Revocation of a Medicare Part B DMEPOS provider’s billing privileges (“PTAN”) sounds the death knell for most businesses unless successfully appealed, but it is preventable.

Here are the TOP 5 reasons that DMEPOS providers presented to our firm with their PTAN revoked in 2023, and how to best prevent it from happening to your company in 2024.

Revocation Reason #1: Violation of Supplier Standard #1 [42 CFR § 424.57(c)(1)]

What is Required –

The supplier “[o]perates its business and furnishes Medicare-covered items in compliance with the following applicable laws:

1. Federal regulatory requirements that specify requirements for the provision of DMEPOS and ensure accessibility for the disabled;
2. State licensure and regulatory requirements. If a State requires licensure to furnish certain items or services, a DMEPOS supplier – (A) Must be licensed to provide the item or service; (B) Must employee the licensed professional on a full-time or part-time basis, except for DMEPOS suppliers who are – (1) awarded competitive bid contracts using subcontractors to meet this standard; or (2) allowed by the State to contract licensed services as described in paragraph (c)(1)(ii)(C) of this section; (C) must not contract with an individual or other entity to provide the licensed services, unless allowed by the State where the licensed services are being performed;
3. Local zoning requirements.”

Examples of Violations –

1. Failure to have a state issued medical equipment provider business license (e.g., DME, HME license) if required for the DMEPOS dispensed in that state;
2. Failure to have any requisite individual professional licensure (e.g., certified orthotic fitter for certain types of braces, or respiratory therapist for CPAP and/or oxygen supplies in required states)

How to Prevent Revocation for Non-Compliance –

Examine state business and professional licensure requirements; if a license is required, obtain it prior to conducting business. Pro Tip: license requirements vary depending on the type of DMEPOS and the state that the beneficiary is located in. Confusion of state licensure requirements for providing continuous glucose monitors (CGM) and orthotics is especially prevalent for revocation reasons under this supplier standard.

Revocation Reason #2: Violation of Supplier Standard #2 [42 CFR § 424.57(c)(2)]

What is Required –

That the supplier “[h]as not made, or caused to be made, any false statement or misrepresenting of a material fact on its application for billing privileges. (A supplier must provide complete and accurate information in response to questions on its application for billing privileges and must report to CMS any changes in information supplied on the application within 30 days of the change).”

Examples of Violations –

Medicare enrolled DMEPOS providers must update their enrollment application (the 855S) within 30 days of any changes to it. For example, if any of the following changes occur, the DMEPOS provider must update its 855S within 30 days of the change taking place to maintain compliance with this standard: days/hours of operation; items/services that are provided; states doing business in; owners/officers/managers of the business; and physical location.

How to Prevent Revocation for Non-Compliance –

Update the business’s 855S within 30 days of any changes taking place. Pro Tip: use the electronic PECOS portal instead of a paper 855S to make any changes; it is quicker, more efficient, provides a current ‘snapshot’ of your business’s enrollment record and will keep track of all documents submitted.

Revocation Reason #3: Violation of Supplier Standard #5 [42 CFR § 424.57(c)(5)]

What is Required –

That the supplier “[a]dvises beneficiaries that they may either rent or purchase inexpensively or routinely purchased durable medical equipment, and of the purchase option for capped rental durable medical equipment . . . (The supplier must provide, upon request, documentation that it has provided beneficiaries with this information, in the form of copies of letters, logs, or signed notices).”

Examples of Violations –

DMEPOS providers must provide inform Medicare beneficiaries of the option to either rent or purchase certain equipment (and of the option to purchase certain equipment after the capped rental period) and must provide documentation of the same upon request. Medicare site-inspectors will ask for evidence of compliance with this standard upon inspection for initial enrollment and revalidation.

How to Prevent Revocation for Non-Compliance –

DMEPOS providers must obtain and maintain evidence that they have provided Medicare beneficiaries with the option to rent or purchase certain equipment (and of the option to purchase certain equipment after the capped rental period) and be able to provide such evidence upon request. As instructed by this supplier standard, such evidence can be in the form of copies of letters provided, logs, or signed notices.

