New York Pharmacy Provider Alert: New York Medicaid Now Requiring Participating Pharmacies to Enroll in Medicare as a DMEPOS Supplier

The New York Department of Health (NYDOH) has promulgated enrollment requirements for pharmacies seeking to participate in the Medicaid program which are unrelated to many of the actual operations of pharmacies within the state of New York. Specifically, as a condition for enrollment in the New York Medicaid program (which is required for participation in Medicaid Fee-For-Service and Managed Care plans), NYDOH has required that pharmacies demonstrate “full participation” in Medicare.  While NYDOH had previously given somewhat inconsistent guidance, it has now adopted a requirement that New York community pharmacies have dual enrollment with Medicare as both a pharmacy provider (through CMS-855B enrollment) and a DMEPOS supplier (through CMS-855S enrollment), irrespective of whether the pharmacy actually dispenses durable medical equipment.

To obtain enrollment as a supplier in the Medicare Program, pharmacies must meet the special additional requirements commonly known as the “Supplier Standards”, which are in addition to the requirements of pharmacies seeking to fill drug claims for Medicare beneficiaries. These requirements can be costly and time-consuming for pharmacy providers, especially those who do not sell DMEPOS.  Among some of these requirements, pharmacies must maintain a surety bond in the amount of $50,000 to protect against loss to the Medicare Program. In addition, for providers that are not eligible for an exemption, pharmacies must obtain accreditation as a DMEPOS Supplier from an organization approved by CMS. The accreditation process takes at least one month to complete in order to demonstrate that the appropriate policies and procedures are in place. Thereafter, providers must also successfully complete a site visit to obtain accreditation.

Even for those providers who take the appropriate steps to enroll in Medicare as a pharmacy provider and supplier, many pharmacies experience unenrollment with Medicare if they do not regularly bill the Program or submit an annual certification of compliance. All too often, pharmacies do not timely receive or review renewal notices or notices of termination from Medicare. Unfortunately, these pharmacies don’t learn that their enrollment in Medicare has administratively lapsed until the New York Department of Health issues an automatic termination notice to the pharmacy, providing thirty days’ notice for the pharmacy to be reinstated as a pharmacy provider and/or supplier in the Medicare Program.  In these situations, time is limited to take the appropriate steps to become reenrolled in the Medicare Program. If the enrollment as a pharmacy and DMEPOS supplier is not complete before the date set by New York Medicaid Provider Enrollment, a pharmacy must complete all initial enrollment forms again with the state program.

Frier Levitt attorneys understand the critical importance of compliance with the New York Medicaid enrollment requirements for pharmacies to avoid disruption to their business. Frier Levitt attorneys regularly counsel pharmacy clients on enrollment issues in state and federal programs. If you have received a notice of termination from the New York Medicaid, contact us.