California HME Update

Consignment Closet Rule Rescinded

AAHomecare announced today that it was informed by CMS officials alerted that the "consignment closet" rule, scheduled to take effect in March, has been rescinded to allow for further review and consideration. The agency is considering rulemaking to address this issue in the future. This means that the current rules governing consignment closets under Medicare are still in place.

The consignment closet policy outlined by CMS in a transmittal issued in September 2009 would have essentially prohibited arrangements where an enrolled supplier of durable medical equipment, prosthetics and supplies (DMEPOS) maintains inventory at a practice location which is not owned by the enrolled DMEPOS supplier, but by the physician, non-physician practitioner or other healthcare professional. The rescinded rule would have required physicians (physician or non-physician practitioner) to take posession of DMEPOS items who then would have had to bill for the equipment using their own supplier billing number. In addition to being impractical for physicians and Medicare beneficiaries, such an arrangement would have likely violated the physician ownership and referral statute--known as the Stark law.