Compliance Standards for Consignment Closets and Stock and Bill Arrangements
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Compliance Standards for Consignment Closets and Stock and Bill Arrangements
 
Suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) which maintain inventory at a practice location owned by a physician or non-physician practitioner for the purpose of DMEPOS distribution and which submit claims to the National Supplier Clearinghouse Medicare Administrative Contractor (NSC-MAC) must comply with current standards, which may be verified by the NSC-MAC.  DMEPOS suppliers, physicians and non-physician practitioners who maintain consignment closets and stock and bill arrangements for DMEPOS Providers should assure that their billing staff are advised of these billing and compliance standards.
 
If pedorthists maintain a consignment closetand stock and bill arrangements with a physician or non-physician, now is the time to get their consignment closet and stock and bill arrangements in order.  This is an opportunity for pedorthists, as allied health providers, to position themselves with their referring physicians or non-physician as the lower extremity specialist.  As a pedorthist and allied health provider you should take this time to let your referring physicians or non-physician know that you are there to assist them to meet their patient's everyday immediate prescription needs.
 
Pedorthists can assisttheir referring physicians or non-physician and their patients with those types of devices that are needed immediately because oftraumatic or overuse injuries.  These are items that your referring physicians or non-physicians often carry in their consignment closets and that you can assist them and their patients with:  cam walkers, air casts, ankle braces and air cast short leg walking boots, lace up ankle gauntlets, hard soled shoes and multi-podus boots.  These are just a few of the devices that pedorthistscan assist their referring physicians and non-physicians and patients with.
 
In addition, physicians and non-physician practitioners who maintain DMEPOS inventory at the physician or non-physician practitioner's practice location for the purpose of DMEPOS distribution should be aware of this issue.
 
The Centers for Medicare and Medicaid Services (CMS) defines and prohibits certain arrangements where an enrolled DMEPOS supplier maintains inventory at a practice location that is not owned by the enrolled DMEPOS supplier, but rather, owned by a physician or non-physician practitioner for the purpose of DMEPOS distribution, commonly referred to as a consignment closet and/or stock and bill arrangement.  A common practice example is that of an enrolled physician practice that allows DMEPOS owned by a separately enrolled DMEPOS supplier to be kept at the physician's practice location.
 
CR 6528 instructs the NSC-MAC that use of consignment closets and/or stock and bill arrangements must be in compliance with current standards.  In addition, the CR defines additional specific compliance standards for NSC-MAC validation for consignment closets and stock and bill arrangements added to the Medicare Program Integrity Manual (PIM), chapter 10, section 21.8, and viewable as an attachment to CR 6528 by clicking here (R297PI).
 
Medicare allows Medicare enrolled DMEPOS suppliers to maintain inventory at a practice location owned by a physician or non-physician practitioner for the purpose of DMEPOS distribution when the following conditions are met by the DMEPOS supplier and verified by the NSC-MAC:
  • The title to the DMEPOS shall be transferred to the enrolled physician or non-physician practitioner's practice at the time the DMEPOS is furnished to the beneficiary.
  • The physician or non-physician practitioner's practice shall bill for the DMEPOS supplies and services using their own enrolled DMEPOS billing number.
  • All services provided to a Medicare beneficiary concerning fitting or use of the DMEPOS shall be performed by individuals being paid by the physician or non-physician practitioner's practice, not by any other DMEPOS supplier.
  • The beneficiary shall be advised that, if they have a problem or questions with the DMEPOS, they should contact the physician or non-physician practitioner's practice, not the DMEPOS supplier who placed the DMEPOS at the physician or non-physician practitioner's practice.
The NSC-MAC shall verify that no more than one enrolled DMEPOS supplier shall be enrolled and/or located at the same practice location.  (Note: This prohibition does not exist for one or more physicians enrolled as DMEPOS suppliers at the same physical location.)  A practice location shall have a separate entrance and separate post office address, recognized by the United States Postal Service.
 
The NSC-MAC customer service personnel shall respond to direct provider and/or supplier questions concerning compliance with this policy.  The responsibility for determining compliance with these provisions is the responsibility of the DMEPOS supplier, physician, or non-physician practitioner.
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