(Medicare Claims Processing Manual)

 Downcodes from a bid item in one product category (category U) to a bid item in another product category (category S) In this case, Medicare payment will only be made to a contract suppli er for the product category U on an assignment -related basis.  Medicare payment will be equal to 80 percent of the lower of the actual charge or the fee schedule amount for the medically necessary bid item in product category S.   Downcoding Scenarios for Beneficiaries Who Do Not Reside In a CBA, But Travel to a CBA From  a Higher Level of Service Item  To a Medically Necessary Item Must be Furnished by Assignment Mandatory (Y/N)  Medicare Payment Based Upon  Non-Bid Item Bid Item  Any Medicare Enrolled Supplier  N Lower of the Actual Charge or Fee Schedule Amount for the Medically Necessary Item  Bid Item  Non-Bid Item Contract Supplier Y Lower of the Actual Charge or Fee Schedule Amount for the Medically Necessary Item  Bid Item in Product Category U Bid Item in Product Category S Contract Supplier for Category U Y Lower of the Actual Charge or Fee Schedule Amount for the Medically Necessary Item   50 - Special Billing Instructions for the DMEPOS Competitive Bidding Program  (Rev. 11427; Issued: 05-20- 22; Effective: 01 -01-23; Implementation: 01-03-23) NOTE:  CMS seeks to reduce burden and modernize processes to ensure a reduction in improper payments and an increase in customer satisfaction. The Certificate of Medical Necessity (CMN) form and DME Information Form (DIF) were originally required to help document the medical necessity and other coverage criteria for selected Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) items. In the past, a supplier received a signed CMN from the treating physician or created and signed a DIF to submit with the claim. Due to improvements in claims processing and medical records management, the information found on CMNs or DIFs is available either on the claim or in the medical record and is redundant. Therefore, to reduce burden and increase customer satisfaction, providers and suppliers no longer need to submit these forms for services rendered after January 1, 2023.  For claims with dates of service on or after January 1, 2023  providers and suppliers no longer need to submit CMNs or DIFs with claims. Due to electronic filing requirements, claims received with these forms attached will be rejected and returned to the provider or supplier.  F or claims with dates of service prior to January 1, 2023  processes will not change and if the CMN or DIF is required, it will still need to be submitted with the claim, or be on file with a previous claim. This statement applies throughout the Program Integrity Manual wherever CMNs and DIFs are mentioned.   Claims for competitively bid items shall be submitted under the general DMEPOS claims billing guidelines specified in Chapter 20, 110 of the Medicare Claims Processing Manual, with the following exceptions described in this section.  50.1 - Electronic Submission of Claims and Mandatory Assignment  (Rev. 2979, Issued: 06- 27-14, Effective: 01-01-12, Implementation: 07-28-14)  Under the DMEPOS Competitive Bidding Program, all claims shall be submitted electronically using the ASC X12 837 profe ssional claim format except for MSP claims. ( NOTE:   Claims with multiple MSP situations may be submitted on a paper claim.)  Exceptions to the mandatory electronic billing requirement granted under the Administrative Simplification Compliance Act (ASCA) do  not apply to DMEPOS Competitive Bidding claims.   All DMEPOS Competitive Bidding Program claims are subject to mandatory assignment. Mandatory assignment denotes that a supplier shall accept the Medicare payment as payment in full for their services.  The beneficiarys liability is limited to any applicable deductible plus the 20 percent coinsurance.  For additional information concerning mandatory assignment of claims, see Chapter 1, 30.3.1 of the Medicare Claims Processing Manual.  50.2 - New Modifiers f or DMEPOS Competitive Bidding Billing (Rev. 1544, Issued: 06- 26-08, Effective: 07-01-08, Implementation: 07-07-08)  Table 1 below describes the modifiers implemented for the DMEPOS Competitive Bidding Program.  Specific instructions for the use of each modifier for billing are included in subsequent subsections.  