(Medicare Claims Processing Manual)

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)  The CPM devices (HCPCS code E0935) are classified as items requiring frequent and substantial servicing and are covered as DME as follows (see the Medicare National Coverage Determinations Manual.):    Continuous passive motion devices are covered for patients who have received a total knee replacement.  To qualify for coverage, use of the device must commence within 2 days following surgery.  In addition, coverage is limited to that portion of the 3 wee k period following surgery during which the device is used in the patient's home.  MACs make payment for each day that the device is used in the patient's home.  No payment can be made for the device when the device is not used in the patient's home or once the 21 day period has elapsed.  Since it is possible for a patient to receive CPM  services in their home on the date that they are discharged from the hospital, this date counts as the first day of the three week limited coverage period.   30.3 - Certain Customized Items  (Rev. 2687, Issued: 04- 19-13, Effective: 01 -01-92, Implementation: 07- 19-13)  Customized items are rarely necessary and are rarely furnished.  In accordance with 42 CFR Section 414.224, in order to be considered a customized item, a covered item (including a wheelchair) must be uniquely constructed or substantially modified for a specific beneficiary according to the description and orders of a physician and be so different from another item used for the same purpose that the two items cannot be grouped together for pricing purposes.  For example, a wheelchair that is custom fabricat ed or substantially modified so that it can meet the needs of wheelchair -confined, conjoined twins facing each other is unique and cannot be grouped with any other wheelchair used for the same purpose.  It is a one- of-a-kind item fabricated to meet specifi c needs.  Items that are measured, assembled, fitted, or adapted in consideration of a patients body size, weight, disability, period of need, or intended use (i.e., custom fitted items) or have been assembled by a supplier or ordered from a manufacturer who makes available customized features, modification or components for wheelchairs that are intended for an individual patients use in accordance with instructions from the patients physician do not meet the definition of customized items.  These items are not uniquely constructed or substantially modified and can be grouped with other items for pricing purposes.  The use of customized options or accessories or custom fitting of certain parts does not result in a wheelchair or other equipment being consi dered as customized.  The item must be uniquely constructed using raw materials or there must be a necessary, substantial modification to the base equipment (e.g., wheelchair frame) for the item to be considered a customized item.   Section 414.224 (b) provides that payment is made for the lump sum purchase of the item based on the MACs individual consideration and judgment of a reasonable payment amount for each customized item.  The MACs individual consideration takes into account  written documentation on the costs (including design, fabrication, and assembly costs) of the item including at least the cost of labor, to the extent that they are reasonable, of those actually performing the customization.  The MACs individual consideration also takes into account the cost of the types of materials, to the extent that they are reasonable, used in custom fabricating or substantially modifying an ite m.  The MAC may need to require a detailed description of each phase of the construction process and labor skills needed to fabricate or modify the item in order to determine a reasonable amount.  MACs shall submit quarterly reports to CMS on the items they have determined meet the definition of customized items and how they reached the conclusion for each item.  MACs shall include in these reports the reasonable payment amount determinations and factors they considered in determining the reasonable payment amount for each item.   The definition of customized DME set forth in regulations at 42 CFR Section 414.224 is based on the longstanding definition of customized DME used in making decisions regarding when to make individual payment determinations outside the normal process for calculating customary and prevailing charges under the reasonable charge payment methodology used for DME prior to 1989.  Public Law 101- 508, Omnibus Budget Reconciliation Act (OBRA), November 5, 1990 (104 Stat. 1388- 79) amended the criteria for treatment o f wheelchair as a customized item at section 1834 (a) (4) of the Social Security Act by adding a clause that in case of a wheelchair furnished on or after January 1, 1992, the wheelchair shall be treated as a customized item if the wheelchair has been measured, fitted, or adapted in consideration of the patients body size, disability period of need, or intended use, and has been assembled by a supplier or ordered from a manufacturer who makes available customized features, modification or components for wheelchairs that are intended for an individual patients use in accordance with instructions from the patients physician.  The amendment further noted that this clause applied only to items furnished on or after January 1, 1992, unless the Secretary devel oped specific criteria before that date for the treatment of wheelchairs as customized items for purposes of section 1834(a) (4) of the Social Security Act (in which case the amendment made by such clause would not become effective.  CMS issued an interim  final rule on December 20, 1991 (56 FR 65995) to announce the decision not to use the optional definition of customized wheelchairs in section 1834 (a) (4) of the Act and add a new section 414.224 to 42 CFR to provide in regulation criteria that must be m et for a covered item to be considered a customized item for payment purposes.  The final rule (58 FR 34919) was published on June 30, 1993.   NOTE:   MACs  must observe that the alternative definition of customized wheelchairs found in section 1834(a)(4) of the Act was never adopted for Medicare payment purposes and should not be confused with the definition of customized items at 42 CFR 414.224.  30.4 - Other Prosthetic and Orthotic Devices  (Rev. 1, 10- 01-03) A3-3629   For payment purposes, these items consist of all prosthetic and orthotic devices excluding:    items requiring frequent and substantial servicing;   customized items;  parenteral/enteral nutritional supplies and equipment; and  intraocular lenses.   Other than these exceptions, A/B MACs (A), (B), (HHH), and DME MACs pay the fee schedule amounts for prosthetic and orthotic devices on a lump- sum purchase basis.  30.5 - Capped Rental Items  (Rev. 1, 10- 01-03)  For these items of DME, A/B MACs (HHH) and DME MACs pay the fee schedule amounts on a monthly rental basis not to exceed a period of continuous use of 15 months.  In the tenth month of rental, the beneficiary is given a purchase option (see 30.5.2).  If the purchase option is exercised, A/B MACs (HHH) and DME MACs continue to pay rental fees not to exceed a period of continuous use of 13 months and ownership of the equipment passes to the beneficiary.  If the purchase option is not exercised, A/B M ACs (HHH) and DME MACs continue to pay rental fees until the 15 month cap is reached and ownership of the equipment remains with the supplier (see 30.5.4 ).  In the case of electric wheelchairs only, the beneficiary must be given a purchase option at the time the equipment is first provided (see 30.5.3 ).  30.5.1 - Capped Rental Fee Variation by Month of Rental  (Rev. 1, 10- 01-03)  For the first three rental months, the capped rental fee schedule is calculated so as to limit the monthly rental to 10 percent of the average of allowed purchase prices on assigned claims for new equipment during a base period, updated to account for infl ation.  For each of the remaining months, the monthly rental is limited to 7.5 percent of the average allowed purchase price.  After paying the rental fee schedule amount for 15 months, no further payment may be made except for the 6 -month maintenance and servicing fee (see 40.2).   30.5.2 - Purchase Option for Capped Rental Items  (Rev. 1, 10- 01-03)  Effective May 1, 1991, suppliers must give beneficiaries the option of converting their capped rental equipment to purchased equipment during their 10th continuous rental month.  DME MACs and A/B MACs (HHH) make no further rental payments after the 11th re ntal month for capped rental items until the supplier notifies the DME MAC or A/B MAC (HHH) that it has contacted the beneficiary and furnished him/her with the option of either purchase or continued rental.  Information contained in Exhibit 1 may be furni shed to beneficiaries by suppliers to help them make a rent/purchase decision.  DME MACs and A/B MACs (HHH) provide copies of Exhibit 1 to suppliers.  Beneficiaries have one month from the date the supplier makes the offer to accept this option.  If the beneficiary declines or fails to respond to the purchase option, the A/B MAC (HHH) or DME MAC continues to make rental payments until the 15- month rental cap is reached.   If the beneficiary accepts the purchase option, the DME MAC or A/B MAC (HHH) continues making rental payments until a total of 13 continuous rental months have been paid.  The DME MAC or A/B MAC (HHH) will not make any additional rental payments beyond the  13th rental month.  On the first day after 13 continuous rental months have been paid, the supplier must transfer title to the equipment to the beneficiary.  30.5.3 - Additional Purchase Option for Electric Wheelchairs  (Rev. 1, 10- 01-03)  Effective May 1, 1991, suppliers must give beneficiaries entitled to electric wheelchairs the option of purchasing them at the time the supplier first furnishes the item.  DME MACs or A/B MACs (HHH) make no rental payment for the first month for electric wheelchairs until the supplier notifies the MAC that it has given the beneficiary the option of either purchasing or renting.  Information contained in Exhibit 2 may be furnished to beneficiaries by suppliers to help them make a rent/purchase decision.  MAC s provide copies of Exhibit 2 to suppliers.  Payment must be on a lump- sum fee schedule purchase basis where the beneficiary chooses the purchase option.  If the beneficiary declines to purchase the electric wheelchair initially, MACs make rental payments in the same manner as any other capped rental item, including the instructions in 30.5.2.  30.5.3.1 - Exhibits  (Rev. 1, 10- 01-03)  Exhibit 1 -  The Rent/Purchase Option