August 21, 2009
Effective September 8, 2009:

New CMS Manual Change Significantly Affects DME Consignment Closet Arrangements
A Polsinelli Shughart PC Health Care Update

On August 7, 2009, CMS issued Transmittal 297 (Change Request 6528) (the “Transmittal”) which significantly affects “consignment closet” or “stock and bill” arrangements where 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 or non physician practitioner (for example, a physician assistant, nurse practitioner or clinical nurse specialist).

Effective September 8, 2009, the Transmittal, which adds Section 21.8 to Chapter 10 of the Medicare Program Integrity Manual, requires that consignment closet / stock and bill arrangements comply with current DMEPOS standards, but further requires that such arrangements meet certain standards (which are subject to verification by the National Supplier Clearinghouse Medicare Administrative Contractor).