(Medicare Claims Processing Manual)

20.6.1 - Special Rules for Certain Rented Durable Medical Equipment (DME), Oxygen and  Oxygen Equipment (Grandfathered Suppliers and Items)  (Rev. 1502; Issued:  05-09- 08; Effective/Implementation Date:  06 -09-08)  Suppliers that were furnishing certain rented DME, or oxygen and oxygen equipment at the time a competitive bidding program begins in a CBA, may become grandfathered suppliers by continuing to furnish these items to the Medicare beneficiaries who have been receiving these items, even if the suppliers do not become contract suppliers for these items in the CBA. Grandfathered items must be any of the following:   (1)  Inexpensive or routinely purchased items furnished on a rental basis;  (2)  Items requiring frequent and substantial servicing;  (3)  Oxygen and oxygen equipment (not including oxygen contents, supplies or accessories  furnished for use in conjunction with beneficiary-owned equipment);  (4) Capped rental items furnished on a rental basis.  20.6.1.1 - Requirements for Grandfathered Suppliers  (Rev. 1502; Issued:  05-09- 08; Effective/Implementation Date:  06 -09-08)  20.6.1.1.1 - Eligibility (Rev. 1502; Issued:  05-09- 08; Effective/Implementation Date:  06 -09-08)  All suppliers must be in good standing and have an active NSC number which requires that the supplier meet any local and State licensure requirements, if any, for provision of the grandfathered item.   20.6.1.1.2 - Servicing Current Beneficiaries  (Rev. 1502; Issued:  05-09- 08; Effective/Implementation Date:  06 -09-08)  A supplier that chooses to continue to furnish a grandfathered item(s) to any beneficiary in a CBA must continue to furnish that grandfathered item(s) to all beneficiaries who elect to continue receiving that item(s) from that supplier for the remainder of the payment period for the item(s), unless the item is no longer medically necessary.  In order to participate as a grandfathered supplier, the supplier must update its billing systems to incorporate any new billing codes, modifiers or other billing instr uctions for grandfathered suppliers in the Medicare DMEPOS Competitive Bidding Program.   20.6.1.1.3 - Notification to Beneficiaries by Suppliers that Choose to Become Grandfathered Suppliers  (Rev. 1532, Issued: 06- 11-08, Effective: 07-01-08, Implementation : 07-07-08)  A noncontract supplier that elects to become a grandfathered supplier is responsible for providing notification to its Medicare customers residing in CBAs who are furnished items identified in section 20.6.1. This notification should meet the following guidelines:   NOTE:  This notification should only be sent to beneficiaries who the supplier is currently serving and who maintain a permanent residence in a CBA.  The list of ZIP Codes for each CBA, the list of the HCPCS for competitively bid items, and the single payment amounts for these items are located in public use files on the CBIC Web site at: http://www.dmecompetitivebid.com/palmetto/cbic.nsf/DocsCat/Home.    It should state that the supplier is offering to continue to furnish rental DME, oxygen and oxygen equipment and/or related accessories and supplies that it is currently furnishing to the beneficiary (i.e., before the start of the competitive bidding program) and to provide these items to the beneficiary for the remainder of the rental period.   It should state that the beneficiary has the choice to continue to receive a grandfathered item(s) from the grandfathered supplier or to elect to begin receiving the i tem(s) from a contract supplier after the competitive bidding program begins.   It should provide the suppliers telephone number so the beneficiary or caregiver may call and notify the supplier of his/her election.   The supplier should provide notification to the beneficiary at least 30 days before the start date of the implementation of the Medicare DMEPOS Competitive Bidding Program.    The supplier should receive an election from a beneficiary and maintain a record as to whether the beneficiary chose to continue to receive the item from a grandfathered supplier, chose to go to a contract supplier to receive the item or did not respond.  The record should indicate, at a minimum, the date that the beneficiary is notified that the supplier elected to become a grandfathered supplier for the item(s), the date the beneficiary made an election (if applicable), and the methods of communication used in the case of each election activity (e.g. letter to the beneficiary).    The supplier should inform the beneficiary of the end date of service and that arrangements will be made to pick -up the item within 10 days of picking up the item.   The supplier should remind the beneficiary of the date and time the equipment will be picked up within 2 business days of picking up the equipment.  Recommended Schedule for Suppliers to Notify Beneficiaries of the Necessity to Decide on Arrangements for Choosing to Use a Grandfathered Supplier or Contract Supplier   Notification - Supplier  Number of Days Before the Start Date of the Competitive Bidding Program  Initial Notification in writing  30 days  Notification before picking up equipment  Within 10 days before picking up the equipment.  Final Notification before picking up equipment  Within 2 business days of picking up the equipmen t  ** A sample notification letter will be posted on the CBIC Web site at www.dmecompetitivebid.com.  20.6.1.1.4 - Notification to Beneficiaries for Suppliers that Choose Not to Become Grandfathered Supplie rs (Rev. 1532, Issued: 06- 11-08, Effective: 07-01-08, Implementation: 07-07-08)  A noncontract supplier that elects not to become a grandfathered supplier should provide notification to the beneficiary stating the supplier will not continue to furnish, after the start of the Medicare DMEPOS Competitive Bidding Program, the competitively bid item(s) that the beneficiary has been receiving from the supplier.  This notification should meet the following guidelines:  NOTE:  This notification should only be sent to beneficiaries who the supplier is currently serving and who maintain a permanent residence in a CBA.  The list of ZIP Codes for each CBA, the list of the HCPCS for competitively bid items, and the single payment amounts for these items are located in  public use files on the CBIC Web site at:  http://www.dmecompetitivebid.com/palmetto/cbic.nsf/DocsCat/Home.    