(a) This subpart specifies to whom Medicare payment is ordinarily made for different kinds of services.

(b) Subpart E of this part sets forth provisions applicable in special situations.

(c) Subpart F of this part specifies the exceptional circumstances under which payment may be made to an assignee or reassignee.

(a) Basic rule. Except as specified in paragraph (b) of this section, Medicare pays the provider for services furnished by a provider.

(b) Exception. Medicare pays the beneficiary for outpatient hospital services if the hospital has collected an amount in excess of the unmet deductible and coinsurance, as specified in § 489.30(b)(4) of this chapter.

Medicare pays a nonparticipating hospital for the following services, if covered, in the specified circumstances:

(a) Emergency inpatient and outpatient services furnished by a U.S. hospital, if the hospital has in effect an election to claim payment in accordance with subpart G of this part.

(b) Certain medical and other health services covered under Medicare Part B and furnished by a U.S. hospital, if the hospital meets the requirements of § 424.55 for payment as a supplier.

(c) Emergency or nonemergency inpatient services furnished by a foreign hospital if the hospital has in effect an election to claim payment in accordance with subpart G of this part.

Medicare pays the beneficiary for the following services, if covered, in the specified circumstances:

(a) Emergency inpatient and outpatient services furnished by a nonparticipating U.S. hospital that has not elected to claim payment in accordance with subpart G of this part.

(b) Certain medical and other health services covered under Medicare Part B and furnished by a nonparticipating U.S. hospital, if the hospital does not receive assigned payment as a supplier under § 424.55.

(c) Emergency or nonemergency services furnished by a foreign hospital if the hospital does not have in effect an election to claim payment in accordance with subpart H of this part.

(d) Physician and ambulance services furnished outside the United States.

(e) Services furnished by a supplier if the claim has not been assigned to the supplier.

Medicare may pay amounts due a beneficiary to the beneficiary's legal guardian or representative payee.

(a) Medicare pays the supplier for covered services if the beneficiary (or the person authorized to request payment on the beneficiary's behalf) assigns the claim to the supplier and the supplier accepts assignment.

(b) In accepting assignment, the supplier agrees to the following:

(1) To accept, as full charge for the service, the amount approved by the carrier as the basis for determining the Medicare Part B payment (the reasonable charge or the lesser of the fee schedule amount and the actual charge).

(2) To limit charges to the beneficiary or any other source as follows:

(i) To collect nothing for those services for which Medicare pays 100 percent of the Medicare approved amount.

(ii) To collect only the difference between the Medicare approved amount and the Medicare Part B payment (for example, the amount of any reduction in incurred expenses under § 410.155(c), any applicable deductible amount, and any applicable coinsurance amount) for services for which Medicare pays less than 100 percent of the approved amount.

(3) Not to charge the beneficiary when Medicare paid for services determined to be “not reasonable or necessary” if—

(i) The beneficiary was without fault in the overpayment; and

(ii) The determination that the payment was incorrect was made by the carrier after the third year following the year in which the carrier sent notice to the beneficiary that it approved the payment.

(c) Exception. In situations when payment under the Act can only be made on an assignment-related basis or when payment is for services furnished by a participating physician or supplier, the beneficiary (or the person authorized to request payment on the beneficiary's behalf) is not required to assign the claim to the supplier in order for an assignment to be effective.

(d) For purposes of claims for services submitted by an MDPP supplier (as defined at § 410.79(b) of this chapter), Medicare deems such claims to have been assigned by the beneficiary (or the person authorized to request payment on the beneficiary's behalf) and the assignment accepted by the MDPP supplier.

[53 FR 6634, Mar. 2, 1988, as amended at 63 FR 20130, Apr. 23, 1998; 69 FR 66426, Nov. 15, 2004; 82 FR 53364, Nov. 15, 2017]

(a) Conditions for split payment. If the beneficiary assigns the claim after paying part of the bill, payment may be made partly to the beneficiary and partly to the supplier.

(b) Payment to the supplier. Payment to the supplier who submits the assigned claim is for whichever of the following amounts is less:

(1) The reasonable charge minus the amount the beneficiary had already paid to the supplier; or

(2) The full Part B benefit due for the services furnished.

(c) Payment to the beneficiary. Any part of the Part B benefit which, on the basis of paragraph (b) of this section, is not payable to the supplier, is paid to the beneficiary.

(d) Examples.

Example 1.An assigned bill of $300 on which partial payment of $100 has been made is submitted to the carrier. The carrier determines that $300 is the reasonable charge for the service furnished. Total payment due is 80 percent of $300 or $240. Of this amount, $200 (the difference between the $100 partial payment and the $300 reasonable charge) is paid to the supplier. The remaining $40 is paid to the beneficiary. Example 2.An assigned bill of $325 on which partial payment of $275 has been made is submitted to the carrier. The carrier determines that $275 is the reasonable charge for the services. Total payment due is 80 percent of $275 or $220. The $220 is paid to the beneficiary, since any payment to the supplier, when added to the $275 partial payment would exceed the reasonable charge for the services furnished. [53 FR 6641, Mar. 2, 1988; 53 FR 12945, Apr. 20, 1988]

(a) Definitions. As used in this section, the following definitions apply:

Accredited DMEPOS suppliers means suppliers that have been accredited by a recognized independent accreditation organization approved by CMS in accordance with the requirements at § 424.58.

Affiliate means a person or organization that is related to another person or organization through a compensation arrangement or ownership.

Assessment means a sum certain that CMS or the Office of Inspector General (OIG) may assess against a DMEPOS supplier under Titles XI, XVIII, or XXI of the Social Security Act or as specified in this chapter.

Attended facility-based polysomnogram means a comprehensive diagnostic sleep test including at least electroencephalography, electro-oculography, electromyography, heart rate or electrocardiography, airflow, breathing effort, and arterial oxygen saturation furnished in a sleep laboratory facility in which a technologist supervises the recording during sleep time and has the ability to intervene if needed.

Authorized surety means a surety that has been issued a Certificate of Authority by the U.S. Department of the Treasury as an acceptable surety on Federal bonds and the certificate has neither expired nor been revoked.

Civil money penalty (CMP) means a sum that CMS has the authority, as implemented by 42 CFR 402.1(c); or OIG has the authority, under section 1128A of the Act or 42 CFR part 1003, to impose on a supplier as a penalty.

CMS approved accreditation organization means a recognized independent accreditation organization approved by CMS under § 424.58.

Continuous positive airway pressure (CPAP) device means a machine that introduces air into the breathing passages at pressures high enough to overcome obstructions in the airway in order to improve airflow. The airway pressure delivered into the upper airway is continuous during both inspiration and expiration.

DMEPOS stands for durable medical equipment, prosthetics, orthotics and supplies.

DMEPOS supplier means an entity or individual, including a physician or a Part A provider, which sells or rents Part B covered items to Medicare beneficiaries and which meets the standards in paragraphs (c) and (d) of this section.

Final adverse action means one or more of the following actions:

(i) A Medicare-imposed revocation of any Medicare billing privileges.

(ii) Suspension or revocation of a license to provide health care by any State licensing authority.

(iii) Revocation for failure to meet DMEPOS quality standards.

(iv) A conviction of a Federal or State felony offense (as defined in § 424.535(a)(3)(i) within the last 10 years preceding enrollment, revalidation, or re-enrollment.

(v) An exclusion or debarment from participation in a Federal or State health care program.

Government-operated supplier is a DMEPOS supplier owned or operated by a Federal, State, or Tribal entity.

Independent accreditation organization means an accreditation organization that accredits a supplier of DMEPOS and other items and services for a specific DMEPOS product category or a full line of DMEPOS product categories.

Medicare covered items means medical equipment and supplies as defined in section 1834(j)(5) of the Act.

Penal sum is the maximum obligation of the surety if a loss occurs.

Rider means a notice issued by a surety that a change in the bond has occurred or will occur.

Sleep test means an attended or unattended diagnostic test for a sleep disorder whether performed in or out of a sleep laboratory. The ‘provider of the sleep test’ is the individual or entity that directly or indirectly administers and/or interprets the sleep test and/or furnishes the sleep test device used to administer the sleep test.

Sufficient evidence means documents CMS may supply to the surety in order to establish that a DMEPOS supplier had received Medicare funds in excess of the amount due and payable under the statute and regulations, the amount of a CMP, or the amount of some other assessment against the DMEPOS supplier.

Surety bond means a bond issued by one or more sureties under 31 U.S.C. 9304 through 9308 and 31 CFR parts 223, 224, and 225.

Unpaid claim means an overpayment made by the Medicare program to the DMEPOS supplier for which the DMEPOS supplier is responsible, plus accrued interest that is effective 90 days after the date of the notice sent to the DMEPOS supplier of the overpayment. If a written agreement for payment, acceptable to CMS, is made, an unpaid claim also means a Medicare overpayment for which the DMEPOS supplier is responsible, plus accrued interest after the DME supplier's default on the arrangement.

(b) General rule. A DMEPOS supplier must meet the following conditions in order to be eligible to receive payment for a Medicare-covered item:

(1) The supplier has submitted a completed application to CMS to furnish Medicare-covered items including required enrollment forms. (The supplier must enroll separate physical locations it uses to furnish Medicare-covered DMEPOS, with the exception of locations that it uses solely as warehouses or repair facilities.)

(2) The item was furnished on or after the date CMS issued to the supplier a DMEPOS supplier number conveying billing privileges. (CMS issues only one supplier number for each location.) This requirement does not apply to items furnished incident to a physician's service.

(3) CMS has not revoked or excluded the DMEPOS supplier's privileges during the period which the item was furnished has not been revoked or excluded.

(4) A supplier that furnishes a drug used as a Medicare-covered supply with durable medical equipment or prosthetic devices must be licensed by the State to dispense drugs (A supplier of drugs must bill and receive payment for the drug in its own name. A physician, who is enrolled as a DMEPOS supplier, may dispense, and bill for, drugs under this standard if authorized by the State as part of the physician's license.)

(5) The supplier has furnished to CMS all information or documentation required to process the claim.

(6) The supplier is in compliance with all conditions of payment in paragraph (b) of this section, as well as with paragraph (c)(1)(ii)(A) of this section, at the time the item or service is furnished.

(c) Application certification standards. The supplier must meet and must certify in its application for billing privileges that it meets and will continue to meet the following standards:

(1) Operates its business and furnishes Medicare-covered items in compliance with the following applicable laws:

(i) Federal regulatory requirements that specify requirements for the provision of DMEPOS and ensure accessibility for the disabled.

