(Medicare Claims Processing Manual)

Except as specifically noted (e.g., IOLs), when discussing payment and other policies, instructions in this chapter will use the terms "prosthetic and orthotic devices" and the abbreviation "P&O" interchangeably to refer to both 1861(s)(8) and (9)  (follow the link, scroll down to section (s) and look for both (8) and (9)) services.   10.2 - Coverage Table for DME Claims (Rev. 4001, Issued: 03- 16-18, Effective: 06 -19-18, Implementation: 06- 19-18) B3-2105   Reimbursement may be made for expenses incurred by a patient for the rental or purchase of durable medical equipment (DME) for use in his/her home provided that all the conditions in column A below have been met.  Column B indicates the action A/B MACs (A), (B), and (HHH), and DME MACs  will take to establish that the conditions have been met.  A - Conditions  B - Review Action  l. Payment may be made for the following:  1. Payment may be made for following:  (a) Items of DME that are medically necessary  (a) The HCPCS file shows coverage status of items.  If item is not listed in the HCPCS file, the MAC will develop LMRP  to determine whether the item is covered.  (b) Separate charges for repair, maintenance and delivery  (b) Repairs - only if DME is being purchased or is already owned by patient and repair is necessary to make the equipment serviceable.  Medicare pays the least expensive alternative.  (See special exception in Chapter 15 of the Medicare Benefit Policy Manual for repair of dialysis delivery system.)  NOTE : See Chapter 15 of the Medicare Benefit Policy Manual for handling claims suggesting deliberate or malicious damage or destruction.  Maintenance - only if the equipment is being purchased, or is already owned by the patient, and if the maintenance is extensive amounting to repairs, i.e., requiring the services of skilled technicians.  (MACs deny claims for routine maintenance and periodic servicing, e.g., testing, cleaning, checking, oiling, etc.)  (See special exception in Chapter 15 of the Medicare Benefit Policy Manual for maintenance of dialysis delivery system.)  Delivery -  of rented or purchased equipment is covered, but the related payment is included in the fee schedule for the item.  Additional payment may be made at the discretion of the MAC in special circumstances (see Chapter 15  of the Medicare Benefit Policy Manual)  (c) Separate charges for disposable supplies, e.g., oxygen, if essential to the effective use of medically necessary (c) Claim must indicate that:   The patient has the DME for which the supply is intended;  A - Conditions  B - Review Action  durable medical equipment.  Separate charges for replacement of essential accessories such as hoses, tubes, mouthpieces, etc., only if the beneficiary owns or is purchasing durable medical equipment (BPM, Chapter 15, 110).  (Medications used in connection with durable medical equipment are covered under certain conditions -  see Chapter 15 of the Medicare Benefit Policy Manual)   The DME continues to be medically necessary; and   The items are readily identifiable as the type customarily used with such equipment. NOTE:  If the quantity of accessories and/or supplies included in a claim seems excessive or if claims for such items are received from the same claimant with undue frequency, see C hapter 5 of the Medicare Program Integrity Manual.  2. DME must be for use in patient's residence other than a health care institution.  (BPM, Chapter 15, 110.1.D & PIM, C hapter 5, 1)  2. Payment cannot be made for equipment for use in a n institution classified as:  a. A participating hospital,  b. An emergency hospital,  c. Meets 1861(e)(1)  of the Act,  d. A participating SNF or  e. Meets 1819(a)(1)  of the Act.  If an institution that includes a Medicare -participating distinct part SNF also has a nonparticipating portion that does not meet 1819(a)(1), the patient may be considered in his/her residence if he/she was physically located in such nonparticipating portion during the use period.  DMEPOS (DME, P&O, and supplies) items provided to hospice patients are generally included in the payment for hospice services.  Items of DMEPOS are covered by Medicare and paid in addition to the hospice payment only when those items or supplies are provid ed to the patient for treatment of a condition or illness not related to the patient's terminal illness.  3. Physician's prescription required.   A supplier must maintain and, upon request, make available to the MAC, the detailed written order (or, when required, the Certificate of Medical Necessity (CMN)) from the treating physician.  See the Medicare Program Integrity Manual, Chapter 5.   10.3 - Beneficiaries Previously Enrolled in Managed Care Who Return to Traditional Fee for Service (FFS)  (Rev. 1, 10- 01-03) B3-9051  When a beneficiary who was previously enrolled in a Medicare HMO/Managed Care program returns to traditional FFS, he or she is subject to all benefits, rules, requirements and coverage criteria as a beneficiary who has always been enrolled in FFS.  When a beneficiary returns to FFS, it is as though he or she has become eligible for Medicare for the first time.  Therefore, if a beneficiary received any items or services from their HMO or Managed Care plan, they may continue to receive such items and services  only if they would be entitled to them under Medicare FFS coverage criteria and documentation requirements.   For example, if a beneficiary received a manual wheelchair under a HMO/Managed Care plan, he or she would need to meet Medicare coverage criteria and documentation requirements for manual wheelchairs.  He or she would have to obtain a Certificate of Medical Necessity (CMN), and would begin an entirely new rental period, just as a beneficiary enrolled in FFS, to obtain a manual wheelchair for the first time.  There is an exception to this rule if a beneficiary was previously enrolled in FFS and received a capped rental item, then enrolled in an HMO, stayed with the HMO for 60 or fewer days, then returned to FFS.  