DME Cold Calling Rules: When Unsolicited Contact Makes Durable Medical Equipment Nonpayable

DME cold calling rules prohibit supplier-initiated calls to Medicare beneficiaries about covered equipment unless written permission or a qualifying prior supply relationship allows the contact. A supplier that knowingly makes a prohibited call loses Medicare payment for items it subsequently furnishes to that person. The equipment can arrive at the door and still be nonpayable. For someone in sales, intake or billing, the important evidence may begin before the prescription: who placed the call, what permission existed then, and which supplier ultimately billed Medicare.

Under What Circumstances Can a DME Supplier Make Telephone Contact With a Beneficiary Regarding a Medicare Covered Item?

The Social Security Act’s telephone-contact rule provides three exceptions. Each turns on the relationship between the beneficiary and the supplier making the contact. The same restriction appears in Supplier Standard 11.

• Written permission. The beneficiary has given that supplier written permission to call about furnishing a covered item.
• An item already furnished. The supplier has already furnished a covered item and calls only about that item.
• A different covered item. The supplier has furnished at least one covered item to the beneficiary during the 15 months before the call about the different item.

The last exception requires an actual supply history. A telephone number bought from a marketing company does not create it. Neither does placing someone in a customer database before anything has been furnished.

These distinctions matter when sales staff see an existing-customer label beside a name. We look at what the supplier actually furnished and when, then compare that history with the item discussed on the call. The furnishing record shows whether the relationship required by the rule existed.

Written Permission to Which Supplier?

For a DME lead vendor, consent obtained before the supplier was identified raises a specific question: what written permission did the beneficiary give to the supplier that called? The statutory exception names the supplier. Purchasing a lead gives the business contact information. The purchase itself supplies neither the beneficiary’s written permission nor a history of furnishing equipment.

A recorded verbal agreement on a call the supplier placed does not satisfy the written-permission exception. For an insider who hears that every lead comes with consent, we examine what that consent actually consists of. The written permission, the supplier it identifies and its date belong beside the original call record. A recording of the beneficiary agreeing to receive equipment answers a different question from whether the supplier had written permission to make the call.

An Order Is Not the Call’s History

A physician’s order and the beneficiary’s written permission are different records. The order identifies what the clinician prescribed. The telephone rule’s written-permission exception concerns what the beneficiary authorized the supplier to do. An order alone does not answer that question.

The sequence can run backward from what the paperwork suggests. In a civil settlement announcement involving Nationwide Health Advocates, the Justice Department alleged that telemarketers collected beneficiaries’ information and used it to generate orders and supporting records. Those records made it appear that a physician was treating the beneficiary for a particular medical problem.

According to the department, a physician engaged through healthcare staffing company Jackson & Coker LocumTenens electronically signed the orders without treating or speaking to the beneficiaries. The department alleged that Nationwide paid the staffing company, which paid the physician for each order reviewed. The alleged sales contact supplied the information from which the apparent treatment record was made.

That is why we examine the call and order together. A signature at the end of the process can leave the beginning of it unexplained.

The First Delivery Call and Extra Braces

A first DME delivery confirmation call does not, by itself, establish the prior supply relationship needed to upsell extra braces under the different-item exception. That exception depends on equipment the supplier has already furnished. An order awaiting its first delivery is not that history.

The useful comparison is between the item that prompted the contact, what had already been furnished and what the representative tried to add. Where the business instead relies on written permission, the permission record is the starting point. We examine that basis for contact alongside the clinical records for the additional equipment.

Why a Prohibited Call Makes Durable Medical Equipment Nonpayable

After a supplier knowingly makes a prohibited call, Medicare cannot pay for any item it later furnishes to that beneficiary. Delivery does not cure the prohibited contact. When suppliers bill Medicare for equipment obtained through prohibited calls, taxpayers get a bill the program should never have paid.