(ii) State licensure and regulatory requirements. If a State requires licensure to furnish certain items or services, a DMEPOS supplier—

(A) Must be licensed to provide the item or service; and

(B) May contract with a licensed individual or other entity to provide the licensed services unless expressly prohibited by State law.

(2) Has not made, or caused to be made, any false statement or misrepresentation of a material fact on its application for billing privileges. (The supplier must provide complete and accurate information in response to questions on its application for billing privileges. The supplier must report to CMS any changes in information supplied on the application within 30 days of the change.);

(3) Must have the application for billing privileges signed by an individual whose signature binds a supplier;

(4) Fills orders, frabicates, or fits items from its own inventory or by contracting with other companies for the purchase of items necessary to fill the order. If it does, it must provide, upon request, copies of contracts or other documentation showing compliance with this standard. 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 Government Executive Branch procurement or nonprocurement program or activity;

(5) Advises beneficiaries that they may either rent or purchase inexpensive or routinely purchased durable medical equipment, and of the purchase option for capped rental durable medical equipment, as defined in § 414.220(a) of this subchapter. (The supplier must provide, upon request, documentation that it has provided beneficiaries with this information, in the form of copies of letters, logs, or signed notices.);

(6) Honors all warranties expressed and implied under applicable State law. A supplier must not charge the beneficiary or the Medicare program for the repair or replacement of Medicare covered items or for services covered under warranty. This standard applies to all purchased and rented items, including capped rental items, as described in § 414.229 of this subchapter. The supplier must provide, upon request, documentation that it has provided beneficiaries with information about Medicare covered items covered under warranty, in the form of copies of letters, logs, or signed notices;

(7) Maintains a physical facility on an appropriate site. An appropriate site must meet all of the following:

(i) Must meet the following criteria:

(A)(1) Except for orthotic and prosthetic personnel described in paragraph (c)(7)(i)(A)(2) of this section, maintains a practice location that is at least 200 square feet beginning—

(i) September 27, 2010 for a prospective DMEPOS supplier;

(ii) The first day after termination of an expiring lease for an existing DMEPOS supplier with a lease that expires on or after September 27, 2010 and before September 27, 2013; or

(iii) September 27, 2013, for an existing DMEPOS supplier with a lease that expires on or after September 27, 2013.

(2) Orthotic and prosthetic personnel providing custom fabricated orthotics or prosthetics in private practice do not have to meet the practice location requirements in paragraph (c)(7)(i)(A)(1) of this section if the orthotic and prosthetic personnel are—

(i) State-licensed; or

(ii) Practicing in a State that does not offer State licensure for orthotic and prosthetic personnel.

(B) Is in a location that is accessible to the public, Medicare beneficiaries, CMS, NSC, and its agents. (The location must not be in a gated community or other area where access is restricted.)

(C) Is accessible and staffed during posted hours of operation.

(D) Maintains a permanent visible sign in plain view and posts hours of operation. If the supplier's place of business is located within a building complex, the sign must be visible at the main entrance of the building or the hours can be posted at the entrance of the supplier.

(E) Except for business records that are stored in centralized location as described in paragraph (c)(7)(ii) of this section, is in a location that contains space for storing business records (including the supplier's delivery, maintenance, and beneficiary communication records).

(F) Is in a location that contains space for retaining the necessary ordering and referring documentation specified in § 424.516(f).

(ii) May be the centralized location for all of the business records and the ordering and referring documentation of a multisite supplier.

(iii) May be a “closed door” business, such as a pharmacy or supplier providing services only to beneficiaries residing in a nursing home, that complies with all applicable Federal, State, and local laws and regulations. “Closed door” businesses must comply with all the requirements in this paragraph.

(8) Permits CMS, the NSC, or agents of CMS or the NSC to conduct on-site inspections to ascertain supplier compliance with the requirements of this section.

(9) Maintains a primary business telephone that is operating at the appropriate site listed under the name of the business locally or toll-free for beneficiaries.

(i) Cellular phones, beepers, or pagers must not be used as the primary business telephone.

(ii) Calls must not be exclusively forwarded from the primary business telephone listed under the name of the business to a cellular phone, beeper, or pager.

(iii) Answering machines, answering services, facsimile machines or combination of these options must not be used exclusively as the primary business telephone during posted operating hours.

(10) Has a comprehensive liability insurance policy 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.

(i) In the case of a supplier that manufactures its own items, this insurance must also cover product liability and completed operations.

(ii) Failure to maintain required insurance at all times results in revocation of the supplier's billing privileges retroactive to the date the insurance lapsed.

(iii) An authorized official of the supplier (as that term is defined in § 424.502) must sign the liability insurance policy.

(11) Must agree not to contact a beneficiary by telephone when supplying a Medicare-covered item unless one of the following applies:

(i) The individual has given written permission to the supplier to contact them by telephone concerning the furnishing of a Medicare-covered item that is to be rented or purchased.

(ii) The supplier has furnished a Medicare-covered item to the individual and the supplier is contacting the individual to coordinate the delivery of the item.

(iii) If the contact concerns the furnishing of a Medicare-covered item other than a covered item already furnished to the individual, the supplier has furnished at least one covered item to the individual during the 15-month period preceding the date on which the supplier makes such contact.

(12) Must be responsible for the delivery of Medicare covered items to beneficiaries and maintain proof of delivery. (The supplier must document that it or another qualified party has at an appropriate time, provided beneficiaries with necessary information and instructions on how to use Medicare-covered items safely and effectively);

(13) Must answer questions and respond to complaints a beneficiary has about the Medicare-covered item that was sold or rented. A supplier must refer beneficiaries with Medicare questions to the appropriate carrier. A supplier must maintain documentation of contacts with beneficiaries regarding complaints or questions;

(14) 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. The item must function as required and intended after being repaired or replaced;

(15) Must accept returns from beneficiaries 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);

(16) Must disclose these supplier standards to each beneficiary to whom it supplies a Medicare-covered item;

(17) Must comply with the disclosure provisions in § 420.206 of this subchapter;

(18) Must not convey or reassign a supplier number;

(19) Must have a complaint resolution protocol to address beneficiary complaints that relate to supplier standards in paragraph (c) of this section and keep written complaints, related correspondence and any notes of actions taken in response to written and oral complaints. Failure to maintain such information may be considered evidence that supplier standards have not been met. (This information must be kept at its physical facility and made available to CMS, upon request.);

(20) Must maintain the following information on all written and oral beneficiary complaints, including telephone complaints, it receives:

(i) The name, address, telephone number, and health insurance claim number of the beneficiary.

(ii) A summary of the complaint; the date it was received; the name of the person receiving the complaint, and a summary of actions taken to resolve the complaint.

(iii) If an investigation was not conducted, the name of the person making the decision and the reason for the decision.

(21) Provides to CMS, upon request, any information required by the Medicare statute and implementing regulations.

(22)(i) All suppliers of DMEPOS and other items and services, and all of their locations whether owned or subcontracted, must meet the DMEPOS quality standards and be separately accredited to enroll in and bill Medicare.

(ii) The accreditation must indicate the specific products and services for which the DMEPOS supplier is accredited in order for the supplier to receive payment for those specific products and services.

(iii) An accredited DMEPOS supplier may be denied enrollment, or its enrollment may be revoked, if CMS determines that it is not compliant with the DMEPOS quality standards.

(23) All DMEPOS suppliers must notify their DMEPOS accrediting organization when a new DMEPOS location is opened.

(24) All accredited DMEPOS suppliers must be surveyed and reaccredited at least once every 12 months.

(25) All DMEPOS suppliers must disclose upon enrollment all products and services, including the addition of new product lines for which they are seeking accreditation. If a new product line is added after enrollment, the DMEPOS supplier will be responsible for notifying the accrediting body of the new product so that the DMEPOS supplier can be re-surveyed and accredited for these new products.

(26) Must meet the surety bond requirements specified in paragraph (d) of this section.

(27) Must obtain oxygen from a State-licensed oxygen supplier (applicable only to those suppliers in States that require oxygen licensure.)

(28) Is required to maintain ordering and referring documentation consistent with the provisions found in § 424.516(f)

(29)(i) Except as specified in paragraph (c)(29)(ii) of this section, is prohibited from sharing a practice location with any other Medicare supplier or provider.

(ii) The prohibition specified in paragraph (c)(29)(i) of this section is not applicable at a practice location that meets one of the following:

(A) Where a physician whose services are defined in section 1848(j)(3) of the Act or a nonphysician practitioner, as described in section 1842(b)(18)(C) of the Act, furnishes items to his or her own patient as part of his or her professional service.

(B) Where a physical or occupational therapist whose services are defined in sections 1861(p) and 1861(g) of the Act, furnishes items to his or her own patient as part of his or her professional service.

(C) Where a DMEPOS supplier is co-located with and owned by an enrolled Medicare provider (as described in § 489.2(b) of this chapter). The DMEPOS supplier—

(1) Must operate as a separate unit; and

(2) Meet all other DMEPOS supplier standards.

(30)(i) Except as specified in paragraph (c)(30)(ii) of this section, is open to the public a minimum of 30 hours per week.

(ii) The provision of paragraph (c)(30)(i) of this section is not applicable at a practice location where a—

(A) Physician whose services are defined in section 1848(j)(3) of the Act furnishes items to his or her own patient(s) as part of his or her professional service;

(B) A physical or occupational therapist whose services are defined in sections 1861(p) and 1861(g) of the Act furnishes items to his or her own patient(s) as part of his or her professional service; or

(C) DMEPOS supplier is working with custom made orthotics and prosthetics.

(d) Surety bonds requirements—(1) Effective date of surety bond requirements—(i) DMEPOS suppliers seeking enrollment or with a change in ownership. Except as provided in paragraph (d)(15) of this section, beginning May 4, 2009, DMEPOS suppliers seeking to enroll or to change the ownership of a supplier of DMEPOS must meet the requirements of paragraph (d) of this section for each assigned NPI for which the DMEPOS supplier is seeking to obtain Medicare billing privileges.

(ii) Existing DMEPOS suppliers. Except as provided in paragraph (d)(15) of this section, beginning October 2, 2009, each Medicare-enrolled DMEPOS supplier must meet the requirements of paragraph (d) of this section for each assigned NPI to which Medicare has granted billing privileges.

