Medicare/Consignment Closets

The Centers for Medicare & Medicaid Services (CMS) has announced changes to the compliance standard for consignment closets and stock and bill arrangements. In such arrangements, ?an enrolled supplier of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) maintains inventory at a practice location which is not owned by the enrolled DMEPOS supplier, but rather, owned by a physician, non-physician practitioner or other health care professional for the purpose of distribution,? according to CMS. The changes are effective March, 2010.

Although most consignment closet or stock and bill arrangements do not satisfy the DMEPOS supplier standards, CMS has identified a limited arrangement that may be permissible. This scenario involves a DMEPOS supplier selling DMEPOS items to the practice of the physician or other non-physician practitioner, and the billing and furnishing of a DMEPOS item(s) would be done by the physician or non-physician practitioner, each arrangement will be evaluated on a case by case basis. The CMS wants to ensure that beneficiaries are aware that the enrolled supplier who has billed Medicare on their behalf has furnished their DMEPOS item(s).