Table 1:  Modifiers Implemented for DMEPOS Competitive Bidding Billing   Modifier  Effective Date  Definition  KG 7/1/07  DMEPOS Item Subject to DMEPOS Competitive Bidding Program Number 1  KK 7/1/07  DMEPOS Item Subject to DMEPOS Competitive Bidding Program Number 2  Modifier  Effective Date  Definition  KU 7/1/07  DMEPOS Item Subject to DMEPOS Competitive Bidding Program Number 3  KL 7/1/07  DMEPOS Item Delivered Via Mail  KT 7/1/07  Beneficiary Resides in a Competitive Bidding Area and Trav els Outside that Competitive Bidding Area and Receives a Competitive Bid Item  KV 1/1/08  DMEPOS Item Subject to DMEPOS Competitive Bidding Program that is Furnished as Part of a Professional Service  KW 1/1/08  DMEPOS Item Subject to DMEPOS Competitive Bidding Program Number 4  KY 1/1/08  DMEPOS Item Subject to DMEPOS Competitive Bidding Program Number 5   50.3 - Billing for Items in Multiple Product Categories  (Rev. 2231, Issued: 05- 27-11, Effective: 08-28-11, Implementation: 08-28-11)   New HCPCS modifiers were developed to facilitate implementation of various policies that apply to certain competitive bidding items. The KG, KK, KU, KW, and KY modifiers are pricing modifiers that suppliers must use to identify when the same supply or accessory HCPC S code is furnished in multiple competitive bidding product categories. For example, HCPCS code E0981 (Wheelchair Accessory, Seat Upholstery, Replacement Only, Each) is found in both the standard and complex rehabilitative power wheelchair competitive bidd ing product categories. Contract suppliers for the standard power wheelchair product category shall submit E0981 claims using the KG modifier, whereas contract suppliers for the complex rehabilitative power wheelchair product category shall use the KK modifier. All suppliers, including grandfathered suppliers, shall submit claims for competitive bid items using the aforementioned competitive bidding modifiers. The KG and KK modifiers are used in Round I of the competitive bidding program and the KU and KW m odifiers are reserved for future program use.   50.4 - Claims Jurisdiction and Billing Procedures for Traveling Beneficiaries  (Rev. 1544, Issued: 06- 26-08, Effective: 07-01-08, Implementation: 07-07-08)  Claims for non- mail order competitively bid items fur nished to beneficiaries who maintain a permanent residence in a CBA, but who are traveling outside of their CB when they obtain the item, must be submitted with a KT modifier to indicate a traveling beneficiary.  Claims for competitively bid items furnis hed to beneficiaries who obtain the item outside of their CBA that do not have a KT modifier shall be denied.  Jurisdiction for these claims remains with DME MAC with jurisdiction for the beneficiary based on the beneficiarys permanent residence. Claims  for mail order competitively bid items that have a KT modifier shall be denied.   50.5 - Claims for DMEPOS Items Furnished to a Beneficiary by a Skilled Nursing Facility (SNF) or Nursing Facility (NF)  (Rev. 1544, Issued: 06- 26-08, Effective: 07-01-08, Im plementation: 07 -07-08)  For purposes of claims adjudication under DMEPOS Competitive Bidding, beneficiaries who maintain a permanent residence in a CBA and, while a resident of a SNF or NF outside of a CBA, obtain a competitively bid item from that SNF or  NF are treated as traveling beneficiaries when their permanent address is within a CBA. As a result, the SNF or NF shall submit a KT modifier on any claims for competitively bid items furnished to beneficiaries, under these circumstances.   A claim must include a place of service 31 to indicate that the beneficiary resides in a SNF or 32 to indicate that the beneficiary resides in a NF, as applicable.  See 20.5.2 for the policies applicable to SNFs and NFs that furnish competitively bid items under D MEPOS Competitive Bidding Program.   50.6 - Billing for Mail Order Items (Rev. 1544, Issued: 06- 26-08, Effective: 07- 01-08, Implementation: 07- 07-08)  The KL modifier has been established for use in submitting claims for mail order DMEPOS items (e.g., dia betic supplies). Beneficiaries who maintain a permanent residence in CBAs for which there is a competitive bidding program for mail order diabetic supplies may choose to obtain their diabetic supplies through mail order or at a storefront.  