(2) Minimum requirements for a DMEPOS supplier. (i) A DMEPOS supplier enrolling in the Medicare program, making a change in ownership, or responding to a revalidation or reenrollment request must submit to the CMS contractor a surety bond from an authorized surety of $50,000 and, if required by the CMS contractor, an elevated bond amount as described in paragraph (d)(3) of this section with its paper or electronic Medicare enrollment application (CMS-855S, OMB number 0938-1056). The term of the initial surety bond must be effective on the date that the application is submitted to the CMS contractor.

(ii) A supplier that seeks to become an enrolled DMEPOS supplier through a purchase or transfer of assets or ownership interest must submit to the CMS contractor surety bond from an authorized surety of $50,000 and, if required by the CMS contractor, an elevated bond amount as described in paragraph (d)(3) of this section that is effective from the date of the purchase or transfer in order to exercise billing privileges as of that date. If the bond is effective at a later date, the effective date of the new DMEPOS supplier billing privileges is the effective date of the surety bond as validated by the CMS contractor.

(iii) A DMEPOS supplier enrolling a new practice location must submit to the CMS contractor a new surety bond from an authorized surety or an amendment or rider to the existing bond, showing that the new practice location is covered by an additional base surety bond of $50,000 or, as necessary, an elevated surety bond amount as described in paragraph (d)(3) of this section.

(3) Elevated surety bond amounts. (i) If required, a DMEPOS supplier must obtain and maintain a base surety bond in the amount of $50,000 as specified in paragraph (d)(2) of this section and an elevated surety bond in the amount prescribed by the CMS contractor as described in paragraph (d)(3)(ii) of this section.

(ii) The CMS contractor prescribes an elevated surety bond amount of $50,000 per occurrence of an adverse legal action within the 10 years preceding enrollment, revalidation, or reenrollment, as defined in paragraph (a) of this section.

(4) Type and terms of the surety bond—(i) Type of bond. A DMEPOS supplier must submit a bond that is continuous.

(ii) Minimum requirements of liability coverage. (A) The terms of the bond submitted by a DMEPOS supplier for the purpose of complying with this section must meet the minimum requirements of liability coverage ($50,000) and surety and DMEPOS supplier responsibility as set forth in this section.

(B) CMS requires a DMEPOS supplier to submit a bond that on its face reflects the requirements of this section. CMS revokes or denies a DMEPOS supplier's billing privileges based upon the submission of a bond that does not reflect the requirements of paragraph (d) of this section.

(5) Specific surety bond requirements. (i) The bond must guarantee that the surety will, within 30 days of receiving written notice from CMS containing sufficient evidence to establish the surety's liability under the bond of unpaid claims, CMPs, or assessments, pay CMS a total of up to the full penal amount of the bond in the following amounts:

(A) The amount of any unpaid claim, plus accrued interest, for which the DMEPOS supplier is responsible.

(B) The amount of any unpaid claims, CMPs, or assessments imposed by CMS or OIG on the DMEPOS supplier, plus accrued interest.

(ii) The bond must provide the following: The surety is liable for unpaid claims, CMPs, or assessments that occur during the term of the bond.

(iii) If the DMEPOS supplier fails to furnish a bond meeting the requirements of paragraph (d) of this section, fails to submit a rider when required, or if the DMEPOS supplier's billing privileges are revoked, the last bond or rider submitted by the DMEPOS supplier remains in effect until the last day of the surety bond coverage period and the surety remains liable for unpaid claims, CMPs, or assessments that—

(A) CMS or the OIG imposes or asserts against the DMEPOS supplier based on overpayments or other events that took place during the term of the bond or rider; and

(B) Were imposed or assessed by CMS or the OIG during the 2 years following the date that the DMEPOS supplier failed to submit a bond or required rider, or the date the DMEPOS supplier's billing privileges were terminated, whichever is later.

(6) Cancellation of a bond and lapse of surety bond coverage. (i) A DMEPOS supplier may cancel its surety bond and must provide written notice at least 30 days before the effective date of the cancellation to the CMS contractor and the surety.

(ii) Cancellation of a surety bond is grounds for revocation of the DMEPOS supplier's Medicare billing privileges unless the DMEPOS supplier provides a new bond before the effective date of the cancellation. The liability of the surety continues through the termination effective date.

(iii) If CMS receives notification of a lapse in bond coverage from the surety, the DMEPOS supplier's billing privileges are revoked. During this lapse, Medicare does not pay for items or services furnished during the gap in coverage, and the DMEPOS supplier is held liable for the items or services (that is, the DMEPOS supplier would not be permitted to charge the beneficiary for the items or services).

(iv) The surety must immediately notify the CMS contractor if there is a lapse in the surety's coverage of the DMEPOS supplier's coverage.

(7) Actions under the surety bond. The bond must provide that actions under the bond may be brought by CMS or by CMS contractors.

(8) Required surety information on the surety bond. The bond must provide the surety's name, street address or post office box number, city, state, and zip code.

(9) Change of surety. A DMEPOS supplier that obtains a replacement surety bond from a different surety to cover the remaining term of a previously obtained bond must submit the new surety bond to the CMS contractor at least 30 days prior to the expiration of the previous surety bond. There must be no gap in the coverage of the surety bond periods. If a gap in coverage exists, the CMS contractor revokes the DMEPOS supplier's billing privileges and does not pay for any items or services furnished by the DMEPOS supplier during the period for which no bond coverage was available. If a DMEPOS supplier changes its surety during the term of the bond, the new surety is responsible for any overpayments, CMPs, or assessments incurred by the DMEPOS supplier beginning with the effective date of the new surety bond. The previous surety is responsible for any overpayments, CMPs, or assessments that occurred up to the date of the change of surety.

(10) Parties to the surety bond. The surety bond must name the DMEPOS supplier as Principal, CMS as Obligee, and the surety (and its heirs, executors, administrators, successors and assignees, jointly and severally) as surety.

(11) Effect of DMEPOS supplier's failure to obtain, maintain, and timely file a surety bond.

(i) CMS revokes the DMEPOS supplier's billing privileges if an enrolled DMEPOS supplier fails to obtain, file timely, or maintain a surety bond as specified in this subpart and CMS instructions. Notwithstanding paragraph (e) of this section, the revocation is effective the date the bond lapsed and any payments for items furnished on or after that date must be repaid to CMS by the DMEPOS supplier.

(ii) CMS denies billing privileges to a DMEPOS supplier if the supplier seeking to become an enrolled DMEPOS supplier fails to obtain and file timely a surety bond as specified with this subpart and CMS instructions.

(12) Evidence of DMEPOS supplier's compliance. CMS may at any time require a DMEPOS supplier to show compliance with the requirements of paragraph (d) of this section.

(13) Effect of subsequent DMEPOS supplier payment. If a surety has paid an amount to CMS on the basis of liability incurred under a bond and CMS subsequently collects from the DMEPOS supplier, in whole or in part, on the unpaid claim, CMPs, or assessment that was the basis for the surety's liability, CMS reimburses the surety the amount that it collected from the DMEPOS supplier, up to the amount paid by the surety to CMS, provided the surety has no other liability to CMS under the bond.

(14) Effect of review reversing determination. If a surety has paid CMS on the basis of liability incurred under a surety bond and to the extent the DMEPOS supplier that obtained the bond is subsequently successful in appealing the determination that was the basis of the unpaid claim, CMP, or assessment that caused the DMEPOS supplier to pay CMS under the bond, CMS refunds the DMEPOS supplier the amount the DMEPOS supplier paid to CMS to the extent that the amount relates to the matter that was successfully appealed, provided all review, including judicial review, has been completed on the matter.

(15) Exception to the surety bond requirement—(i) Qualifying entities and requirements. (A) Government-operated DMEPOS suppliers are provided an exception to the surety bond requirement if the DMEPOS supplier has provided CMS with a comparable surety bond under State law.

(B) State-licensed orthotic and prosthetic personnel in private practice making custom made orthotics and prosthetics are provided an exception to the surety bond requirement if—

(1) The business is solely-owned and operated by the orthotic and prosthetic personnel, and

(2) The business is only billing for orthotic, prosthetics, and supplies.

(C) Physicians and nonphysician practitioners as defined in section 1842(b)(18) of the Act are provided an exception to the surety bond requirement when items are furnished only to the physician or nonphysician practitioner's own patients as part of his or her physician service.

(D) Physical and occupational therapists in private practice are provided an exception to the surety bond requirement if—

(1) The business is solely-owned and operated by the physical or occupational therapist;

(2) The items are furnished only to the physical or occupational therapist's own patients as part of his or her professional service; and

(3) The business is only billing for orthotics, prosthetics, and supplies.

(ii) Loss of a DMEPOS supplier exception. A DMEPOS supplier that no longer qualifies for an exception as described in paragraph (d)(15)(i) of this section must submit a surety bond to the CMS contractor in accordance with requirements of paragraph (d) of this section within 60 days after it knows or has reason to know that it no longer meets the criteria for an exception.

(e) Failure to meet standards—(1) Revocation. CMS revokes a supplier's billing privileges if it is found not to meet the conditions or standards in paragraphs (b) and (c) of this section. Except as otherwise provided in this section, the revocation effective date is as specified in § 424.535.

(2) Overpayments associated with final adverse actions. CMS or a CMS contractor may reopen (in accordance with § 405.980 of this chapter) all Medicare claims paid on or after the date of a final adverse action (as defined in paragraph (a) of this section) in order to establish an overpayment determination.

(f) Payment prohibition. No Medicare payment will be made to the supplier of a CPAP device if that supplier, or its affiliate, is directly or indirectly the provider of the sleep test used to diagnose the beneficiary with obstructive sleep apnea. This prohibition does not apply if the sleep test is an attended facility-based polysomnogram.

(g) Revalidation of billing privileges. A supplier must revalidate its application for billing privileges every 3 years after the billing privileges are first granted. (Each supplier must complete a new application for billing privileges 3 years after its last revalidation.)

(h) Change in majority ownership. A supplier must comply with the provisions of § 424.551 if it undergoes a change in majority ownership.

[65 FR 60377, Oct. 11, 2000, as amended at 71 FR 48409, Aug. 18, 2006; 73 FR 69939, Nov. 19, 2008; 75 FR 52648, Aug. 27, 2010; 76 FR 5962, Feb. 2, 2011; 77 FR 14994, Mar. 14, 2012; 79 FR 69773, Nov. 24, 2014; 87 FR 70231, Nov. 18, 2022; 90 FR 55607, Dec. 2, 2025]

(a) Scope and purpose. This part implements section 1834(a)(20)(B) of the Act, which requires the Secretary to designate and approve one or more independent accreditation organizations for purposes of enforcing the DMEPOS quality standards for suppliers of DMEPOS and other items or services. Section 1847(b)(2)(A)(i) of the Act requires a DMEPOS supplier to meet the DMEPOS quality standards under section 1834(a)(20) of the Act before being awarded a contract.

