Docstoc

Federal Register Vol 75, No 166 Friday, August 27, 2010 Rules

Document Sample
Federal Register Vol 75, No 166 Friday, August 27, 2010 Rules Powered By Docstoc
					                                                                     Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations                                         52629

                                                  DEPARTMENT OF HEALTH AND                                in § 424.57(a) as an entity or individual,               • Is for use in the home.
                                                  HUMAN SERVICES                                          including a physician or Part A                       Examples of DMEPOS supplies include
                                                                                                          provider, that sells or rents Part B                  items such as blood glucose monitors,
                                                  Centers for Medicare & Medicaid                         covered DMEPOS items to Medicare                      hospital beds, nebulizers, oxygen
                                                  Services                                                beneficiaries that meet the DMEPOS                    delivery systems, and wheelchairs.
                                                                                                          supplier standards. This final rule                      Prosthetic devices are included in the
                                                  42 CFR Part 424                                         applies to all DMEPOS suppliers and                   definition of ‘‘medical and other health
                                                  [CMS–6036–F]                                            amends the DMEPOS supplier standards                  services’’ under section 1861(s)(8) of the
                                                                                                          set forth at § 424.57(c). Those                       Act. Prosthetic devices are defined in
                                                  RIN 0938–AO90                                           individuals or entities that do not                   this section of the Act as ‘‘devices (other
                                                                                                          furnish DMEPOS items but furnish                      than dental) which replace all or part of
                                                  Medicare Program; Establishing                          other types of health care services only              an internal body organ (including
                                                  Additional Medicare Durable Medical                     (for example, physician services or                   colostomy bags and supplies directly
                                                  Equipment, Prosthetics, Orthotics, and                  nurse practitioner services) would not                related to colostomy care), including
                                                  Supplies (DMEPOS) Supplier                              be subject to this requirement. A                     replacement of such devices, and
                                                  Enrollment Safeguards                                   supplier that furnishes durable medical               including one pair of conventional
                                                  AGENCY:  Centers for Medicare &                         equipment, prosthetics, orthotics, and                eyeglasses or contact lenses furnished
                                                  Medicaid Services (CMS), HHS.                           suppliers (DMEPOS) is one category of                 subsequent to each cataract surgery with
                                                  ACTION: Final rule.                                     supplier. Other supplier categories may               insertion of an intraocular lens.’’ Other
                                                                                                          include, for example, physicians, nurse               examples of prosthetic devices include
                                                  SUMMARY:   This final rule will clarify,                practitioners, and physical therapists. If            cardiac pacemakers, cochlear implants,
                                                  expand, and add to the existing                         a supplier, such as a physician or                    electrical continence aids, electrical
                                                  enrollment requirements that Durable                    physical therapist, also provides                     nerve stimulators, and tracheostomy
                                                  Medical Equipment and Prosthetics,                      DMEPOS to a patient, then the supplier                speaking valves.
                                                  Orthotics, and Supplies (DMEPOS)                        is also considered to be a DMEPOS                        Section 1861(s)(9) of the Act provides
                                                  suppliers must meet to establish and                    supplier. The term ‘‘DMEPOS’’                         for the coverage of ‘‘leg, arm, back, and
                                                  maintain billing privileges in the                      encompasses the types of items                        neck braces, and artificial legs, arms,
                                                  Medicare program.                                       included in the definition of medical                 and eyes, including replacement of
                                                  DATES: These regulations are effective                  equipment and supplies in section                     required because of a change in the
                                                  on September 27, 2010.                                  1834(j)(5) of the Act.                                patient’s physical condition.’’ As
                                                  FOR FURTHER INFORMATION CONTACT:                           In FY 2007, the Medicare program                   indicated by section 1834(h)(4)(C) of the
                                                  Barry Bromberg, (410) 786–9953 for                      spent more than $10 billion for                       Act, these items are often referred to as
                                                  general issues, on-site inspections,                    DMEPOS supplies, and in March 2008,                   ‘‘orthotics and prosthetics.’’ Under
                                                  maintaining ordering and referring                      there were 113,154 individual DMEPOS                  section 1834(h)(4)(B) of the Act,
                                                  documentation, and hours of operation.                  suppliers. However, due to the                        prosthetic devices do not include
                                                    Kimberly McPhillips, (410) 786–5374                   affiliation of some DMEPOS suppliers                  parenteral and enteral nutrition
                                                  for issues related to compliance with                   with chains, there were 65,984 unique                 nutrients and implantable items payable
                                                  applicable laws, appropriate sites, direct              billing numbers. The largest                          under section 1833(t) of the Act.’’
                                                  solicitation, oxygen suppliers, and                     concentrations of DMEPOS suppliers                       Section 1861(s)(5) of the Act includes
                                                  prohibition on sharing a practice                       were located in five States: California               ‘‘surgical dressings, splints, casts, and
                                                  location.                                               (approximately 9 percent), Texas                      other devices used for reduction of
                                                                                                          (approximately 7 percent), Florida                    fractures and dislocation’’ as one of the
                                                  SUPPLEMENTARY INFORMATION:
                                                                                                          (approximately 7 percent), New York                   ‘‘medical and other health services’’ that
                                                  I. Background                                           (approximately 6 percent) and                         is covered by Medicare. Other items that
                                                                                                          Pennsylvania (approximately 5 percent).               may be furnished by suppliers would
                                                  A. General Overview
                                                                                                          We believe that approximately 20                      include (among others):
                                                     Medicare services are furnished by                   percent of the DMEPOS suppliers are                      • Prescription drugs used in
                                                  two types of entities, providers, and                   located in rural areas throughout the                 immunosuppressive therapy furnished
                                                  suppliers. At § 400.202, the term                       United States and that the vast majority              to an individual who receives an organ
                                                  ‘‘provider’’ is defined as a hospital, a                of DMEPOS suppliers are small entities                transplant for which payment is made
                                                  critical access hospital (CAH), a skilled               (based on Medicare reimbursement                      under this title, and that are furnished
                                                  nursing facility (SNF), a comprehensive                 alone).                                               within a certain time period after the
                                                  outpatient rehabilitation facility (CORF),                 The term ‘‘durable medical                         date of the transplant procedure as
                                                  a home health agency (HHA), or a                        equipment’’ is defined at section 1861(n)             noted at section 1861(s)(2)(j) of the Act.
                                                  hospice that has in effect an agreement                 of the Act. This definition, in part,                    • Extra-depth shoes with inserts or
                                                  to participate in Medicare, or a clinic, a              excludes from coverage as DMEPOS,                     custom molded shoes with inserts for an
                                                  rehabilitation agency, or a public health               items furnished in SNFs and hospitals.                individual with diabetes as listed at
                                                  agency that has in effect a similar                     Also, the term DMEPOS is included in                  section 1861(s)(12) of the Act.
                                                  agreement but only to furnish outpatient                the definition of ‘‘medical and other                    • Home dialysis supplies and
                                                  physical therapy or speech pathology                    health services’’ in section 1861(s)(6) of            equipment, self-care home dialysis
                                                  services, or a community mental health                  the Act. Furthermore, the term is                     support services, and institutional
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  center that has in effect a similar                     defined in § 414.202 as equipment                     dialysis services and supplies included
                                                  agreement but only to furnish partial                   furnished by a supplier or a HHA that—                at section 1861(s)(2)(F) of the Act.
                                                  hospitalization services. The term                         • Can withstand repeated use;                         • Oral drugs prescribed for use as an
                                                  ‘‘provider’’ is also defined in sections                   • Is primarily and customarily used                anticancer therapeutic agent as specified
                                                  1861(u) and 1866(e) of the Social                       to serve a medical purpose;                           in section 1861(s)(2)(Q) of the Act.
                                                  Security Act (the Act).                                    • Generally is not useful to an                       • Self-administered erythropoietin as
                                                     For purposes of the DMEPOS supplier                  individual in the absence of an illness               described in section 1861(s)(2)(O) of the
                                                  standards, the term ‘‘supplier’’ is defined             or injury; and                                        Act.


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00023   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                  52630              Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations

                                                    The National Supplier Clearinghouse                   33) amended section 1834 of the Act to                to providers and suppliers under the
                                                  (NSC) is the Center for Medicare &                      require that certain Medicare supplies of             Medicare program as established by
                                                  Medicaid Services’ (CMS) designated                     durable medical equipment, prosthetics,               Title XVIII of the Act.
                                                  national enrollment contractor for                      and supplies (DMEPOS) to furnish CMS
                                                                                                                                                                II. Provisions of the Proposed Rule
                                                  DMEPOS suppliers. The primary                           with a surety bond in an amount not
                                                  functions of the NSC are to: (1) Ensure                 less than $50,000.                                       In the January 25, 2008 Federal
                                                  that only qualified suppliers of                           • Section 4313 of the BBA amended                  Register (73 FR 4503), we published a
                                                  DMEPOS are enrolled or remain                           sections 1124(a)(1) and 1124A of the Act              proposed rule that clarified, revised,
                                                  enrolled in the Medicare program;                       to require disclosure of both the                     and added to the DMEPOS supplier
                                                  (2) process enrollment application in                   Employer Identification Number (EIN)                  standards in § 424.57.
                                                  timely and accurate manner; and                         and Social Security Number (SSN) of                      In § 424.57(c)(1), we proposed to
                                                  (3) take the necessary actions to revoke                each provider or supplier, each person                revise this supplier standard by adding
                                                  enrolled suppliers who no longer meet                   with ownership or control interest in                 language to clarify that a DMEPOS
                                                  supplier standards.                                     the provider or supplier, any                         supplier must be licensed to provide
                                                                                                          subcontractor in which the provider or                licensed service(s) and cannot contract
                                                  B. Statutory Authority                                  supplier directly or indirectly has a 5               with an individual or entity to provide
                                                     Various sections of the Act and the                  percent or more ownership interest, and               the licensed service(s).
                                                  regulations require providers and                       any managing employees including                         The purpose of this standard is to
                                                  suppliers to furnish information                        Directors and Board Members of                        ensure that DMEPOS suppliers obtain
                                                  concerning the amounts due and the                      corporations and non-profit                           and maintain the necessary State
                                                  identification of individuals or entities               organizations and charities. The ‘‘Report             licenses required to furnish the services
                                                  that furnish medical services to                        to Congress on Steps Taken to Assure                  provided to Medicare beneficiaries. In
                                                  beneficiaries before payment can be                     Confidentiality of Social Security                    addition, we believe that each DMEPOS
                                                  made. The following is an overview of                   Account Numbers as Required by the                    supplier is responsible for determining
                                                  the sections that grant this authority:                 Balanced Budget Act’’ was signed by the               what licenses are required to operate a
                                                     • Sections 1102 and 1871 of the Act                  Secretary and sent to the Congress on                 DMEPOS supplier’s business. While the
                                                  provide general authority for the                       January 26, 1999. This report outlines                NSC maintains information regarding
                                                  Secretary of Health and Human Services                  the provisions of a mandatory collection              State licensure laws, we do not believe
                                                  (the Secretary) to prescribe regulations                of SSNs and EINs effective on or after                that the NSC is responsible for notifying
                                                  for the efficient administration of the                 April 26, 1999.                                       any supplier of what licenses are
                                                  Medicare program. Under this authority,                    • Section 31001(i)(1) of the Debt                  required or that any changes have
                                                  this final rule will require the collection             Collection Improvement Act of 1996                    occurred in the State licensing
                                                  of information from providers and                       (DCIA) (Pub. L. 104–134) amended                      requirements. We believe that we are
                                                  suppliers for the purpose of enrolling in               section 7701 of 31 U.S.C. by adding                   enrolling DMEPOS suppliers, not third
                                                  the Medicare program and granting                       paragraph (c) to require that any person              party agents that subcontract their
                                                  privileges to bill the program for health               or entity doing business with the                     operations to suppliers that are not
                                                  care services furnished to Medicare                     Federal Government must provide their                 enrolled or cannot enroll in the
                                                  beneficiaries.                                          Tax Identification Number (TIN).                      Medicare program. Therefore, to ensure
                                                     • Sections 1814(a), 1815(a), and                        • Section 936(a) of the Medicare                   that only qualified suppliers are
                                                  1833(e) of the Act require the                          Prescription Drug, Improvement, and                   enrolled or maintain enrollment in the
                                                  submission of information necessary to                  Modernization Act of 2003 (MMA) (Pub.                 Medicare program, we maintain that a
                                                  determine the amounts due a provider                    L. 108–173) amended section 1866 of                   DMEPOS supplier must be licensed to
                                                  or other person.                                        the Act by adding a new subsection                    provide licensed service(s) and cannot
                                                     • Section 1834(j)(1)(A) of the Act                   (j)(1) to require the Secretary to establish          contract with an individual or entity to
                                                  states that no payment may be made for                  a process for the enrollment of providers             provide the licensed service(s).
                                                  items furnished by a supplier of medical                of services and suppliers.                               In § 424.57(c)(7), we proposed to
                                                  equipment and supplies unless such                         • Section 302(a)(1) of MMA amended                 clarify the supplier standard for
                                                  supplier obtains (and renews at such                    the Act to require the Secretary to                   maintaining a physical facility on an
                                                  intervals as the Secretary may require)                 develop quality standards for DMEPOS                  appropriate site. Specially, we proposed
                                                  a supplier number. In order to obtain a                 suppliers.                                            to clarify the term, ‘‘appropriate site.’’ In
                                                  supplier billing number, a supplier must                   • Section 154(b) of the MIPPA                      addition, we stated that an ‘‘appropriate
                                                  comply with certain supplier standards                  amended the Act to establish a deadline               site’’ applies to ‘‘closed door’’ businesses,
                                                  as identified by the Secretary.                         for DMEPOS accreditation.                             (such as pharmacies/suppliers
                                                     • Section 1842(r) of the Act requires                   Section 6405(a) of the Affordable Care             providing services only to beneficiaries
                                                  CMS to establish a system for furnishing                Act (ACA) requires that in order for                  residing in a nursing home). We also
                                                  a unique identifier for each physician                  payment for services to be made, a                    solicited comments on whether we
                                                  who furnishes services for which                        physician who orders DME for                          should establish a minimum square
                                                  payment may be made. To complete                        individuals must be a Medicare                        footage requirement to the definition of
                                                  this, we need to collect information                    participating physician enrolled under                an appropriate site and what, if any,
                                                  unique to that physician.                               section 1866(j) of the Act or an eligible             appropriate exceptions would apply to
                                                     • Section 1862(e)(1) of the Act states               professional under section 1848(k)(3)(B)              a minimum square footage requirement.
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  that no payment may be made when an                     of the Act that is enrolled under section                The supplier location must be
                                                  item or service was at the medical                      1866(j) of the Act.                                   accessible during posted business hours
                                                  direction of an individual or entity that                  We are authorized to collect                       to beneficiaries and to CMS, and must
                                                  is excluded in accordance with sections                 information on the Medicare enrollment                maintain a visible sign and posted hours
                                                  1128, 1128A, 1156, or 1842(j)(2) of the                 application (that is, the CMS–855,                    of operation. We believe that all
                                                  Act.                                                    (Office of Management and Budget                      DMEPOS suppliers must have a
                                                     • Section 4312 of the Balanced                       (OMB) approval number 0938–0685)) to                  permanent, durable sign that is visible
                                                  Budget Act of 1997 (BBA) (Pub. L. 105–                  ensure that correct payments are made                 at the main entrance of the facility and


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00024   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                                     Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations                                        52631