The law also addresses the beneficiary’s money. It can require a nonparticipating supplier to return amounts collected from the patient for equipment made nonpayable by the telephone violation. Medicare payment and the patient’s own payment therefore belong in the same examination.

A pattern of knowing prohibited contacts requires exclusion from Medicare under the statute. That puts repeated dialing practices, purchased lists and management instructions in view alongside the individual claim. A sales policy can explain why the same problem appears across customer files.

For a False Claims Act case involving health care, we connect the prohibited contact to the claim for money the supplier was not entitled to receive, and to what the business knew. The payment restriction supplies the connection between the call and the government bill. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

An Outside Caller Can Still Lead Back to the Supplier

Hiring a telemarketing company does not put the supplier’s resulting claims beyond scrutiny. In a North Carolina enforcement matter, the Department of Health and Human Services’ Office of Inspector General alleged that a supplier contracted with a telemarketing company to obtain equipment orders through unsolicited calls. The supplier then allegedly used the information to submit Medicare claims.

The inspector general said the calls made on the supplier’s behalf fell outside the exceptions. It also alleged that the supplier paid the telemarketing company to refer beneficiaries or arrange equipment orders. The outside caller was part of the government’s account of how the supplier obtained and billed the business.

U.S. Healthcare Supply and Oxford Diabetic Supply illustrate the same question through a different arrangement. In its September 2016 settlement announcement, the Justice Department alleged that the companies set up and controlled Diabetic Experts to make unsolicited calls to suspected Medicare beneficiaries. The suppliers then allegedly billed Medicare for equipment sold through those calls.

The supposed separation was between the entity making the sales pitch and the entities submitting the claims. The government’s allegations connected them through ownership, control and the resulting orders. For an insider, the vendor agreement and instructions to the caller can explain a relationship that the supplier name on the claim leaves out.

When an Outbound Call Becomes an Inbound Record

Call records can conceal who initiated the contact. A whistleblower’s complaint concerning KPM Capital’s Western Medical Group business alleged that the company treated calls the recipient hung up on as dropped calls and returned the numbers to the outgoing queue.

The whistleblower alleged that she made outbound follow-up calls and logged them that way. Supervisors then instructed her to change how those calls were recorded:

The complaint also alleged that physicians received prepared order forms with representations that the patients had contacted the business and requested the equipment. In the whistleblower’s account, the false story about who started the call followed the sale into the request sent to the physician.

The computer entry said inbound. The employee said she dialed out. Changing the entry did not change who made the call.

Medicare Supplier Rules and TCPA Consent

Durable medical equipment supplier rules and Telephone Consumer Protection Act consent address different requirements. The Medicare supplier rule concerns telephone contact about furnishing covered equipment and expressly connects prohibited contact with nonpayment. The Telephone Consumer Protection Act, the Telemarketing Sales Rule and state laws also govern the activities of participants in the marketing business.

When a lead vendor points to TCPA consent, we examine the supplier’s Medicare calling basis as its own question. The written permission, prior furnishing and relationship to the caller still matter to the equipment claim.

What the Call Center and Billing Office Each See

The call center sees how the conversation began. Intake sees the beneficiary information and order. The supplier’s fulfillment and billing records show what went out and what Medicare was asked to pay.

Our examination follows the original call through the vendor handoff, permission record, prior supply history, physician order, delivery and billing. Where the company collected money from the beneficiary, that payment and any refund belong alongside the Medicare claim. We compare the dates and the supplier identities throughout that sequence.

The useful insider may know why a call was labeled inbound, why a lead counted as an existing customer or what a vendor delivered before receiving payment. Those are specific decisions inside the business. They can explain how an apparently complete equipment file began with a prohibited solicitation.

You Know How the Call Really Began

If you know how your company turns outbound calls or purchased leads into Medicare equipment claims, speak with our whistleblower experts about that process. We work with you to build your strongest whistleblower case around the calling practices, the orders and the money, and bring in durable medical equipment fraud whistleblower lawyers who understand supplier marketing. We stay beside you from that first conversation through the case.