(b) Definitions. The following definitions apply to the provisions in this section:

Complaint means an allegation from any party and via any format that one of the DMEPOS accrediting organization's accredited DMEPOS suppliers may be non-compliant with one or more DMEPOS quality standards or other applicable CMS requirement. The complaint need not involve actual or potential beneficiary harm.

Immediate family member means any person with whom the accrediting organization owner(s), surveyors or employees have a lineal or immediate familial or marital relationship, including all of the following:

(i) A husband or wife.

(ii) Birth or adoptive parent, child, or sibling.

(iii) Stepparent, stepchild, stepbrother, or stepsister.

(iv) Father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law.

(v) Grandparent or grandchild.

(vi) Spouse of a grandparent or grandchild.

Immediate jeopardy means a situation in which the DMEPOS supplier's non-compliance with one or more DMEPOS quality standards or other applicable CMS requirement has caused, or is likely to cause, serious injury, harm, impairment, or death to a patient or to the health and safety of the general public.

Reasonable assurance means that a DMEPOS accrediting organization has demonstrated to CMS' satisfaction all of the following:

(i) Its DMEPOS accreditation program requirements meet or exceed the Medicare program requirements.

(ii) The DMEPOS suppliers that the DMEPOS accrediting organization accredits meet or exceed Medicare program requirements.

(iii) The DMEPOS accrediting organization is compliant with all provisions of this section.

Unannounced survey means both of the following:

(i) A survey that is conducted without any prior notice of any type (through any means of communication or forum) to the DMEPOS supplier to be surveyed such that the supplier does not expect the survey until the surveyors arrive.

(ii) The DMEPOS accrediting organization schedules its surveys so that DMEPOS suppliers cannot predict when they will be performed.

(c) Initial application procedures—(1) Required information. An independent DMEPOS accrediting organization applying for initial approval of its DMEPOS accreditation program is required to furnish CMS with all the following information and materials to demonstrate that the DMEPOS accrediting organization provides reasonable assurance (as defined in paragraph (b) of this section) regarding its program.

(i) A list of the types of DMEPOS supplies, products, and services for which the organization is requesting approval.

(ii) A detailed comparison of the organization's accreditation requirements and standards with the applicable DMEPOS quality standards, such as a crosswalk.

(iii) A detailed description of the organization's operational, survey, and other accreditation processes to confirm that the DMEPOS suppliers it accredits meet or exceed the DMEPOS quality standards and Medicare program requirements. This must include all of the following:

(A) Procedures for performing unannounced surveys.

(B) Frequency of the surveys performed.

(C) Copies of the organization's survey forms.

(D) Guidelines and instructions to surveyors.

(E) Quality review processes for deficiencies identified with accreditation requirements.

(F) Dispute resolution processes and policies when there is a negative survey finding or decision.

(G) If the DMEPOS accrediting organization has the discretion to perform a survey in certain instances, how it determines whether to perform one. This must include a suggested methodology for sampling locations for surveys under a single tax identification number or organization.

(iv) Procedures used to notify DMEPOS suppliers of compliance or noncompliance with the accreditation requirements.

(v) Procedures used to monitor the correction of deficiencies found during an accreditation survey.

(vi) Procedures for coordinating surveys with another DMEPOS accrediting organization if the organization does not accredit all supplies, products, and services the DMEPOS supplier provides.

(vii) Detailed professional information about the individuals who perform surveys for the DMEPOS accrediting organization, including the size and composition of accreditation survey teams for each type of DMEPOS supplier accredited, and the education and experience requirements that surveyors must meet. The information must also include the following:

(A) The content and frequency of the continuing education training provided to survey personnel.

(B) The evaluation systems used to monitor the performance of individual surveyors and survey teams.

(C) Policies and procedures for a surveyor or institutional affiliate of the DMEPOS accrediting organization that participates in a survey or accreditation decision regarding a DMEPOS supplier with which that individual or institution is professionally or financially affiliated.

(D) The organization's policies and procedures to avoid conflicts of interest and the appearance thereof involving individuals who conduct surveys or participate in accreditation decisions. This must include the organization's policies and procedures for all of the following:

(1) The separation of its consulting services from its accreditation services.

(2) Protecting the integrity of the DMEPOS accrediting organization's accreditation program (including the requirements of paragraphs (m) and (n) of this section).

(3) The prevention and handling of potential or actual conflicts of interest that could arise from situations in which a DMEPOS accrediting organization owner, surveyor, or employee has an interest in, or relationship with, a DMEPOS supplier to which the accrediting organization provides accreditation services. Such interests or relationships include, but are not limited to the following:

(i) Being employed as a DMEPOS accrediting organization surveyor.

(ii) Being employed by a DMEPOS supplier that is accredited by the DMEPOS accrediting organization.

(iii) Having an ownership, financial, or investment interest in a DMEPOS supplier that is accredited by the DMEPOS accrediting organization.

(iv) Serving as a director of or trustee for a DMEPOS supplier that is accredited by the DMEPOS accrediting organization.

(v) Serving on a utilization review committee of a DMEPOS supplier that is accredited by the DMEPOS accrediting organization.

(vi) Accepting fees or payments from a DMEPOS supplier or group of DMEPOS suppliers that is/are accredited by the DMEPOS accrediting organization.

(vii) Accepting fees for personal services, contract services, referral services, or for furnishing supplies to a DMEPOS supplier that is accredited by the DMEPOS accrediting organization.

(viii) Providing consulting services to a DMEPOS supplier that the DMEPOS accrediting organization accredits.

(ix) Having any immediate family member (as defined in paragraph (b) of this section) engaged in any of the activities described in paragraphs (c)(1)(vii)(D)(3)(i) through (viii) of this section.

(x) Engaging in any activities during the course of the survey of the facility that would be or cause a conflict of interest.

(4) For notifying CMS when a conflict of interest is discovered.

(5) For the purposes of this section, a conflict of interest exists when a DMEPOS accrediting organization, the DMEPOS accrediting organization's successors, transferees, or assigns, the DMEPOS accrediting organization owner(s), surveyors, or employees, or the immediate family members of the DMEPOS accrediting organization owners(s), surveyors and other employees have an employment, business, financial or other type of interest in or relationship with a DMEPOS supplier that the DMEPOS accrediting organization accredits.

(E) The organization's policies and procedures for ensuring it has an adequate number of surveyors at all times.

(viii) Its processes for identifying and correcting deficiencies within its DMEPOS accreditation program.

(ix) A description of the organization's data management, analysis and reporting system for its surveys and accreditation decisions, including the kinds of reports, tables, and other displays generated by that system. This must also include a detailed description of how the organization uses its data to ensure the compliance of its DMEPOS accreditation program with Medicare program requirements.

(x) Procedures for responding to, investigating, and (as applicable) closing out complaints against accredited facilities, including policies and procedures regarding coordination of these activities with appropriate licensing bodies, ombudsman programs, the applicable National Provider Enrollment contractor, and CMS. This must also include a detailed outline of all of the following:

(A) The steps and research the DMEPOS accrediting organization will undertake in its initial review of the complaint as described in paragraph (e)(3) of this section.

(B) How the DMEPOS accrediting organization determines whether, in accordance with a complaint, non-compliance with a DMEPOS quality standard or other applicable CMS requirement exists, including the information it considers in its review and when and how it would take action against the DMEPOS supplier.

(xi) The organization's policies and procedures for notifying CMS of DMEPOS suppliers that fail to meet the DMEPOS accrediting organization's requirements.

(xii) A description of all types, categories, and durations of accreditations offered by the organization.

(xiii) A list of the following:

(A) All currently accredited DMEPOS suppliers.

(B) The types, categories, and product codes of accreditation currently held by each DMEPOS supplier.

(C) The effective and expiration dates of each DMEPOS supplier's current accreditation.

(D) The upcoming survey cycles for all DMEPOS suppliers' accreditation surveys scheduled to be performed by the organization.

(xiv) A written presentation that demonstrates the organization's ability to furnish CMS with electronic data in ASCII comparable code.

(xv) A resource analysis that demonstrates that the organization's staffing, funding, and other resources are adequate to perform fully the required surveys and related activities.

(xvi) Information that demonstrates the DMEPOS accrediting organization's knowledge, expertise, and experience in DMEPOS.

(xvii) Information about the DMEPOS accrediting organization's ability to conduct timely reviews of DMEPOS supplier accreditation applications.

(xviii) A description of the organization's accreditation decision-making process. This includes its policies and procedures for approving, denying, or terminating accreditation status for DMEPOS suppliers that fail to meet the DMEPOS accrediting organization's standards or requirements. This must include an explanation of the reasons for which it will deny or terminate a supplier's accreditation.

(xix) Policies and procedures for both of the following:

(A) Determining whether and when a survey is performed (for example, the DMEPOS supplier is providing a new item type). This includes the circumstances under which the DMEPOS accrediting organization will impose a corrective action plan (CAP) in lieu of performing a follow-up survey for an identified DMEPOS supplier deficiency.

(B) Ensuring that all onsite surveys are unannounced, including procedures that protect against unannounced surveys becoming known to the DMEPOS supplier before the visit.

(xx) Policies and procedures regarding when the DMEPOS accrediting organization will apply a CAP to a DMEPOS supplier. This must include the following:

(A) The specific circumstances under which the DMEPOS accrediting organization will apply a CAP as opposed to, as applicable, denying or terminating accreditation and the rationale for why the accrediting organization believes a CAP in these situations is more appropriate.

(B) How a CAP is developed, implemented, and enforced, including the following:

(1) How the DMEPOS accrediting organization determines whether a CAP is acceptable.

(2) The requirements of (and the timeframe and deadline for) the DMEPOS supplier's resumption of compliance.

(3) How the DMEPOS accrediting organization determines whether the DMEPOS supplier has resumed compliance and maintains compliance.

(4) The circumstances under which the DMEPOS accrediting organization will impose a CAP in lieu of performing a follow-up survey for an identified DMEPOS supplier deficiency.

(xxi) An explanation of the following:

(A) What the DMEPOS accrediting organization considers to be a DMEPOS supplier deficiency and how it defines the term deficiency.

(B) Whether the DMEPOS accrediting organization has different levels of DMEPOS supplier deficiencies.