                                                  positioned so that it is visible to the                 the policy and notify the NSC in writing              and maintain this standard, we believe
                                                  public, including customers using                       within 30 days of any policy changes or               that DMEPOS suppliers who are
                                                  wheelchairs.                                            cancellations.                                        supplying oxygen must contract with a
                                                     In § 424.57(c)(8), we proposed to                       In § 424.57(c)(11), we proposed to                 supplier licensed by the State to provide
                                                  clarify this provision by revising (c)(8)               revise this supplier standard to clarify              them with oxygen. Obviously, this
                                                  to read as follows: ‘‘Permits CMS, the                  that suppliers cannot directly solicit                standard does not apply when the State
                                                  NSC, or agents of CMS or the NSC to                     patients, which includes, but is not                  does not license oxygen suppliers. We
                                                  conduct on-site inspections to ascertain                limited to, a prohibition on telephone,               understand that in certain areas,
                                                  supplier compliance with the                            computer e-mail or instant messaging,                 DMEPOS suppliers may obtain oxygen
                                                  requirements of this section.’’ If the NSC              coercive response Internet advertising                from oxygen suppliers in other States.
                                                  or its agents are unable to perform a site              on sites unrelated to DMEPOS products,                However, when a DMEPOS supplier is
                                                  visit during a supplier’s posted business               or in-person contacts. We also proposed               located in a State where licensure is
                                                  hours, the NSC would deny billing                       that DMEPOS supplier may only contact                 required, then they must obtain their
                                                  privileges for prospective applicants or                the Medicare beneficiary under the                    oxygen from a State-licensed oxygen
                                                  would revoke the billing privileges of                  current provisions at § 424.57(c)(11)(i)              supplier, regardless of which State the
                                                  DMEPOS suppliers enrolled in the                        through (iii). We believe that if CMS or              oxygen supplier obtained their
                                                  Medicare program.                                       the NSC through on-site inspection                    licensure. We believe that this standard
                                                     In § 424.57(c)(9), we proposed to                    obtains or develops evidence that a                   would help to protect Medicare
                                                  revise this supplier standard to exclude                DMEPOS supplier has made prohibited                   beneficiaries and promote quality in the
                                                  the use of cell phones and beepers/                     contacts with Medicare beneficiaries in               furnishing of oxygen.
                                                  pagers as a method of receiving calls or                violation of the provisions found in this                In § 424.57(c)(28), we proposed a new
                                                  using ‘‘call forwarding’’ to forward a call             section that CMS or the NSC may revoke                supplier standard that states that the
                                                  to a cell phone or beeper/pager from the                that supplier’s billing privileges, and               supplier is required to maintain
                                                  public or beneficiaries during the                      may determine if such billing may be for              ordering and referring documentation,
                                                  supplier’s posted hours of operation. We                fraudulent or unnecessary supplies.                   including the National Provider
                                                  maintain that DMEPOS suppliers who                         In § 424.57(c)(12), we proposed to                 Identifier, received from a physician,
                                                  are utilizing cell phones, call                         revise the provision to clarify its intent.           nurse practitioner, physician assistant,
                                                  forwarding, beeper numbers, pagers,                     Specifically, we proposed that a                      clinical social worker, or certified nurse
                                                  answering services or other methods to                  DMEPOS supplier: (1) Is responsible for               midwife, for 7 years after the claim has
                                                  receive telephone calls in a location                   maintaining proof of the delivery in the              been paid. We maintain that a DMEPOS
                                                  other than the place of business for                    beneficiary’s file; (2) must furnish                  supplier should retain the necessary
                                                  business calls during their posted hours                information to beneficiaries at the time              ordering and referring documentation
                                                  of operations are not in compliance with                of delivery of items as to how the                    received from physicians, nurse
                                                  this standard and that DMEPOS                           beneficiary can contact the supplier by               practitioners, physician assistants,
                                                  suppliers who exclusively use                           telephone; (3) must provide the                       clinical social workers, or certified
                                                  answering machines or answering                         beneficiary with instructions on how to               nurse midwives to assure themselves
                                                  services during their posted hours of                   safely and effectively use the equipment              that coverage criterion for an item has
                                                  operations are not in compliance with                   or contract this service to a qualified               been met. If the information in the
                                                  this standard. Therefore, we revised this               individual; (4) is responsible for                    patient’s medical record does not
                                                  standard to read, ‘‘Maintains a primary                 providing instruction on the safe and                 adequately support the medical
                                                  business telephone that is operating at                 effective use of the equipment that                   necessity for the item, the supplier is
                                                  the appropriate site listed under the                   should be completed at the time of                    liable for the dollar amount involved
                                                  name of the business locally or toll-free               delivery; and (5) must document that                  unless a properly executed Advance
                                                  for beneficiaries. The use of cellular                  this instruction has taken place. Our                 Beneficiary Notice of possible denial
                                                  phones, beeper numbers, and pagers as                   proposal was based on the belief that a               has been obtained.
                                                  the primary business phone is                           DMEPOS supplier is solely responsible                    In § 424.57(c)(29), we proposed a new
                                                  prohibited. Additionally, DMEPOS                        for delivery of Medicare-covered items                standard that specifies that the supplier
                                                  suppliers are prohibited from                           and for instruction on the use of those               is prohibited from sharing a practice
                                                  forwarding calls from the primary                       items. While we believe that a DMEPOS                 location with another Medicare
                                                  business telephone listed under the                     supplier may choose to contract out the               supplier. In addition, we solicited
                                                  name of the business to a cellular                      delivery of Medicare-covered items to                 comments on whether we should
                                                  phone, or a beeper/pager. The exclusive                 another individual or entity, the                     establish an exception to this space
                                                  use of answering machines, answering                    DMEPOS supplier has ultimate                          sharing proposal for physicians and
                                                  services or facsimile machine (or                       responsibility for ensuring delivery in               nonphysician practitioners and the
                                                  combination of these options) cannot be                 accordance with this standard and for                 circumstances which warrant an
                                                  used as the primary business telephone                  maintaining all necessary                             exception since we are aware that
                                                  during posted operating hours.’’                        documentation to demonstrate that the                 physicians and other licensed
                                                     In § 424.57(c)(10), we proposed to                   beneficiary received the Medicare-                    nonphysician practitioners may obtain
                                                  revise this provision to specify that the               covered item and appropriate                          their own DMEPOS supplier number
                                                  DMEPOS supplier has a comprehensive                     instructions for its use. We believe that             and furnish DMEPOS from their office.
                                                  liability insurance policy in the amount                our revised interpretation of this section            We believe that allowing a DMEPOS
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  of at least $300,000 per incident that                  will help to ensure that instructions for             supplier to commingle its practice
                                                  covers both the supplier’s place of                     the safe and appropriate use of products              location with another DMEPOS supplier
                                                  business and all customers and                          will be given to beneficiaries.                       effectively limits the ability of CMS and
                                                  employees of the supplier and ensures                      In § 424.57(c)(27), we proposed a new              the NSC to ensure that each DMEPOS
                                                  that insurance policy must remain in                    standard that specified that the                      supplier meets all of the supplier
                                                  force at all times. In addition, we                     DMEPOS supplier must obtain oxygen                    standards specified at § 424.57. Since
                                                  proposed that a DMEPOS supplier must                    from a State-licensed oxygen supplier.                we are aware that physicians and other
                                                  list the NSC as a certificate holder on                 To ensure that DMEPOS suppliers meet                  licensed nonphysician practitioners


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00025   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                  52632              Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations

                                                  may obtain their own DMEPOS supplier                    that § 424.57(d)(2) is necessary because              licensing requirements for his or her
                                                  number and furnish DMEPOS from their                    some DMEPOS suppliers fail to report                  business. During the enrollment and
                                                  office, we solicited comments on                        adverse legal actions and felony                      reenrollment process the NSC verifies
                                                  whether we should establish an                          convictions to the NSC within the 30                  that the DMEPOS supplier is in
                                                  exception to this space sharing proposal                days of the reportable event. Since it is             compliance with all applicable State
                                                  for physicians and nonphysician                         essential that DMEPOS suppliers notify                licensing requirements.
                                                  practitioners and the circumstances                     the NSC of all adverse legal actions and                 Comment: Several commenters
                                                  which warrant an exception.                             felony convictions within 30 days of the              supported requiring DMEPOS suppliers
                                                     In § 424.57(c)(30), we proposed a new                reportable event, we believe that it is               to be licensed for all services they
                                                  supplier standard that would require a                  essential to establish this new provision.            provide and that DMEPOS suppliers
                                                  DMEPOS supplier to be open to the                       This new provision would allow the                    should not be allowed to contract out
                                                  public a minimum of 30 hours per                        CMS, the NSC, or a designated Medicare                for these services. In addition, one
                                                  week, except for those DMEPOS                           contractor the authority to assess and                commenter stated that the changes
                                                  suppliers who are working with custom-                  collect an overpayment from the time of               proposed to the licensure requirement
                                                  made or fitted orthotics and prosthetics.               the reportable event. In addition, the                for Medicare suppliers are necessary
                                                  We believe that most legitimate                         CMS, the NSC, or a designated CMS                     and beneficial.
                                                  DMEPOS suppliers are open to the                        contractor would revoke the DMEPOS                       Response: We agree and are revising
                                                  public for more than 40 hours per week                  supplier’s Medicare billing privileges, in            § 424.57(c)(1)(ii)(C) to address the
                                                  and that all legitimate DMEPOS would                    accordance with § 424.57(d)(1), if the                commenters’ concern regarding
                                                  need to be open a minimum of at least                   legal adverse action or felony conviction             contracting out of services. In addition,
                                                  30 hours per week in order to attract,                  precludes participation in or payment                 this requirement applies to the
                                                  retain, and serve Medicare beneficiaries.               from the Medicare program.                            competitive bidding program as
                                                  Given that Medicare beneficiaries may                                                                         governed by part 414, subpart F.
                                                  not be able to find transportation during               III. Analysis of and Responses to Public                 Comment: A commenter believes that
                                                  limited operating hours, the DMEPOS                     Comments                                              because of the complexity of State
                                                  supplier must be open and available for                   In the January 25, 2008 Federal                     licensing requirements, it is too severe
                                                  periods long enough for beneficiaries to                Register (73 FR 4503), we published a                 to revoke all billing numbers when
                                                  readily access their facility. We believe               proposed rule that clarified, revised,                licensing requirements are not met in
                                                  that most legitimate DMEPOS suppliers                   and added to the DMEPOS supplier                      only one State.
                                                  are open to the public for more than 40                 standards in § 424.57.                                   Response: We do not believe that
                                                  hours per week and that all legitimate                    We received 208 timely comments in                  there are any exceptions to State
                                                  DMEPOS would need to be open a                          response to the proposed rule. In this                licensing requirements, unless the State
                                                  minimum of at least 30 hours per week                   section of the final rule we present a                in which the DMEPOS supplier
                                                  in order to attract, retain, and serve                  summary of our proposals and address                  furnishes services provides for such an
                                                  Medicare beneficiaries. To ensure that                  the comments received on these                        exception, and that exception does not
                                                  DMEPOS suppliers are able to report                     proposals.                                            conflict with Federal law. Moreover,
                                                  any change in their posted business                                                                           while a DMEPOS supplier can enroll
                                                  hours, we are proposing to revise the                   A. Clarifications and Revisions of                    using a single tax identification number
                                                  CMS–855S Medicare enrollment                            Existing DMEPOS Supplier Standards                    (TIN) for one or more practice locations,
                                                  application to accommodate this                         1. Licensure Requirements                             a DMEPOS supplier also may obtain
                                                  proposed change.                                                                                              different TINs for each practice location.
                                                     In § 424.57(c)(31), we proposed to add                  In § 424.57(c)(1), we proposed to                  If the DMEPOS supplier makes the
                                                  a new supplier standard that specified                  revise this supplier standard by adding               business decision to enroll multiple
                                                  that a DMEPOS supplier could not have                   language to clarify that a DMEPOS                     practice locations under the same TIN,
                                                  Internal Revenue Service (IRS) or a State               supplier must be licensed to provide                  a revocation by the NSC of this TIN will
                                                  taxing authority tax delinquency. We                    licensed service(s) and cannot contract               necessitate the revocation of related
                                                  also proposed to define a ‘‘tax                         with an individual or entity to provide               businesses associated with that TIN.
                                                  delinquency’’ as meaning an amount of                   the licensed service(s). These licensed                  Comment: One commenter stated that
                                                  money owed to the United States or a                    services include but are not limited to               restricting licensed professionals to W–
                                                  State: a conviction or civil judgment for               supplying oxygen or a general DMEPOS                  2 employees likely will increase overall
                                                  tax evasion, a criminal or civil charge of              license.                                              operating expenses and requested that
                                                  tax evasion, or the filing of a tax lien.                  Comment: A commenter believes the                  we clarify that licensed professionals
                                                     In § 424.57(d), we proposed to                       NSC should maintain and make                          may be hired as either part-time or full-
                                                  redesignate the current text as paragraph               available, a list of each State’s licensing           time employees.
                                                  (d)(1) and proposed adding a new                        requirements.                                            Response: We agree and have revised
                                                  paragraph that specified that ‘‘CMS, the                   Response: The National Supplier                    § 424.57(c)(1)(ii) to clarify that the
                                                  NSC, or CMS designated contractor                       Clearinghouse (NSC) does maintain                     licensed professionals must be part-time
                                                  establishes a Medicare overpayment                      information regarding State licensure                 or full-time employees.
                                                  from the date of an adverse legal action                laws for DMEPOS suppliers on its Web                     Comment: A commenter stated that
                                                  or felony conviction (including felony                  site (see http://www.palmettogba.com/                 § 424.57(c)(1)(ii) as written, would allow
                                                  convictions within the 10 years                         nsc). However, the DMEPOS supplier is                 DMEPOS suppliers to contract with
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  preceding enrollment or revalidation of                 ultimately responsible for determining                nonlicensed individuals to avoid
                                                  enrollment) that precludes payment. In                  what business, product and other                      contracting with licensed individuals.
                                                  addition, we proposed that any                          applicable licenses are required for his              In addition, it would not be financially
                                                  overpayment assessed by CMS or its                      or her business, regardless of the                    feasible for all DMEPOS suppliers to
                                                  designated contractor due to a lack of                  accuracy of the information provided on               have licensed professionals on staff, and
                                                  reporting would follow the existing                     the NSC Web site. We also believe it is               therefore, CMS should allow contracting
                                                  rules governing Medicare overpayments                   the business owner’s responsibility to be             for services as long as they are in
                                                  set forth at § 405.350 et seq. We believe               aware of any changes in the State                     compliance with State requirements.


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00026   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                                     Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations                                       52633

                                                     Response: We do not believe that this                licensed health care professionals as                 individual and we will allow
                                                  provision is written in such a way as to                supplier companies; in fact, to do                    contracting for licensed services only
                                                  allow DMEPOS suppliers to contract                      otherwise would allow different                       when the State where the item or
                                                  with nonlicensed individuals to avoid                   regulatory and compliance standards to                service is supplied permits a DMEPOS
                                                  employing part-time or full-time W–2                    emerge. Finally, many of the rules of                 supplier to contract for licensed
                                                  employees. In addition, we believe that                 licensed health care professionals and                services. Moreover, we believe that
                                                  a DMEPOS supplier who does not have                     many of the rules of the supplier                     DMEPOS suppliers participating in
                                                  a licensed individual on staff (part-time               companies are not duplicative or                      competitive bidding must maintain all
                                                  or full-time) as a W–2 employee would                   consecutive; rather, they are cumulative.             applicable State licenses for the
                                                  be in violation of § 424.57(c)(1).                         Comment: Several commenters                        products and services they are bidding
                                                  Moreover, while we are concerned with                   believe that the licensing requirement                on or furnishing in each competitive
                                                  the financial burden placed on small                    provision is too restrictive and should               bidding area. In addition, we believe
                                                  businesses, we recognize that a certain                 be revised to state that properly licensed            that it is the responsibility of DMEPOS
                                                  amount of capital is required to                        personnel are available to furnish the                suppliers participating in competitive
                                                  establish and maintain a business. To                   offered services. In addition, these                  bidding to ensure that any subcontractor
                                                  this end, we believe that enrolled                      commenters stated that the current                    obtains and maintains all appropriate
                                                  DMEPOS suppliers should be required                     language is too broad and would                       State licenses in the area where they are
                                                  to meet State licensing qualifications,                 include administrative staff.                         providing services. We maintain that
                                                  rather than subcontracting to a third-                     Response: This final regulation states             DMEPOS suppliers awarded a
                                                  party agent who may or may not be                       that a DMEPOS supplier must be in                     competitive bidding contract and that
                                                  qualified. Moreover, since we cannot                    compliance with Federal, State, and                   are subcontracting will be allowed on a
                                                  ensure with any degree of certainty, the                local laws and requirements. It also                  phase-in basis for licenses services and
                                                  qualifications of a subcontracted                       states a DMEPOS supplier cannot                       licensed professionals participating in
                                                  individual or his or her compliance                     contract with an individual or other                  competitive bidding.
                                                  with Federal, State, and local licensure                entity to provide licensed services. This                Comment: One commenter believes
                                                  requirements, we believe the Medicare                   requirement only would apply to a                     that this regulation is in conflict with
                                                  program and its Medicare beneficiaries                  DMEPOS supplier’s administrative staff                some State licensing requirements, as
                                                  would be better served if we could                      if the administrative staff member is                 some States permit DMEPOS suppliers
                                                  verify that a DMEPOS supplier meets                     also responsible for providing a licensed             to comply with its State licensing
                                                  the applicable State licensing                          service for the DMEPOS supplier.                      requirements by contracting with an
                                                  requirements for a DMEPOS supplier’s                    Moreover, we are promoting a State’s                  individual or other entity to provide the
                                                  chosen specialty.                                       prerogatives on licensure by imposing                 licensed service. In addition, the
                                                     Comment: One commenter questioned                    this requirement only in States where                 commenter states a Federal regulation
                                                  whether CMS considers a co-                             there are no such rules for contracting               cannot supersede the historic police
                                                  employment arrangement with a                           for licensed services. Rather, we are                 powers of the State unless it was the
                                                  Professional Employment Organization                    hoping to diminish the chance of                      clear and manifest purpose of the
                                                  to be compliant or noncompliant with                    fraudulent practices by requiring that a              Congress (see Downhaur v. Somani).
                                                  this proposed rule.                                     DMEPOS supplier directly furnish                         Response: We agree with this
                                                     Response: We would consider a co-                    licensed services.                                    commenter because, State licensing
                                                  employment arrangement with a                              Comment: One commenter believes                    laws and regulations on the licensure of
                                                  professional employment organization                    disallowing contracting with                          DMEPOS suppliers govern how
                                                  to be compliant with this proposed rule                 individuals or entities is unfair to the              DMEPOS suppliers furnish items within
                                                  provided any licensed services are                      small supplier.                                       a particular State. Therefore, we
                                                  performed by an individual who                             Response: While we are concerned                   maintain that a DMEPOS supplier can
                                                  receives a W–2 with the DMEPOS                          with the potential financial burden that              contract for licensed services only when
                                                  supplier’s legal business name on it. For               this change imposes on small                          the State where the licensed service is
                                                  situations of co-employment, the W–2                    businesses, and we will monitor the                   being provided allows for this sort of
                                                  also may have the legal business name                   impact of this requirement on small                   arrangement consistent with
                                                  of the professional employment                          businesses. We believe that small                     § 424.57(c)(1)(ii)(C).
                                                  organization, but this must be in                       DMEPOS suppliers should meet the                         Comment: A commenter does not
                                                  addition to the DMEPOS supplier’s legal                 applicable State licensing requirements               believe that CMS should be in the
                                                  business name.                                          for the services they provide.                        business of professional licensing.
                                                     Comment: A commenter requested                          Comment: One commenter                                Response: It is important to note that
                                                  that physical therapy clinics be exempt                 recommended that rather than                          we require the DMEPOS supplier to be
                                                  from the requirement for State                          restricting the practice of contracting               State licensed, not to obtain a license
                                                  certification that applies to DMEPOS                    with licensed personnel, CMS should                   from CMS. This change will help to
                                                  suppliers because it will affect patient                require the supplier to purchase                      ensure that DMEPOS suppliers are
                                                  access to necessary care if the physical                additional insurance to cover the                     meeting State licensing requirements.
                                                  therapy clinic in which an individual                   licensed person.                                         Comment: Several commenters
                                                  was being treated was not certified as a                   Response: We believe that a DMEPOS                 recommended that the provision of not
                                                  DMEPOS supplier and that it is an                       supplier must meet the applicable State               contracting out licensed services and
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  unnecessary burden to apply the same                    licensing requirements for the services               the W–2 employee provisions of this
                                                  rules to licensed health care                           they provide to Medicare beneficiaries.               standard only apply when not
                                                  professionals as supplier companies.                    In addition, while we agree that                      addressed by State licensing
                                                     Response: We believe that enrolled                   additional insurance may provide                      requirements.
                                                  DMEPOS suppliers should meet all                        additional protection for the supplier, it               Response: We agree with these
                                                  applicable State licensing requirements.                does not help to ensure that a Medicare               commenters. We believe that DMEPOS
                                                  We do not believe it is an unnecessary                  beneficiary is receiving quality products             suppliers must meet all applicable State
                                                  burden to apply the same rules to                       and instruction from a licensed                       licensing requirements and that this


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00027   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                  52634              Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations

                                                  standard will only apply when not                       standards in § 424.57 are separate from               DMEPOS supplier may hire a licensed
                                                  addressed by State licensing                            the quality standards which are used by               W–2 employee on a part-time or full-
                                                  requirements.                                           accrediting organizations. This                       time basis and we will permit
                                                     Comment: Several commenters do not                   regulation does not conflict with our                 contracting for licensed services, so long
                                                  believe it should matter if the service is              accreditation standards listed at                     as the State permits contracting for
                                                  furnished by a W–2 employee or a 1099                   § 424.57(c)(22) through (c)(25).                      licensed services and the DMEPOS
                                                  contractor so long as both are properly                    Comment: A commenter stated that                   supplier complies with State licensure
                                                  licensed with no adverse legal action                   the proposed rule is unnecessary                      laws and is ultimately responsible for
                                                  current or pending.                                     because many of the DMEPOS suppliers                  the services provided by a contractor.
                                                     Response: We agree with these                        must be accredited by September 30,                      Comment: One commenter asks how
                                                  commenters because a DMEPOS                             2009 on top of already having to meet                 disallowing the contracting of licensed
                                                  supplier is accountable for meeting the                 the State licensure requirements.                     individuals could affect competitive
                                                  applicable State licensing requirements,                Moreover, supplier’s ability to use                   bidding, given that a supplier is
                                                  and by requiring that W–2 employees or                  subcontractors for the purpose of                     required to submit a bid for all of the
                                                  a 1099 contractor (when allowed by                      assuring service throughout a                         oxygen modalities.
                                                  State law) of the supplier are                          competitive bidding area would be                        Response: When allowed under State
                                                  appropriately licensed, the NSC can                     limited which could disadvantage the                  law, we will permit contracting for
                                                  verify that a DMEPOS supplier is                        small suppliers compared to large                     licensed services, so long as the
                                                  meeting all applicable State licensing                  suppliers.                                            DMEPOS supplier complies with State
                                                  requirements.                                              Response: We disagree with these                   licensure laws and is ultimately
                                                     Comment: One commenter stated that                   commenters because a DMEPOS                           responsible for the services provided by
                                                  they are opposed to the revisions in                    supplier is accountable for meeting the               a contractor. In order for a DMEPOS
                                                  § 424.57(c)(1) because it would prevent                 applicable State licensing requirements,              supplier to be able to participate in the
                                                  all but the largest DMEPOS suppliers                    and by requiring DMEPOS suppliers to                  DMEPOS competitive bidding program,
                                                  from bidding on contracts under the                     employ individuals who are                            the supplier must comply with all of the
                                                  DMEPOS competitive bidding program                      appropriated licensed, the NSC can                    DMEPOS supplier standards and be
                                                  because smaller businesses would not                    verify that a DMEPOS supplier is                      enrolled in the Medicare program as a
                                                  be able to hire staff all the potential                 meeting all applicable State licensing                DMEPOS supplier.
                                                  licensed professionals as W–2                           requirements.                                            Comment: One commenter asked if
                                                  employees.                                                 Comment: Several commenters stated                 this rule is requiring all oxygen
                                                     Response: We want to clarify that the                that the standard to prohibit a DMEPOS                suppliers to directly provide liquid
                                                  employment requirement will not apply                   supplier from contracting with an                     oxygen since CMS competitive bidding
                                                  to contract suppliers participating in the              individual or other entity to provide the             rules allow for contracting in certain
                                                  competitive bidding program and we                      licensed service places an unfair burden              areas.
                                                  have reflected this intention in                        on small suppliers who at times must                     Response: No, all oxygen suppliers do
                                                  § 424.57(c)(1)(ii)(B).                                  contract with licensed personnel or                   not need to directly provide liquid
                                                     Comment: Several commenters                          provide specific services to the                      oxygen. A supplier can use a qualified
                                                  believe that the proposed rule conflicts                supplier’s patients. Also, this                       subcontractor to deliver oxygen. If the
                                                  with the rules for participation in the                 requirement makes it seem like CMS is                 supplier is not in a competitive bidding
                                                  competitive bidding program, as the                     singling out DMEPOS suppliers by not                  area and does not furnish liquid oxygen
                                                  competitive bidding program itself                      allowing them the use of staffing                     as part of their business model and the
                                                  allows items and services in a product                  agencies when demand is great. In                     prescription specifically indicates that
                                                  category to be supplied directly or                     addition, the commenter believes that                 the physician is ordering liquid oxygen,
                                                  through a subcontractor and provides                    this standard would restrict suppliers                the supplier would either need to get
                                                  safeguards to allow subcontracting.                     that have full time respiratory therapists            approval from the ordering physician to
                                                     Response: We agree with these                        from hiring temporary licensed                        furnish a different modality or refer the
                                                  commenters, and have revised                            respiratory therapists during times of                beneficiary to another supplier. If a
                                                  § 424.57(c)(1)(ii)(B) to reflect that the               vacation, illness or increased staffing               physician orders liquid oxygen in areas
                                                  employment requirement for the                          needs, and have a detrimental effect on               that fall under competitive bidding,
                                                  furnishing of licensed services does not                patient’s access to care and restrict                 then the oxygen supplier must supply
                                                  apply to contract suppliers participating               respiratory therapists from performing                liquid oxygen.
                                                  in the competitive bidding program.                     duties in the patient’s home.                            Comment: A commenter stated that
                                                     Comment: One commenter stated that                      Response: We believe that a DMEPOS                 the proposed rule would result in
                                                  this regulation conflicts with CMS’                     supplier must be licensed to provide                  different Federal requirements for
                                                  accreditation standards which permit                    licensed services, and therefore, we are              hospital-based DMEPOS suppliers based
                                                  contracting for licensed services, so long              not adopting any exceptions to this                   solely on the location of the supplier
                                                  as the DMEPOS supplier complies with                    provision except where a State permits                and further disadvantage hospitals
                                                  State licensure laws and is ultimately                  contracting for licensed services. In                 because hospitals generally use
                                                  responsible for the services provided by                addition, many small businesses                       independent contractors to perform its
                                                  a contractor.                                           currently have an owner or W–2                        services.
                                                     Response: We have amended                            employee who is licensed to provide a                    Response: We disagree with this
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  § 424.57(c)(1) to permit contracting for                service that requires a State licensure.              commenter because all DMEPOS
                                                  licensed services, so long as the State                 We believe that the changes we are                    suppliers, including those based at
                                                  where the licensed services are being                   adopting in this final regulation will not            hospitals or operated by other providers,
                                                  performed allow for such contracting                    have a detrimental effect on patient’s                are required to meet State licensing
                                                  and the DMEPOS supplier complies                        access to care and do not restrict                    requirement for the services they
                                                  with State licensure laws and is                        respiratory therapists from performing                provide. This change will enable CMS
                                                  ultimately responsible for the services                 duties in the patient’s home. Finally, as             or our designated contractor to verify
                                                  provided by a contractor. The supplier                  stated previously, we are clarifying that             that the supplier is meeting the


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00028   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                                     Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations                                        52635

                                                  applicable State licensing requirements                 that 200 square feet represents the                   without exception for the specific
                                                  for the services that it furnishes.                     smallest practice location that can be                services being furnished.
                                                                                                          used to meet the supplier standards in                   Response: We believe that the
                                                  2. Physical Facility—Appropriate Site                                                                         provisions of § 424.57(c)(7) are designed
                                                                                                          § 424.57. Specifically, we would expect
                                                     In § 424.57(c)(7), we proposed to                    that most practice locations have space               to ensure that DMEPOS suppliers
                                                  clarify the supplier standard for                       for inventory, storage, including patient             conform to generally accepted business
                                                  maintaining a physical facility on an                   records, a desk and chairs, and in most               practices employed by quality suppliers.
                                                  appropriate site. Specially, we proposed                cases a restroom for employees and                       Comment: Several commenters
                                                  to clarify the term, ‘‘appropriate site.’’ In           customers.                                            believe it would be in CMS’s best
                                                  addition, we stated that an ‘‘appropriate                  Comment: One commenter                             interest to retain the current policy
                                                  site’’ applies to ‘‘closed door’’ businesses            recommended that we clarify that                      which allows for a central record storage
                                                  (such as pharmacies/suppliers                           DMEPOS suppliers may continue to                      location for multi-State DME suppliers.
                                                  providing services only to beneficiaries                utilize centralized business centers to                  Response: We agree that multistate
                                                  residing in a nursing home). We also                    house beneficiary and other business                  DME suppliers can maintain central
                                                  solicited comments on whether we                        records and centralized customer call                 record storage locations and have
                                                  should establish a minimum square                       centers are permissible under this                    amended the regulations text in
                                                  footage requirement to the definition of                revised standard.                                     § 424.57(c)(7)(i) to reflect this concern.
                                                  an appropriate site and what, if any,                      Response: We believe that it is                       Comment: One commenter stated that
                                                  appropriate exceptions would apply to                   necessary to have prompt access to                    there can be a problem with the
                                                  a minimum square footage requirement.                   delivery, maintenance, and beneficiary                requirement of external signage when it
                                                     Comment: One commenter                               records at the supplier’s facility where              conflicts with local zoning ordinances.
                                                  recommended that a minimum square                       the beneficiary receives services. This                  Response: We believe that prospective
                                                  footage requirement be established so                   enables the beneficiary to promptly                   suppliers of DMEPOS and existing
                                                  the suppliers cannot qualify for                        obtain necessary information and for                  suppliers of DMEPOS must understand
                                                  participation in the Medicare program                   CMS and our agents to perform a review                and comply with the supplier standards
                                                  with unsuitable locations. This                         of the records. We agree that the use of              found in this section. Accordingly,
                                                  commenter stated that square footage                    a centralized business center by a                    prospective suppliers of DMEPOS
                                                  should be adequate to store the                         multisite supplier to house these                     should ensure that their practice
                                                  necessary inventory.                                    records when the information in the                   location meets the requirements found
                                                     Response: We appreciate this                         records can be furnished to the                       in § 424.57(c)(7) and the other supplier
                                                  comment and have adopted a minimum                      beneficiary or CMS and our agents, or                 standards found in this section prior to
                                                  square footage requirement of 200                       both. For example, the supplier location              buying or entering into a leasing
                                                  square feet in § 424.57(c)(7). We agree                 could use a computer terminal to access               arrangement for a given practice
                                                  with this commenter that a DMEPOS                       the records which are being stored off                location. For example, if the owner of
                                                  supplier must maintain a minimum area                   site. Then, it could express mail the                 prospective supplier of DMEPOS knows
                                                  of space for inventory, storage, and                    documents requested.                                  or should have known that local zoning
                                                  including patient records.                                 Comment: A commenter stated that it                ordinances preclude the establishment
                                                     Comment: Several commenters stated                   is not economically feasible for a small              of home-business in a residential
                                                  that the variability between suppliers                  supplier to maintain a storefront.                    neighborhood, then the prospective
                                                  and services provided are too great to                     Response: We do not require that a                 supplier of DMEPOS should make the
                                                  set a minimum number of square feet                     DMEPOS supplier maintain a storefront,                business decision to: (1) Obtain a waiver
                                                  required to attain a supplier number.                   and if the DMEPOS supplier chooses to                 to the local zoning ordinance in advance
                                                     Response: We appreciate these                        maintain a storefront, it may be coupled              of submitting their enrollment
                                                  comments and considered them in                         with its storage space for DMEPOS.                    application to the NSC; or (2) select a
                                                  establishing minimum square footage                     However, if the supplier is in a                      different practice location that will
                                                  requirements within § 424.57(c)(7).                     commercial building, the sign can be                  ensure the supplier’s compliance with
                                                     Comment: A number of commenters                      posted at the entrance of the building.               the requirements specified in
                                                  opposed the establishment of a specific                 We believe that it is essential for our               § 424.57(c)(7).
                                                  square footage requirement for supplier’                beneficiaries and site reviewers to be                   Comment: One commenter stated that
                                                  physical locations.                                     able to promptly locate the supplier.                 it may not be possible to fulfill the
                                                     Response: Since many DMEPOS                          Therefore, the signage must be readily                signage requirement because the owner
                                                  suppliers who do not have a minimum                     visible to the general public. We                     of the building may not allow the
                                                  square footage have been determined in                  understand the concerns that additional               posting of the sign, and that the patients
                                                  the past to be fraudulent suppliers or                  costs may be incurred for small                       that they see are by appointment only so
                                                  have provided less than sufficient                      businesses. However we believe that the               posting a sign with office hours is not
                                                  services to Medicare beneficiaries, we                  majority of our DMEPOS suppliers                      necessary.
                                                  believe that a minimum square footage                   already meet this requirement.                           Response: As previously stated, we
                                                  requirement is necessary to ensure that                 Additionally, those DMEPOS suppliers                  believe that prospective suppliers of
                                                  DMEPOS suppliers are operating a                        with less than the 200 square foot                    DMEPOS and existing suppliers of
                                                  legitimate business. However, based on                  minimum space and who have entered                    DMEPOS must understand and comply
                                                  public comments, we were concerned                      into a long term lease before the                     with the supplier standards found in
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  that establishing a minimum square                      publication of this final rule will have              this section. Accordingly, prospective
                                                  footage requirement of 500 square feet                  time to transition into a new location, as            suppliers of DMEPOS should ensure
                                                  may impose an undue burden for some                     explained later in this rule.                         that their practice location meets the
                                                  suppliers. Accordingly, based on public                    Comment: Several commenters stated                 requirements found in § 424.57(c)(7)
                                                  comments and our review of existing                     that they do not support CMS’ proposal                and the other supplier standards found
                                                  supplier operations, we are adopting a                  to micromanage a supplier’s business                  in this section prior to buying or
                                                  minimum square footage of 200 square                    operation by dictating size, hours,                   entering into a leasing arrangement for
                                                  feet per practice location. We believe                  staffing, and access via a single standard            a given practice location. Accordingly,


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00029   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                  52636              Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations

                                                  we disagree with this commenter, and                      Response: We note that we have                      before the publication date of this final
                                                  believe that it is essential that the                   always made exceptions concerning                     rule. We believe that this phase-in
                                                  beneficiaries and CMS agents can                        posted hours for disasters and                        period will provide small businesses
                                                  clearly see where the supplier is located               emergencies and Federal and State                     with sufficient time to identify a
                                                  and the supplier’s hours of operation. If               holidays. However, while we recognize                 practice location that meets the
                                                  the building owner will not allow the                   that personal emergencies do occur, we                minimum square footage requirement.
                                                  posting of hours of operation, then the                 believe that suppliers should be                      We will make this requirement effective
                                                  DMEPOS supplier should consider the                     available during posted business hours.               for existing DMEPOS suppliers 3 years
                                                  supplier site to be inappropriate for a                 Moreover, we believe that a DMEPOS                    from the effective date of this regulation.
                                                  business that serves Medicare                           supplier should do its best to plan and               However, we do not believe that it is
                                                  beneficiaries. Even for suppliers that                  staff for temporary absences.                         appropriate to establish a similar
                                                  take appointments, we believe that                        Comment: One commenter believes                     requirement for prospective suppliers of
                                                  proper signage and posted hours are                     the minimum square footage                            DMEPOS, including those suppliers
                                                  required for proper beneficiary                         requirement causes potential issues for               who have a pending enrollment
                                                  information.                                            orthotic and prosthetic suppliers since               application with the NSC.
                                                     Comment: One commenter believes it                   the lab area is separate from the patient             Consequently, we expect prospective
                                                  is not always possible to give the NSC                  area and is often located off-site. The               DMEPOS suppliers to comply with this
                                                  prior notice to a change in the hours of                patient interaction area is most                      requirement as of the effective date of
                                                  operation.                                              important, but since this area can be as              this regulation. As prospective DMEPOS
                                                     Response: While we understand that                   small as 80 square feet, the size                     suppliers seek billing privileges after the
                                                  suppliers have 30 days to notify the                    requirement should not be imposed as                  effective date of this regulation, we
                                                  NSC of change in posted business hours,                 to orthotic and prosthetic suppliers.                 expect them to comply with this
                                                  we do not believe that legitimate                         Response: We agree with the concerns                requirement in order to be enrolled in
                                                  suppliers routinely change their posted                 raised by this commenter and have                     Medicare.
                                                  hours of operation frequently. Moreover,                adopted an exception to § 424.57(c)(7)                   Comment: One commenter is
                                                  there is nothing in our current rules or                for State-licensed orthotic and                       concerned that the minimum square
                                                  within this final regulation which                      prosthetic personnel in private practice              footage requirement may be over
                                                  precludes a DMEPOS supplier from                        as one of the exceptions to this                      interpreted as a means to shut down
                                                  notifying the NSC prior to or at the time               provision.                                            legitimate suppliers (for example, a
                                                  a change of posted business hours are                     Comment: One commenter suggests                     legitimate supplier being 25 feet short
                                                  implemented.                                            that rather than mandating a certain                  after the rule becomes effective but
                                                     Comment: A commenter stated that                     amount of square footage, an alternative              having a 5-year lease to fulfill).
                                                  size and space requirements are already                 could be a rule indicating that the office               Response: We proposed the minimum
                                                  established in the accreditation process,               space must consist of an ADA accessible               square footage as a basis for ensuring
                                                  and therefore, are unnecessary as a                     reception area, a minimum of one                      that legitimate suppliers are meeting the
                                                  separate supplier standard.                             examination room and a restroom,                      supplier standards in § 424.57 and that
                                                     Response: Since the requirements                     unless there is a common area restroom.               these suppliers are providing quality
                                                  included within accreditation standards                   Response: We believe that it would be               products and services to Medicare
                                                  set forth in § 424.57(c)(21) through                    very difficult for us to develop                      beneficiaries. As stated previously, we
                                                  § 424.57(c)(25) and quality standards are               specifications for these items. Moreover,             will impose this requirement on those
                                                  independent of the supplier standards                   we believe that doing so would likely be              suppliers who have entered into leases,
                                                  in § 424.57, we believe that it is                      more restrictive for some types of                    including long-term leases, on or before
                                                  appropriate to establish a minimum                      suppliers.                                            the date of publication of this final rule.
                                                  square footage requirement to assist us                   Comment: One commenter notes that                   Accordingly, we maintain that DMEPOS
                                                  in determining whether a DMEPOS                         in most leased spaces, especially in                  suppliers who had entered into lease
                                                  supplier is operating a legitimate                      medical buildings, the signage locations              arrangements of 1 year or less must
                                                  business as neither of the                              are predetermined, and therefore, the                 come into compliance with this
                                                  aforementioned sets of standards                        commenters do not believe a quality                   provision at the end of their current
                                                  include a provision for minimum square                  standard should mandate signage on the                lease. Similarly, DMEPOS suppliers
                                                  footage.                                                exterior of the building.                             who have entered into leasing
                                                     Comment: One commenter requested                       Response: We believe that the sign                  arrangements of more than 1 year but
                                                  what defines a permanent, durable sign                  must be visible at the main entrance of               less than 3 years must come into
                                                  and noted that sometimes it may be                      the facility and visible to the public.               compliance with this standard at the
                                                  necessary to have permanent signage                     Therefore, in a public medical building,              end of their current lease; and that all
                                                  attached to the glass panel of a facility.              the sign could be posted in the main                  existing DMEPOS suppliers must come
                                                     Response: While we have not defined                  lobby entrance if access to the lobby is              into compliance with this standard
                                                  what constitutes a permanent durable                    available to the general public.                      within 3 years of the effective date of
                                                  sign, there is no requirement that a                      Comment: One commenter                              this final rule.
                                                  permanent sign be or not be attached to                 recommended that if CMS does set                         Finally, while we are establishing a
                                                  a glass panel.                                          minimum square footage requirements                   transition period for implementation of
                                                     Comment: Several commenters                          that we give suppliers time for the                   this requirement for DMEPOS suppliers
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  suggested that an exemption should be                   expiration of current leases and to                   already enrolled in the Medicare
                                                  granted when it is necessary for the                    obtain a new location or ‘‘grandfather’’              program, we are not adopting a
                                                  office to be temporarily closed during                  locations already in use.                             transition period for DMEPOS suppliers
                                                  posted office hours to account for                        Response: We agree with this                        enrolling a new practice location,
                                                  holidays, natural disasters, short-term                 commenter and will establish a 3-year                 reactivating the billing privileges for a
                                                  closures, patient deliveries,                           phase-in period for those existing                    DMEPOS supplier previously enrolled
                                                  emergencies, and other unforeseen                       suppliers of DMEPOS who have signed                   in the Medicare program or for DMEPOS
                                                  occurrences.                                            leases, including long-term leases, on or             suppliers changing their existing


