(Medicare Claims Processing Manual)

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:   Symbol  Payment Class  Category Label  IN Inexpensive/routinely purchased.  DME  FS Frequency Service.  DME  CR Capped Rental.  DME  OX Oxygen and Oxygen Equipment.  OXY  Symbol  Payment Class  Category Label  OS Ostomy, Tracheostomy and Urologicals  P/O S/D Surgical Dressings.  S/D P/O Prosthetics and Orthotics.  P/O SU Supplies.  DME  TE TENS.  DME   The A/B MACs (HHH) need to retrieve data from all of  the above categories.  A/B MACs (A) need to retrieve data only from categories P/O, S/D and SU.  A/B MACs (A) need to retrieve the SU category in order to be able to price supplies on Part B SNF claims.   20.5 - Online Pricing Files for DMEPOS  (Rev. 2464, Issued: 05- 04-12, Effective: 10 -01-11-MCS/10 -01-12-VMS, Implementation: 10 -03-11-MCS, VMS Analysis and Design /10- 01-12-VMS implementation)   The CMS provides updates to the DMEPOS fee schedule and related schedules annually or as otherwise necessary.  A/B MACs (B) or DME MACs must maintain at least five full calendar years of fee schedules and related pricing data (i.e., the current and four prior calendar years) , regardless of the number of updates or pricing periods within those five years.   20.6 - Phase -in For Competitive Bid Rates in Areas Not in a Competitive Bid Area  (Rev. 3801, Issued: 06- 28-17, Effective: 07 -01-16, Implementation: 07- 03-17 - For contractors to retrieve and test the fee schedule and begin the adjustment process; 10-02-17 - For contractors to complete the adjustment process)   Section 1834(a)(1)(F)(ii) of the Act mandates adjustments to the fee schedule amounts for certain DME items furnished on or after January 1, 2016, in areas that are not competitive bid areas, based on information from competitive bidding programs for DME. Regulations at section 414.210(g)(9) phased in these adjusted fees so that from January 1, 2016 through June 30, 2016, the fee schedule amount in non- bid areas was based on 50 percent of the adjusted payment amount established using competitive bidding inf ormation and 50 percent of the unadjusted fee schedule amount (i.e., the 2015 fee schedule amount updated by the 2016 covered item update). Beginning July 1, 2016, the fee schedule amounts for non- bid areas reverted to 100 percent of the adjusted payment a mounts determined using competitive bidding information.  Section 16007 of the 21st Century Cures Act changes the 2016 fee schedule transition period so that payment based on 50 percent of the adjusted payment amount established using competitive bidding information and 50 percent of the unadjusted fee schedule amount extends from June 30, 2016 to December 31, 2016. Section 16007 also changes from July 1, 2016 to January 1, 2017 the date that payment based on 100 percent of the adjusted payment amounts in non- bid areas is effective.   Repriced Cures Act claim adjustments for the above mentioned dates of service shall use the following RARC code: N689 -   Alert: This reversal is due to a retroactive rate change.   30 - General Payment Rules  (Rev. 11414; Issued: 05- 12-22; Effective: 06 -13-22; Implementation: 06 -13-22) 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.   For 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.   B3-5102  DMEPOS are categorized into one of the following payment classes:   Inexpensive or other routinely purchased DME;   Items requiring frequent and substantial servicing;   Certain customized items;  Other prosthetic and orthotic devices;   Capped rental items; or   Oxygen and oxygen equipment.  The CMS determines the category that applies to each HCPSC code and issues instructions when changes are appropriate.  See 130 for billing information for each payment class.   DME, including DME furnished under the home health benefit and Part B DME benefit, is paid on the basis of the fee schedule.   Oxygen and oxygen equipment are paid on the basis of a fee schedule.   Any DME or oxygen furnished to inpatients under a Part A covered stay is included in the SNF or hospital PPS rate.  When an inpatient in a hospital or SNF is not entitled to Part A inpatient benefits, payment may not be made under Part B for DME or oxygen provided in the hospital or SNF because such facilities do not qualify as a patient's home.  The definition of DME in 1861(n) of the Act provides that DME is covered by Part B only when intended for use in the home, which explicitly does not include a SNF  or hospital.  (See the Medicare Benefit Policy Manual, Chapter 15).  This does not preclude separate billing for DME furnished after discharge.  Payment to providers and suppliers other than Home Health Agencies (HHAs) for supplies that are necessary for the effective use of DME is made on the basis of a fee schedule, except that payment for drugs is made under the drug payment methodology rules (S ee Chapter 17 for drug payment information.)   