It should state that the supplier will not continue to furnish rental DME and/or oxygen and oxygen equipment that it is currently furnishing to the beneficiary after the start of the competitive bidding program and that the beneficiary may need to select a contract supplier to continue to receive these items.   It should inform the beneficiary of the start of the competitive bidding program and the date the supplier plans to pick up the item.   It should inform the beneficiary that he/she may obtain information about the competitive bidding program by calling 1-800- MEDICAR E or accessing www.medicare.gov on the Internet.  It should also refer him/her to the supplier locator tool on www.medicare.gov .   The supplier should provide this written notification to the beneficiary 30 days before the start date from the implementation of the Medicare DMEPOS Competitive Bidding Program.    The supplier should inform the beneficiary of the end date of service and that arrangements will be made to pick -up the item within 10 days of picking up the item.   The supplier should remind the beneficiary of the date and time the equipment will be picked up within 2 business days of picking up the equipment.  Recommended Schedule for Suppliers to Notify Beneficiaries to Lo cate a Contract Supplier   Notification - Supplier  Number of Days Before the Start Date of the Competitive Bidding Program Initial Notification in writing  30 days  Notification before picking up equipment  Within 10 days before picking up the equipment.  Final Notification before picking up equipment  Within 2 business days of picking up the equipment   ** A sample notification letter will be posted on the CBIC Web site at www.dmecompetitivebid.com.  20.6.2 - New Period of Continuous Use  (Rev. 1502; Issued:  05-09- 08; Effective/Implementation Date:  06 -09-08)  In the case of grandfathered items that are oxygen and oxygen equipment or capped rental DME, whenever a new period of continuous use begins following a break in use of greater than 60 days plus the days remaining in the last rental month, after the start of the competitive bidding program, the new or additional equipment covered under the new period of continuous use must be obtained from a competitive bidding contract supplier.  See 42 CFR 414.230 for determining a period of continuous use.  20.6.3 - Picking Up Equipment  (Rev. 1502; Issued:  05-09- 08; Effective/Implementation Date:  06 -09-08)  Under no circumstances may the supplier discontinue services by picking up a medically necessary item(s) prior to the end of a month for which the supplier is eligible to receive a rental payment, even if the last day ends after the start date of the Medicare DMEPOS Competitive Bidding Program.  A noncontract supplier may only pick up medically necessary oxygen equipment or capped rental DME prior to the start of the competitive bidding program or prior to the end of the month for which the supplier is eligible to receive payment if the beneficiary relocates his/her permanent residence outside the CBA and outside the normal service area of the supplier.  The pick up by the noncontract supplier and the delivery by the contract supplier of the equipment should occur on the same day and month as the item rental anniversa ry date.  The anniversary date is the day of the month on which the item was first delivered to the beneficiary.  For capped rental DME or oxygen and oxygen equipment, the noncontract supplier is responsible for submitting a claim for any rental period tha t begins prior to the start of the competitive bidding program.  In all cases, we expect the contract supplier to consult with the noncontract supplier to obtain the anniversary date.  The noncontract supplier should work with the contract supplier so that  there is no break in service or furnishing of medically necessary items.  We expect the contract supplier and the current supplier will work together to make arrangements suitable to the beneficiarys needs.   Examples:  Using July 1st as the beginning dat e of the Medicare DMEPOS Competitive Bidding Program   A.  If a beneficiarys last anniversary date before the beginning of the competitive bidding program is June 29, the noncontract supplier must submit a claim for the rental month beginning June 29 and e nding July 28th.  The noncontract supplier must not pick up the equipment prior to July 29th.   In this case, the current supplier would pick up its equipment, on July 29th, and the contract supplier would deliver its equipment on July 29th.  B.  If a bene ficiarys anniversary date is July 1st, the beginning date for the competitive bidding program, the noncontract supplier must not pick up the equipment before July 1st and must not submit a claim for the July rental period.  The contract supplier should de liver the equipment to the beneficiary on July 1st and must submit a claim for this month.   20.6.4 - Transfer of Title for Oxygen Equipment and Capped Rental DME  (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  Title to oxygen equipment transfers to the beneficiary on the first day that begins after the 36th continuous month during which Medicare payment is made for rental of the equipment.  Title for capped rental equipment transfers to the beneficiary on the first day that begins after the 13th continuous month during which Medicare payment is made for the capped rental DME equipment.  These requirements apply to all suppliers without regard to their grandfathered status.  Suppliers that do not become contract suppliers or grandfathered suppliers must transfer title for the equipment to the beneficiary in accordance with these requirements even in situations where the 36th continuous month for oxygen equipment or the 13th continuous month for capped rental DME ends after the start date of the competitive bidding program.   20.6.5 - Capped Rental DME Furnished Prior to January 1, 2006  (Rev. 1502; Issued:  05- 09-08; Effective/Implementation Date:  06 -09-08)  This section addresses situations where the beneficiary did not elect the purchase option described in section 30.5.2 of Chapter 20 for capped rental DME for which the first rental month occurred prior to January 1, 2006.  In accordance with section 30.5.4 of Chapter 20, the supplier that provides the item in the 15th month of the rental period is responsible for supplying the equipment and for maintenance and servicing after the 15- month period.  This requirement is not eliminated by any requirement under the competitive bidding program and applies to both contract and noncontract suppliers without regard to their grandfathered status.  (See section 50.1 of Chapter 20).