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00030   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                                     Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations                                        52637

                                                  practice location or selling their existing             the supplier’s operations or the needs of             supplier compliance with the
                                                  practice location.                                      the beneficiaries being serviced.                     requirements of this section.’’
                                                     Comment: One commenter notes that                       Response: We disagree with this                       Comment: One commenter
                                                  licensing and accrediting bodies inspect                commenter. While we are not                           recommended that instead of revoking a
                                                  suppliers’ facilities to assure the                     preempting State and local land use                   supplier’s billing privileges when a site
                                                  supplier has a legally defined means of                 laws, we are establishing criteria to                 visit cannot be conducted, the NSC
                                                  providing care. The commenter believes                  enroll in the Medicare program as a                   should ‘‘suspend’’ the billing privileges
                                                  that Medicare should have no role in                    DMEPOS supplier. We believe that this                 pending further investigation to
                                                  determining the appropriateness of a                    revised criterion will help to ensure that            determine if the entity is a legitimate
                                                  supplier’s facility.                                    Medicare beneficiaries receive quality                supplier.
                                                     Response: While we agree that                        services from quality suppliers.                         Response: We do not have statutory or
                                                  licensing and accreditation are essential                  Comment: A commenter stated that                   regulatory authority to suspend billing
                                                  elements for ensuring quality of care, we               the minimum square footage                            privileges under those circumstances.
                                                  disagree with the commenter that CMS                    requirement is unnecessary for                        However, we note that DMEPOS
                                                  or our designated contractor should                     suppliers’ facilities that are not intended           suppliers are afforded appeal rights if
                                                  have no role in determining the                         for beneficiary access and that this                  their billing privileges are revoked.
                                                  appropriateness of a supplier’s facility.               proposed standard blurs the distinction                  Comment: A commenter believes
                                                  Since the implementation of the                         between a classic retail establishment                routine on-site visits should be by
                                                  DMEPOS supplier standards in October                    and a service facility dedicated to the               appointment to ensure proper person(s)
                                                  of 2000, we have played an important                    provision of supplies and equipment to                are available.
                                                  role in determining the appropriateness                 patients in their homes. In addition, the                Response: We disagree with this
                                                  of a supplier’s facility via regulation at              commenter requests that CMS consider                  commenter. While we understand that
                                                  § 424.57.                                               different business models for supplier                proper staff may not always be on-site
                                                     Comment: One commenter questioned                    standards, including suppliers that                   when unannounced site visits occur, it
                                                  why the square footage matters if a                     provide quality items and services to                 is necessary for all DMEPOS suppliers
                                                  supplier meets all requirements and has                 beneficiaries, but do not operate                     to be open during posted hours of
                                                  Medicare beneficiaries coming to the                    facilities intended to be stores for in-              operations. The revised language only
                                                  supplier’s physical location where                      person access.                                        clarifies who is authorized to conduct
                                                  products are stocked and provided.                         Response: We disagree with this                    the on-site visit. Moreover, we believe
                                                     Response: We maintain that an                        commenter. Since most DMEPOS                          that unannounced site visits are
                                                  appropriate amount of square footage is                 suppliers are not solely service                      necessary to ensure that a DMEPOS
                                                  generally necessary to ensure that the                  facilities, we believe that these enrolled            supplier is continually meeting the
                                                  facility can meet its obligations to a                  suppliers must provide reasonable                     supplier standards in § 424.57.
                                                  beneficiary which include an area for                   access for Medicare beneficiaries in the                 Comment: Several commenters
                                                  the beneficiary to sit, or room for a                   event that a beneficiary has a problem                believed that it would be unjust to deny
                                                  wheelchair and room for it to turn/move                 or requires prompt service. It is also                or revoke based on one site visit during
                                                  around, as well as room for stock and                   essential that CMS or our agents have                 posted hours because the business could
                                                  for the equipment necessary for running                 access during posted hours of                         be closed for a legitimate reason on the
                                                  a business. In addition, in the past many               operations to ensure that the supplier                day of the visit, the mandated staff may
                                                  suppliers with very minimal square                      continues to meet the supplier                        be on call, or that another emergency
                                                  footage have been determined to be                      standards in § 424.57.                                situation may occur that would prevent
                                                  fraudulent or have provided inferior                       Comment: A commenter suggests that                 a DMEPOS supplier from being open
                                                  service to Medicare beneficiaries.                      CMS consider that the appropriate size                during posted hours of operation.
                                                     Comment: One commenter questioned                    of a facility is based on the services                   Response: While we understand that
                                                  whether it is CMS’ intent to require                    provided, the size of the organization                unexpected or emergency business
                                                  suppliers to be a retail-type business by               and the status of the location.                       closings can occur, we believe that it is
                                                  mandating minimum square footage                           Response: We appreciate this                       essential that DMEPOS suppliers
                                                  which needlessly drives up the cost of                  comment and have considered these                     establish practices and procedures to
                                                  doing business for nonretail suppliers.                 factors in adopting a minimum square                  address unexpected or emergency
                                                     Response: While ‘‘closed door’’                      footage requirement for DMEPOS                        situations. In addition, we understand
                                                  businesses are eligible to participate in               suppliers. As noted previously, we                    the nature of unforeseen emergencies
                                                  the Medicare program, we believe that                   maintain that an appropriate amount of                and when warranted, the NSC will
                                                  it is necessary to include a minimum                    square footage is generally necessary to              conduct an unannounced follow-up
                                                  square footage into what is considered                  ensure that the facility can meet its                 visit prior to denying or revoking billing
                                                  an appropriate site. We understand                      obligations to a beneficiary which                    privileges.
                                                  there may be concern that this                          include an area for the beneficiary to sit,              Comment: One commenter believes
                                                  requirement may cause a change in                       or room for a wheelchair and room for                 this requirement constitutes over
                                                  business practices for smaller suppliers                it to turn/move around, as well as space              regulating by the government.
                                                  and could possibly result in increased                  for inventory, patient records and                       Response: We disagree with the
                                                  costs. However, we believe that most                    equipment necessary for running a                     commenter. We have found
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  DMEPOS suppliers are already meeting                    business.                                             unannounced on-site visits to be a very
                                                  this standard.                                                                                                effective tool in combating fraud and
                                                                                                          3. On-Site Inspections                                abuse and to protect the Medicare Trust
                                                     Comment: A commenter stated that
                                                  the minimum square footage                                In § 424.57(c)(8), we proposed to                   Fund from unscrupulous suppliers.
                                                  requirement is not appropriate because                  clarify this provision by revising (c)(8)             Moreover, CMS and our designated
                                                  the Federal rule would preempt State or                 to read as follows: ‘‘Permits CMS, the                contractor, the NSC, have conducted
                                                  local land use or supplier laws already                 NSC, or agents of CMS or the NSC to                   unannounced on-site visits since 2000
                                                  in place and will not take into account                 conduct on-site inspections to ascertain              to ensure compliance with those


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00031   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                  52638              Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations

                                                  standards which only can be verified by                 6. Solicitation of Beneficiaries                      In addition, section 1871 of the Act
                                                  visual inspection.                                         In § 424.57(c)(11), we proposed to                 provides the Secretary the right to
                                                                                                          revise this supplier standard to clarify              prescribe regulations as may be
                                                  4. Business Telephone Operations
                                                                                                          that suppliers and their agents cannot                necessary to carry out the
                                                     In § 424.57(c)(9), we proposed a                                                                           administration of the Medicare program.
                                                  revision of this standard so that it would              make a direct solicitation of Medicare
                                                                                                          beneficiaries, which includes, but is not             Moreover, we believe that it is necessary
                                                  read, ‘‘Maintains a primary business                                                                          to review, clarify, and, if necessary,
                                                  telephone that is operating at the                      limited to, telephone, computer, e-mail,
                                                                                                          instant messaging, or in-person contacts,             revise existing regulatory standards to
                                                  appropriate site listed under the name                                                                        address changes in practice by DMEPOS
                                                  of the business locally or toll-free for                except under the current provisions at
                                                                                                                                                                suppliers in order to protect Medicare
                                                  beneficiaries. The use of cellular                      § 424.57(c)(11)(i) through (iii).
                                                                                                             Comment: One commenter                             beneficiaries and the Medicare Trust
                                                  phones, beeper numbers, and pagers is                                                                         Funds.
                                                  prohibited. Additionally, DMEPOS                        recommended that we retract the
                                                                                                                                                                   Comment: Several commenters stated
                                                  suppliers are prohibited from                           proposed provision and allow the
                                                                                                                                                                that our proposal to clarify and revise
                                                  forwarding calls from the primary                       current telephone standard to remain
                                                                                                                                                                § 424.57(c)(11) violated First
                                                  business telephone listed under the                     unchanged. This commenter also stated
                                                                                                                                                                Amendment protections by
                                                  name of the business to a cellular                      that a supplier is not ‘‘cold calling’’ the           unconstitutionally restricting
                                                  phone, or a beeper/pager. The exclusive                 beneficiary when the supplier has                     commercial speech. In addition, this
                                                  use of answering machines, answering                    received a verbal order from a physician              commenter stated that, ‘‘Business
                                                  services or facsimile machine (or                       and requested that we clarify that a                  solicitation by DME suppliers is clearly
                                                  combination of these options) cannot be                 supplier is not violating this standard if            a form of commercial speech as any
                                                  used as the primary business telephone                  the supplier contacts a beneficiary via               business has the right to market its
                                                  during posted operating hours.’’                        telephone after it has received a verbal              products to potential customers.
                                                     Comment: One commenter requested                     order from the beneficiary’s treating                 Advertising by suppliers of medical
                                                  that we clarify that all call forwarding                physician.                                            equipment is not inherently misleading
                                                  to a main business office number when                      Response: We do not agree. We                      and can be an important method of
                                                  multiple office locations exist would be                believe that it is inappropriate for a                informing beneficiaries of products and
                                                  permitted.                                              DMEPOS supplier to contact a                          services that are covered or accessible
                                                     Response: While we appreciate this                   beneficiary based solely on a physician               under their Medicare coverage.’’
                                                  comment, we do not believe that it is                   order. In the situation described by the                 Response: We disagree that the
                                                  appropriate for a DMEPOS supplier to                    commenter, the contact is without the                 revisions that we are adopting in
                                                  forward calls from one practice location                beneficiary’s knowledge that the                      § 424.57(c)(11) of this final rule deny or
                                                  to a main business office number when                   physician would be contacting a                       abridge First Amendment rights.
                                                  multiple practice locations exists.                     supplier on the beneficiaries behalf and              Specifically, this revised standard does
                                                     Comment: One commenter stated that                   would be prohibited unless one of the                 not change or alter a DMEPOS
                                                  preventing the use of alternative                       current provisions in § 424.57(c)(11)(i)              supplier’s ability to advertise its
                                                  technologies during business hours                      through (iii) applied. However, if a                  products and services to the general
                                                  would have an adverse effect on the                     physician contacts the supplier on                    public or Medicare beneficiaries
                                                  quality of services that suppliers are                  behalf of the beneficiary’s with the                  generally. As such, television, radio,
                                                  able to furnish to Medicare                             beneficiary’s knowledge, and then a                   and Internet advertisements are
                                                  beneficiaries.                                          supplier contacts the beneficiary to                  permitted. In addition, DMEPOS
                                                     Response: While we appreciate this                   confirm or gather information needed to               suppliers may advertise their products
                                                  comment, we believe that the supplier                   provide that particular covered item                  or services at health fairs, community
                                                  standards in § 424.57(c)(9) are not                     (including the delivery and billing                   events, or the DMEPOS supplier’s Web
                                                  overly prescriptive and help to ensure                  information), then that contact would                 site. This provision seeks to prohibit a
                                                  that the DMEPOS supplier is                             not be considered a direct solicitation               supplier from making direct
                                                  operational during posted hours of                      for the purpose of this standard. This is             solicitations with Medicare beneficiaries
                                                  operations.                                             the case even if the physician has not                without their consent.
                                                                                                          specified the precise DMEPOS supplier                    Comment: One commenter stated that
                                                  5. Comprehensive Liability Insurance                    that will be contacting the beneficiary               the proposed change to § 424.57(c)(11)
                                                     In § 424.57(c)(10), we proposed a                    regarding the item referred by that                   would harm Medicare beneficiaries and
                                                  revision to this provision to specify that              physician.                                            all healthcare consumers. This
                                                  the DMEPOS supplier has a                                  Comment: One commenter stated that                 commenter also stated that this proposal
                                                  comprehensive liability insurance                       CMS lacks the statutory authority to                  would have the effect of limiting
                                                  policy in the amount of at least                        expand on the longstanding statutory                  consumer education, price comparison,
                                                  $300,000 per incident that covers both                  and regulatory prohibition on                         and overall choice.
                                                  the supplier’s place of business and all                unsolicited telephone contacts to further                Response: We disagree with this
                                                  customers and employees of the                          types of speech.                                      commenter that the changes we are
                                                  supplier and ensures that insurance                        Response: We disagree with the                     adopting in this final rule will limit
                                                  policy must remain in force at all times.               commenter’s assertion that we are trying              consumer education, price comparison
                                                  In addition, we proposed that a                         to expand on the statutory authority                  or overall choice because suppliers can
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  DMEPOS supplier must list the NSC as                    which prohibits unsolicited telephone                 continue to educate the public about the
                                                  a certificate holder on the policy and                  contacts set forth in section 1834(a)(17)             advantages of their products or services
                                                  notify the NSC in writing within 30                     of the Act. We believe that we have the               through marketing practices that help to
                                                  days of any policy changes or                           statutory authority to clarify and revise             educate and inform the public and
                                                  cancellations. Although we are not                      the supplier standard in § 424.57(c)(11).             Medicare beneficiaries about their
                                                  finalizing the proposed revision in this                Specifically, section 1834(j)(1)(B) of the            healthcare choices.
                                                  final rule, we will consider this                       Act gives the Secretary the authority to                 Comment: One commenter stated that
                                                  provision in a future rulemaking.                       establish additional supplier standards.              if a beneficiary visited a retail store, on


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00032   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                                     Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations                                          52639

                                                  their on volition, to seek information on               general public are permissible and are                suppliers from contacting Medicare
                                                  DMEPOS products, that the proposed                      not considered direct solicitation for the            beneficiaries in the situations described
                                                  change would prohibit the supplier                      purpose of this standard.                             in the current provisions in
                                                  from providing information or                              Comment: Several commenters would                  § 424.57(c)(11)(i) through (iii). For
                                                  education that the beneficiary                          like CMS to clarify the restrictions on a             example, a supplier could contact a
                                                  requested.                                              supplier who may contact a Medicare                   beneficiary with whom they already
                                                     Response: We disagree that a                         recipient about noncovered items                      have an established business
                                                  DMEPOS supplier could not provide                       because it appears to limit a supplier’s              relationship or for legitimate reasons,
                                                  information or education when the                       legitimate marketing activities such as               such as annual fitting reminders,
                                                  beneficiary contacts the DMEPOS                         web pages describing various products,                updating or verifying information from
                                                  supplier for information. The revised                   services and inserts to periodical                    previously serviced beneficiaries.
                                                  supplier standard in § 424.57(c)(11)                    publications dealing with various                        Comment: Several commenters
                                                  states that DMEPOS suppliers must                       products and services.                                recommended that we add another
                                                  agree not to directly solicit patients,                    Response: We do not agree that this                reason for the DMEPOS supplier to
                                                  except as permitted under the current                   standard limits a supplier’s legitimate               contact the patient, namely when the
                                                  provisions in § 424.57(c)(11)(i) through                marketing activities. We believe that                 physician places the DMEPOS order
                                                  (iii). Accordingly, if the Medicare                     DMEPOS suppliers can continue to                      (written or verbal) on behalf of the
                                                  beneficiary initially contacts the                      conduct mass advertising. For the                     patient.
                                                  DMEPOS supplier, then the supplier’s                    purposes of this final rule, we believe                  Response: As noted previously, a
                                                  contact with the beneficiary would not                  direct solicitation targets Medicare                  DMEPOS supplier may not contact a
                                                  be a direct solicitation and the supplier               beneficiaries without their consent.                  beneficiary based solely on a physician
                                                  may, therefore, discuss, educate, and                   Accordingly, we believe that direct                   order. However, a supplier may contact
                                                  inform the Medicare beneficiary about                   solicitation is significantly different in            a beneficiary if a physician contacts a
                                                  the various products and alternatives                   scope than general advertising. Again,                DMEPOS supplier on behalf of a
                                                  available to that beneficiary.                          these solicitations are one on one in                 beneficiary with the beneficiary’s
                                                     Comment: One commenter stated that                   nature and not the same as general                    knowledge, and then a supplier contacts
                                                  we did not adequately define, ‘‘directly                advertising to the public and also apply              the beneficiary to confirm or gather
                                                  solicit’’ or ‘‘coercive internet                        to noncovered items if they are being                 information needed to provide that
                                                  advertising.’’                                          solicited by a Medicare enrolled                      particular covered item (including
                                                     Response: We appreciate the request                  DMEPOS supplier.                                      delivery and billing information). In that
                                                  for clarification. We believe that ‘‘direct                Comment: One commenter asks if a                   instance, the contact would not be
                                                  solicitation’’ occurs when a DMEPOS                     web site dedicated to short-term cash                 considered a direct solicitation and
                                                  supplier or its agents directly contacts                rentals of not readily-accessible portable            therefore, would not implicate the
                                                  an individual Medicare beneficiary by                   oxygen concentrators for travel use                   standard set forth at § 424.57(c)(11).
                                                  telephone, e-mail, instant messaging, or                (using an Advance Beneficiary Notices                 Please note that the beneficiary need
                                                  in-person contact without his or her                    (ABN) if the customer is a Medicare                   only be aware that a DMEPOS supplier
                                                  consent for the purpose of marketing the                beneficiary) violates the provisions                  will be contacting him/her regarding the
                                                  DMEPOS supplier’s health care                           outlined in the proposed rule.                        prescribed covered item, recognizing
                                                  products or services or both. In                           Response: We believe, for the purpose              that the appropriate supplier may not
                                                  addition, we removed the reference to                   of this standard, a web site dedicated to             have been identified at the time of the
                                                  ‘‘coercive response internet advertising’’              short-term cash rentals of not-readily                consultation.
                                                  from this rule in order to ensure that                  accessible portable oxygen                               Comment: A commenter stated that
                                                  this standard is clear and                              concentrators for travel use to be of use             prohibiting a supplier from directly
                                                  understandable.                                         to the general public. Using ABNs if the              soliciting patients, including ‘‘in-person
                                                     Comment: One commenter asked if                      customer is a Medicare beneficiary                    contacts’’ improperly restrains free
                                                  internet advertising such as internet                   would be required for the supplier to                 speech and disadvantages a small
                                                  ‘‘yellow pages,’’ the use of Google                     not be held liable for the charge under               supplier by limiting a supplier to mass
                                                  AdWords, appearance in search engine                    section 1879 of the Act. Using ABNs                   media advertising, which is only
                                                  results or other ‘‘keyword’’                            assists the beneficiaries in making                   financially feasible to large suppliers.
                                                  advertisements informing the public of                  informed decisions about the product. A               The commenter also stated that the
                                                  products and services provided by a                     dedicated web site that can be freely                 beneficiary will be adversely affected
                                                  supplier would constitute coercive                      accessed by the general public, at the                because, under the proposed rule, a
                                                  response Internet advertising.                          consumer’s choice, is not considered                  member of the hospital staff would need
                                                     Response: As noted previously, we                    direct solicitation for the purpose of this           to obtain written permission from the
                                                  removed the reference to ‘‘coercive                     standard.                                             beneficiary and transmit that permission
                                                  response Internet advertising’’ from this                  Comment: Several commenters                        to the supplier before the supplier could
                                                  final rule in order to ensure that this                 suggested that the standard is                        initiate the service causing unnecessary
                                                  standard is clear and understandable.                   satisfactory as it exists and that                    waiting periods.
                                                  We believe that advertising techniques                  changing it as proposed would be overly                  Response: We believe that a ‘‘direct
                                                  such as internet yellow pages, Google                   restrictive, burdensome, and could                    solicitation’’ occurs when a DMEPOS
                                                  AdWords, and search engine keyword                      prevent patients from receiving                       supplier or their agent contacts an
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  result-driven advertising are techniques                important information.                                individual Medicare beneficiary without
                                                  used by businesses to educate and                          Response: We believe the revision of               their consent for the purpose of
                                                  inform the public about a company and                   this standard was necessary to include                marketing the DMEPOS supplier’s
                                                  its products. In addition, these practices              current trends and technological                      health care products or services or both;
                                                  are normally considered mass                            advances, such as door-to-door                        therefore we are clarifying our
                                                  advertising. Accordingly, web site                      solicitation, electronic mail, and instant            regulations by adding the definition of
                                                  advertisements that are intended to                     messaging. However, we do not believe                 ‘‘direct solicitation’’ to § 424.57(a). These
                                                  market a DMEPOS supplier to the                         this provision would prohibit DMEPOS                  types of direct solicitations are one on


