Payment Matters

October 2, 2008

Practitioners Get Relief from DMEPOS Accreditation Requirements

By: Julie E. Kass

Physicians and other practitioners can breathe a sigh of relief now that CMS has clarified that they do not have to meet DMEPOS requirements. New provisions in the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) have been interpreted by CMS to exempt practitioners from durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) accreditation and quality standards requirements.

Prior to MIPPA, it was CMS' position that under Section 302 of the Medicare Modernization Act of 2003 (MMA) all individuals or entities that used DMEPOS supplier numbers to bill for DMEPOS were required to meet the DMEPOS quality standards and to be accredited by an organization approved by CMS. This would have required physicians, physical and occupational therapists, optometrists and others to meet all of the requirements of commercial DME suppliers, even when only supplying limited equipment and supplies to their own patients. However, MIPPA exempts the following practitioners from the MMA requirements:

  • Physicians (as defined in section 1861(r) of the Act)
  • Physical Therapists
  • Occupational Therapists
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Health Care Providers May Be Required to Take Action Against Identity Theft "Red Flags"

By: James B. Wieland and Emily H. Wein

Given that health care providers often issue invoices for payment, rather than receiving payment at the time of services, they may be required to develop identify theft detection and prevention programs by November 1, 2008 pursuant to regulations jointly issued by the Federal Trade Commission (FTC) and several federal banking agencies.

Ober|Kaler Update: On October 22, 2008, the FTC announced that it will "suspend enforcement" of the regulations until May 1, 2009 to allow entities heretofore exempted from FTC regulation to craft compliant programs. One could read "suspension" of the Rule as technically not the same as "delaying the effective date" of the Rule. However, the exact wording of the FTC announcement was that the suspension was given "to give creditors and financial institutions additional time in which to develop and implement written identity theft prevention programs." [Emphasis added.] This seems to indicate that the suspension is effectively the same as a delay. You may review the FTC press release here:, and you may review Ober|Kaler's analysis of that press release here.

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CMS Releases New Rules Limiting Recoupment Pending Claims Appeals

By: Paul W. Kim* and Mark A. Stanley*

Providers, physicians, and suppliers of medical goods and services (collectively, "providers") may now be able to avoid recoupment of alleged overpayments pending appeals, but at a cost. Providers who ultimately lose their appeals will be charged an exorbitant interest rate (currently 11.375%) on any outstanding overpayments not recouped by CMS pending the appeals. Providers who do not wish to risk paying interest on unsuccessful appeals must voluntarily remit overpayments to CMS within thirty days of receiving a demand notice from the Medicare contractor. CMS established the revised procedures for recoupment of overpayments pursuant to Section 935 of the Medicare Prescription Drug, Improvement and Modernization act of 2003.

Section 935 ostensibly makes the same interest available to providers who are victorious on appeal. However, CMS has interpreted this mandate so narrowly as to render it meaningless. Under CMS's interpretation of Section 935 interest does not accrue on amounts voluntarily paid by a provider pending the outcome of the appeals process. Rather, interest only accrues on funds that the Medicare contractor affirmatively recoups from the provider prior to receiving notice of the provider's appeal. Contractors do not commence recoupment until shortly before the expiration of filing deadlines, so, under CMS's interpretation of Section 935, funds subject interest in favor of victorious providers will be extremely limited.

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Delinquent Tax Payments - IRS Sharpens Its Collection Tools

By: Donna J. Senft

Beginning October 1, 2008, the IRS is authorized to collect payments due the IRS, by reducing Medicare payments due providers. Section 1024 of the Taxpayer Relief Act of 1997 authorized the IRS to collect overdue taxes by reducing Medicare payments to health care providers. As a result of this federal legislation, the IRS implemented the Federal Payment Levy Program (FPLP) in July 2000. Under the FPLP, the IRS is authorized to collect overdue taxes by placing a continuous levy on payments owed to contractors doing business with the federal government.

Beginning October 1, 2008, the FPLP was extended to include payments made to Medicare providers. (Additional information regarding the application of FPLP to Medicare providers is available at CMS' web site.)

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