Face Challenges Confidently

Yes, You Can Call Medicare Beneficiaries…But Be Careful

Wednesday, November 4th, 2015

(July 2013)

Let me make this clear: CMS does not like it when DME suppliers call Medicare beneficiaries. A CMS official once said to me: “We don’t want DME suppliers calling our beneficiaries.” The concern is that an elderly person….who does not feel well…..can be taken advantage of over the phone by an unscrupulous supplier using “boiler room” tactics. I understand CMS’ concern. My father (now deceased) was a WWII vet, a college athlete, and a professional. Dad was tough as nails…..John Wayne and Clint Eastwood rolled into one. Unfortunately, Dad got old and feeble and during the last years of his life, he would have been bulldozed by an aggressive marketer.

Conditions DME Suppliers Must Follow When Calling Medicare Beneficiaries

The telephone solicitation statute and Supplier Standard # 11 are limited to DME suppliers. They are meant to protect the elderly from getting “cold called.” The statute and standard essentially say the same thing:

Picture Mrs. Smith, a 78 year old Medicare beneficiary, sitting in her living room watching television.

ABC Medical Equipment, Inc., directly or through an agent, may not call Mrs. Smith unless one of three conditions exist.

First condition – ABC has provided a Medicare-covered item to Mrs. Smith any time in the past, and ABC is calling Mrs. Smith about that particular item.

Second condition – ABC has provided a Medicare-covered item to Mrs. Smith within the past 15 months, and ABC is calling Mrs. Smith about other products that ABC can provide. This second condition allows ABC to cross-sell to Mrs. Smith if she has obtained a covered item from ABC within the preceding 15 months.

Third condition – ABC has never provided a Medicare-covered item to Mrs. Smith. Mrs. Smith is a prospective customer of ABC. Mrs. Smith has given her consent (electronic or “blue ink”) to be called by ABC. Let’s drill down on this a bit. Under the guise of “if it looks like a duck, walks like a duck, and sounds like a duck,” here is what cannot happen: (i) ABC cannot call Mrs. Smith and ask for permission to call her at a later time (don’t laugh…..a client asked if it could do this); (ii) a marketer cannot cold call Mrs. Smith and ask her if ABC can call her; (iii) a “final expense” life insurance company cannot call its beneficiaries, ask them a bunch of questions about their life insurance, and then ask them if they are interested in DME, and if the answer is “yes,” transfer their names to ABC; and (iv) a marketer cannot call Mrs. Smith under the guise of a “survey,” ask her questions about her house, her dog, her flowers, and then ask her if she is interested in DME….and if she says “yes,” then transfer her name to ABC. In law school, I took Constitutional Law. In that class I learned that the definition of pornography is that “you know it when you see it.” Likewise, “you know a cold call when you see it.”

An Example Of A Permitted Phone Call

Let’s drill down on the third condition a bit further. ABC can call Mrs. Smith if it is a “solicited” call….that is…..if Mrs. Smith has affirmatively taken action that reflects her consent to be called. For example, let’s say that Mrs. Smith watches a television commercial, or reads a newspaper ad, and calls ABC. Mrs. Smith reaches ABC’s answering service or voicemail. Mrs. Smith leaves a message asking that ABC call her. In response, ABC calls Mrs. Smith. It is unlikely that CMS will allege that the telephone solicitation statute and Supplier Standard # 11 are violated. Look at another example. Mrs. Smith goes to a web landing page for ABC. She fills out the consent-to-be-called box and then hits “submit.” In response, ABC calls Mrs. Smith. This is a proper electronic consent on condition that (i) ABC is the only company listed on the web landing page, (ii) the consent is specific to ABC, and (iii) the box that Mrs. Smith submits clearly states that she is giving ABC permission to call her.

What Happens When A Supplier Violates The Standards?

Unsolicited phone calls to Medicare beneficiaries are a big deal to two of the most powerful CMS contractors: the NSC and ZPICs. On several occasions, I have seen a ZPIC instruct DME MACs to suspend payments to a DME supplier because the supplier is allegedly violating the telephone solicitation statute. I have also seen the NSC threaten to revoke a DME supplier’s Part B supplier number because the supplier is allegedly violating Supplier Standard # 11. For example, as I write this article I am staring at a letter from the NSC to a DME supplier that states the following:

“Dear Supplier: This letter is official notice that the Supplier Audit and Compliance Unit (SACU) of the National Supplier Clearinghouse (NSC) has found the facility….to be in violation of one or more of the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) supplier standards……More specifically, we would like to draw your attention to [Supplier Standard # 11]. Our office has received information that your company contacted a patient in order to solicit their business. Under Section 1834(a)(17) of the Social Security Act, DMEPOS suppliers are prohibited from making unsolicited telephone contacts. Please provide proof of your compliance with this standard. Please be advised that you are allowed 21 calendar days from the date of this letter to provide the SACU with information that may allow us to verify your full compliance with the DMEPOS supplier standards. If you fail to comply with the 21-day deadline, the SACU may initiate actions to revoke your Medicare DMEPOS supplier number.”

The take away from this article is the “walks like a duck” analogy. Pure and simple, when Mrs. Smith is sitting in her rocking chair, her phone may not ring. Period……unless one of the three conditions discussed above are met.

This monograph is not intended to be legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only. The law pertaining to this monograph may have changed following the date of the monograph. The reader should consult his or her own attorney for legal advice concerning the contents of this monograph. Except where noted, attorneys are not certified by the Texas Board of Legal Specialization.

Prepared by:

Health Care Group
Brown & Fortunato
P.O. Box 9418
Amarillo, Texas 79105-9418
(806) 345-6300
(806) 345-6363 (fax)

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