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00033   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                  52640              Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations

                                                  one in nature and not the same as                          Response: It is our intention to ensure              Comment: One commenter
                                                  advertising to the public in a general                  that oxygen suppliers promote quality                 recommended that we incorporate the
                                                  marketing campaign. Finally, we do not                  in the furnishing of oxygen or oxygen-                proposed standard in § 424.57(c)(27)
                                                  believe Medicare beneficiaries will be                  related equipment, and, in doing so,                  into the revised supplier standard in
                                                  adversely affected by this provision’s                  protect Medicare beneficiaries against                § 424.57(c)(1).
                                                  contact restrictions causing unnecessary                substandard product(s) or poor service.                 Response: We disagree with this
                                                  waiting periods prior to a DMEPOS                       The pick-up and delivery of liquid and                commenter and have adopted a new
                                                  supplier’s initiation of services. As long              gaseous oxygen cylinders does not                     supplier standard in § 424.57(c)(27).
                                                  as the beneficiary has completed a                      interfere with our intentions for this                2. Ordering and Referring
                                                  consent form giving the hospital staff                  provision. Therefore, oxygen suppliers                Documentation
                                                  member permission to share the                          may continue to subcontract the pick-up
                                                  beneficiary’s information with the                      and delivery of oxygen and oxygen-                       In § 424.57(c)(28), we proposed a new
                                                  DMEPOS supplier for the purpose of                      related products.                                     supplier standard that states that the
                                                  initiating service, the hospital staff                     Comment: A commenter stated that                   supplier is required to maintain
                                                  person can order the service on the                     there is confusion regarding who needs                ordering and referring documentation,
                                                  beneficiary’s behalf. Hospitals or other                to be licensed for specific services and              including the National Provider
                                                  entities use consent forms for the                      believes the provisions in                            Identifier, received from a physician,
                                                  purpose of ordering medical supplies or                 § 424.57(c)(27) needs greater specificity             nurse practitioner, physician assistant,
                                                  services on behalf of patients as                                                                             clinical social worker, or certified nurse
                                                                                                          and detail.
                                                  standard operating procedure to ensure                                                                        midwife, for 7 years after the claim has
                                                                                                             Response: We appreciate this
                                                                                                                                                                been paid.
                                                  compliance with the Privacy Act and its                 comment and have revised                                 Comment: One commenter stated that
                                                  implementing regulations.                               § 424.57(c)(27) to address this concern.              it would be more practical and
                                                  7. Product Delivery and Beneficiary                     We have clarified in this section that                reasonable to base any records retention
                                                  Instructions                                            DMEPOS suppliers are responsible for                  policy on the date of service and
                                                                                                          knowing which licenses are required for               lengthen the retention period to 10
                                                     In § 424.57, we proposed to revise                   the DMEPOS that they supply.
                                                  paragraph (c)(12) provision to clarify its                                                                    years, which is the guideline used by
                                                                                                             Comment: One commenter                             many in the industry. This commenter
                                                  intent. Specifically, we proposed that a                interpreted the proposed rule as
                                                  DMEPOS supplier: (1) Is responsible for                                                                       stated that this change would capture
                                                                                                          requiring an oxygen supplier to get their             CMS’ concerns about availability of
                                                  maintaining proof of the delivery in the                oxygen from an in-State licensed oxygen
                                                  beneficiary’s file; (2) must furnish                                                                          records and cause fewer disruptions to
                                                                                                          supplier.                                             the supplier recordkeeping practices.
                                                  information to beneficiaries at the time                   Response: This final rule will require
                                                  of delivery of items as to how the                                                                            Another commenter believes that record
                                                                                                          licensed oxygen suppliers to get their                retention should mirror that of industry
                                                  beneficiary can contact the supplier by                 oxygen and oxygen-related equipment
                                                  telephone; (3) must provide the                                                                               or State standards such as the State
                                                                                                          from other licensed or State-certified                Board of Pharmacy which is typically 3
                                                  beneficiary with instructions on how to                 oxygen suppliers. However, if an oxygen
                                                  safely and effectively use the equipment                                                                      years.
                                                                                                          supplier’s physical location is in a State               Response: We appreciate the
                                                  or contract this service to a qualified                 that does not require oxygen licensure                commenter’ suggestions. However with
                                                  individual; (4) is responsible for                      or certification, then the oxygen                     the enactment of section of 6406(a) of
                                                  providing instruction on the safe and                   supplier is not required to get its oxygen            the ACA, we published an interim final
                                                  effective use of the equipment that                     or oxygen-related equipment from other                rule with comment in the May 5, 2010
                                                  should be completed at the time of                      licensed oxygen suppliers. It is not our              Federal Register (75 FR 24437), which
                                                  delivery; and (5) must document that                    intention to restrict Medicare                        established 7 year retention period
                                                  this instruction has taken place. We are                beneficiaries’ oxygen supplier choices.               based on the date of service in
                                                  continuing to review the public                            Comment: One commenter                             § 424.516(f). Moreover, we believe that
                                                  comments received on this provision                     interpreted this standard as requiring an             this retention policy is consistent with
                                                  and we will consider finalizing this                    in-State oxygen license for out-of-State              the policy established at § 424.516(f) in
                                                  provision in a future rulemaking effort.                suppliers and believes this limits access             the November 19, 2008 final rule (73 FR
                                                  B. New DMEPOS Supplier Standards                        for Medicare beneficiaries.                           69726) entitled ‘‘Medicare Program;
                                                                                                             Response: We do not require oxygen                 Payment Policies Under the Physician
                                                  1. Obtaining Oxygen                                     licensure or certification for oxygen                 Fee Schedule and Other Revisions to
                                                     In § 424.57(c)(27), we proposed a new                suppliers whose physical locations are                Part B for CY2009; E-Prescribing
                                                  standard that specified that the                        in States that do not require oxygen                  Exemption for Computer-Generated
                                                  DMEPOS supplier must obtain oxygen                      licensure or certification. However, this             Facsimile Transmissions; and Payment
                                                  from a State-licensed oxygen supplier.                  provision does restrict unlicensed                    for Certain Durable Medical Equipment,
                                                  In addition, we stated that the proposed                oxygen suppliers from supplying                       Prosthetics, Orthotics and Supplies
                                                  new standard would not apply when the                   oxygen and oxygen-related equipment                   (DMEPOS)’’. Finally, in § 424.57(c)(28),
                                                  State does not license oxygen suppliers.                to oxygen suppliers whose physical                    we establish that suppliers are required
                                                     Comment: One commenter stated that                   locations are in States that require                  to maintain ordering and referring
                                                  they generally agree that DMEPOS                        oxygen licensure or certification.                    documentation consistent with the
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  suppliers should obtain oxygen from                        Comment: A commenter suggested                     provisions found in § 424.516(f).
                                                  appropriately licensed oxygen supply                    adding ‘‘if applicable’’ to this provision               Comment: One commenter stated that
                                                  companies, but requested that we clarify                because not all States license oxygen                 it would be more practical and
                                                  that the supplier standard in                           suppliers.                                            reasonable to base any records retention
                                                  § 424.57(c)(27) does not preclude                          Response: We agree and will revise                 policy on the date of service.
                                                  suppliers from subcontracting the pick-                 § 424.57(c)(27) to incorporate language                  Response: We concur with this
                                                  up and delivery of liquid and gaseous                   regarding applicability to States that                commenter and have revised this
                                                  oxygen cylinders.                                       license oxygen suppliers.                             supplier standard to reflect that records


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00034   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                                     Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations                                        52641

                                                  should be based on the date of service                  supplier. In addition, we solicited                   location if these suppliers are furnishing
                                                  and not the date of payment.                            comments on whether we should                         DMEPOS to their own patients as part
                                                     Comment: One commenter is                            establish an exception to this space                  of professional service.
                                                  concerned about why CMS would                           sharing proposal for physicians and                      Comment: One commenter stated that
                                                  develop a supplier safeguard mandating                  nonphysician practitioners and the                    if any limitation on sharing practice
                                                  records retention based upon the date                   circumstances which warrant an                        locations is put in place that we should,
                                                  the claim was paid when all business                    exception since we are aware that                     at most, formalize the NSCs practice of
                                                  transactions are based upon the date of                 physicians and other licensed                         prohibiting multiple NSC supplier
                                                  service or date equipment was provided.                 nonphysician practitioners may obtain                 numbers at a single address.
                                                  The addition of a new date would                        their own DMEPOS supplier number                         Response: While we have established
                                                  require systems modification just for                   and furnish DMEPOS from their office.                 a limited number of exceptions to the
                                                  managing records and the purge                             Comment: One commenter stated that                 prohibition of sharing a practice
                                                  process.                                                the proposed standard is too restrictive              location, we agree that the NSC should
                                                     Response: As stated previously, we                   and could discourage suppliers from                   not convey billing privileges to
                                                  have revised this standard to base any                  forming networks under the competitive                suppliers who are not in compliance
                                                  records retention policy on the date of                 rules and urged CMS to retract the new                with the provisions of this final rule.
                                                  service.                                                standard in § 424.57(c)(29).                          Moreover, with the implementation of
                                                     Comment: Some commenters stated                         Response: We do not believe that the               the National Provider Identifier (NPI), a
                                                  that the Health Insurance Portability                   new standard will restrict the ability of             DMEPOS supplier must obtain a NPI for
                                                  and Accountability Act of 1996 (HIPAA)                  suppliers to form networks for the                    each practice location, unless the
                                                  (Pub. L. 104–191) and State laws govern                 purpose of competitive bidding.                       supplier is a sole proprietorship.
                                                  the manner in which medical records                        Comment: Several commenters
                                                                                                                                                                Accordingly, we believe that this policy
                                                  need to be kept and urged CMS to                        requested that we clarify whether a
                                                                                                                                                                is consistent with current National
                                                  retract the new standard in                             ‘‘practice location’’ is limited to physical
                                                                                                                                                                Supplier Clearinghouse operational
                                                  § 424.57(c)(28).                                        space or whether it also encompasses
                                                                                                                                                                policy and the provisions for issuing an
                                                     Response: The HIPAA record                           equipment or staff and requests
                                                                                                                                                                NPI.
                                                  retention policy codified at 45 CFR                     clarification of the definition of the
                                                                                                                                                                   Comment: One commenter agreed
                                                  164.530 relates to a covered entities                   terms ‘‘sharing’’ and ‘‘practice location.’’
                                                                                                             Response: DMEPOS suppliers list the                with the statement in the preamble of
                                                  privacy policies and procedures (for                                                                          the proposed rule that stated, ‘‘We do
                                                  example, administrative records of                      practice location in Section 4 of the
                                                                                                          Medicare enrollment application (CMS–                 not believe that legitimate DMEPOS
                                                  complaints, notices, and other                                                                                suppliers routinely share practice
                                                  administrative actions or procedures);                  855S). For the purposes of this standard,
                                                                                                          sharing a practice location refers to                 locations with another Medicare
                                                  and therefore, does not preclude us from                                                                      supplier.’’
                                                  establishing a documentation retention                  sharing of the physical location as
                                                                                                          described on the CMS–855S. In general,                   Response: We appreciate this
                                                  standard. In addition, since Medicare is                                                                      comment and continue to believe that
                                                  a Federal program, it is not subject to                 the practice location is the physical
                                                                                                          space where a DMEPOS supplier                         legitimate businesses do not share
                                                  State law. We note that section 6406(a)                                                                       practice locations with competitors.
                                                  of the ACA (Pub. L. 111–148) amends                     operates his or her business and meets
                                                                                                          with customers and potential customers.                  Comment: One commenter stated that
                                                  section 1842(h) of the Act by adding a                                                                        if a space sharing agreement passes
                                                  new paragraph (9) which states the                         Comment: One commenter requested
                                                                                                          that we clarify that the enrolled practice            under both the Anti-kickback statute
                                                  following:                                                                                                    and the Stark statute and regulations,
                                                                                                          location does not include a warehouse,
                                                     The Secretary may revoke enrollment, for             storage facility, or repair facility.                 then they do not believe such
                                                  a period of not more than one year for each                Response: As stated previously, a                  arrangements should be automatically
                                                  act, for a physician or supplier under section                                                                prohibited by a supplier standard.
                                                  1866(j) if such physician or supplier fails to
                                                                                                          DMEPOS supplier identifies the practice
                                                                                                          location in Section 4 of the CMS–855                     Response: We disagree with this
                                                  maintain and, upon request of the Secretary,
                                                  provide access to documentation relating to             and is a place where a DMEPOS                         commenter. While the statutory and
                                                  written orders or requests for payment for              supplier operates his or her business                 regulatory provisions referenced
                                                  durable medical equipment, certifications for           and meets with customers and potential                previously are intended to prohibit
                                                  home health services, or referrals for other            customers.                                            specific practices, these provisions do
                                                  items or services written or ordered by such               Comment: Several commenters                        not address the full range of problems
                                                  physician or supplier under this title, as              requested that we clarify that the space              that occur when DMEPOS suppliers are
                                                  specified by the Secretary.                             sharing provision in § 424.57(c)(29) is               commingling practice locations. The
                                                  We also note that section 6406(d) of                    not intended to preclude a physician or               Anti-kickback statute, the Stark statute,
                                                  ACA specifies that ‘‘[t]he effective date               licensed health professional (who is also             and our regulations are separate
                                                  of this provision shall apply to orders,                recognized as a DMEPOS supplier by                    authorities and do not preclude us from
                                                  certifications and referrals made on or                 Medicare) from furnishing both                        establishing additional DMEPOS
                                                  after January 1, 2010.’’ Therefore, we                  DMEPOS products and professional                      supplier standards. In addition, we do
                                                  believe that finalization of our proposed               services to his or her patients in the                not believe that legitimate DMEPOS
                                                  record retention requirements at                        same practice location.                               suppliers share inventory, staffing or a
                                                  § 424.57(c)(28) is consistent with the                     Response: We appreciate this                       practice location with a competing
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  section 6406(a) of ACA requirement.                     comment and have established an                       DMEPOS supplier.
                                                                                                          exception to this standard for                           Comment: Several commenters
                                                  3. Prohibition on Sharing of a Practice                 physicians and NPPs as defined in the                 recommended that physical therapists
                                                  Location                                                statute. Under section 1842(b)(18)(C) of              (PTs) be exempt from this provision
                                                     In § 424.57(c)(29), we proposed a new                the Act, physical and occupational                    because it would place an undue burden
                                                  standard that specifies that the supplier               therapists may operate as a DMEPOS                    on the patient to purchase the limited
                                                  is prohibited from sharing a practice                   supplier, as well as a licensed                       DME items offered in the PT office at
                                                  location with another Medicare                          professional at the same practice                     another location—especially for


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00035   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                  52642              Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations

