Durable Medical Equipment (DME) Company Compliance

Durable medical equipment (DME) companies are subject to unique standards and requirements under Medicare and the other federal health care benefit programs. In order to mitigate their risk of facing federal charges as a result of a health care fraud investigation, DME companies must adopt (and adhere to) comprehensive compliance programs.

Like all service providers and suppliers that bill Medicare, Medicaid, Tricare, and the Department of Labor (DOL), durable medical equipment (DME) companies are subject to a comprehensive set of rules and regulations. These rules and regulations govern virtually all aspects of DME companies’ businesses, from how they bill for equipment and supplies to how they structure their relationships with doctors and other health care providers.

In order to bill Medicare, DME companies must demonstrate that they meet the quality standards established by the Centers for Medicare and Medicaid Services (CMS), and they must obtain accreditation from a CMS-approved Accreditation Organization. However, these are just the first steps in an ongoing compliance process. Like all health care businesses that bill Medicare, Medicaid, Tricare, and the DOL, DME companies are subject to constant scrutiny by CMS and other agencies, and billing violations and other mistakes can trigger costly penalties.

Federal Compliance Counsel for DME Companies

Oberheiden, P.C. is a federal health care law firm that represents DME companies and other clients across the country with regard to compliance, investigations, and civil and criminal prosecutions. Our attorneys work closely with our clients to develop comprehensive compliance programs that are custom-tailored to their unique business needs, relying on centuries of combined experience in federal health care fraud matters. In addition to attorneys who have spent their entire careers representing DME companies and health care providers, our compliance team also includes several former federal health care fraud prosecutors, and we utilize the insights gained from this government experience to help DME companies structure and implement compliance programs capable of fending off charges in the event of a federal investigation.

While DME companies face many of the same compliance challenges as other businesses and health care providers, they face some unique challenges as well. From marketing to billing, and from cultivating relationships with physicians to dealing directly with CMS and other federal agencies, DME company executives and managers must be cognizant of the compliance risks involved in all aspects of their companies’ day-to-day operations. At Oberheiden, P.C., we have an intimate understanding of these risks, and we have a proven track record of providing our clients with the information and tools they need to manage these risks successfully.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Attorney-at-Law & Founder

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Lynette S. Byrd
Lynette S. Byrd

Former Federal Prosecutor

Partner

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Subodh Chandra
Subodh Chandra

Former Federal Prosecutor

Local Counsel

Elizabeth K. Stepp
Elizabeth K. Stepp

Partner

Roger Bach
Roger Bach
(Non-Lawyer)

Former Special Agent, OIG

Dennis A. Wichern
Dennis A. Wichern
(Non-Lawyer)

Former Special Agent-in-Charge

Chris Quick
Chris Quick
(Non-Lawyer)

Former Special Agent, FBI

Kevin M. Sheridan
Kevin M. Sheridan
(Non-Lawyer)

Retired Supervisory Special Agent, FBI

Ray Yuen
Ray Yuen
(Non-Lawyer)

Former Supervisory Special Agent, FBI

Gamal Abdel-Hafiz
Gamal Abdel-Hafiz
(Non-Lawyer)

Former Supervisory Special Agent, FBI

The OIG’s “Elements of an Effective Compliance Program” for DME Companies

Along with CMS, the U.S. Department of Health and Human Services’ Office of Inspector General (OIG) is among the agencies primarily responsible for investigating and prosecuting DME companies and health care providers suspected of billing violations, unlawful compensation arrangements, and other forms of program fraud. In an effort to help DME companies comply with their legal and regulatory obligations, the OIG has published a list of “7 fundamental elements applicable to an effective compliance program.” These elements are:

1. “Implementing written policies, procedures and standards of conduct.”

Thorough documentation is critical to an effective health care compliance program. For DME companies, this includes developing written, policies, procedures, and standards of conduct relating to:

  • Medicare, Medicaid, Tricare, and DOL billing compliance;
  • Contracts and financial relationships with doctors and other third-party providers;
  • Marketing efforts for durable medical equipment and supplies;
  • Dissemination of information on a company-wide scale; and,
  • Identifying, assessing, and remedying potential compliance issues.

In order for these types of compliance documentation to be effective, they must be custom-tailored to the organization as well as the specific government health care benefit program(s) being billed. Medicare, Medicaid, Tricare, and the DOL all have their own unique billing rules and compliance regimes, and DME companies that focus solely on Medicaid or adopt more-general compliance standards will be setting themselves up for problems should they face scrutiny from federal authorities.