(xxii) In performing the functions described in this section, its processes for both of the following:

(A) Detecting and addressing potential fraud, waste, and abuse by DMEPOS suppliers (including identifying the accrediting organization's definitions of the terms fraud, waste, and abuse).

(B) Reporting this activity to CMS and, as applicable, law enforcement.

(xxiii) A statement on the DMEPOS accrediting organization's letterhead that is signed and dated by the accrediting organization's chief executive officer (or similar official with authority to commit the organization to adhere to Medicare laws and regulations) acknowledging that, as a condition for CMS approval or continued approval of a DMEPOS accrediting organization's accreditation program, the organization agrees to all of the following:

(A) Provide CMS, within 3 business days of CMS's request, both of the following:

(1) Any of the information described in paragraph (e)(1)(i) of this section.

(2) Any other information CMS deems necessary to facilitate its oversight of the DMEPOS accrediting organization's accreditation program.

(B) Provide CMS written notification when an accreditation survey or complaint investigation identifies an immediate jeopardy situation (as that term is defined in paragraph (b) of this section). Consistent with paragraph (e)(1)(iii) of this section, this notice must be provided within 2 business days of the finding.

(C) Provide written notification to CMS of any proposed changes to the DMEPOS accrediting organization's accreditation program and that it will not implement the proposed changes without prior written notice of continued program approval from CMS consistent with paragraph (e)(2) of this section.

(D) Notify CMS in writing of any decision to terminate, revoke, withdraw, or amend the accreditation status of a specific DMEPOS supplier within 3 business days of the date the organization took such action.

(E) Notify CMS of any decision to apply a CAP to a specific DMEPOS supplier within 10 calendar days of the decision. This notification must include the following:

(1) The reason for the decision.

(2) A detailed explanation and justification as to why the DMEPOS accrediting organization applied a CAP instead of, as applicable, denying or terminating the DMEPOS supplier's accreditation.

(3) The details of the DMEPOS supplier's CAP.

(F) Submit timely, accurate, and complete data to support CMS's evaluation of the DMEPOS accrediting organization's performance.

(1) Data to be submitted includes, but is not limited to, DMEPOS supplier identifying information, survey schedules, survey findings, and notices of accreditation decisions.

(2) The organization must submit necessary data according to the instructions and timeframes CMS specifies.

(G) In response to a written notice from CMS to the organization of a change in the CMS quality standards, survey process, or other requirement, provide CMS with proposed corresponding changes in the organization's requirements for its DMEPOS accreditation program to ensure continued comparability with the CMS quality standards, survey process, and requirements. This includes compliance with the following requirements:

(1) Submission of the data required in paragraph (e)(7) of this section.

(2) The proposed changes must be submitted to CMS within 30 calendar days of the date of the written CMS notice to the organization.

(3) The organization must not implement its proposed corresponding changes without prior CMS approval.

(H) Apply and adhere to in its accreditation activities any CMS-established—

(1) Definition(s) of deficiency; and

(2) Deficiency levels and categories.

(I) The DMEPOS accrediting organization will permit its surveyors to serve as witnesses if CMS takes an adverse action based on accreditation findings.

(J) If CMS permits the DMEPOS accrediting organization to perform surveys via a sampling process, the accrediting organization:

(1) Will submit to CMS its planned sampling methodology in detail; and

(2) Will not undertake sampling until CMS has approved the accrediting organization's submitted methodology.

(K) Will not include the following as patient medical records in its DMEPOS supplier surveys:

(1) Mock files.

(2) Fictional patient records.

(3) Simulated documentation.

(4) Templates.

(5) Duplicate patient records.

(L) Have a binding written agreement with each DMEPOS supplier the DMEPOS accrediting organization accredits regarding whether the accrediting organization, the supplier in question, or both will assume the costs of a survey that CMS directs the accrediting organization to perform in accordance with paragraph (e)(8)(ii) of this section.

(M) Submit all required information to CMS both before and after approval of its DMEPOS accreditation program in a truthful, accurate, and complete manner.

(N) Adhere to all of the requirements of this section at all times, including the policies, procedures, practices, and agreements it outlined in paragraph (c) of this section as part of its initial or reapproval application and any CMS-approved changes thereto under paragraph (e)(2) or (7) of this section.

(2) Additional information needed. If CMS determines that additional information is necessary to make a determination for approval or denial of the organization's initial application, CMS notifies the organization and affords it an opportunity to provide the additional information.

(3) Withdrawing an application. A DMEPOS accrediting organization may withdraw its initial application for CMS' approval of its DMEPOS accreditation program at any time before CMS posts the notice described in paragraph (c)(6) of this section.

(4) Reasons for denial. CMS may deny a DMEPOS accrediting organization's application for any of the following reasons:

(i) The DMEPOS accrediting organization has failed to comply with all application, data, and agreement submission requirements outlined in this paragraph (c).

(ii) The DMEPOS accrediting organization has failed to provide reasonable assurance (as defined in paragraph (b) of this section).

(iii) The current number of CMS-approved DMEPOS accreditation programs is sufficient to ensure the continued administration of CMS' DMEPOS accreditation program.

(iv) The DMEPOS accrediting organization's DMEPOS accreditation program was previously terminated, suspended, or placed on probation by CMS under, respectively, paragraph (h), (i), or (j) of this section.

(v) The DMEPOS accrediting organization, or any owner (as defined in § 424.502), managing employee (as defined in § 424.502), governing body member, W-2 or contracted surveyor, or W-2 or contracted health care or administrative or management services personnel thereof—

(A) Is excluded by the Office of Inspector General (OIG) from Medicare, Medicaid, and any other Federal health care program;

(B) Is debarred, suspended, or otherwise excluded from participating in any Federal procurement or non-procurement activity in accordance with section 2455 of the Federal Acquisition Streamlining Act (FASA);

(C) Within the preceding 10 years—

(1) Was convicted of a Federal or State felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries;

(2) Has had a Medicare enrollment revoked under § 424.535;

(3) Has had a license to provide health care suspended or revoked by any State licensing authority; or

(4) Has been suspended or terminated from participating in a Federal or State health care program.

(vi) The DMEPOS accrediting organization has submitted false or misleading information on its application in order to gain CMS approval or reapproval as a DMEPOS accrediting organization.

(vii) The AO is non-compliant with any provision in this section.

(viii) CMS otherwise determines that approval of the applicant as a DMEPOS AO would not be in the best interests of the Medicare program and its beneficiaries.

(5) Notice of approval or denial of application. CMS sends to the DMEPOS accrediting organization a notice of its decision to approve or deny the application within 210 calendar days from the date CMS determines the accrediting organization's application is complete. The final notice specifies the following:

(i) The basis for the decision.

(ii) If applicable, the effective date of approval.

(iii) If applicable, the term of the approval (not to exceed 6 years).

(6) Decision announcement. CMS announces on its website its decision to approve or deny the DMEPOS accrediting organization's application.

(i) This announcement is posted within 210 calendar days from the date that CMS determines that the DMEPOS accrediting organization's application was complete.

(ii) If the application is approved, the posting states the approval's effective date (no later than the announcement's posting date) and length (6 years or less).

(7) Term of approval. CMS may approve a DMEPOS accreditation organization for any period up to a maximum of 6 years.

(d) Reapproval process—(1) General requirement—(i) Timeline for submission. Except as stated in paragraph (d)(1)(ii) of this section, an approved DMEPOS accrediting organization that seeks to continue as such must apply for reapproval of accreditation no later than 9 months before the expiration of its current term of approval. If the organization fails to do so, CMS, at its discretion, may provide the organization an additional 30 days to reapply.

(ii) Discretion to request reapproval applications. CMS may require DMEPOS accrediting organizations to submit reapproval applications under this paragraph (d) any time after January 1, 2026. An application must be submitted within 60 calendar days of CMS' submission request. Failure to submit the application results in the termination of the DMEPOS accrediting organization's approval.

(2) Submission of information and statements. As part of its reapproval application, the DMEPOS accrediting organization must submit all information and statements identified in paragraph (c)(1) of this section. CMS may also request information under paragraph (c)(2) of this section.

(3) Withdrawing an application. A DMEPOS accrediting organization may withdraw its reapproval application for CMS' approval of its DMEPOS accreditation program at any time before CMS posts the notice described in paragraph (d)(6) of this section.

(4) Denial reasons. CMS may deny a DMEPOS accrediting organization's reapproval application for any of the reasons described in paragraph (c)(4) of this section.

(5) Notice of approval or denial of application. CMS sends a notice of its decision to approve or deny the DMEPOS accrediting organization's reapproval application within 210 calendar days from the date CMS determines the accrediting organization's reapproval application is complete. The final notice specifies the following:

(i) The basis for the decision.

(ii) If applicable, the effective date of reapproval.

(iii) If applicable, the term of the reapproval (not to exceed 6 years).

(6) Decision announcement. CMS announces on its website its decision to reapprove or deny the DMEPOS accrediting organization's reapproval application.

(i) This announcement is posted within 210 calendar days from the date that CMS determines that the DMEPOS accrediting organization's reapproval application was complete.

(ii) If the reapproval application is approved, the posting states the reapproval's effective date (no later than the announcement's posting date) and length (6 years or less).

(7) Term of approval. CMS may reapprove a DMEPOS accreditation organization for any period up to a maximum of 6 years.

(e) Ongoing responsibilities of a CMS-approved DMEPOS accrediting organization. A DMEPOS accrediting organization approved by CMS must undertake the following activities on an ongoing basis:

(1) Submission of information. (i) On a monthly basis, provide to CMS all the following in written format (either electronic or hard copy):

(A) Copies of all accreditation survey results and reports, together with any survey related information that CMS may require. This includes both of the following:

(1) CAPs and summaries of findings with respect to unmet CMS requirements.

(2) The instances where the DMEPOS accrediting organization had the discretion to perform a survey (for example, sampling) but decided not to, including the reason(s) for the organization's decision.

(B) Notice of all accreditation decisions.

(C) Notice of all resolved deficiencies.

(D) Information about any supplier of DMEPOS and other items and services against which the CMS-approved DMEPOS accrediting organization has taken remedial or adverse action, including termination of the supplier's accreditation.

(ii) CMS may at any time request the DMEPOS accrediting organization to submit any of the information described in paragraph (e)(1)(i) of this section or any other data CMS deems necessary to facilitate its oversight of the accrediting organization's DMEPOS accreditation program. This information must be furnished to CMS within 3 business days of the request.

