AAH investigates illegal online sales

‘Nobody asked for us for a prescription, and it wasn’t a mistake or accident’
Friday, January 12, 2018

WASHINGTON – The sale of medical devices over the Internet without a required prescription is nothing new, but with the possibility of Amazon getting into the HME market in a bigger way, stakeholders say the industry needs to take a harder line against them.

The issue reared its head recently, when providers in North Dakota were able to obtain CPAP devices though third-party sellers without a prescription. Such sales typically violate state and federal laws, as well as Amazon’s own rules.

“We have the specific record of the complete sale in North Dakota and we plan to go on record with Amazon with concerns about the illegal sale,” said Tom Ryan, president and CEO of AAHomecare. “Specifically, we are working on putting a letter together for Amazon and other regulatory agencies noting a potential violation of federal and state law in connection.”

AAHomecare announced in December that it has retained outside counsel to develop a strategy to curb illegal online sales of DME.

Such sales are nothing new, says provider John Goodman.

“We have written to states when we’ve bought items from Amazon, saying these companies are ignoring federal and state laws, and we had no response,” said Goodman, a co-owner of CPAP.com, a Houston-based online provider. “Nobody asked for us for a prescription, and it wasn’t a mistake or accident.”

As an HME provider who must follow a mountain of rules and regulations, Goodman says it’s particularly vexing because Amazon doesn’t appear to be held to the same standard, even in Texas, where it has a large distribution center.

“Texas is on us constantly about prescriptions,” he said. “They regularly come in and want all the files for the last 12 months, and they look through to see if you’ve got prescriptions.”



Are you releasing who is being investigated?


Isn't it also a breach of some sort when DME companies are selling online?  Most insurance contracts indicate that you must bill for the patient or not provide it at all, essentially saying you cannot sell it to a member for cash unless they absolutely do not qualify or it is a non covered item.  What if you sell to a customer that has an insurance that you are contracted with and it could have been billed?  Also, I believe that as a Medicare/Medicaid provider, you are required to verify insurance eligibility.  When selling online, these DME's do not verify insurance.  What if they are selling coverable items to a person who has Medicaid?  They are not supposed to be accepting cash from a Medicaid member if it is a coverable item.