With the publication of the FAQs, CMS qualified and softened the effect of a controversial statement in the OIG's Updated Special Fraud Alert addressing Telemarketing by Durable Medical Equipment Suppliers published January 14, 2010 ("Updated Special Fraud Alert"). 

In the Updated Special Fraud Alert, the OIG stated DME suppliers violate section 1834(a)(17) of the Social Security Act (the "Act") (prohibiting DME suppliers from making "unsolicited" telephone calls to Medicare beneficiaries) when they contact Medicare beneficiaries by telephone based solely on treating physicians' preliminary written or verbal orders prescribing DME for such beneficiaries ("Statement").  This Statement caused a strong reaction in the homecare and DME industries.  Industry stakeholders believe the OIG, in publishing this Statement, did not take into account long-standing industry processes and procedures for ensuring the quick delivery of reasonable and necessary physician-prescribed medical equipment.   Further, the OIG's Statement was viewed as more restrictive than what is required under the Act; Congress passed the no-solicitation provisions of the Act to curtail aggressive and fraudulent "cold-call" telemarketing of DME by unscrupulous profiteers, not to restrict necessary communication between the supplier and beneficiary.  For more details on the Updated Special Fraud Alert, see Health Law News (1/22/2010) at: http://www.hallrender.com/library/articles/562/Health%20Law%20News2_01_21_10.html. 

In addition to the important clarification summarized above, the FAQs also make it clear that a DME supplier returning a beneficiary's telephone call does not constitute prohibited solicitation, and a DME supplier need not maintain documentation from the physician reflecting that the physician has contacted the supplier with the beneficiary's knowledge.  As a word of caution, CMS does not go so far as to completely rescind the OIG's Statement; per CMS, if a supplier contacts a beneficiary based on a physician's order and the contact is without the beneficiary's knowledge that the physician would be contacting a supplier on the beneficiary's behalf, then the supplier to beneficiary contact might be prohibited "depending on the facts and circumstances."  DME suppliers may be wise to verify with the ordering physician and maintain documentation thereof, reflecting that the physician has told the beneficiary that the physician would be contacting a DME supplier and that the DME supplier would follow-up with a call to the beneficiary to facilitate delivery of prescribed DME.

CMS' prompt response to the OIG Updated Special Fraud Alert is likely a result of the efforts and strong advocacy of interested parties such as the American Association for Homecare, the national trade association of home health care providers.  We will provide further updates as they become available.

Should you have any questions, please do not hesitate to contact Adele Merenstein at 317-752-4427 or your regular Hall Render attorney at 317-633-4884.

ADDENDUM
Telemarketing Frequently Asked Questions

Question 1: Under what circumstances can a DME supplier make telephone contact with a beneficiary regarding a Medicare covered item?

Answer 1: If the beneficiary gave written permission for the supplier to contact him/her, if the supplier has already provided a covered item to the beneficiary and the supplier is calling the beneficiary about such covered item or if the beneficiary has already received a covered item from the supplier in the last 15 months.

Question 2: Is a supplier returning a beneficiary's phone call considered an "unsolicited" contact?

Answer 2: No. In that scenario, the beneficiary initiated the contact and is inviting a response from the supplier.

Question 3: Is a supplier contacting the beneficiary based on the receipt of a physician order considered an "unsolicited" contact?

Answer 3: If a physician contacts a supplier on behalf of a beneficiary with the beneficiary's knowledge, and then a supplier contacts the beneficiary to confirm or gather information needed to provide that particular covered item (including delivery and billing information), then that contact would not be considered "unsolicited." Please note that the beneficiary need only be aware that a supplier will be contacting him/her regarding the prescribed covered item, recognizing that the appropriate supplier may not have been identified at the time of consultation. (Emphasis added.)

Question 4: What if a supplier contacts the beneficiary based solely on the physician order (and therefore the contact is without the beneficiary's knowledge that the physician would be contacting a supplier on the beneficiary's behalf)?

Answer 4: Then that contact would be considered "unsolicited" and, depending on the facts and circumstances of the particular case, may be prohibited.

Question 5: Does a supplier have to collect and maintain documentation from the physician reflecting that the physician has contacted the supplier with the beneficiary's knowledge?

Answer 5: No. However, it would be a business decision on the part of the supplier whether to collect and obtain such documentation for their records.

Question 6: If a supplier makes solicited contact with a beneficiary for a particular covered item, can the supplier speak with the beneficiary about additional covered items during that same contact?