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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.