Download The Sale of a Medicare Business

The Sale of a Medicare Business
”If I am selling or buying a Medicare business, what are my responsibilities?”
This article will review two specific scenarios:
• Asset Purchase
• Stock Purchase
While there may be a variety of legal definitions and purchase options, for the purposes
of this article with regard to Medicare, there are two, defined as follows:
An asset purchase is the purchase of the assets of a business only. The buyer will be
operating the business under a new tax ID.
A stock purchase is the purchase of all assets and liabilities where the buyer will retain
and operate the business under its existing tax ID.
There are two specific things to keep in mind.
• Supplier Standard #2 (see listing of all DMEPOS Supplier Standards on Page ___)
states that a supplier “must report to CMS any change in information supplied on the
application within 30 days of the change.”
• Supplier numbers are associated with tax ID. If the buyer chooses to purchase the assets
and liabilities, retaining the tax ID, then the supplier file only needs to be updated. If
there is a change in tax ID, then the new owner must obtain a new supplier number.
No Change in Tax ID (Stock Purchase)
I am purchasing all assets and liabilities and will be using the new current ID.
Specifically what do I need to do to report this change?
As the buyer, you must fill out a CMS-855S application form as a “Change of
Information”. The Change of Information Guide on our web site gives more detail and
provides the specific sections that need to be filled out. Remember that, if there are any
changes other than ownership, those sections must be included in the Change of
Information form as well. Include the bill of sale with the CMS-855S form that you send
to the NSC. This change must be reported to the NSC within 30 days of the date of sale.
If your purchase has taken place further back than 30 days, ensure that you send in the
paperwork immediately to update your supplier file.
Please note that anyone who is on file can access information about the supplier file. If
you do not remove anyone who should no longer be on your supplier file, they will still
have access. Ensure board members, managing employees, other companies who may
have previously owned the business, etc., are removed and the new information added.
Change in Tax ID (Asset Purchase)
I have purchased the assets of a Medicare supplier. What do I need to do as the buyer?
You will need to fill out a CMS-855S application form in its entirety, include all required
attachments, including the bill of sale. This package needs to be sent to the NSC within
30 days of the transaction.
I have a Medicare supplier number and have sold the assets of my company to someone
else. What is my responsibility?
You must ensure that the NSC is made aware of the sale of your company within 30 days
of the date of sale. Use the CMS-855S application form to perform a “Voluntary
Termination” of your supplier number.
As the buyer, may I use the supplier number of the company I purchased until I receive
my own?
Supplier numbers cannot be transferred. If this is an asset purchase only and you will
operate your new business under a different tax ID, do not use the old supplier number
for your current business activities. You will need to obtain your own supplier number.
(See standard # 18.)
When I apply for my new supplier number, will that number be retroactive back to the
date I purchased the company?
Your number can be made retroactive back to the date on the bill of sale or to the date of
your newest license, insurance document, permit, etc.
If you have all of your licenses, insurance, permits, and/or certificates that are required
for your specialty under your new business name and tax ID as of the date of the bill of
sale AND you are in compliance with the 21 Supplier Standards in every other way, then
your number will be made retroactive back to the date on the bill of sale.
The supplier standards are pretty specific about your requirements. If even one of your
licenses has a date after the date on the bill of sale, this means that you weren’t in full
compliance until the date on that license. Your number can only be made retroactive back
to that date.
Exactly what do I need to have in order to be in compliance and obtain a new number?
Please go to http://www.vgm.com/membersOnly/Presentations/presentation.asp
On the vgm.com web site and click on the Medicare Supplier Standards and Procedures
for DMEPOS Providers document. Go through the supplier standards one at a time and
make sure that your company is in compliance with each standard. If you have any
questions, please feel free to contact Mark Higley at 800.642.6054
There is also a license directory at
http://www.palmettogba.com/palmetto/statelicensure.nsf
Select your state and then your specialty for detailed information about licensure
requirements.
Other Items For New Medicare Businesses
•
USING THE MEDICARE NAME IN YOUR BUSINESS
When you name your business, advertise your business or products, or have anything
written or broadcast in connection with your business, it is important to note and be in
compliance with section 1140 of the Social Security Act (SSA).
It is forbidden to use an entire list of words and symbols—including “Medicare”—in a
manner that would convey that the business or product is approved, endorsed, or
authorized by Medicare or the other government organizations listed in this section of the
SSA.