                                                  pediatric PTs or those located in rural                   Comment: One commenter asked if                        Response: We agree that a DMEPOS
                                                  areas.                                                  two entities, with two different ‘‘Doing              supplier may be enrolled within the
                                                     Response: As stated previously, we                   Business As’’ (DBA) names are owned                   same building owned by a hospital.
                                                  are establishing an exception for                       by the same parent company would they                    Comment: One commenter does not
                                                  physical and occupational therapists                    be prohibited from having a common                    believe co-existing in an office space
                                                  from the provision in § 424.57(c)(29).                  location under § 424.57(c)(29).                       jeopardizes quality supplier standards.
                                                     Comment: Several commenters stated                     Response: As stated previously, we                     Response: We disagree because we
                                                  that there should be an exception to this               have established certain exceptions to                have found that unrelated business
                                                  provision when both businesses are                      this provision. However, we do not                    entities that share the same practice
                                                  owned by the same person or entity or                   believe that it is a common practice to               location often provide poor quality care
                                                  the DME supplier is a separate unit                     establish multiple DBAs at the same                   or, in some case, are associated with
                                                  located within or owned by a larger                     practice location. Accordingly, we                    fraudulent businesses or do not exist.
                                                  health care facility such as a hospital.                                                                         Comment: One commenter agrees
                                                                                                          believe that two different DBAs that are
                                                  Other commenters stated there should                                                                          with CMS’ proposal that nonphysician
                                                                                                          owned by the same parent company
                                                  be an exception to this provision when                                                                        DMEPOS suppliers should not share a
                                                                                                          would be prohibited from sharing a
                                                  a pharmacy is operating within a State-                                                                       practice location with another Medicare
                                                                                                          practice location under this provision.
                                                  licensed health center because of the                                                                         supplier, especially if that other
                                                  burden separate locations would put on                    Comment: One commenter believes                     Medicare supplier is a possible referral
                                                  the patients.                                           the regulation text does not properly                 source.
                                                     Response: We disagree with                           convey the intent of the language in the                 Response: We appreciate the support
                                                  commenters who stated that we should                    preamble and will result in additional                for our provision regarding the sharing
                                                  establish an exception based solely on                  micromanagement of DMEPOS                             of space and further clarify that the
                                                  ownership. Moreover, unless the owner                   suppliers by CMS.                                     Anti-kickback statute, the Stark Statute,
                                                  of DMEPOS supplier is a sole                              Response: We believe that the                       and our regulations are separate
                                                  proprietorship, DMEPOS suppliers are                    provisions of this final rule and the                 authorities apart from the sharing of
                                                  required to obtain a unique National                    regulation text are consistent. In                    space provisions adopted within this
                                                  Provider Identifier for each practice                   addition, we believe that the provisions              final rule.
                                                  location. Accordingly, unless a                         as adopted allow CMS or the NSC to                       Comment: Several commenters
                                                  DMEPOS supplier has satisfied an                        ensure that DMEPOS suppliers are                      requested that we not create exceptions
                                                  exception under § 424.57(c)(29), we do                  operating in accordance with                          to this provision for physicians and
                                                  not believe that an owner should be                     established business practices used by                other licensed providers to share space
                                                  permitted to establish a sole                           legitimate companies. As stated                       as it is a bad idea that creates
                                                  proprietorship and an organizational                    previously, we do not believe that                    inconsistent application of the
                                                  entity at the same practice location.                   legitimate DMEPOS suppliers share                     regulations. In addition, making
                                                  Similarly, we do not believe that the                   inventory, staffing or operational space              physicians discontinue distributing
                                                  same owner should be able to obtain                     with their competitors.                               DME from their offices is good and the
                                                  separate Medicare billing privileges for                  Comment: One commenter believes                     physician, orthotist/prosthetist, and
                                                  DMEPOS suppliers at the same practice                   that an orthotic and prosthetic facility              physical therapist should have no
                                                  location found on the Medicare                          should be allowed to share space with                 financial relationship to ensure true
                                                  enrollment application. As stated                       complementary, but not competing                      medical necessity.
                                                  previously, we do not believe that                      businesses that may already have a                       Response: We believe that we can
                                                  legitimate businesses share practice                    Medicare supplier number, specifically                consistently apply the regulations and
                                                  locations with competitors. However,                    physicians and physical therapy offices.              allow for reasonable exceptions.
                                                  we agree with the commenters who                                                                              Moreover, we believe that physicians
                                                  stated that there should be an                            Response: We disagree with this                     can furnish DMEPOS to their own
                                                  exemption when the entity or DME                        commenter. While we have established                  patients as part of professional service.
                                                  supplier is a separate unit located                     an exception to § 424.57(c)(29) for                   In addition, in many cases, a physician
                                                  within or owned by a larger facility.                   physicians, NPPs, and physical and                    furnishing DMEPOS to their own
                                                  Therefore, we have established                          occupational therapists who are                       patients can benefit those patients in
                                                  exceptions to the sharing of space                      furnishing items to their own patients as             terms of convenience and continuity of
                                                  limitation found in § 424.57(c)(29). In                 part of their professional service, we do             care.
                                                  § 424.57(c)(29)(ii)(C), we have                         not believe that a similar exception                     Comment: One commenter asks if this
                                                  established an exception for DMEPOS                     should be established for orthotic and                standard would apply in the
                                                  suppliers that have a practice location                 prosthetic facilities or personnel                    circumstance where the business owner
                                                  within a Medicare provider that is                      because they are not individual                       owns a pharmacy and a separate
                                                  subject to the requirements specified in                practitioners who are furnishing items                DMEPOS company with 2 different
                                                  42 CFR 489.2(b). This exception will                    to their own patients as part of their                supplier Medicare numbers sharing the
                                                  allow a hospital, home health agency                    professional service. The facilities in               same location for retail sales (note—
                                                  (HHA), skilled-nursing facility (SNF), or               question would be sharing space with                  both businesses have the same stock
                                                  other Part A provider that is enrolled in               another supplier whereas the exceptions               holders and are held by a separate
                                                  Medicare to co-locate with a DMEPOS                     noted are supplying their own patients                holding company).
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  supplier that is owned by that Part A                   as part of their service.                                Response: We believe that the
                                                  provider and is a separate unit. It is                    Comment: Several commenters                         scenario described is prohibited under
                                                  important to note that these DMEPOS                     questioned whether the supplier can                   the provisions of this final regulation.
                                                  suppliers while owned by the Part A                     have an office in the same building                      Comment: One commenter suggested
                                                  provider must still meet all of the other               where other hospital-owned Medicare                   that an exception to this provision be
                                                  DMEPOS supplier standards in § 424.57                   suppliers (outpatient pharmacy,                       made for those physicians/NPPs that
                                                  to obtain and maintain Medicare billing                 physician groups) are located if it is                supply blood glucose monitoring
                                                  privileges.                                             hospital-owned.                                       devices to their patients.


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00036   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                                     Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations                                         52643

                                                    Response: We appreciate this                          the hours are posted and the supplier is              DMEPOS supplies makes up such a
                                                  comment and as stated previously, we                    open during those hours.                              small portion of the practice.
                                                  are adopting an exception to the                           Response: We believe that DMEPOS                      Response: We appreciate these
                                                  prohibition on space sharing for                        suppliers must be open to the public a                comments and have added an exception
                                                  physician, NPPs, and physical and                       minimum number of hours to ensure                     to this supplier standard for physicians
                                                  occupational therapists.                                patient access to services. After a careful           and licensed non-physician
                                                                                                          review of these comments, we continue                 practitioners, including physical and
                                                  4. Hours of Operation                                   to believe that DMEPOS suppliers must                 occupational therapists, that only
                                                     In § 424.57(c)(30), we proposed a new                be open and available to the public a                 furnish DMEPOS supplies to their own
                                                  supplier standard that would require a                  minimum of 30 hours per week. We                      patients to § 424.57(c)(30).
                                                  DMEPOS supplier to be open to the                       believe that establishing a minimum                      Comment: Several commenters stated
                                                  public a minimum of 30 hours per                        number of hours is in the best interest               that it is not economically feasible for a
                                                  week, except for those DMEPOS                           of the Medicare program and Medicare                  small one person supplier to be staff
                                                  suppliers who are working with custom-                  patients, especially for those who are                during all posted hours of operations
                                                  made orthotics and prosthetics.                         disabled or with limited means of                     because they often make house calls.
                                                     Comment: Several commenters                          transportation.                                          Response: While we understand the
                                                  requested that physical therapy                            Comment: Several commenters stated                 concerns of small suppliers, we believe
                                                  practices be exempt from posting office                 that they do not believe that CMS has                 that Medicare beneficiaries and the NSC
                                                  hours because this would limit the                      the authority or business expertise to                should be able to have access to the
                                                  services available to the Medicare                      dictate the number of hours a DMEPOS                  supplier at regularly posted hours. Also,
                                                  patients.                                               supplier should operate to be                         as previously noted, we have
                                                     Response: We believe that all                        considered legitimate when this would                 established exceptions for physicians,
                                                  DMEPOS suppliers should have posted                     be determined based on the needs of the               NPPs, and certain other suppliers.
                                                  hours of operation.                                     customer base.                                           Comment: One commenter stated that
                                                     Comment: A commenter stated that it                     Response: We believe that section                  this requirement does not allow a sole
                                                  would be burdensome for hospitals or                    1834(j)(1)(B) of the Act gives the                    proprietor, being the only certified fitter
                                                  health systems that owned or controlled                 Secretary the authority to implement                  as well as the owner, to be sick, go on
                                                  DMEPOS suppliers to display hours of                    additional supplier standards. We                     vacation, or have a personal emergency
                                                  operation and that the proposed                         maintain that the requirement that a                  without violating Medicare standards.
                                                  standard is unnecessary since the                       DMEPOS supplier is open a minimum                        Response: We agree and have adopted
                                                  implementation of mandatory                             number of hours help to ensure that it                an exception to this provision for
                                                  accreditation.                                          is engaged in furnishing DMEPOS to                    suppliers working with custom-made
                                                     Response: In § 424.57(c)(8), we                      Medicare beneficiaries. In addition, we               orthotics and prosthetics.
                                                  already require that DMEPOS suppliers,                  believe that this requirement also may                   Comment: Several commenters stated
                                                  including those owned or controlled by                  help increase access to care for                      that there may be episodic instances
                                                  hospitals and health systems, to                        Medicare beneficiaries.                               where DMEPOS suppliers may
                                                  maintain a visible sign and post their                     Comment: One commenter                             legitimately not be able to be open for
                                                  hours of operation. Accordingly, we                     recommended that we consider                          30 hours per week including inclement
                                                  believe that we are clarifying an existing              permitting flexibility in the hours of                weather conditions, staffing shortages as
                                                  NSC practice by adopting this revised                   operation so long as they are clearly                 the result of labor disputes, staff
                                                  standard. Moreover, since accreditation                 posted and deviations to the posted                   illnesses or holiday periods, and various
                                                  primarily focuses on patient care, it                   hours are noted with a specific return                other unusual occurrences or natural
                                                  does not directly address the                           time.                                                 disasters that would prohibit a supplier
                                                  verification of this existing supplier                     Response: We disagree with this                    from being open 30 hours in a particular
                                                  standard.                                               commenter. It is essential for our                    week.
                                                     Comment: One commenter believes                      Medicare beneficiaries to have access to                 Response: We recognize that
                                                  the requirement that suppliers maintain                 suppliers during regularly scheduled                  unforeseen emergencies do occur that
                                                  a physical facility that is staffed at all              hours. Medicare beneficiaries should                  would require a supplier to make
                                                  times with posted working hours is                      not be advised that the supplier has                  temporary changes to scheduled hours.
                                                  most beneficial.                                        temporarily changed their hours once                  The NSC will take these circumstances
                                                     Response: We appreciate this                         they have made the effort to visit the                into account. However, we believe that
                                                  comment and have adopted a minimum                      supplier. Moreover, allowing DMEPOS                   DMEPOS suppliers should adhere to its
                                                  number of posted hours of operation for                 suppliers to constantly change their                  posted hours and should develop
                                                  DMEPOS suppliers in § 424.57(c)(30).                    posted hours of operation would make                  contingencies to remain open when
                                                     Comment: Several commenters stated                   it virtually impossible for us to                     personal emergencies or when staffing
                                                  that it is a widespread practice among                  determine if a supplier is actually in                issues occur.
                                                  DMEPOS suppliers—large and small—                       operation. While we recognize that                       Comment: One commenter
                                                  to have part-time or ‘‘by appointment                   emergencies do occur, it is the                       recommended that CMS implement an
                                                  only’’ hours for some locations,                        responsibility of the DMEPOS supplier                 exception for physical therapists for the
                                                  especially in rural areas, and asked that               to establish staff contingencies to ensure            posting of office hours.
                                                  we reconsider the new supplier                          that their business remains open to the                  Response: We disagree with this
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  standard in § 424.57(c)(30) which                       public in spite of a personal emergency.              commenter. We believe a physical
                                                  requires suppliers to remain open to the                   Comment: Several commenters                        therapist enrolled as a DMEPOS
                                                  public for a minimum of 30 hours a                      recommended that we establish an                      supplier must post its hours of
                                                  week. Some commenters believe                           exception to the supplier standard in                 operation for beneficiaries so that CMS
                                                  remaining at the facility for 30 hours per              § 424.57(c)(30) for physicians, physical              or its agents can perform site visits.
                                                  week would leave no time for item                       therapists, and other licensed health                 However, as discussed previously, we
                                                  delivery and proposed that CMS                          professionals holding DMEPOS                          note that we have established an
                                                  consider the requirement met as long as                 suppliers numbers, especially when                    exception for physical therapists in


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00037   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                  52644              Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations

                                                  certain circumstances to the supplier                   unannounced site visits to ensure                     enrollment and the revocation of billing
                                                  standard of the 30 hours minimum                        compliance with the standards set forth               privileges.
                                                  requirement.                                            at § 424.57.                                             Comment: One commenter stated that
                                                     Comment: One commenter suggested                        Comment: One commenter believes                    the term ‘‘adverse legal action’’ was
                                                  the language describing the proposed                    the weekly hourly requirement severely                vague and requested that we clarify or
                                                  change at § 424.57(c)(8) be changed from                limits the ability to provide services in             eliminate the authority regarding
                                                  ‘‘would deny’’ to ‘‘may deny’’ to allow for             small towns, because it does not allow                overpayments resulting from adverse
                                                  situations where the NSC or its agents                  for the use of ‘‘limited business hour’’              legal actions in § 424.57(d). The
                                                  are unable to perform a site visit during               satellite facilities.                                 commenter stated that no notice was
                                                  a supplier’s posted business hours.                        Response: After careful review of this             provided regarding the types of events
                                                     Response: While we understand this                   standard, we have determined that                     that would trigger an overpayment
                                                  comment, we do not believe that the                     requiring a DME supplier to be open                   collection. This commenter further
                                                  change is needed.                                       and available to the public no less than              stated that before this regulatory
                                                     Comment: One commenter asked for                     30 hours per week is in the best interest             provision could be finalized, more
                                                  clarification of what constitutes custom                of the patient, especially for those who              fulsome notice must be given so that
                                                  fabricated orthotics and prosthetics. The               are disabled or with limited means of                 stakeholders can submit meaningful
                                                  commenter questioned whether it is the                  transportation.                                       comments.
                                                  definition from the competitive bidding                                                                          Response: We agree and have revised
                                                  document or the explanation of each                     5. Tax Delinquency
                                                                                                                                                                § 424.57(a) to add a definition for the
                                                  product in the HCPCS codes.                                In § 424.57(c)(31), we proposed                    term ‘‘final adverse action’’ as meaning
                                                     Response: For purposes of the                        adding a new supplier standard that                   one or more of the following actions: (1)
                                                  regulatory provision, orthotics and                     specified that a DMEPOS supplier could                A Medicare-imposed revocation of any
                                                  prosthetics is defined in the HCPCS                     not have Internal Revenue Service (IRS)               Medicare billing number; (2) suspension
                                                  codes related to each product and as                    or a State taxing authority tax                       or revocation of a license to provide
                                                  described in the DMEPOS quality                         delinquency. We also proposed to                      health care by any State licensing
                                                  standards.                                              define a ‘‘tax delinquency’’ as meaning               authority; (3) revocation or suspension
                                                     Comment: One commenter suggested                     an amount of money owed to the United                 of accreditation; (4) a conviction of a
                                                  an alternative to the proposed provision                States or a State: A conviction or civil              Federal or State felony offense (as
                                                  could be for the entire practice (all                   judgment for tax evasion, a criminal or               defined in § 424.535(a)(3)(i)) within the
                                                  office locations collectively), to be open              civil charge of tax evasion, or the filing            last 10 years preceding enrollment,
                                                  a minimum number of hours which                         of a tax lien.                                        revalidation, or re-enrollment; or (5) an
                                                  would allow for satellite offices in                       With the enactment of section 189 of               exclusion or debarment from
                                                  remote areas, as well as accommodating                  the Medicare Improvements for Patients                participation in a Federal or State health
                                                  those therapists in private practice for                and Providers Act (MIPPA) (Pub. L.                    care program. This definition is
                                                  the purpose of limiting their work                      110–275) on July 15, 2008, we are                     narrower than the list of final adverse
                                                  hours. The commenter considers 20                       deferring the implementation of this                  actions contained in Section 3 of the
                                                  hours a week to be reasonable.                          proposal while we continue to review                  CMS–855S which was published on
                                                     Response: Each DMEPOS supplier                       the public comments received on this                  March 23, 2009. In fact, we limited the
                                                  location is separately enrolled, and                    provision and we will consider                        definition of ‘‘final adverse action’’ in
                                                  therefore, each location must meet all                  finalizing this provision in a future                 this rule to those actions that currently
                                                  the required supplier standards in                      rulemaking effort if we deem it                       serve as a basis for CMS to revoke a
                                                  § 424.57.                                               necessary. Accordingly, we are not                    supplier’s Medicare billing privileges
                                                     Comment: A commenter stated that                     adopting this proposed supplier                       under § 424.535(a). If a final adverse
                                                  requiring DMEPOS suppliers, except                      standard in this rule and have removed                action has been imposed upon a
                                                  suppliers of prosthetics and orthotics, to              the paperwork burden associated with                  supplier, then that supplier would not
                                                  be open to the public for at least 30                   this provision.                                       be eligible to maintain Medicare billing
                                                  hours a week is unnecessary for                                                                               privileges from the date of a final
                                                  supplier’s facilities that are not intended             6. Medicare Overpayment
                                                                                                                                                                adverse action. This provision provides
                                                  for beneficiary access and that this                       In § 424.57(d), we proposed to                     CMS or its contractors with the
                                                  proposed standard blurs the distinction                 redesignate the current text as paragraph             discretion to establish an overpayment
                                                  between a classic retail establishment                  (d)(1) and proposed adding a new                      determination (as defined in § 405.350)
                                                  and a service facility dedicated to the                 paragraph that specified that ‘‘CMS, the              for all Medicare items and services
                                                  provision of supplies and equipment to                  NSC, or CMS designated contractor                     furnished from the date of the final
                                                  patients in their homes. In addition, the               establishes a Medicare overpayment                    adverse action. CMS or our contractors
                                                  commenter requests that CMS consider                    from the date of an adverse legal action              may reopen all claims paid to the
                                                  different business models for supplier                  or felony conviction (including felony                supplier on or after the date of the final
                                                  standards, and let the beneficiaries and                convictions within the 10 years                       adverse action that had been imposed
                                                  their physicians decide what model may                  preceding enrollment or revalidation of               upon that supplier. Moreover, suppliers
                                                  work best for them.                                     enrollment) that precludes payment.’’ In              who are assessed overpayments under
                                                     Response: We do not believe these                    addition, we proposed that any                        this provision may appeal these
                                                  arrangements are always in the best                     overpayment assessed by CMS or its                    determinations in accordance with the
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  interest of the patient. We believe that                designated contractor due to a failure to             Medicare claims appeal procedures set
                                                  all enrolled DMEPOS suppliers, except                   report this information would follow the              forth in § 405.900 through § 405.1140.
                                                  suppliers of prosthetics and orthotics,                 existing rules governing Medicare                        Comment: One commenter believes
                                                  should maintain a minimum number of                     overpayments set forth at § 405.350                   the requirement to notify the NSC of
                                                  hours open to the public. This will                     et seq. The underlying basis to report                changes is too burdensome.
                                                  ensure that the DMEPOS supplier is                      ‘‘adverse legal actions’’ to the NSC are                 Response: We appreciate the
                                                  operational and allows CMS, the NSC or                  found in § 424.530 and § 424.535, which               commenters’ concerns. However, we
                                                  agents of CMS or the NSC to conduct                     state the provisions for denial of                    maintain that it is necessary to require


