  • You have not submitted a Medicare Enrollment DMEPOS Supplier application (CMS-855S) for 3 years or more.
  • You want to reactivate a Medicare supplier number that was deactivated for nonbilling so that you can receive payment for future Medicare claims.
  • You are changing any information relative to adding or deleting a location to an organization with a taxpayer identification number already listed with the NCS.
  • You are deactivating your Medicare billing privileges because of sale or closure of a business location.

The revised CMS-855S form requires submission of your National Provider Identifier (NPI) and a copy of the NPI notification furnished by the NPI Enumerator with all enrollment documentation. If are enrolling for the first time, you must also submit the “Medicare Participating Physician or Supplier Agreement” (CMS-460).

It takes NCS approximately 45 days to process changes on the CMS-855S. Missing information will extend the processing time and delay issuance of your supplier billing number.