Effective December 31, 2014, durable medical equipment (DME) suppliers that do business in the State of Colorado will be required to have a license from the Colorado Secretary of State. In addition, as part of the license application, DME suppliers are required to sign an affidavit attesting that (1) the supplier has one or more physical locations within Colorado or within 50 miles of the border of Colorado, (2) the supplier has sufficient inventory and staff to service or repair products and (3) the supplier is accredited by an accrediting organization acceptable to the Federal Centers for Medicare and Medicaid Services. The DME supplier license application and affidavit are available on the Colorado Secretary of State’s website. Below is a summary of the current DME supplier licensing requirements in Colorado.

What is a “durable medical equipment supplier”?

Under C.R.S. § 24-21-115(1), a “durable medical equipment supplier” means “a person or entity that delivers disposable medical supplies or durable medical equipment directly to a recipient and that currently bills or plans to bill the Medicare program for services or products in the current calendar year.” The term does not include a supplier of insulin infusion pumps and related supplies or services.

Are there any exceptions for out-of-state, mail-order DME suppliers?

No. The applicable Colorado statutes do not provide any exceptions for out-of-state DME suppliers, such as for those DME suppliers delivering products via overnight carrier.

Are there are any specific requirements regarding the types of “physical location”?

No. The applicable Colorado statutes do not specify any requirements for the DME supplier’s physical location, such as minimum space requirements, whether any inventory must be stored on site, whether the location must be owned or can be leased, or whether the physical location must be used for storing inventory or repairing products. As such, it is not clear whether a DME supplier could designate its registered agent’s physical address in Colorado as the DME’s physical location in the State of Colorado. However, the statute does require that a DME supplier prominently display its license at each of its physical business locations as well as list its street address and a local business telephone number on the license application.

Are there any specific requirements regarding whether the DME supplier has “sufficient” inventory or staff?

No. The applicable Colorado statutes do not specify any inventory or staff requirements, such as minimum amount of inventory to be deemed “sufficient,” or whether the inventory or staff must be located in Colorado. In addition, it is possible that “staff” is broader than “employees” and, therefore, could be deemed to include third-party independent contractors. In addition, there is no requirement in the applicable Colorado statutes that the DME supplier’s staff must be Colorado residents. Note, however, that the preamble to HB 14-1369 (which was codified at C.R.S. § 24-21-115) noted the General Assembly's view that access to vital durable medical equipment was being jeopardized by suppliers outside of Colorado that do not, in part, “have Colorado employees to run the businesses.”

Where are the license fees? How long is the term of the license?

The fee for initial and renewal applications is currently $350. The DME supplier license is good for one year.