DMEPOS Suppliers Require a License to Dispense Drugs (Rev. 1, 10-01-03)

by  Jared Staheli
July 8th, 2015

Regulations at 42 CFR 424.57(b)(4) (supplier standards) state that 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.)”

Therefore, suppliers may not bill the durable medical equipment regional carriers (DMERCs) for any Medicare-covered drugs unless they have a State license to dispense the drugs, regardless of whether or not the drugs require a prescription. Similarly, a physician may not dispense Medicare-covered prescription or nonprescription drugs unless he or she is authorized by the State to dispense such drugs as part of his or her physician’s license.

The DMERCs must deny claims for prescription drugs, and related equipment when billed on the same claim, if the National Supplier Clearinghouse’s (NSC) records show the supplier was not licensed to dispense the drug on the DOS (date of service).

In effect, for DOS on or after December 11, 2000, the DMERCs must deny claims for all Medicare- covered drugs dispensed by a supplier or physician who is not licensed to dispense the drug. If the DMERCs feel that it is necessary, they may coordinate to develop a list of drugs and related equipment that should be subjected to the licensure edit.

Note that these provisions do not apply to EPO. Method I beneficiaries must obtain their EPO through their dialysis facilities, and Method II beneficiaries must receive EPO from the same supplier that provides all their other dialysis supplies.


DMEPOS Suppliers Require a License to Dispense Drugs (Rev. 1, 10-01-03). (2015, July 8). Find-A-Code Articles. Retrieved from

© InnoviHealth Systems Inc

Article Tags  (click on a tag to see related articles)

Publish this Article on your Website, Blog or Newsletter

This article is available for publishing on websites, blogs, and newsletters. The article must be published in its entirety - all links must be active. If you would like to publish this article, please contact us and let us know where you will be publishing it. The easiest way to get the text of the article is to highlight and copy. Or use your browser's "View Source" option to capture the HTML formatted code.

If you would like a specific article written on a medical coding and billing topic, please Contact Us.


innoviHealth Systems, Inc.
62 East 300 North
Spanish Fork, UT 84660
Phone: 801-770-4203 (9-5 Mountain)
free demo
request yours today
for any budget
sign IN
welcome back!

Thank you for choosing Find-A-Code, please Sign In to remove ads.