(iii) Within 2 business days of identifying an immediate jeopardy deficiency of a DMEPOS supplier, provide CMS with written notice of the deficiency and any adverse action implemented by the DMEPOS accrediting organization.

(2) Standard or requirement changes. Provide written notice of any proposed changes to its accreditation standards, requirements, or survey process. This includes the addition, modification, or removal of a new DMEPOS product service category to the list of categories for which the organization accredits DMEPOS suppliers.

(i) The notice must be submitted to CMS no less than 60 calendar days before the proposal's planned effective date. It must include the following:

(A) A detailed description of the changes and the rationale for them.

(B) A detailed crosswalk (in table format) that states the exact language of the organization's revised accreditation requirements and the applicable Medicare requirements for each.

(ii) CMS communicates to the DMEPOS accrediting organization in writing its approval or disapproval of the proposal within 30 calendar days of the proposed change's effective date.

(iii) CMS approval is required before the DMEPOS accrediting organization can implement the change. If the organization implements the changes before or without CMS' approval, CMS may terminate its approval of the accrediting organization.

(3) Addressing complaints. (i) Upon receipt of a complaint—

(A) Notify CMS in writing of the complaint no later than 5 calendar days after receipt;

(B) Using the DMEPOS accrediting organization's policies and procedures described in paragraph (c)(1)(x) of this section, perform an initial review of the complaint to determine whether, based on the complaint and any other information, the DMEPOS supplier may be non-compliant with one or more DMEPOS quality standards or other applicable CMS requirement; and

(C) Perform a survey of the DMEPOS supplier if the DMEPOS accrediting organization's initial review concludes that such non-compliance may exist. This survey must be performed no later than 21 calendar days after the accrediting organization received the initial complaint.

(ii) No later than 10 calendar days after completing the action in, as applicable, paragraph (e)(3)(i)(B) or (C) of this section, notify CMS in writing of the result of the initial review or, as applicable, the survey. The notice must include information regarding any action the DMEPOS accrediting organization took or plans to take with respect to the DMEPOS supplier, such as a termination of accreditation or a CAP.

(4) CAPs. Notify CMS in writing of any decision to apply a CAP to a specific DMEPOS supplier within 10 calendar days of the decision. This notification must include all of the following:

(i) The reason for the decision.

(ii) A detailed explanation and justification as to why the DMEPOS accrediting organization applied a CAP instead of, as applicable, denying or terminating the DMEPOS supplier's accreditation.

(iii) The details of the DMEPOS supplier's CAP (for example, deadline for compliance, the DMEPOS accrediting organization's plans for enforcement and ensuring compliance).

(5) Denials and terminations. (i) Notify CMS in writing of any decision to deny accreditation to (or terminate, revoke, withdraw, or amend the accreditation of) a DMEPOS supplier within 5 calendar days of the decision. This notification must include the reason for the denial or termination.

(ii)(A) Notwithstanding any other provision in this section, the DMEPOS accrediting organization must deny accreditation to (or terminate the accreditation of) a DMEPOS supplier if—

(1) The supplier does not meet the licensure requirements in § 424.57(c)(1)(ii);

(2) The supplier is not operational (as that term is defined in § 424.502);

(3) The supplier's location does not meet the accessibility requirements in § 424.57(c)(7)(i)(B);

(4) The supplier's Medicare enrollment is revoked due to non-compliance with one or more DMEPOS quality standards and the reenrollment bar under § 424.535(c) has not expired; or

(5) Directed by CMS.

(B) If paragraph (e)(5)(ii)(A)(5) of this section applies, the DMEPOS accrediting organization must do the following:

(1) Deny or terminate the DMEPOS supplier's accreditation no later than 3 business days after receiving written notice from CMS to do so.

(2) Notify CMS in writing that it has taken this action within 5 business days of receiving the written notice from CMS.

(6) Provide an annual summary of data related to accreditation. Provide, on an annual basis, summary data specified by CMS that relate to the past year's accreditation activities and trends.

(7) Notification of change from CMS. (i) Within 30 calendar days of receipt of a written notice from CMS to the organization of a change in the quality standards, survey process, or other requirement, provide CMS with proposed corresponding changes to the organization's requirements for its CMS-approved DMEPOS accreditation program to ensure continued comparability with the CMS quality standards, survey process, or other requirements. This includes all of the following:

(A) An acknowledgment of CMS's notification of the change.

(B) A revised cross walk reflecting the new requirements.

(C) An explanation of how the DMEPOS accrediting organization plans to alter its standards to conform to CMS's new requirements, within the timeframes specified in the notification it received from CMS.

(ii) The DMEPOS accrediting organization must not implement its proposed corresponding changes without prior CMS approval.

(8) Performance of surveys. (i) Except as otherwise directed or permitted in writing by CMS (for example, allowing sampling), the DMEPOS accrediting organization must—

(A) Perform a survey of all DMEPOS supplier locations for which the supplier seeks accreditation or reaccreditation with the DMEPOS accrediting organization. This includes, but is not limited to, accreditations for a new item type the supplier has not previously furnished or as required under § 424.551;

(B) Perform all surveys as unannounced surveys; and

(C) Not accredit the DMEPOS supplier before the survey is performed and the DMEPOS accrediting organization determines that the supplier is compliant with the quality standards.

(ii) CMS may, at any time, direct the DMEPOS accrediting organization to perform a survey of an accredited DMEPOS supplier or a group thereof. Existence of an actual or suspected supplier deficiency is not a requirement for CMS to direct the performance of a survey of a supplier.

(iii) When performing a survey, the DMEPOS accrediting organization must also confirm that the DMEPOS supplier meets the licensure requirements in § 424.57(c).

(9) Surveyor witnesses. Permit its surveyors to serve as witnesses if CMS takes an adverse action based on accreditation findings.

(10) Data entry. If directed by CMS, enter accreditation, survey, product code, and other data into a CMS-designated system.

(11) Relationships. The DMEPOS accrediting organization, or any owner (as defined in § 424.502), managing employee (as defined in § 424.502), governing body member, or any W-2 or contracted surveyor, health care, administrative. or management personnel thereof, must not have any of the following:

(i) A current exclusion by the OIG from Medicare, Medicaid, and any other Federal health care program.

(ii) A current debarment, suspension, or exclusion from participating in any other Federal procurement or non-procurement activity in accordance with section 2455 of the Federal Acquisition Streamlining Act (FASA).

(iii) Within the preceding 10 years—

(A) A conviction of a Federal or State felony offense that CMS determines is detrimental to the best interests of the Medicare program and its beneficiaries;

(B) A Medicare enrollment revocation under § 424.535;

(C) A suspension or revocation of a license to provide health care by any State licensing authority; or

(D) A suspension or termination from participating in a Federal or State health care program.

(f) Continuing federal oversight of approved DMEPOS accrediting organizations. CMS evaluates the performance of each CMS-approved DMEPOS accreditation program on an ongoing basis. Means of monitoring include, but are not limited to, the reviews identified in this paragraph (f).

(1) Equivalency review. CMS may, at any time, compare the DMEPOS accrediting organization's standards and its application and enforcement of those standards to the comparable CMS requirements and processes.

(2) Validation survey of DMEPOS supplier—(i) Survey scope. CMS may survey suppliers of DMEPOS and other items and services accredited under this section in order to validate the DMEPOS accrediting organization's survey process. Surveys can be comprehensive or focus on certain standards or requirements.

(ii) Authorization. A DMEPOS supplier selected for a validation survey must—

(A) Authorize the validation survey to take place; and

(B) Permit the CMS survey team to monitor the correction of any deficiencies found during the validation survey.

(iii) Failure to authorize. If a DMEPOS supplier selected for a validation survey fails to comply with the requirements of paragraph (f)(2)(ii) of this section, it is deemed to no longer meet the DMEPOS supplier quality standards and may have its enrollment revoked.

(iv) Non-compliance. If a validation survey results in a finding that the DMEPOS supplier is not in compliance with one or more DMEPOS supplier quality standards, the supplier no longer meets the DMEPOS quality standards and may have its enrollment revoked.

(3) Deficiencies. (i) With respect to DMEPOS supplier compliance with the quality standards, CMS has the discretion to do all of the following:

(A) Define the term deficiency.

(B) Establish levels and categories of deficiencies.

(C) Revise the quality standards.

(ii) In its DMEPOS accreditation activities, the DMEPOS accrediting organization must apply and adhere to all of the following:

(A) Any CMS-established definition of deficiency.

(B) All CMS-established levels and categories of deficiencies.

(C) All CMS-established quality standards.

(4) Review of DMEPOS accrediting organization. (i)(A) CMS may at any time and for any reason conduct a review of the DMEPOS accrediting organization's processes or performance to:

(1) Verify the organization's representations to CMS; or

(2) Assess the organization's compliance with its own policies and procedures, the provisions of this section, and all other CMS requirements.

(B) The scope, length, and timing of the review are within CMS' discretion. Evidence of the DMEPOS accrediting organization's potential non-compliance with any element addressed in paragraph (f)(4)(i)(A) of this section is not a prerequisite for performing a review.

(ii) Types of CMS reviews include, but are not limited, the following, and may be performed collectively or individually:

(A) Equivalency reviews under paragraph (f)(1) of this section.

(B) Conducting surveys of accredited DMEPOS suppliers under paragraph (f)(2) of this section.

(C) Examining the results of a DMEPOS accrediting organization's surveys of DMEPOS suppliers.

(D) Observing a DMEPOS accrediting organization's onsite surveys and other audits of DMEPOS suppliers.

(E) Conducting onsite inspections of the DMEPOS accrediting organization's operations and offices.

(F) Requesting and reviewing documents.

(G) Interviewing DMEPOS accrediting organization staff.

(H) Observing an accreditation organization's internal meetings concerning the accreditation process.

(g) Voluntary termination of CMS-approved DMEPOS accreditation program—(1) Timing. A DMEPOS accrediting organization may voluntarily terminate its CMS-approved accreditation program at any time. In doing so, the accrediting organization must do all of the following:

(i) Notify CMS of its decision to voluntarily terminate its approved DMEPOS accreditation program at least 120 calendar days in advance of the effective date of the termination.

(ii) Provide written notice at least 90 days in advance of the effective date of the termination to each of its accredited DMEPOS suppliers but not before notifying CMS of its decision in accordance with paragraph (g)(1)(i) of this section. The notice to each supplier must do the following:

(A) Describe the provisions in paragraph (g)(2) of this section regarding the expiration dates of the DMEPOS supplier's accreditation with the terminating DMEPOS accrediting organization.

(B) Inform the DMEPOS supplier that any lapse in its accreditation (including between the date its existing accreditation with the terminating DMEPOS accrediting organization expires and the effective date of its accreditation with a different accrediting organization) may result in the revocation of its enrollment under § 424.535.

(2) Supplier continuation of accreditation. Unless the DMEPOS supplier is otherwise determined to be non-compliant with the quality standards or other requirement for accreditation, the supplier's accreditation with the terminating DMEPOS accrediting organization remains in effect until the earlier of the following:

(i) The expiration of its current term of accreditation with the terminating DMEPOS accrediting organization.

(ii) The effective date of its accreditation with a different CMS-approved DMEPOS accrediting organization.

(h) Involuntary termination—(1) Reasons for termination. (i) CMS may terminate a DMEPOS accrediting organization's approval for any of the following reasons:

(A) CMS determines that the DMEPOS accrediting organization no longer demonstrates reasonable assurance (as defined in paragraph (b) of this section).

(B) CMS determines that the continued approval of a CMS-approved DMEPOS accreditation program of any DMEPOS accrediting organization poses an immediate jeopardy to the patients of the entities accredited under that program, or the continued approval otherwise constitutes a hazard to the public health.

(C) CMS determines that the DMEPOS accrediting organization is non-compliant with any provision of this section. This includes, but is not limited to, situations where the accrediting organization has failed to do either of the following:

(1) Comply with a term or condition of a statement or agreement in paragraph (c)(1)(xxiii) of this section.

(2) Adhere to a policy, procedure, or practice it outlined under paragraph (c) of this section as part of its initial application or reapproval application or a CMS-approved change thereto under paragraph (e)(2) or (7) of this section.

(D) There is a pattern or practice of the DMEPOS accrediting organization's accredited DMEPOS suppliers being revoked under § 424.535(a) for failing to comply with the quality standards.

(ii) CMS may terminate the DMEPOS accrediting organization's DMEPOS accreditation program effective the date of the letter described in paragraph (h)(2) of this section or any date thereafter.

(2) Notification to DMEPOS accrediting organization. CMS notifies the DMEPOS accrediting organization in writing of its decision to terminate the organization's accreditation approval. The notice must include all of the following:

(i) The reason for the termination.

(ii) The effective date of the termination.

(3) Announcement. CMS announces its termination decision (and the effective date thereof) on its website.

(4) Notification to DMEPOS suppliers. A DMEPOS accrediting organization whose CMS approval of its DMEPOS accreditation program has been terminated must notify, in writing, each of its accredited DMEPOS suppliers of the termination of CMS approval and its implications no later than 30 calendar days after the CMS website announcement described in paragraph (h)(3) of this section. The notice to each DMEPOS supplier must do all of the following:

(i) Describe the provisions in paragraph (h)(6) of this section regarding the expiration dates of the DMEPOS supplier's accreditation with the terminated DMEPOS accrediting organization.

(ii) Inform the DMEPOS supplier that any lapse in its accreditation (including between the date its existing accreditation with the terminated DMEPOS accrediting organization expires and the effective date of its accreditation with a different DMEPOS accrediting organization) results in the revocation of its enrollment under § 424.535.

(5) Collaboration. If CMS terminates a DMEPOS accrediting organization's approved status, the DMEPOS accrediting organization must work collaboratively with CMS to direct its accredited DMEPOS suppliers to the remaining CMS-approved DMEPOS accrediting organizations within a reasonable period of time.

(6) Continued accreditation. (i) Unless the DMEPOS supplier is otherwise determined to be non-compliant with the quality standards or other requirement for accreditation, the supplier's accreditation with the terminated DMEPOS accrediting organization remains in effect until the earliest of one of the following:

(A) The expiration of its current term of accreditation with the terminated DMEPOS accrediting organization.

(B) The effective date of its accreditation with a different CMS-approved DMEPOS accrediting organization.

(C) A date specified by CMS based on the circumstances of the termination of the DMEPOS accrediting organization's approval.

(ii) In the event paragraph (h)(6)(i)(C) of this section is applicable, CMS notifies the affected DMEPOS supplier in writing of the deadline by which the supplier must be reaccredited.

(7) Refunds. If CMS terminates a DMEPOS accrediting organization's approved status, the terminated organization must refund to a DMEPOS supplier all payments the supplier made to the organization—

(i) As part of the DMEPOS supplier's request for accreditation or reaccreditation; and

(ii) Prior to the organization's notification to the DMEPOS supplier of its final decision regarding the supplier's request.

(i) Suspension—(1) Reasons for suspension. CMS may suspend a DMEPOS accrediting organization's approval for any of the following reasons:

(i) CMS determines that the DMEPOS accrediting organization no longer demonstrates reasonable assurance (as defined in paragraph (b) of this section).

(ii) CMS determines that the DMEPOS accrediting organization is non-compliant with any provision of this section. This can include, but is not limited to, situations where the DMEPOS accrediting organization has failed to do either of the following:

(A) Comply with a term or condition of a statement or agreement in paragraph (c)(1)(xxiii) of this section.

(B) Adhere to a policy, procedure, or practice it outlined under paragraph (c) of this section as part of its initial application or reapproval application or a CMS-approved change thereto under paragraph (e)(2) or (7) of this section.

(iii) There is a pattern or practice of the DMEPOS accrediting organization's accredited DMEPOS suppliers being revoked under § 424.535 for failing to comply with the DMEPOS quality standards.

(2) Components of a suspension. (i) Except as otherwise specified or permitted by CMS, a DMEPOS accrediting organization may not perform any Medicare DMEPOS accreditation activities while suspended.

(ii) CMS determines the length of the suspension, which lasts no longer than 1 year. Upon the expiration of the suspension period, CMS either lifts the suspension or terminates the organization's approval in accordance with paragraph (h) of this section.

(iii) CMS may suspend the DMEPOS accrediting organization's DMEPOS accreditation program effective the date of the letter described in paragraph (i)(3) of this section or any date thereafter.

(3) Notification to DMEPOS accrediting organization. (i) CMS notifies the DMEPOS accrediting organization in writing of its decision to suspend the organization's accreditation approval. The notice must include the following:

(A) The reason(s) for the suspension.

(B) The effective date and length of the suspension.

(C) The terms of the suspension.

(D) The steps the DMEPOS accrediting organization must take to have the suspension lifted.

(ii) No later than 3 calendar days after the date it receives the notice of suspension, the DMEPOS accrediting organization must notify CMS in writing its acknowledgment of receipt of such notice.

(iii) No later than 3 calendar days after receipt of such acknowledgment, CMS publishes on its website a notice of its decision to suspend its approval of the organization's DMEPOS accreditation program.

(4) Status of DMEPOS suppliers. (i) The accreditation status of DMEPOS suppliers currently accredited by the suspended DMEPOS accrediting organization remains in effect through the length of the suspension unless—

(A) The DMEPOS supplier's current term of accreditation with the suspended DMEPOS accrediting organization expires during the suspension;

(B) The DMEPOS supplier is otherwise determined to be non-compliant with the quality standards or other requirement for accreditation; or

(C) CMS specifies a different accreditation termination date based on the circumstances of the suspension of the DMEPOS accrediting organization's DMEPOS accreditation program.

(ii)(A) If paragraph (i)(4)(i)(A) of this section applies, the DMEPOS supplier must be reaccredited by—

(1) Its current DMEPOS accrediting organization if the suspension has been lifted; or

(2) A different CMS-approved DMEPOS accrediting organization.

(B) If paragraph (i)(4)(i)(C) of this section applies, CMS notifies the affected DMEPOS supplier in writing of the deadline by which the supplier must be reaccredited.

(iii) Any lapse in the DMEPOS supplier's accreditation (including between the date its existing accreditation with the suspended DMEPOS accrediting organization expires and the effective date of its accreditation with a different accrediting organization) may result in the revocation of its enrollment under § 424.535(a).

(5) Lifting of suspension. (i) CMS lifts a DMEPOS accrediting organization's suspension if it determines all of the following:

(A) The reasons for the suspension no longer exist.

(B) The DMEPOS accrediting organization demonstrates reasonable assurance (as defined in paragraph (b) of this section).

(C) The DMEPOS accrediting organization is in compliance with all provisions of this section.

(ii) If the suspension is lifted:

(A) CMS notifies the DMEPOS accrediting organization thereof in writing.

(B) No later than 3 calendar days after the date it receives the notice described in paragraph (i)(5)(i)(A) of this section, the DMEPOS accrediting organization must notify CMS in writing its acknowledgment of receipt of such notice.

(C) No later than 3 calendar days after receipt of such acknowledgment, CMS publishes on its website a notice of the lifting of the suspension.

(6) Refunds. If CMS suspends a DMEPOS accrediting organization's DMEPOS accreditation program, the accrediting organization must refund to a DMEPOS supplier all payments the supplier made to the organization—

(i) As part of the DMEPOS supplier's request for accreditation or reaccreditation; and

(ii) Prior to the organization's notification to the DMEPOS supplier of its final decision regarding the supplier's request.

(7) Multiple suspensions. Nothing in this paragraph (i) prohibits CMS from suspending the organization's DMEPOS accreditation program more than once.

(j) Probation—(1) Placement on probation. CMS may place a DMEPOS accrediting organization's DMEPOS accreditation program on probation and require the organization's successful completion of a corrective action plan (CAP) if CMS determines any of the following:

(i) The DMEPOS accrediting organization no longer demonstrates reasonable assurance (as defined in paragraph (b) of this section).

(ii) The DMEPOS accrediting organization is non-compliant with any provision of this section. This can include, but is not limited to, situations where the accrediting organization has failed to—

(A) Comply with a term or condition of a statement or agreement in paragraph (c)(1)(xxiii) of this section; or

(B) Adhere to a policy, procedure, or practice it outlined under paragraph (c) of this section as part of its—

(1) Initial or reapproval application; or

(2) A CMS-approved change thereto under paragraph (e)(2) or (7) of this section.

(iii) There is a pattern or practice of the DMEPOS accrediting organization's accredited DMEPOS suppliers being revoked under § 424.535(a) for failing to comply with the quality standards.

(iv) The DMEPOS organization's period of suspension under paragraph (i) of this section has expired and CMS determines that a subsequent probationary period and CAP are warranted.

(2) Notification to accrediting organization. (i) CMS notifies the DMEPOS accrediting organization in writing of the probation. The notice must include the following:

(A) The reason(s) for CMS' decision.

(B) The length of the probationary period, which must not exceed 1 year.

(C) The terms of the CAP.

(D) The requirements and deadline for achieving compliance.

(E) A description of how CMS will monitor the DMEPOS accrediting organization's efforts to resume compliance (for example, requests for information, surveys).

(ii) Except as otherwise prescribed in the CAP, the DMEPOS accrediting organization may continue its accreditation activities as normal.

(3) Conclusion of period. (i) At the conclusion of the probationary period, CMS notifies the DMEPOS accrediting organization in writing of the following:

(A) Whether the DMEPOS accrediting organization is compliant with all requirements of this section.

(B) The reason for the determination in paragraph (j)(3)(i)(A) of this section.

(C) The consequences of the determination (for example, termination or suspension of accreditation, successful completion of and cessation of the probationary period and CAP).

(ii) If CMS determines that the DMEPOS accrediting organization has resumed compliance with all requirements of this section, CMS may do all of the following:

(A) Send the notice described in paragraph (j)(3)(i) of this section.

(B) Terminate the probationary period.

(C) End the CAP before the conclusion of the assigned probationary period.

(k) Noncompliance actions. (1) CMS may impose a certain action in paragraph (h), (i), or (j) of this section in lieu of another such action specified in paragraph (h), (i), or (j) of this section if the same ground(s) for the action exists.

(2) CMS may terminate—

(i) A probation period (either before or in accordance with the probationary period's original expiration date) and impose a suspension or termination if grounds for either action exist.

(ii) A suspension (either before or in accordance with the suspension's original expiration date) and impose a termination if a basis for doing so exists.

(l) Reconsiderations and rebuttals—(1) Reconsiderations. (i) A DMEPOS accrediting organization may request a reconsideration under part 498 of the following CMS initial determinations identified in § 498.3(b)(21) and (22):

(A) Denial of the DMEPOS accrediting organization's application for initial approval of its DMEPOS accreditation program under paragraph (c)(4) of this section.

(B) Denial of the DMEPOS accrediting organization's application for reapproval of its DMEPOS accreditation program under paragraph (d)(4) of this section.

(C) Termination of the DMEPOS accrediting organization's approval of its DMEPOS accreditation program under paragraph (h)(1) of this section.

(2) Rebuttals. (i)(A) If a DMEPOS accrediting organization receives notice from CMS that its DMEPOS accreditation program has been suspended or placed on probation in accordance with paragraph (i) or (j) of this section, the DMEPOS accrediting organization has 15 calendar days from the date of the written notice of the suspension or probation to submit a rebuttal to CMS.

(B) CMS may, at its discretion, extend the 15-day time-period referenced in paragraph (l)(2)(i)(A) of this section.

(ii) A rebuttal submitted under this section must—

(A) Be in writing;

(B) Specify the facts or issues about which the DMEPOS accrediting organization disagrees with CMS' determination, as well as the reasons for disagreement;

(C) Submit all documentation the DMEPOS accrediting organization wants CMS to consider in its review of its determination; and

(D) Be submitted in the form of a letter that is signed and dated by the DMEPOS accrediting organization's CEO (or similar official with authority to commit the organization to adhere to Medicare laws and regulations) or a legal representative (as defined in § 498.10 of this chapter).

(1) If the legal representative is an attorney, the attorney must include a statement that he or she has the authority to represent the accrediting organization; this statement would be sufficient to constitute notice of such authority.

(2) If the legal representative is not an attorney, the accrediting organization must file with CMS written notice of the appointment of a representative; this notice of appointment must be signed and dated by, as applicable, the accrediting organization's CEO (or similar official with authority to commit the organization to adhere to Medicare laws and regulations) or a legal representative.

(iii) The DMEPOS accrediting organization's failure to submit a rebuttal that is both timely under paragraph (l)(2)(i) of this section and fully compliant with all of the requirements of paragraph (l)(2)(ii) of this section constitutes a waiver of all rebuttal rights under this section.

(iv) Upon receipt of a timely and compliant rebuttal, CMS reviews the rebuttal to determine whether the imposition of the suspension or probation is correct.

(v) CMS is not required to delay the imposition of the suspension or probation pending the completion of the CMS review described in paragraph (l)(2)(iv) of this section.

(vi) A determination made under paragraph (i) or (j) of this section is not an initial determination under § 498.3(b) of this chapter and therefore not appealable.

(m) Restrictions on consulting—(1) Definition. For purposes of this paragraph (m) only, the terms consulting and consulting services mean those services provided by a DMEPOS accrediting organization (or its consulting division or separate business entity (such as a company or corporation) that provides such services) for the review of a DMEPOS supplier's standards, processes, policies, and functions for compliance with the accrediting organization's standards, the DMEPOS quality standards, or other Medicare requirements through simulation of a real survey, such as a mock survey, with comprehensive written reports of findings and early intervention and action to correct deficiencies prior to an actual accreditation survey.

(2) Prohibitions. Except as provided in paragraph (m)(3) of this section, an accrediting organization or its consulting division or separate business entity (such as a company or corporation that provides consulting) may not provide consulting services in the following instances:

(i) To any new DMEPOS supplier before the initial accreditation survey has been completed.

(A) For purposes of this paragraph (m)(2)(i), the term initial survey means the first accreditation survey performed of a supplier by a DMEPOS accrediting organization that has not previously received accreditation services from that accrediting organization.

(B) If a supplier is voluntarily or involuntarily terminated from the services of a DMEPOS accrediting organization and later retains the services of the same or a new DMEPOS accrediting organization, the first accreditation survey performed by the same or new DMEPOS accrediting organization of that supplier would be considered an initial accreditation survey.

(ii) To a DMEPOS supplier that the DMEPOS accrediting organization accredits within 6 months prior to the next scheduled re-accreditation survey of that supplier. For purposes of this paragraph (m)(2)(ii), the term re-accreditation survey means any subsequent accreditation survey performed by the accrediting organization following the initial survey.

(iii) To a DMEPOS supplier to which the DMEPOS accrediting organization provides accreditation services, in response to a complaint received by the accrediting organization regarding that supplier.

(3) Circumstances permitting consulting. A DMEPOS accrediting organization, its consulting division, or separate business entity, such as a company or corporation that provides consulting, may provide consulting to the DMEPOS suppliers it accredits only under the following circumstances:

(i) During the 6-month period after an initial or re-accreditation survey is performed.

(ii) To address complaints received and investigated by CMS or its contractor regarding a DMEPOS accrediting organization's accredited DMEPOS supplier in which one or more immediate jeopardy deficiencies or grounds for revocation of enrollment under § 424.535 are identified. Such consulting by an accrediting organization may occur only after CMS or the CMS contractor investigation is completed and must only address those issues identified in the investigation.

(iii) Consulting services provided to DMEPOS suppliers that the DMEPOS accrediting organization does not accredit at the time the consulting services are furnished.

(iv) General education provided by the DMEPOS accrediting organization about its DMEPOS accreditation program.

(4) Submission of report. The DMEPOS accrediting organization must provide to CMS upon CMS' request and with each initial and reapproval application under paragraphs (c) and (d) of this section a report containing the following information:

(i) Whether the DMEPOS accrediting organization or an associated consulting division or company established by the accrediting organization provides consulting services.

(ii) The names, National Provider Identifiers, and addresses of all DMEPOS suppliers to which the DMEPOS accrediting organization or its associated consulting division or company has provided consulting services during the previous 6-month period.

(iii) The dates the consulting services were provided to each DMEPOS supplier.

(iv) Whether the DMEPOS accrediting organization has ever provided, or is currently providing, accreditation services to any DMEPOS supplier listed in this report.

(v) For each DMEPOS supplier listed in this report, the date—

(A) Of the most recent accreditation survey performed; and

(B) That the next re-accreditation survey is due to be performed.

(vi) A description of the consulting services provided to each DMEPOS supplier listed in this report.

(5) Consulting firewall policies and procedures. (i) A DMEPOS accrediting organization, its consulting division, or separate business entity (such as a company or corporation that provides consulting services to the DMEPOS suppliers the accrediting organization accredits) must have and adhere to written consulting policies and procedures, which, at a minimum, must include the following:

(A) The DMEPOS accrediting organization's consulting services must be provided by a separate division of the accrediting organization or separate business entity, such as a company or corporation, that is separate from the accrediting organization's accreditation division.

(B) A DMEPOS accrediting organization's consulting division or separate business entity must maintain separate staff from that of the accrediting organization's accreditation divisions to ensure that the consulting division staff do not perform the accrediting organization's accreditation division functions and that the accrediting organization's accreditation division staff do not perform consulting division functions.

(C) A DMEPOS accrediting organization's accreditation staff and surveyors are prohibited from marketing the accrediting organization's consulting services to the accrediting organization's accreditation clients.

(ii) A DMEPOS accrediting organization that provides consulting services must submit its written consulting firewall policies and procedures to CMS by a date specified by CMS and with each application submitted seeking initial CMS approval or reapproval of their DMEPOS accreditation programs.

(n) Conflicts of interest—(1) General prohibition regarding relationships. (i) If a DMEPOS accrediting organization owner, surveyor, or employee (currently or within the previous 2 years) has or had an interest in or relationship (as described in paragraph (c)(1)(vii)(D) of this section) with a DMEPOS supplier that is accredited by the DMEPOS accrediting organization, the accrediting organization owner, surveyor, or employee is not permitted to do any of the following:

(A) Participate in the survey of that DMEPOS supplier.

(B) Have input into the results of the survey and accreditation for that DMEPOS supplier.

(C) Have involvement with the pre-or post-survey activities for that DMEPOS supplier.

(D) Have contact with or access to the records for the survey and accreditation of that DMEPOS supplier.

(ii) For purposes of this paragraph (n)(1), the term immediate family member has the same meaning as that term is defined in paragraph (b) of this section.

(iii) CMS may request at any time outside of the initial approval and reapproval processes that the DMEPOS accrediting organization furnish any and all information required under paragraph (c)(1)(vii)(D) of this section.

(2) CMS Contractor. An entity may not serve as a CMS-approved DMEPOS accrediting organization if it is currently a CMS contractor (or an owner or subsidiary thereof (regardless of the ownership percentage involved)) with any oversight responsibility of DMEPOS suppliers.

(o) Change of ownership. A DMEPOS accrediting organization that wishes to undergo a change of ownership is subject to the requirements of § 488.5(f).

[71 FR 48409, Aug. 18, 2006, as amended at 90 FR 55607, Dec. 2, 2025]