Payment for prosthetics and orthotics is made on the basis of a fee schedule whether it is billed to the A/B MAC (A), (B), or (HHH), or DME MAC.  Payment under Part B for surgical dressings is made on the basis of the fee schedule except:    Those applied incident to a physician's professional services;   Those furnished by an HHA; and   Those applied while a patient is being treated in an outpatient hospital department.     30.1 - Inexpensive or Other Routinely Purchased DME                   (Rev.4027; Issued: 04- 27-18; Effective: 10 -01-18; Implementation: 10 -01-18) For this type of equipment, A/B MACs (A), (B), or (HHH), and DME MACs pay for rentals or lump -sum purchases. However, with the exception of TENS (see 30.1.2), the total payment amount may not exceed the actual charge or the fee schedule amount for purchas e.   A. Inexpensive DME   This category is defined as equipment whose purchase price does not exceed $150.   B. Other Routinely Purchased DME  This category is defined as equipment that is acquired at least 75 percent of the time by purchase and includes equipment that is an accessory used in conjunction with a nebulizer, aspirator, or ventilators that are either continuous airway pressure devices or intermittent assist devices with continuous airway pressure devices. Effective October 1, 2015, this category also includes speech generating devices and accessories necessary for the effective use of speech generating devices.    30.1.1 - Used Equipment  (Rev. 1, 10- 01-03)  For payment purposes, used equipment is considered routinely purchased equipment and is any equipment that has been purchased or rented by someone before the current purchase transaction.  Used equipment also includes equipment that has been used under circumstances where there has been no commercial transaction (e.g., equipment used for trial periods or as a demonstrator).   However, if a beneficiary rented a piece of brand new equipment and subsequently purchased it, the payment amount for the purchase should be high enough so that the total combined rental and purchase amounts at least equal the fee schedule for the purchase of comparable new equipment.  The payment amount may be established in this manner only to the extent it does not exceed the actual charge made for the purchase.  EXAMPLES:  The fee schedule amounts for an item of DME are ordinarily as follows:   $500 for purchase when the item is new.  $375 for purchase when the item is used.  $50 per month for renting the item.  Situation 1: A beneficiary rented the item when it was brand new for one month and then purchased it for $500.  The amount allowed for the purchase is $450 (i.e., $500 minus the $50 allowed for the one month of rental) rather than $375.  Situation 2: A beneficiary rented the item for one month when it was brand new and then purchased it for $400.  The amount allowed for the purchase is $400 rather than the $450 that is allowable in situation 1 since the payment amount may not exceed the ac tual charge for an item.   30.1.1.2 - Used Rental Equipment  (Rev. 3443, Issued: 01- 29-16, Effective: 07 -01-16, Implementation: 07- 05-16)  When a beneficiary elects to purchase previously rented inexpensive and routinely purchased DME and the service has a UE (purchase of used equipment) modifier the Medicare allowed amount for used purchased equipment will be calculated at the lower of the purchase fee schedule amount (UE) minus previous paid rental amounts or the actual charge for the used purchased equipment .  30.1.2 - Transcutaneous Electrical Nerve Stimulator (TENS)  (Rev. 2605, Issued: 11- 30-12, Effective: 06 -08-12, Implementation: 01- 07-13)  In order to permit an attending physician time to determine whether the purchase of a TENS is medically appropriate for a particular patient, MACs pay 10 percent of the purchase price of the item for each of 2 months.  The purchase price and payment for maintenance and servicing are determined under the same rules as any other frequently purchased item, except that there is no reduction in the allowed amount for purchase due to the two months rental.  Effective June 8, 2012, CMS will allow coverage for TENS use in the treatment of chronic low back pain (CLBP) only under specific conditions which are described in the NCD Manual, Pub. 100- 03, chapter 1 Section 160.27.  30.2 - Items Requiring Frequent and Substantial Servicing  (Rev. 1, 10- 01-03) A3-3629   For this type of equipment, MACs pay the fee schedule amounts on a rental basis until medical necessity ends.  MACs cannot pay for purchase of this type of equipment.  30.2.1 - Daily Payment for Continuous Passive Motion (CPM) Devices  (Rev. 1, 10- 01-03)