There is a monetary penalty of $5,000 per violation for written use of these names and
symbols and $25,000 for each violation consisting of a broadcast or telecast. To read that
section of the SSA and find out which words and symbols are protected, go to the
following website: http://www.ssa.gov/OP_Home/ssact/title11/1140.htm
•
INSURANCE REQUIREMENTS
Since August 1, 2004, all suppliers are be required to place the National Supplier
Clearinghouse as “Certificate Holder” on the insurance document required in Supplier
Standard #10. As a certificate holder, the NSC will be notified if the policy is cancelled.
Current suppliers should ensure that the necessary addition to the policy is made as reenrollment time approaches (or sooner). If you cancel your insurance, be sure to have
your new insurance company add the NSC as certificate holder and send the new policy
with a CMS-855S form used as a Change of Information. Questions? Call VGM
Insurance at 800-362-3363.
•
Contacting the NSC
Mailing Address: National Supplier Clearinghouse P.O. Box 100142 Columbia, SC
29202-3142
Overnight Mailing Address: National Supplier Clearinghouse 2300 Springdale Dr., Bldg.
1, GM-219Camden, SC 29020
Phone Number:1-866-238-9652
Web Site: www.PalmettoGBA.com
NSC Email: [email protected]
•
The Medicare DMEPOS Supplier Standards
1. A supplier must be in compliance with all applicable Federal and State
licensure and regulatory requirements.
2. A supplier must provide complete and accurate information on the
DMEPOS supplier application. Any changes to this information must be
reported to the National Supplier Clearinghouse within 30 days.
3. An authorized individual (one whose signature is binding) must sign the
application for billing privileges.
4. A supplier must fill orders from its own inventory, or must contract with
other companies for the purchase of items necessary to fill the order. A
supplier may not contract with any entity that is currently excluded from
the Medicare program, any State health care programs, or from any other
Federal procurement or nonprocurement programs.
5. A supplier must advise beneficiaries that they may rent or purchase
inexpensive or routinely purchased durable medical equipment, and of the
purchase option for capped rental equipment.
6. A supplier must notify beneficiaries of warranty coverage and honor all
warranties under applicable State law, and repair or replace free of charge
Medicare covered items that are under warranty.
7. A supplier must maintain a physical facility on an appropriate site.
8. A supplier must permit CMS, or its agents to conduct on-site inspections
to ascertain the supplier's compliance with these standards. The supplier
location must be accessible to beneficiaries during reasonable business
hours, and must maintain a visible sign and posted hours of operation.
9. A supplier must maintain a primary business telephone listed under the
name of the business in a local directory or a toll-free number available
through directory assistance. The exclusive use of a beeper, answering
machine or cell phone is prohibited.
10. A supplier must have comprehensive liability insurance in the amount of
at least $300,000 that covers both the supplier's place of business and all
customers and employees of the supplier. If the supplier manufactures its
own items, this insurance must also cover product liability and completed
operations.
11. A supplier must agree not to initiate telephone contact with beneficiaries,
with a few exceptions allowed. This standard prohibits suppliers from
calling beneficiaries in order to solicit new business.
12. A supplier is responsible for delivery and must instruct beneficiaries on
use of Medicare covered items, and maintain proof of delivery.
13. A supplier must answer questions and respond to complaints of
beneficiaries, and maintain documentation of such contacts.
14. A supplier must maintain and replace at no charge or repair directly, or
through a service contract with another company, Medicare-covered items
it has rented to beneficiaries.
15. A supplier must accept returns of substandard (less than full quality for the
particular item) or unsuitable items (inappropriate for the beneficiary at
the time it was fitted and rented or sold) from beneficiaries.
16. A supplier must disclose these supplier standards to each beneficiary to
whom it supplies a Medicare-covered item.
17. A supplier must disclose to the government any person having ownership,
financial, or control interest in the supplier.
18. A supplier must not convey or reassign a supplier number; i.e., the
supplier may not sell or allow another entity to use its Medicare billing
number.
19. A supplier must have a complaint resolution protocol established to
address beneficiary complaints that relate to these standards. A record of
these complaints must be maintained at the physical facility.
20. Complaint records must include: the name, address, telephone number and
health insurance claim number of the beneficiary, a summary of the
complaint, and any actions taken to resolve it.
21. A supplier must agree to furnish CMS any information required by the
Medicare statute and implementing regulations.