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00038   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                                     Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations                                       52645

                                                  DMEPOS suppliers to notify the NSC of                   provide the licensed service(s) and                     • In § 424.57(e) (which was proposed
                                                  a final adverse action or other reportable              cannot contract with an individual or                 as § 424.57(d)), we are modifying our
                                                  change, including change of location,                   entity to provide the licensed service(s).            proposal with a change to the effective
                                                  change of ownership (including                             ++ Added language to clarify that a                date of date of revocation. (See the
                                                  authorized and delegated officials)                     licensed professional can be a part-time              Surety Bond final rule in the March 27,
                                                  within 30 days to mitigate the possible                 or full-time employee.                                2009 Federal Register (74 FR 13345)). In
                                                  impacts associated with these types of                     • In § 424.57(c)(7), we modified our               order to be consistent with our
                                                  changes.                                                proposal as follows:                                  regulations at § 424.535(g), we are
                                                                                                             ++ Revised the proposed                            extending the effective date of
                                                  7. Notification of Change in Hours                      introductory text of paragraph (c)(7).                revocation from 15 to 30 days after
                                                  Operation                                               The language regarding the space for                  notification of the revocation.
                                                     In § 424.57(c)(32), we are proposing                 storing records and retaining ordering
                                                                                                          and referring documentation was                       V. Collection of Information
                                                  that each supplier must report changes
                                                                                                          modified and redesignated as                          Requirements
                                                  in hours of operation to the NSC 15
                                                  calendar days prior to the proposed                     paragraphs (c)(7)(i)(E) and (F),                         Under the Paperwork Reduction Act
                                                  change. The burden associated with this                 respectively.                                         of 1995 (PRA), agencies are required to
                                                  requirement is the time and effort                         ++ Added a new paragraph                           provide a 30-day notice in the Federal
                                                  associated with notifying the NSC of the                (c)(7)(i)(A) that specifies a minimum                 Register and solicit public comment
                                                  change in hours of operation.                           square footage requirement and an                     before a collection of information
                                                     We are not finalizing this provision.                exception to the minimum square                       requirement is submitted to the Office of
                                                  In section V. of this final rule, we                    footage requirement for State-licensed                Management and Budget (OMB) for
                                                  respond to the comment received on the                  orthotic and prosthetic personnel                     review and approval. In order to fairly
                                                  information collection requirement                      providing custom fabricated orthotics or              evaluate whether an information
                                                  associated with this provision.                         prosthetics in private practice.                      collection should be approved by OMB,
                                                                                                             ++ Modified and redesignated                       section 3506(c)(2)(A) of the PRA
                                                  8. Other Issues                                         proposed paragraphs (c)(7)(i) through                 requires that we solicit comments on the
                                                     The following is our response to a                   (c)(7)(iii) as paragraphs (c)(7)(i)(B)                following issues:
                                                  comment that was not on a proposal                      through (c)(7)(i)(D).                                    • Whether the information collection
                                                  included in this proposed rule:                            ++ Redesignated paragraph (c)(7)(iv)               is necessary and useful to carry out the
                                                     Comment: One commenter requested                     as paragraph (c)(7)(ii).                              proper functions of the agency;
                                                  that we clarify that § 424.57(c)(26) was                   ++ Added a new paragraph (c)(7)(iii)                  • The accuracy of the agency’s
                                                  reserved for the proposed DME surety                    that specifies that an appropriate site               estimate of the information collection
                                                  bond standard.                                          may be the centralized location for all               burden;
                                                     Response: We note that                               of the business records and ordering and                 • The quality, utility, and clarity of
                                                  § 424.57(c)(26) was reserved for the                    referring documentation of a multisite                the information to be collected; and
                                                  proposed DME surety bond standard.                      supplier.                                                • Recommendations to minimize the
                                                                                                             • In § 424.57(c)(9), we made technical             information collection burden on the
                                                  We also note that the proposed
                                                                                                          and clarifying changes.                               affected public, including automated
                                                  provision at § 424.57(c)(26) was                           • In § 424.57(c)(10), we are not
                                                  finalized in the January 2, 2009 final                                                                        collection techniques.
                                                                                                          finalizing this proposed provision in                    The following is a discussion of the
                                                  rule (74 FR 166) entitled ‘‘Medicare                    this final regulation.
                                                  Program; Surety Bond Requirement for                                                                          provisions, as stated in section III. of
                                                                                                             • In § 424.57(c)(11), we added a                   this final rule, that contain information
                                                  Suppliers of Durable Medical                            definition of direct solicitation in
                                                  Equipment, Prosthetics, Orthotics, and                                                                        collection requirements.
                                                                                                          § 424.57(a).                                             The provision at § 424.57(c)(1) states
                                                  Supplies (DMEPOS).’’                                       • In § 424.57(c)(12), we are not                   that a supplier must operate its own
                                                  IV. Provisions of the Final Regulations                 finalizing this proposed provision in                 business and furnish Medicare–covered
                                                                                                          this final rule.                                      items in compliance with all applicable
                                                      This final rule finalizes the provisions               • In § 424.57(c)(27), we are adopting
                                                  of the proposed rule with the following                                                                       Federal and State licensure and
                                                                                                          this provision as proposed.
                                                  exceptions:                                                • In § 424.57(c)(28), we adopting the              regulatory requirements. The purpose of
                                                      • In § 424.57(a), we modified our                   provision established in § 424.516(f).                this standard is to ensure that DMEPOS
                                                  proposal as follows:                                       • In § 424.57(c)(29), we added an                  suppliers obtain and maintain the
                                                      ++ Added the definition for the term                exception to our requirements on the                  necessary State licenses required to
                                                  ‘‘direct solicitation.’’                                prohibition of sharing a practice                     furnish services provided to Medicare
                                                      ++ Revised the definition for the term              location in paragraph (c)(29)(ii).                    beneficiaries. While there is burden
                                                  ‘‘final adverse action’’. We note that the                 • In § 424.57(c)(30), we added                     associated with complying with this
                                                  definition for this term was added by a                 exceptions for DMEPOS suppliers who                   standard, we believe it is exempt from
                                                  January 2, 2009 final rule (74 FR 166).                 are working with custom-made orthotics                the PRA as stated in 5 CFR 1320.3(b)(3).
                                                  We revised this term by—(1) replacing                   and prosthetics and physicians,                       A collection of information conducted
                                                  the semicolons at the end of paragraphs                 nonphysician practitioners, and                       or sponsored by a Federal agency that is
                                                  (i) through (iv) with periods; (2) revising             physical and occupational therapists.                 also conducted or sponsored by a unit
                                                  paragraph (iii) by adding the phrase ‘‘as                  • In § 424.57(c)(31), we are not                   of State, local, or tribal government is
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  stated § 424.58’’ to the end of the                     finalizing this proposed provision in                 presumed to impose a Federal burden
                                                  paragraph; and (3) revising paragraph                   this final rule.                                      except to the extent that the agency
                                                  (iv) by removing the word ‘‘or’’ from the                  • In § 424.57(c)(32), we are not                   shows that such State, local, or tribal
                                                  end of the paragraph.                                   finalizing this proposed revision in this             requirement would be imposed even in
                                                      • In § 424.57(c)(1), we made the                    final rule. Accordingly, we have                      the absence of a Federal requirement. In
                                                  following modifications to our proposal:                withdrawn the information collection                  addition, we believe the burden
                                                      ++ Added language to clarify that a                 requirement request associated with this              associated with the maintenance of the
                                                  DMEPOS supplier must be licensed to                     provision.                                            required documentation is exempt from


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00039   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                  52646              Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations

                                                  the PRA as stated in 5 CFR 1320.3(b)(2),                information collection request to OMB                 require that DMEPOS suppliers report
                                                  to the extent that the time, effort, and                for its review and approval.                          changes in operation within 30 calendar
                                                  financial resources necessary to comply                    The provision at § 424.57(c)(28)                   days.
                                                  with collection of information that                     discusses a recordkeeping requirement.                  We have submitted a copy of this final
                                                  would be incurred by persons in the                     This provision states that suppliers are              rule to OMB for its review and approval
                                                  normal course of their activities.                      required to maintain ordering and                     of the aforementioned information
                                                  Maintaining State license                               referring documentation, including NPI,               collection requirements.
                                                  documentation is part of usual and                      received from a physician or eligible
                                                                                                                                                                VI. Regulatory Impact Statement
                                                  customary business practices.                           professional for 7 years from the date of
                                                     Proposed § 424.57(c)(10)(iii) stated                 service. Based on public comment and                     We have examined the impacts of this
                                                  that with respect to liability insurance,               the provisions established in prior                   rule as required by Executive Order
                                                  it was the responsibility of the DMEPOS                 rulemaking documents, we revised this                 12866 on Regulatory Planning and
                                                  supplier to, ‘‘promptly notify the NSC in               provision for record retention                        review (September 30, 1993), the
                                                  writing of any policy changes or                        requirement from 7 years after a claim                Regulatory Flexibility Act (RFA)
                                                                                                          is reimbursed to 7 years from the date                (September 19, 1980, Pub. L. 96–354),
                                                  cancellations.’’ The burden associated
                                                                                                          of service.                                           section 1102(b) of the Social Security
                                                  with this proposed requirement was the
                                                                                                             The burden associated with this                    Act, section 202 of the Unfunded
                                                  time and effort associated with drafting
                                                                                                          requirement is the time and effort                    Mandates Reform Act of 1995 (Pub. L.
                                                  and submitting notification to the NSC
                                                                                                          necessary for a supplier to file and                  104–4), Executive Order 13132 on
                                                  of any policy changes or cancellations.
                                                                                                          maintain ordering and referring                       Federalism (August 4, 1999), and the
                                                  However, we have decided not to
                                                                                                          documentation from the previously                     Congressional Review Act (5 U.S.C.
                                                  finalize this requirement in this final
                                                                                                          stated list of providers. While this                  804(2)).
                                                  rule and therefore will not be submitting                                                                        Executive Order 12866 directs
                                                  an information collection request to                    requirement is subject to the PRA, the
                                                                                                          associated burden is exempt under 5                   agencies to assess all costs and benefits
                                                  OMB for its review and approval.                                                                              of available regulatory alternatives and,
                                                                                                          CFR 1320.3(b)(2), to the extent that the
                                                     Proposed § 424.57(c)(12) stated that a                                                                     if regulation is necessary, to select
                                                                                                          time, effort, and financial resources
                                                  supplier, ‘‘[m]ust be responsible for the                                                                     regulatory approaches that maximize
                                                                                                          necessary to comply with collection of
                                                  delivery of Medicare-covered items to                   information that would be incurred by                 net benefits (including potential
                                                  beneficiaries and maintain proof of                     persons in the normal course of their                 economic, environmental, public health
                                                  delivery.’’ In addition, the supplier                   activities. Maintaining ordering and                  and safety effects, distributive impacts,
                                                  must, ‘‘[d]ocument that it or another                   referring documentation is a usual and                and equity). A regulatory impact
                                                  qualified party has at an appropriate                   customary business practice.                          analysis (RIA) must be prepared for
                                                  time, provided beneficiaries with                          Proposed § 424.57(c)(32), stated that              major rules with economically
                                                  information and instructions on how to                  each supplier must report changes in                  significant effects ($100 million or more
                                                  use the Medicare-covered items safely                   hours of operation to the NSC 15                      in any 1 year). This rule does not reach
                                                  and effectively.’’ The burden associated                calendar days prior to the proposed                   the economic threshold and thus is not
                                                  with this section is the time and effort                change. The burden associated with this               considered a major rule.
                                                  required to: Document the delivery of                   requirement is the time and effort                       To ensure that Medicare is making
                                                  the Medicare-covered item; document                     associated with notifying the NSC of the              correct payments to only legitimate
                                                  the provision of information or                         change in hours of operation. We                      DMEPOS suppliers, we implemented a
                                                  instructions to the beneficiary by the                  estimated that 1,000 suppliers will be                comprehensive payment and enrollment
                                                  supplier itself or another qualified                    subject to this requirement. The                      strategy. This strategy includes
                                                  party; maintain the documentation of                    estimated time required to report the                 developing and implementing the
                                                  delivery of the Medicare-covered items                  information to the NSC is 10 minutes.                 statutorily-mandated competitive
                                                  and the necessary information and                       The estimated total annual burden                     bidding program, making revisions to
                                                  instructions. While the burden                          associated with this requirement is 167               the National Supplier Clearinghouse
                                                  associated with the aforementioned                      hours. We received a public comment                   contract, implementing a DMEPOS
                                                  proposed requirements is subject to the                 regarding the burden assessment for the               demonstration project, and publishing a
                                                  PRA, we have decided not to finalize                    information collection requirement                    proposed rule that would require
                                                  these requirements in this final rule and               contained in § 424.57(c)(32).                         DMEPOS suppliers to obtain a surety
                                                  therefore will not be submitting an                        Comment: One commenter stated that                 bond.
                                                  information collection request to OMB                   there is little gained by imposing such                  Accordingly, it is essential that we
                                                  for its review and approval.                            a rigid notification and requests that the            further develop and implement
                                                     Proposed § 424.57(c)(12)(ii) specified               requirement be modified to permit the                 administrative and regulatory changes
                                                  that a supplier must furnish information                supplies to notify the NSC of changes in              which prevent unscrupulous DMEPOS
                                                  to beneficiaries at the time of delivery                operation within 30 calendar days after               suppliers from enrolling or maintaining
                                                  of items on how the beneficiary can                     the proposed change and that we should                their enrollment in the Medicare
                                                  contact the supplier by telephone. The                  revise the burden estimate associated                 program. To this end, we have
                                                  burden associated with complying with                   with this provision.                                  implemented the following
                                                  the standard is the time and effort                        Response: We appreciate this                       administrative changes and are seeking
                                                  required for the supplier to provide its                comment and agree that this provision                 comments on mandated DMEPOS surety
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  contact information to beneficiary at the               would increase the paperwork burden                   bonding requirements.
                                                  time of delivery of the Medicare-covered                imposed on DMEPOS suppliers.                             As part of our administrative change,
                                                  item(s). While the burden associated                    Accordingly, we are not adopting this                 we revised the contract with the
                                                  with the aforementioned proposed                        new supplier standard and have                        National Supplier Clearinghouse (NSC)
                                                  requirement is subject to the PRA, CMS                  removed the paperwork burden                          in FY 2008 and are currently
                                                  has decided not to finalize this                        associated with this provision.                       recompeting this contract through full
                                                  requirement in this final rule and                      Consistent with supplier standard in                  and open competition. The revised
                                                  therefore will not be submitting an                     § 424.57(c)(2), we will continue to                   contract requires that the NSC conduct


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00040   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                                     Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations                                       52647

                                                  and increase the number of on-site visits               of provider revenues listed, $7.0, $10.0,             that this final rule will not have a
                                                  to ensure that DMEPOS suppliers are in                  $13.5, and $34.5 million or less).                    significant impact on the operations of
                                                  compliance with the provisions in                       Individuals and States are not included               a substantial number of small rural
                                                  § 424.57. We are also expanding the                     in the definition of a small entity.                  hospitals. We understand that a large
                                                  funding for NSC operations to support                      We are not preparing an analysis for               number of DMEPOS suppliers fall into
                                                  the increased number of site visits.                    the RFA because we are certifying that                this category, however these provisions
                                                  These expanded measures will help to                    this rule will not have a significant                 are procedural in nature and we expect
                                                  ensure that only legitimate DMEPOS                      economic impact on a substantial                      that legitimate DMEPOS suppliers are
                                                  suppliers are enrolled or maintain                      number of small entities. We have                     already meeting these provisions.
                                                  enrollment in the Medicare program. In                  determined that the RFA is reasonable                    Section 202 of the Unfunded
                                                  addition, we announced plans on June                    given that the provisions contained in                Mandates Reform Act of 1995 (UMRA)
                                                  28, 2007, to implement a 2-year                         this final rule are primarily procedural              also requires that agencies assess
                                                  demonstration involving DMEPOS                          and do not require DMEPOS suppliers                   anticipated costs and benefits before
                                                  suppliers. The goal of this initiative is               to incur additional operating costs. We               issuing any rule that may result in
                                                  to strengthen our ability to detect and                 also believe that the regulatory impact               expenditure in any 1 year by State,
                                                  prevent fraudulent activity and has                     of this final rule is negligible and not              local, or tribal governments, in the
                                                  focused specifically on DMEPOS                          calculable. We understand that there                  aggregate, or by the private sector, of
                                                  suppliers in South Florida and the Los                  may be some additional concerns about                 $100 million. That threshold is
                                                  Angeles metropolitan area. Based on the                 costs associated with a minimum square                currently approximately $130 million.
                                                  findings of this initiative, we will                    footage requirement; however, we                      This rule does not mandate
                                                  determine if the administrative                         maintain that this final rule would not               expenditures by State, local, or tribal
                                                  processes and procedures used in this                   have an adverse impact on a significant               governments, in the aggregate, or by the
                                                  demonstration should be expanded to                     number of small entities because we                   private sector of $130 million and
                                                  other parts of the country.                             believe that these suppliers are                      therefore no analysis is required.
                                                     On August 1, 2007, we published a                    operating on standard business practices                 Executive Order 13132 establishes
                                                  proposed rule (72 FR 42001) which                       and therefore are already in compliance               certain requirements that an agency
                                                  would implement section 4312(a) of the                  with these standards. Additionally, we                must meet when it promulgates a
                                                  Balanced Budget Act of 1997 (BBA) by                    established a limited time exception for              proposed rule (and subsequent final
                                                  requiring all Medicare DMEPOS                           those entities that do not meet the                   rule) that imposes substantial direct
                                                  suppliers to furnish CMS with a surety                  minimum square footage requirement                    requirement costs on State and local
                                                  bond. The public comment period for                     and have entered into a long-term lease               governments, preempts State law, or
                                                  this proposed rule closed on October 1,                 on or before the publication date of this             otherwise has Federalism implications.
                                                  2007. As noted previously, we finalized                 final rule. Since we believe that a                   Since this regulation does not impose
                                                  the surety bond provisions in a final                   significant number of small entities                  any costs on State or local governments,
                                                  rule entitled ‘‘Medicare Program; Surety                currently meet each of the revised or                 the requirements of E.O. 13132 are not
                                                  Bond Requirement for Suppliers of                       new standard, we do not have                          applicable.
                                                  Durable Medical Equipment,                              information available to calculate the                   We anticipate that this rule would
                                                  Prosthetics, Orthotics, and Supplies                    economic impact of any individual or                  codify certain procedural policies
                                                  (DMEPOS)’’ on January 2, 2009.                          combination of proposals would have                   contained in the Program Integrity
                                                     Accordingly, while the activities                    on small entities. This final rule would              Manual (PIM) that DMEPOS suppliers
                                                  described previously will promote                       merely clarify, expand, and update our                already are supposed to adhere to, and
                                                  compliance with the existing supplier                   current policy in the DMEPOS supplier                 that legitimate DMEPOS suppliers
                                                  standards, these activities do not supply               standards currently covered in § 424.57.              should already be meeting. By
                                                  CMS and the NSC with the needed                         Therefore, we anticipate a minimal                    establishing the standards in this rule,
                                                  authority to deny or revoke billing                     economic impact, if any, on small                     we are establishing our authority to
                                                  privileges to those DMEPOS suppliers                    entities.                                             deny or revoke the Medicare billing
                                                  that pose a significant risk to the                        As of March 2008, there were 113,154               privileges of DMEPOS suppliers that
                                                  program. Therefore, we believe that the                 individual DMEPOS suppliers.                          have failed to comply with one or more
                                                  provisions of this final rule are essential             However, due to the affiliation of some               of these supplier standards.
                                                  in expanding upon and strengthening                     DMEPOS suppliers with chains, there                      We have considered alternatives to all
                                                  the supplier standards in order to                      were only approximately 65,984 unique                 of the provisions; however, only one of
                                                  ensure that only legitimate suppliers are               billing numbers. We believe that                      the provisions considered lends itself to
                                                  enrolled or maintain enrollment in the                  approximately 20 percent of the                       other options. Initially, we considered
                                                  Medicare program.                                       DMEPOS suppliers are located in rural                 establishing a 40 hour requirement for a
                                                     The RFA requires agencies to analyze                 areas.                                                DMEPOS supplier’s hours of operation
                                                  options for regulatory relief for small                    In addition, section 1102(b) of the Act            since most business are open to the
                                                  businesses. For purposes of the RFA,                    requires us to prepare a regulatory                   public for a minimum of 40 hours each
                                                  small entities include small businesses,                impact analysis if a rule may have a                  week.
                                                  nonprofit organizations, and                            significant impact on the operations of                  To reduce the burden associated with
                                                  government agencies. Most hospitals                     a substantial number of small rural                   this provision, but also to establish a
                                                  and most other providers and suppliers                  hospitals. This analysis must conform to              minimum requirement for the hours of
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  are small entities, either by nonprofit                 the provisions of section 604 of the                  operation, we relaxed the initial 40-hour
                                                  status or by having revenues of $7.0 to                 RFA. For purposes of section 1102(b) of               requirement to 30 hours per week
                                                  $34.5 million in any 1 year. (For details,              the Act, we define a small rural hospital             because we believe that this is the
                                                  see the Small Business Administration’s                 as a hospital that is located outside of              minimum amount of time that a
                                                  Web site at http://sba.gov/idc/groups/                  a Metropolitan Statistical Area and has               DMEPOS supplier is required to be open
                                                  public/documents/sba_homepage/                          fewer than 100 beds. We are not                       and legitimately operate as a business.
                                                  serv_sstd_tablepdf.pdf (refer to the                    preparing an analysis for section 1102(b)             We did not consider the alternative of
                                                  620000 series. There are four categories                of the Act because we have determined                 not proceeding with the proposed