For purposes of this instruction, CMS has interpreted an end to medical necessity to include enrollment in an HMO for 60 or more days.   Another partial exception to this rule involves home oxygen claims.  If a beneficiary has been receiving oxygen while under a Medicare HMO, the supplier must obtain an initial CMN and submit it to the DME MAC at the time that FFS coverage begins.  However,  the beneficiary does not have to obtain the blood gas study on the CMN within 30 days prior to the Initial Certification date on the CMN, but the test must be the most recent study the patient obtained while in the HMO, under the guidelines specified in D ME MAC policy.  It is important to note that, just because a beneficiary qualified for oxygen under a Medicare HMO, it does not necessarily follow that he/she will qualify for oxygen under FFS.   Another partial exception to this rule involves home oxygen claims.  If a beneficiary has been receiving oxygen while under a Medicare HMO, the supplier must obtain an initial CMN and submit it to the DME MAC at the time that FFS coverage begins.  However,  the beneficiary does not have to obtain the blood gas study on the CMN within 30 days prior to the Initial Certification date on the CMN, but the test must be the most recent study the patient obtained while in the HMO, under the guidelines specified in D ME MAC policy.  It is important to note that, just because a beneficiary qualified for oxygen under a Medicare HMO, it does not necessarily follow that he/she will qualify for oxygen under FFS.   These instructions apply whether a beneficiary voluntarily returns to FFS, or if he or she involuntarily returns to FFS because their HMO or Managed Care plan no longer participates in the Medicare + Choice (HMO) program.    20 - Calculation and Update of Payment Rates  (Rev. 1, 10- 01-03) B3-5017, PM B -01-54, 2002 PEN Fee Schedule   Section1834 of the Act requires the use of fee schedules under Medicare Part B for reimbursement of durable medical equipment (DME) and for prosthetic and orthotic devices, beginning January 1 1989.  Payment is limited to the lower of the actual charge for the equipment or the fee established.  Beginning with fee schedule year 1991, CMS calculates the updates for the fee schedules and national limitation amounts and provides the A/B MACs (A), (B), (HHH), and DME MACs with the revised payment amounts.  The CMS calculates most fee schedule amounts and provides them to the A/B MACs (A), (B), and (HHH), and DME MACs.  However, for some services CMS asks A/B MACs (B) to calculate local fee amounts and to provide them to CMS to include in calculation of national amounts.  These vary from update to updat e, and CMS issues special related instructions to A/B MACs (B) when appropriate.   Parenteral and enteral nutrition services paid  on and after January 1, 2002 are paid on a fee schedule.  This fee schedule also is furnished by CMS.  Prior to 2002, payment amounts for PEN were determined under reasonable charge rules, including the application of the lowest charge level (LCL) restrictions.  The CMS furnishes fee schedule updates (DMEPOS, PEN, etc.) at least 30 days prior to the scheduled implementation.  A/B MACs (A), and (HHH)  use the fee schedules to pay for covered items, within their claims processing jurisdictions, supplied by hospitals, home health agencies, and other providers.  A/B MACs (A) and (HHH)  consult with DME MACs and, where appropriate with A/B MACs (B), on filling gaps in fee schedules.   The CMS furnishes the fee amounts annually, or as updated if special updates should occur during the year, to A/B MACs (A), (B), (HHH), and DME MACs and the Railroad Retirement Board (RRB), Specialty MAC (SMAC), and to other interested parties (including the Pricing, Data Analysis and Coding Contractor (PDAC), RRB, Indian Health Service, and United Mine Workers).   20.1 - Update Frequency  (Rev. 1, 10- 01-03) AB-03-071, AB -03-100, CMS Web Site   The DMEPOS fee schedule is updated annually to apply update factors and quarterly to include new codes and correct errors.   The current update of the DMEPOS fee schedule is located at:  http://www.cms.gov/Medicare/Medicare -Fee-for-Service-Payment/DMEPOSFeeSched/DMEPOS -Fee-Schedule.html   The current quarterly update is also located at:  http://www.cms.gov/Medicare/Medicare -Fee-for-Service -Payment/DMEPOSFeeSched/DMEPOS -Fee-Schedule.html  20.2 - Locality (Rev. 1, 10- 01-03) B3-5017.1  For services furnished on or after January 1, 1987, the U.S. is considered one locality.  The U.S. constitutes a "medical service area comparable to the concept of trade areas," for the furnishing of enteral and parenteral therapies.  The therapies, nutrients and associated supplies are available only from nationally recognized manufacturers and a review of their published price lists dis played no variation based upon individual State or other localities.   20.3 - Elimination of "Kit" Codes and Pricing of Replacement Codes  (Rev. 1, 10- 01-03) PM B -01-56  Prior to 2002, most suppliers billed for dialysis supplies using codes describing "kits" of supplies.  The use of kit codes allowed suppliers to bill for supply items without separately identifying the supplies that are being furnished to the patient.  Eff ective January 1, 2002, these kit codes  were deleted and suppliers are required to bill for dialysis supplies using HCPCS codes for individual dialysis supplies.  20.4 - Contents of Fee Schedule File  (Rev. 1, 10- 01-03) PM A -02-090  The fee schedule file provided by CMS contains HCPCS codes and related prices subject to the DMEPOS fee schedules, including application of any update factors and any changes to the national limited payment amounts.  The file does not contain fees for drugs that are necessary for the effective use of DME.  It also does not include fees for items for which fee schedule amounts are not established.  See Chapter 23 for a description of pricing for these.  The CMS releases via program issuance, the gap- filled amounts and the annual update factors f or the various DMEPOS payment classes: