Legal: Look before you leap

Q. I’d like to expand the reach of my HME business by offering medical equipment and supplies to patients on a mail-order basis – what regulations should I be aware of?  

A. Expanding beyond the confines of walk-in retail customers and local delivery is a great way to increase HME offerings and business revenue. However, providers must be cognizant of the additional regulatory red tape that accompanies such growth. 

For starters, state licensure requirements can vary greatly from state to state, product by product. While a business’ home state may not require a license to provide diabetes testing supplies, the new state(s) a supplier begins shipping into may very well require some form of license.  

Similarly, individual professional licensure requirements for certain DMEPOS – such as respiratory therapists and orthotic fitters – differ throughout the country. These licensure requirements pertain to Medicare, commercially insured and self-paying customers alike. Failing to have requisite state licensure is not only a violation of DMEPOS Supplier Standard No.1 governing Medicare providers – giving rise to overpayments and risking Medicare provider number revocation – but also that of state law.  

All HME providers accordingly need to ensure they undertake a state license analysis prior to conducting new interstate business to ensure they meet all business and individual professional licensure requirements. Additionally, when expanding into other states a provider needs to be aware of what activities may implicate state sales tax. This also mandates a state-by-state analysis, with the state sales tax applicability often dependent upon whether a nexus between the business and state is created. 

When marketing to prospective new customers in other states, suppliers need to further ensure they comply with applicable federal and state advertising requirements. Medicare’s DMEPOS Supplier Standard No. 11 specifically governs direct solicitation of Medicare beneficiaries, and many states have regulations pertaining to sales communications directed to residents into their jurisdictions. E-commerce is a vital component for HME businesses to remain competitive in today’s environment – suppliers just need to ensure to take a look before they leap approach when expanding their operations. 

Michael Silverman, Esq., is with Silverman Bain, LLP. Reach him at michael@silvermanbain.com.