2. “Designating a compliance officer and compliance committee.”

Health care compliance is an active process. Preparing the necessary documentation is not sufficient in itself, but instead should be viewed as a means for implementing adequate compliance mechanisms and protocols on a company-wide basis. This includes designating a compliance officer and establishing a compliance committee. The compliance officer’s role should be clearly documented as well, and should involve proactively assessing and addressing potential compliance issues throughout the company. The compliance committee should serve in an advisory capacity, helping company leaders make critical decisions when faced with challenging compliance issues.

3. “Conducting effective training and education.”

Ongoing compliance efforts should also include providing training and education to company employees. Even if a company has a comprehensive compliance policy, if there is no evidence to indicate that the information contained in the policy has been distributed to appropriate personnel in a meaningful manner, then the policy itself is highly unlikely to protect the company against federal prosecution. As a result, not only should training and education programs be developed and conducted by qualified individuals, but all training and education sessions should be thoroughly documented as well.

4. “Developing effective lines of communication.”

Beyond initial and ongoing training and education, appropriate lines of communication should be established so that company personnel know when, how, and to whom to report potential compliance issues. Internal reporting of compliance issues should be openly encouraged, and employees should know exactly where to look if they need information regarding the company’s compliance program or its obligations under Medicare, Medicaid, Tricare, or the DOL health care benefit program.

5. “Enforcing standards through well-publicized disciplinary guidelines.”

While DME companies should seek to promote a culture of transparency and compliance, they must also have adequate disciplinary guidelines to ensure that employees are disincentivized to engage in billing and coding violations and other improper practices. To this end, DME companies must adopt appropriate written guidelines that satisfy their compliance obligations while also appropriately addressing all relevant state and federal employment law considerations.

6. “Conducting internal monitoring and auditing.”

Compliance monitoring should be a systematic and routine practice conducted in such a way as to identify potential issues as soon as possible after they arise. The task of compliance monitoring should be assigned to an appropriate individual who is capable of identifying potential compliance issues in all aspects and at all levels of the business, and who is in a position to assess the business’s compliance efforts from a completely unbiased perspective.

7. “Responding promptly to detected offenses and developing corrective action.”

Finally, if the compliance officer or compliance committee detects a compliance concern, or if an employee reports a potential violation, appropriate measures should be taken to respond. The company’s compliance documentation should specify appropriate response protocols, including the chain of command, and corrective action should be commenced immediately.

Additional Considerations for DME Company Health Care Compliance

As noted in the OIG’s guidance, “[g]iven the diversity within the industry, there is no single ‘best’ DMEPOS supplier compliance program.” As a result, while the above elements can be viewed as a baseline for most companies, specificity is key, and in many cases more will need to be done. Based on our attorneys’ experience, some additional important compliance considerations for DME companies include:

  • Documentation vs. Good Documentation. There is documentation, and then there is good documentation. While having a documented compliance program is absolutely essential, documenting mediocre, non-specific, and insufficient efforts to comply with federal law and the Medicare, Medicaid, Tricare, and DOL billing regulations can serve to confirm federal authorities’ suspicions that a DME company’s practices are noncompliant.
  • Mischaracterization of Employees. Paying percentage-based compensation to individuals who have been characterized as independent contractors will often be viewed as a red flag for the unlawful diversion of program-reimbursed funds. When structuring relationships with marketers, medical directors, and other individuals, particular care needs to be taken to ensure that the compensation structure is legally compliant.
  • Third-Party Marketers and Billing Administrators – Relationships with third-party marketers and billing administrations can be dangerous from a compliance perspective if they are not structured and documented appropriately. Buying leads for Medicare beneficiaries can be dangerous, as can relationships that appear to involve improper payments for program beneficiary referrals. Similar, while third-party billing administrators often claim to be experts in their field (and, to be fair, some of them are), delegating compliance to a third-party provider does not absolve a DME company of its legal and regulatory obligations.
  • DME Sales in Telemedicine. Despite the benefits of providing patients with access to telemedicine, the telemedicine industry is heavily scrutinized by federal authorities, and high volumes of DME sales are particularly likely to trigger federal investigations. While there is nothing inherently illegal about telemedicine practice, in order to avoid unwanted scrutiny, DME companies involved in telemedicine must be particularly careful to tailor their compliance programs accordingly.

Contact the Federal Health Care Compliance Lawyers at Oberheiden, P.C.

If you would like to speak with one of our lawyers about your DME company’s compliance needs, we encourage you to get in touch. To get started with a free and confidential consultation, please call (214) 692-2171 or inquire online today.

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