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The Compliance Team
Challenges of Selling Mail Order – Part II
By Nancy Barney, Senior Resource Advisor, The Compliance Team, Inc., nbarney@thecomplianceteam.org

Medicare defines mail-order as “items ordered by phone, email, Internet or mail, and delivered to your house by common carriers like U.S. Postal Service, Federal Express, or United Parcel Service. It doesn’t include items bought from local supplier store fronts.”

As discussed in Part 1, licensing requirements for each state where the product is dispensed is one of the first steps a supplier must take before shipping a DMEPOS item.

When providing mail order items, the supplier must be able to identify the product classification (e.g. HCPCs). If in doubt, the supplier should refer to the DME Pricing, Data Analysis and Coding (PDAC) contractor (Nordian) website for a full description of the Healthcare Common Procedure Coding System (HCPCS) codes being billed.

A mail order supplier will need to demonstrate and document their processes as follows:

  1. Intake & Assessment:
    1. The supplier must have a process in place for documenting the intake procedure to include the ordering/referring prescription protocol.
    2. Provide the product that is specified by the ordering physician. (i.e., off-the shelf versus prefabricated versus custom fabricated)
    3. Be sure that the ordering physician’s medical record justifies the need for the type of product selected.
    4. Have detailed documentation in the supplier’s record that justifies the code selected.
  2. Delivery & Patient Training/Instructions:
    1. Support the process for obtaining the patient’s signature confirming that all required patient paperwork, documents and educational materials were received. The patient paperwork is to include a complaint protocol with The Compliance Team contact information, supplier’s dedicated customer services phone numbers, anticipated response time, and after hour processes, etc. The supplier must also demonstrate the patient survey process and how surveys will be obtained from the mail-order customer.
    2. The supplier will have an updated "Equipment Pick-Up" policy specifying how returned items will be handled, how this is conveyed to the patient, and how the items are tracked when they are received back in the facility.
  3. Follow-up:
    1. The provider will have an updated equipment-related “Follow-up” policy specifying the survey and follow-up process to determine patient satisfaction as well as document any problems with the equipment such as operating function, settings and comfort level of the patient, safety concerns, and availability of services if the patient needs follow-up assistance.
Ordering/Referring Terms

The ordering/referring requirement became effective January 1, 1992, and is required by §1833(q) of the Act. All claims for Medicare covered services and items that are the result of a physician’s order or referral shall include the ordering/referring physician’s name. Medicare Part B claims use the term “ordering/referring provider” to denote the person who ordered, referred, or certified an item or service reported in that claim.

Medical Necessity

Medicare requires that supplier’s claims for DMEPOS be “reasonable and necessary” (SSA § 1862(a)(1)(A)). Further, local coverage determinations (LCDs) issued by the two Medicare contractors (MACs) that process DMEPOS claims include utilization guidelines and documentation requirements for orthotic braces.

Staff Training

Documentation of staff training via manufacturer on the variety of products to be shipped as well as job specific training must be kept in the employee or training files.


The Compliance Team staff is always willing to guide the supplier to the regulatory resources available for licensing, physician orders, medical necessity criteria and proof of delivery requirements; however, the supplier is responsible for researching and determining the regulations that apply to the products they dispense.

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