“Direct Solicitation” DMEPOS Rule is Unfeasible as Written, CMS Says

In a final rule published on August 27, 2010, CMS addressed and modified several durable medical equipment prosthetics orthotics and supplies (DMEPOS) supplier standards at 42 C.F.R. §424.57, which lists the special payment rules for items furnished by DMEPOS suppliers and issuance of DMEPOS supplier billing privileges. One provision that was amended involved the prohibition against the “direct solicitation” of Medicare beneficiaries by DMEPOS suppliers (see 42 C.F.R. §424.57(c)(11)).

The August 2010 final rule expanded the scope of the prohibition on direct solicitation to include in-person contacts, email, and instant messaging. Prior to the final rule, the definition of direct solicitation generally was limited to telephonic contact. Since the adoption of the “direct supervision” definition, CMS found that the implementation of the expansion of this provision was unfeasible. So, in an April 4, 2011 proposed rule, CMS proposed removing the definition of “direct solicitation,” revising 42 C.F.R. §424.57(c)(11) to remove all references to “direct solicitation,” and clarifying that the prohibition was limited to telephonic contact.

On March 14, 2012, CMS issued a final rule amending the regulation at 42 C.F.R. §424.57. In addition to removing the definition of “direct supervision” and any reference to “direct supervision,” the final rule allows DMEPOS suppliers to contract with licensed agents to provide DMEPOS supplies unless prohibited by state law, removes the requirement for compliance with local zoning laws, and modifies certain state licensure requirement exceptions. 

Commenters criticized the definition of “direct solicitation” as overly broad as it covered some types of marketing activity outside the bounds of what CMS intended to prohibit under the regulations. One commenter recommended that the standard be revised to allow beneficiaries to give verbal permission for a supplier to contact them and allow DMEPOS suppliers to contact beneficiaries when they have received a written order or prescription for a Medicare-covered item to be furnished from the patient’s physician prior to contact with the beneficiary. CMS disagreed with the recommendation of verbal consent due to the potential for abuse, stating that there needs to be a documented record of the beneficiary’s approval of the contract.

The rule at §424.57(c)(11) now states that DMEPOS suppliers must agree not to contact a beneficiary by telephone when supplying a Medicare-covered item unless one of the following applies: (1) the individual has given written permission to the supplier to contact them by telephone concerning the furnishing of a Medicare-covered item that is to be rented or purchased, (2) the supplier has furnished a Medicare-covered item to the individual and the supplier is contacting the individual to coordinate the delivery of the item, or (3) if the contact concerns the furnishing of a Medicare-covered item other than a covered item already furnished to the individual, the supplier has furnished at least one covered item to the individual during the 15-month period preceding the date on which the supplier makes such contact.

Although CMS has finalized its proposal to delete the definition of “direct solicitation” from the regulation, CMS has taken steps to resolve unwanted and unsolicited communications and will continue to actively monitor the issue of unwanted and unsolicited communications between DMEPOS suppliers and beneficiaries. In addition, CMS will be working with law enforcement agencies to determine if further agency intervention is required. If CMS determines that action needs to be taken to limit DMEPOS suppliers’ communications with Medicare beneficiaries, it will engage in further rulemaking.

CMS has addressed concerns about this standard in its Frequently Asked Questions. Click on “DME Supplier Telemarketing Frequently Asked Questions” under the Downloads section.