Saturday, July 31, 2004

Supplier standards 1 and 4
with Javier Talamo
Q. I heard that some of our colleagues have received letters suspending their Medicare provider numbers for violating several of the “Supplier Standards.” Is there a particular standard that is being enforced with more particularity?

A. While it is true that CMS has been suspending billing privileges for an increasing number of DMEPOS, no particular pattern seems to have emerged. However, particular emphasis is being placed on provider standards No. 1 and No. 4, which are often subject to arbitrary interpretation.

Most providers interpret No. 1 to mean that they are in compliance as long as their business fulfills all state and local zoning, occupational and license requirements and their enrollment application is approved. Unfortunately, many have discovered that assumption is wrong. CMS has interpreted the term “regulatory requirements” to include regulations promulgated by The Department of Health, FDA, DOT, etc. Applicable federal laws include the ADA, Deptartment of Labor rules and worker’s compensation regulations.

Standard No. 4 involves inventory. But what does it mean “to fill” from your own inventory, and how much inventory does it take to comply? A proposed clarification of No. 4 states that compliance can be achieved if the provider has at least $25,000 in inventory or credit with other companies equaling such amount. While this may prove to be a manageable amount for most, small specialty providers may have difficulty meeting this standard.

The primary problem with the supplier standards is that they are subject to various interpretations.

Javier Talamo is an attorney with Kravitz & Talamo. He can be reached at