Medtrade recently published an insightful article exploring the actions many suppliers are considering in light of the Medicare DMEPOS Competitive Bidding Program (CBP): establishing or reviewing subcontracting arrangements.
“A subcontracting arrangement,” the aforementioned article states, “is where a DME supplier has an arrangement with another entity to perform a service on behalf of the DME supplier or for the DME supplier.”
Here’s what DMEs/ HMEs need to know about subcontracting, accreditation, and licensure:
First, subcontracting!
What services can a DME supplier subcontract?
- Purchase of inventory - a DME supplier may contract with another company to purchase inventory needed to fulfill orders. Copies of inventory purchase contracts must be available upon request to Medicare. Medtrade adds: “A supplier may not contract with any entity that is currently excluded from federal or state health care programs.”
- Delivery and instruction - a DME supplier may contract with another company to deliver DME to a patient and provide instruction. Of course, documentation of the delivery and instruction is required from the supplier, not the subcontractor.
- Maintenance and repair of rented equipment - a DME supplier may contract with another company to maintain and repair equipment rented to the patient from the supplier. If services beyond repair are provided, the subcontractor will need to be accredited (barring an exemption).
What services cannot be subcontracted by a DME supplier?
- Patient intake and assessment
- Coordinating care with the physician
- Submitting claims to Medicare on behalf of the patient
- Ownership and responsibility for the equipment
- Ensuring product safety
Medicare calls these items “core responsibilities.” To summarize, Medtrade states: “Regardless of whether a supplier uses a subcontractor or performs a task directly, the supplier retains full responsibility and accountability for any services provided to a Medicare beneficiary.”
Next, accreditation!
Like DME suppliers, subcontractors must be accredited to provide the subcontracted service, barring three exceptions:
- A subcontractor that only sells inventory to a DME supplier does not need to be accredited
- A subcontractor that only delivers DME to a patient does not need to be accredited
- A subcontractor that only repairs equipment that a supplier is renting to a patient does not need to be accredited.
Finally, licensure!
The Competitive Bidding Implementation Contractor (CBIC) states: “If a contract supplier decides to use a subcontractor to deliver items and services under the contract or perform other subcontracted services, both the contract supplier and the subcontractor must have all applicable state/territory licenses.”
Of course, licensure requirements vary by state and territory. Suppliers can reference the DMEPOS licensure databases maintained by NPWest and NPEast - but these are only guides. Suppliers must ensure compliance with all applicable licensure laws.