A beneficiary w ho resides in a CBA and chooses to obtain their diabetic supplies through mail order must obtain these supplies from a contract supplier for mail order diabetic supplies for the CBA where they maintain a permanent residence.  Claims for mail order diabetic supplies furnished to beneficiaries who maintain a permanent residence in a CBA must be billed with the modifier KL.  If the beneficiary chooses to obtain their diabetic supplies at a storefront, DMEPOS competitive bidding rules do not apply and these c laims will be processed under the normal guidelines for supply claims.  See 20.5.3 for additional information on mail -order contract suppliers of diabetic supplies.  50.7 - Claims Submitted for Physicians and Treating Practitioners Who Furnish Competitive ly Bid Items (Rev. 1544, Issued: 06- 26-08, Effective: 07- 01-08, Implementation: 07- 07-08)  Under DMEPOS Competitive Bidding, physicians and treating practitioners may furnish certain competitively bid items without submitting a bid and being awarded a cont ract.  This exception requires that the items be furnished by the physician or treating practitioner to his or her own patients as part of his or her professional service.   The professional service must be furnished on the same date as the date that the DME item is initially furnished.  In addition, physicians and treating practitioners must submit their office visit claim on the same day that they submit the DME claim to ensure timely and accurate claims processing.  Physicians and treating practitioners  who provide DME items in their offices shall continue to be paid even though they are not a contract supplier for the items.  See 20.6 for additional information.  Physicians and treating practitioners that are located in a CBA must submit the KV modif ier on claims for competitively bid items and related accessories that are furnished in accordance with this exception to receive payment for these items for the CBA where the beneficiary maintains a permanent residence.  Physician and treating practitioner submitted competitive bidding claims that do not have an accompanying office visit will be denied.  Physicians and treating practitioners located outside a CBA who furnish DME competitively bid items and/or related accessories as part of a professional s ervice to traveling beneficiaries who maintain a permanent residence in a CBA must also affix the KV modifier to claims submitted for these items.   50.8 - Billing for Oxygen and Oxygen Equipment  (Rev. 1544, Issued: 06- 26-08, Effective: 07- 01-08, Implementation: 07 -07-08)  Noncontract suppliers of oxygen and oxygen equipment may elect to become grandfathered suppliers and continue furnishing these items and services to beneficiaries after the start of the DMEPOS Competitive Bidding Program, if th e beneficiary agrees to the arrangement.  This grandfathering process only applies to suppliers that began furnishing oxygen and oxygen equipment to beneficiaries in a CBA prior to the implementation of the competitive bidding program for that area and cho ose to continue to furnish the grandfathered oxygen and oxygen equipment to these same beneficiaries in the CBA after the start of the DMEPOS Competitive Bidding Program.  See 20.6 for additional information on payments to noncontract suppliers.   If a noncontract supplier does not want to continue furnishing oxygen and oxygen equipment to its existing customers/beneficiaries, the beneficiaries must use a contract supplier to obtain the oxygen and oxygen equipment.  Ordinarily, the title to the oxygen equipment would transfer to the beneficiary after rental payments have been made for 36 months of continuous use.  However, Medicare allows for a minimum of 10 months of payments to be made to a contract supplier for oxygen and oxygen equipment furnished to a beneficiary who changes suppliers under the DMEPOS Competitive Bidding Program because the current supplier chose not to become a grandfathered supplier.  Therefore, under the DMEPOS Competitive Bidding Program, up to 45 continuous payments could be made fo r the oxygen and oxygen equipment.  The beneficiary is liable for co -payments for all paid oxygen and oxygen equipment claims.