Understanding the Medicare DMEPOS Accreditation Exemption for Pharmacies

If your pharmacy has been accredited for DMEPOS items for at least 5 years, and total sales from those items are 5% or less of your pharmacy gross revenue, you may be eligible for the Medicare Accreditation Exemption.

Financial and Time-Saving Benefits

• Cost Savings: Avoid accreditation fees, which can exceed $5,000 every three years.
• Reduced Administrative Burden: Eliminate the need for ongoing site inspections, accreditation renewals, and maintaining extensive DMEPOS-specific policies and procedures.
• Simplified Compliance: Streamline operations by focusing on core pharmacy services without the complexities of full DMEPOS accreditation requirements.

Eligibility Criteria

To qualify for the accreditation exemption, a pharmacy must meet the following conditions:

1. Medicare Enrollment Duration: The pharmacy must have been enrolled as a Medicare DMEPOS supplier for at least five years.
2. Compliance History: The pharmacy should not have had any unrescinded final adverse legal actions in the past five years.
3. DMEPOS Billing Threshold: Medicare billing for DMEPOS (excluding drugs and pharmaceuticals not subject to accreditation) must be less than 5% of the pharmacy's total sales over the previous three calendar or fiscal years.
4. Liability Insurance: The pharmacy must maintain comprehensive liability insurance of at least $300,000 per incident, listing the NPE contractor as a certificate holder.
5. Surety Bond: The pharmacy must maintain its Surety Bond.
   • If the bond is unpaid, the bond company notifies NPE East and West and the PTAN is immediately deactivated.
6. Documentation: Provide materials verifying that the pharmacy meets the exemption criteria, such as:
   • A statement signed by a certified accountant verifying that DMEPOS sales are less than 5% of total pharmacy sales for the previous three years.
   • Copies of signed tax returns (e.g., IRS Form 1120-S) for the previous three years showing gross receipts.

Note: Pharmacies that have changed ownership or legal business entity (including changes in Taxpayer Identification Number) within the past five years are not eligible for the exemption.

Submission Process

1. Gather Documentation: Collect the necessary supporting documents, including liability insurance and financial verification.
2. Complete the Attestation: Fill out and sign the accreditation exemption attestation form.(Medicare Exemption Fact Sheet and Application)
3. Submit to NPE Contractor: Send the attestation and supporting materials to the appropriate NPE contractor:
   • NPE East (Novitas Solutions): For pharmacies located in the eastern United States.
   • NPE West (Palmetto GBA): For pharmacies located in the western United States.

It's advisable not to terminate existing accreditation until receiving confirmation of exemption approval to prevent potential disruptions in Medicare billing privileges.

Additional Requirements

PTAN must remain active with no less than one Part B DMEPOS or pharmaceutical dispensed, billed and paid per quarter.

CMS DMEPOS Quality Standards must be followed 

If you would like to start dispensing DMEPOS items, are interested in support for your current DMEPOS offerings, or need support with your Medicare 855-S application/re-validation please reach out to sales@rjhedges.com