Revocation Reason #4: Violation of Supplier Standard #11 [42 CFR § 424.57(c)(11)]

What is Required –

That the supplier cannot contact a Medicare Part B beneficiary by telephone regarding a Medicare-covered item unless one of the following applies:

1. The individual has given written permission to the supplier or the ordering physician or nonphysician practitioner to contact them concerning the furnishing of a Medicare-covered item that is to be rented or purchased;
2. The supplier has furnished a Medicare-covered item to the individual and the supplier is contacting the individual to coordinate the delivery of the item; or
3. If the contact concerns the furnishing of a Medicare-covered item other than a covered item already furnished to the individual, the supplier has furnished at least one covered item to the individual during the 15-month period preceding the date on which the supplier makes such contact.

Examples of Violations –

DMEPOS providers cannot initiate direct contact with a Medicare Part B beneficiary regarding a Medicare-covered item unless one of the above exceptions applies. If there is no pre-existing relationship with the individual a provider needs express written consent specific to their business prior to initiating contact.

How to Prevent Revocation for Non-Compliance –

What a DMEPOS provider cannot do directly it cannot do indirectly, and providers are responsible for the actions of their sub-contractors/third-party marketers. “Know thy subcontractor”. Ensure that the DMEPOS provider (or its representatives/agents/third-party marketers) does not initiate contact with a Medicare beneficiary unless it has express written consent to do that is specific to the business and DMEPOS item the individual is contacted regarding; ensure that documentation of such consent is stored and maintained.

Revocation Reason # 5: Violation of Supplier Standard #25 [42 CFR § 424.57(c)(25)]

What is Required –

That “[a]ll DMEPOS suppliers must disclose upon enrollment all products and services, including the addition of new product lines for which they are seeking accreditation. If a new product line is added after enrollment, the DMEPOS supplier will be responsible for notifying the accrediting body of the new product so that the DMEPOS supplier can be re-surveyed and accredited for these new products.”

Examples of Violations –

If a DMEPOS provider supplies any equipment/supplies to a Medicare Part B beneficiary that they are not first accredited to provide, they are in violation of this standard.

How to Prevent Revocation for Non-Compliance –

DMEPOS providers must ensure that they are accredited to provide any equipment/supplies to a Medicare Part B beneficiary prior to doing so. For dual purposes of compliance with this standard and DMEPOS Supplier Standard #2, businesses must ensure that the equipment/supplies that they are accredited to provide through their accreditation organization matches its Medicare enrollment record (855S).

Your Company Unfortunately Received A Revocation Notice: Now What?

Sometimes even when precautions are taken, a Medicare Part B enrolled DMEPOS provider may still receive a PTAN revocation notice. In this event, depending on the underlying allegations of non-compliance resulting in PTAN revocation, a DMEPOS provider may have the option of submitting (i) a Corrective Action Plan (“CAP”); or (ii) a Reconsideration Request.

CAP –

The CAP is an opportunity to demonstrate that you have corrected the deficiencies identified and establish eligibility to maintain enrollment in the Medicare program, and is only available for certain violations. Once a CAP is submitted, the decision is not appealable so provider’s need to ensure they are taking their best ‘shot’ in the initial submission.

The CAP must:

• Be received in writing within 35 calendar days of the date of the letter and mailed and/or emailed;
• Be signed by the provider or supplier, an authorized or delegated official that has been reported within your Medicare enrollment record, or an authorized representative; and
• Provide evidence to demonstrate that you are in compliance with Medicare requirements.

Reconsideration Request –

In a Reconsideration Request, a DMEPOS provider disagrees with the allegations of non-compliance and has documentation to provide to support compliance with the DMEPOS Supplier Standards for which non-compliance is alleged.

The Reconsideration Request must:

• Be received in writing within 65 calendar days of the date of this letter and mailed and/or emailed to the address below.
• State the issues or findings of fact with which you disagree and the reasons for disagreement.
• Be signed by the provider or supplier, an authorized or delegated official that has been reported within your Medicare enrollment record, or an authorized representative.

Takeaways

Proactive compliance measures are the only way to best insulate a Medicare Part B enrolled DMEPOS provider from allegations of non-compliance with Medicare’s DMEPOS Supplier Standards and to prevent revocation of its PTAN. Ensure your business is aligned with appropriate counsel to ensure it is thoroughly educated on requirements to prevent PTAN revocation, and in the unfortunate event it faces revocation to readily defend it.