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00041   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                  52648              Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations

                                                  provisions because we believe that they                    (iv) A conviction of a Federal or State            CMS, NSC, and its agents. (The location
                                                  are necessary to ensure that only                       felony offense (as defined in                         must not be in a gated community or
                                                  legitimate DMEPOS suppliers are                         § 424.535(a)(3)(i) within the last 10                 other area where access is restricted.)
                                                  enrolling and maintaining enrollment in                 years preceding enrollment,                              (C) Is accessible and staffed during
                                                  the Medicare program.                                   revalidation, or re-enrollment.                       posted hours of operation.
                                                    In accordance with the provisions of                     (v) An exclusion or debarment from                    (D) Maintains a permanent visible
                                                  Executive Order 12866, this regulation                  participation in a Federal or State health            sign in plain view and posts hours of
                                                  was reviewed by the Office of                           care program.                                         operation. If the supplier’s place of
                                                  Management and Budget.                                  *       *     *    *     *                            business is located within a building
                                                                                                             (c) Application certification                      complex, the sign must be visible at the
                                                  List of Subjects in 42 CFR Part 424
                                                                                                          standards. The supplier must meet and                 main entrance of the building or the
                                                    Emergency medical services, Health                                                                          hours can be posted at the entrance of
                                                                                                          must certify in its application for billing
                                                  facilities, Health professionals,                                                                             the supplier.
                                                                                                          privileges that it meets and will
                                                  Medicare, Reporting and recordkeeping                                                                            (E) Except for business records that
                                                                                                          continue to meet the following
                                                  requirements.                                                                                                 are stored in centralized location as
                                                                                                          standards:
                                                  ■ For the reasons set forth in the                         (1) Operates its business and                      described in paragraph (c)(7)(ii) of this
                                                  preamble, the Centers for Medicare &                    furnishes Medicare-covered items in                   section, is in a location that contains
                                                  Medicaid Services amends 42 CFR                         compliance with the following                         space for storing business records
                                                  chapter IV as set forth below:                          applicable laws:                                      (including the supplier’s delivery,
                                                                                                             (i) Federal regulatory requirements                maintenance, and beneficiary
                                                  PART 424—CONDITIONS FOR                                 that specify requirements for the                     communication records).
                                                  MEDICARE PAYMENT                                                                                                 (F) Is in a location that contains space
                                                                                                          provision of DMEPOS and ensure
                                                                                                                                                                for retaining the necessary ordering and
                                                  ■ 1. The authority citation for part 424                accessibility for the disabled.
                                                                                                                                                                referring documentation specified in
                                                  continues to read as follows:                              (ii) State licensure and regulatory
                                                                                                                                                                § 424.516(f).
                                                    Authority: Secs. 1102 and 1871 of the                 requirements. If a State requires
                                                                                                                                                                   (ii) May be the centralized location for
                                                  Social Security Act (42 U.S.C. 1302 and                 licensure to furnish certain items or
                                                                                                                                                                all of the business records and the
                                                  1395hh).                                                services, a DMEPOS supplier—
                                                                                                                                                                ordering and referring documentation of
                                                                                                             (A) Must be licensed to provide the
                                                  Subpart D—To Whom Payment Is                                                                                  a multisite supplier.
                                                                                                          item or service;                                         (iii) May be a ‘‘closed door’’ business,
                                                  Ordinarily Made                                            (B) Must employ the licensed                       such as a pharmacy or supplier
                                                                                                          professional on a full-time or part-time              providing services only to beneficiaries
                                                  ■ 2. Section 424.57 is amended by—                      basis, except for DMEPOS suppliers
                                                  ■ A. Adding in paragraph (a) the                                                                              residing in a nursing home, that
                                                                                                          who are—                                              complies with all applicable Federal,
                                                  definition of ‘‘direct solicitation’’ in
                                                                                                             (1) Awarded competitive bid contracts              State, and local laws and regulations.
                                                  alphabetical order.
                                                  ■ B. In paragraph (a) revising the
                                                                                                          using subcontractors to meet this                     ‘‘Closed door’’ businesses must comply
                                                  definition of ‘‘final adverse action’’.                 standard; or                                          with all the requirements in this
                                                  ■ C. Revising the introductory text of
                                                                                                             (2) Allowed by the State to contract               paragraph.
                                                  paragraph (c).                                          licensed services as described in                        (8) Permits CMS, the NSC, or agents
                                                  ■ D. Revising paragraphs (c)(1), (c)(7)                 paragraph (c)(1)(ii)(C) of this section.              of CMS or the NSC to conduct on-site
                                                  through (c)(9), (c)(11), and (e).                          (C) Must not contract with an                      inspections to ascertain supplier
                                                  ■ E. Adding new paragraphs (c)(27)                      individual or other entity to provide the             compliance with the requirements of
                                                  through (c)(30).                                        licensed services, unless allowed by the              this section.
                                                    The additions and revisions read as                   State where the licensed services are                    (9) Maintains a primary business
                                                  follows:                                                being performed; and                                  telephone that is operating at the
                                                                                                             (iii) Local zoning requirements.                   appropriate site listed under the name
                                                  § 424.57 Special payment rules for items
                                                  furnished by DMEPOS suppliers and                       *       *     *    *     *                            of the business locally or toll-free for
                                                  issuance of DMEPOS supplier billing                        (7) Maintains a physical facility on an            beneficiaries.
                                                  privileges.                                             appropriate site. An appropriate site                    (i) Cellular phones, beepers, or pagers
                                                     (a) * * *                                            must meet all of the following:                       must not be used as the primary
                                                     Direct solicitation means direct                        (i) Must meet the following criteria:              business telephone.
                                                  contact, which includes, but is not                        (A) Except for State-licensed orthotic                (ii) Calls must not be exclusively
                                                  limited to, telephone, computer, e-mail,                and prosthetic personnel providing                    forwarded from the primary business
                                                  instant messaging or in-person contact,                 custom fabricated orthotics or                        telephone listed under the name of the
                                                  by a DMEPOS supplier or its agents to                   prosthetics in private practice,                      business to a cellular phone, beeper, or
                                                  a Medicare beneficiary without his or                   maintains a practice location that is at              pager.
                                                  her consent for the purpose of marketing                least 200 square feet beginning—                         (iii) Answering machines, answering
                                                  the DMEPOS supplier’s health care                          (1) September 27, 2010 for a                       services, facsimile machines or
                                                  products or services or both.                           prospective DMEPOS supplier;                          combination of these options must not
                                                  *       *    *     *     *                                 (2) The first day after termination of             be used exclusively as the primary
                                                     Final adverse action means one or                    an expiring lease for an existing                     business telephone during posted
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                  more of the following actions:                          DMEPOS supplier with a lease that                     operating hours.
                                                     (i) A Medicare-imposed revocation of                 expires on or after September 27, 2010                *       *     *    *     *
                                                  any Medicare billing privileges.                        and before September 27, 2013; or                        (11) Agree not to make a direct
                                                     (ii) Suspension or revocation of a                      (3) September 27, 2013, for an existing            solicitation (as defined in § 424.57(a)) of
                                                  license to provide health care by any                   DMEPOS supplier with a lease that                     a Medicare beneficiary unless one or
                                                  State licensing authority.                              expires on or after September 27, 2013.               more of the following applies:
                                                     (iii) Revocation for failure to meet                    (B) Is in a location that is accessible               (i) The individual has given written
                                                  DMEPOS quality standards.                               to the public, Medicare beneficiaries,                permission to the supplier or the


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00042   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1
                                                                     Federal Register / Vol. 75, No. 166 / Friday, August 27, 2010 / Rules and Regulations                                         52649

                                                  ordering physician or non-physician                        (B) Licensed non-physician                         Colorado, as its first local service. A
                                                  practitioner to contact them concerning                 practitioners whose services are defined              staff engineering analysis indicates that
                                                  the furnishing of a Medicare-covered                    in sections 1861(p) and 1861(g) of the                Channel 247C3 can be allotted to
                                                  item that is to be rented or purchased.                 Act furnishes items to his or her own                 DeBeque consistent with the minimum
                                                     (ii) The supplier has furnished a                    patient(s) as part of his or her                      distance separation requirements of the
                                                  Medicare-covered item to the individual                 professional service; or                              Rules with a site restriction 13.8
                                                  and the supplier is contacting the                         (C) DMEPOS supplier is working with                kilometers (8.5 miles) northeast of the
                                                  individual to coordinate the delivery of                custom made orthotics and prosthetics.                community. The reference coordinates
                                                  the item.                                               *      *     *     *      *                           are 39–24–45 NL and 108–05–26 WL.
                                                     (iii) If the contact concerns the                       (e) Failure to meet standards—(1)                  DATES: Effective September 30, 2010.
                                                  furnishing of a Medicare-covered item                   Revocation. CMS revokes a supplier’s                  ADDRESSES: Secretary, Federal
                                                  other than a covered item already                       billing privileges if it is found not to              Communications Commission, 445
                                                  furnished to the individual, the supplier               meet the standards in paragraphs (b)                  Twelfth Street, SW., Washington, DC.
                                                  has furnished at least one covered item                 and (c) of this section. Except as                    20554.
                                                  to the individual during the 15-month                   otherwise provided in this section, the
                                                  period preceding the date on which the                                                                        FOR FURTHER INFORMATION CONTACT:
                                                                                                          revocation is effective 30 days after the
                                                  supplier makes such contact.                            entity is sent notice of the revocation, as           Rolanda F. Smith, Media Bureau, (202)
                                                                                                          specified in § 405.874 of this                        418–2180.
                                                  *       *      *    *     *
                                                                                                          subchapter.                                           SUPPLEMENTARY INFORMATION: This is a
                                                     (27) Must obtain oxygen from a State-
                                                  licensed oxygen supplier (applicable                       (2) Overpayments associated with                   summary of the Commission’s Report
                                                  only to those suppliers in States that                  final adverse actions. CMS or a CMS                   and Order, MB Docket No. 10–22,
                                                  require oxygen licensure.)                              contractor may reopen (in accordance                  adopted August 12, 2010, and released
                                                     (28) Is required to maintain ordering                with § 405.980 of this chapter) all                   August 16, 2010. The Notice of
                                                  and referring documentation consistent                  Medicare claims paid on or after the                  Proposed Rule Making proposed the
                                                  with the provisions found in                            date of a final adverse action (as defined            substitution of Channel 247C3 for
                                                  § 424.516(f)                                            in paragraph (a) of this section) in order            vacant Channel 275C3 at DeBeque,
                                                     (29)(i) Except as specified in                       to establish an overpayment                           Colorado. See 75 FR 4036, published
                                                  paragraph (c)(29)(ii) of this section, is               determination.                                        January 26, 2010. The full text of this
                                                  prohibited from sharing a practice                      *      *     *     *      *                           Commission decision is available for
                                                  location with any other Medicare                                                                              inspection and copying during normal
                                                                                                            Authority: (Catalog of Federal Domestic
                                                  supplier or provider.                                   Assistance Program No. 93.773, Medicare—
                                                                                                                                                                business hours in the Commission’s
                                                     (ii) The prohibition specified in                    Hospital Insurance; and Program No. 93.774,           Reference Information Center, 445
                                                  paragraph (c)(29)(i) of this section is not             Medicare—Supplementary Medical                        Twelfth Street, SW., Washington, DC
                                                  applicable at a practice location that                  Insurance Program).                                   20554. The complete text of this
                                                  meets one of the following:                               Dated: August 19, 2010.
                                                                                                                                                                decision may also be purchased from
                                                     (A) Where a physician whose services                                                                       the Commission’s duplicating
                                                                                                          Donald M. Berwick,
                                                  are defined in section 1848(j)(3) of the                                                                      contractor, Best Copy and Printing, Inc.,
                                                                                                          Administrator, Centers for Medicare &                 445 12th Street, SW., Room CY–B402,
                                                  Act or a nonphysician practitioner, as                  Medicaid Services.
                                                  described in section 1842(b)(18)(C) of                                                                        Washington, DC, 20554, telephone 1–
                                                                                                            Approved: August 24, 2010.                          800–378–3160 or http://
                                                  the Act, furnishes items to his or her                  Kathleen Sebelius,
                                                  own patient as part of his or her                                                                             www.BCPIWEB.com. This document
                                                                                                          Secretary.                                            does not contain proposed information
                                                  professional service.
                                                     (B) Where a physical or occupational
                                                                                                          [FR Doc. 2010–21354 Filed 8–26–10; 8:45 am]           collection requirements subject to the
                                                  therapist whose services are defined in                 BILLING CODE 4120–01–P                                Paperwork Reduction Act of 1995,
                                                  sections 1861(p) and 1861(g) of the Act,                                                                      Public Law 104–13. In addition,
                                                  furnishes items to his or her own patient                                                                     therefore, it does not contain any
                                                  as part of his or her professional service.             FEDERAL COMMUNICATIONS                                proposed information collection burden
                                                     (C) Where a DMEPOS supplier is co-                   COMMISSION                                            ‘‘for small business concerns with fewer
                                                  located with and owned by an enrolled                                                                         than 25 employees,’’ pursuant to the
                                                                                                          47 CFR Part 73                                        Small Business Paperwork Relief Act of
                                                  Medicare provider (as described in
                                                  § 489.2(b) of this chapter). The DMEPOS                 [DA 10–1521; MB Docket No. 10–22, RM–                 2002, Public Law 107–198, see 44 U.S.C.
                                                  supplier—                                               11591].                                               3506(c)(4). The Commission will send a
                                                     (1) Must operate as a separate unit;                                                                       copy of this Report and Order in a
                                                  and                                                     Radio Broadcasting Services;                          report to be sent to Congress and the
                                                     (2) Meet all other DMEPOS supplier                   DeBeque, Colorado                                     Government Accountability Office
                                                  standards.                                                                                                    pursuant to the Congressional Review
                                                                                                          AGENCY:  Federal Communications                       Act, see 5 U.S.C. 801(a)(1)(A).
                                                     (30)(i) Except as specified in                       Commission.
                                                  paragraph (c)(30)(ii) of this section, is               ACTION: Final rule.                                   List of Subjects in 47 CFR Part 73
                                                  open to the public a minimum of 30
                                                                                                                                                                  Radio, Radio broadcasting.
                                                  hours per week.                                         SUMMARY:   The Audio Division grants a
WReier-Aviles on DSKGBLS3C1PROD with RULES




                                                     (ii) The provision of paragraph                      Petition for Rule Making issued at the                ■ As stated in the preamble, the Federal
                                                  (c)(30)(i) of this section is not applicable            request of Cochise Media Licenses, LLC,               Communications Commission amends
                                                  at a practice location where a—                         requesting the substitution of Channel                47 CFR part 73 as follows:
                                                     (A) Physician whose services are                     247C3 for vacant Channel 275C3 at                     PART 73—RADIO BROADCAST
                                                  defined in section 1848(j)(3) of the Act                DeBeque to accommodate the hybrid                     SERVICES
                                                  furnishes items to his or her own                       application, proposing the reallotment
                                                  patient(s) as part of his or her                        of Channel 274C3, Crawford, Colorado,                 ■ 1. The authority citation for part 73
                                                  professional service;                                   to Channel 275C3 at Battlement Mesa,                  continues to read as follows:


                                             VerDate Mar<15>2010   14:41 Aug 26, 2010   Jkt 220001   PO 00000   Frm 00043   Fmt 4700   Sfmt 4700   E:\FR\FM\27AUR1.SGM   27AUR1

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:32
posted:7/25/2011
language:English
pages:21