(Medicare Claims Processing Manual)

a CBA  The beneficiary should obtain the competitively bid item from a contract supplier in the CBA if the beneficiary wants Medicare to cover the item.  Non-CBA  Medicare -enrolled DMEPOS supplier   Suppliers that furnish DMEPOS items to Medicare beneficiaries who maintain a permanent residence in a CBA and who travel to a non-CBA need to be aware of the public use files on the CBIC Web site at: http://www.dmecompetitivebid.com/palmetto/cbic.nsf/DocsCat/Home. The public use files contain the ZIP Codes for the CBAs, the HCPCS for competitively bid items, and the single payment amounts for these items. Suppl iers will be able to use these files to identify if the beneficiary traveling to the area maintains a permanent residence in a CBA, determine whether the beneficiary is obtaining a competitively bid item, and determine the single payment amount for those i tems.   The Medicare payment amount is always based on the location in which the beneficiary maintains a permanent residence. For example:   a. If a beneficiary maintains a permanent residence in a CBA and travels outside of the CBA, payment for a competitively  bid item for the CBA in which the beneficiary maintains a permanent residence is the single payment amount for that item in the beneficiarys CBA.   b. When a beneficiary maintains a permanent residence in an area that is not in a CBA and travels to CBA or non- CBA, the supplier that furnishes the item will be paid the fee schedule amount for the area where the beneficiary maintains a permanent residence.   40.10.1 - Traveling Beneficiaries and Transfer of Title of Oxygen Equipment or Capped Rental Items  (Rev. 1532, Issued: 06- 11-08, Effective: 07-01-08, Implementation: 07-07-08)  If a beneficiary has two residences in different areas and uses a local supplier in each area or if a beneficiary changes suppliers during or after the rental period, this does not result in a new rental episode. The supplier that provides the item in the 36th month of a rental episode for oxygen equipment or the 13th month of a rental episode for capped rental DME is responsible for transferring title to the equipment to the beneficiary . This applies to snow bird or extended travel patients and coordinated services for patients who travel after they have purchased the item.   40.11 - Billing Procedures Related to Advance Beneficiary Notice (ABN) Upgrades under the Competitive Bidding Pr ogram  (Rev. 1532, Issued: 06- 11-08, Effective: 07-01-08, Implementation: 07-07-08)  In general, an item included in a competitive bidding program must be furnished by a contract supplier for Medicare to make payment.  This requirement applies to situations where the item is furnished directly or indirectly as an upgrade.  An upgrade is an item with features that go beyond what is medically necessary.  An upgrade may include an excess component.  An excess component may be an item feature or service, which is in addition to, or is more extensive than, the item that is reasonable and necessary under Medicare coverage requirements.  An item is indirectly furnished if Medicare makes payment for it because it is medically necessary and is furnished as part of an upgraded item.   The billing instructions for upgraded equipment found in section 120 of chapter 20 of the Medicare Claims Processing Manual (Pub. 100 -04) continue to apply under the DMEPOS Competitive Bidding Program.   The following scenarios and chart des cribe situations where a beneficiary, residing in a competitive bidding area, elects to upgrade to an item with features or upgrades that are not medically necessary.    Upgrades from a bid item to a non- bid item  In this situation, Medicare payment will only  be made to a contract supplier on an assignment -related basis.  Medicare payment will be equal to 80 percent of the single payment amount for the medically necessary bid item.    Upgrades from a non- bid item to a bid item  When upgrading from a non- bid to a bid item, Medicare payment is made to a contract supplier on either an assigned or unassigned 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 non -bid item.    Upgrades from a bid item in one product category (category S) to a bid item in another product category (category U) In this case, Medicare payment is only made to a contract supplier for the product category U on an ass ignment-related basis.  Medicare payment would be equal to 80 percent of the single payment amount for the medically necessary bid item in product category S.   Upgrade Scenarios for Beneficiaries Residing in a Competitive Bidding Area (CBA)  From  the Medically Necessary Item To the Upgraded Item Must be Furnished by Assignment Mandatory (Y/N)  Medicare Payment Based Upon  Bid Item  Non-Bid Item Contract Supplier Y Single Payment Amount for the Medically Necessary Item  Non-Bid Item Bid Item  Contract Supplier N Lower of the Actual Charge or Fee Schedule Amount for the Medically Necessary Item  Bid Item in Product Category S Bid Item in Product Category U Contract Supplier for Category U Y Single Payment Amount for Category S for the Medically N ecessary Item   The following scenarios and chart describe situations where a beneficiary, who does not reside in a competitive bidding area, but travels to a competitive bidding area, elects to upgrade to an item with features that are not medically neces sary.    Upgrades from a bid item to a non- bid item  In this situation, Medicare payment is only made to a contract supplier 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.    Upgrades from a non- bid item to a bid item  When upgrading from a non- bid to a bid item, Medicare payment is made to a contract supplier on either an assigned or unassigned 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 non -bid item.    Upgrades from a bid item in one product category (category S) to a bid item in another product category (category U) In this case, Medicare payment is only made to a contract supplier for the product category U on an assignment -related basis.  Medicare payment would be equal to 80 percent of lower of the actual charge or the fee schedule amount for the medically necess ary bid item in product category S.  Upgrade Scenarios for Beneficiaries Who Do Not Reside In a CBA, But Travel to a CBA From  the Medically Necessary Item To the Upgraded Item Must be Furnished by Assignment Mandatory (Y/N)  Medicare Payment Based Upon  Bid Item  Non-Bid Item Contract Supplier Y Lower of the Actual Charge or Fee Schedule Amount for the Medically Necessary Item  Non-Bid Item Bid Item  Contract Supplier N Lower of the Actual Charge or Fee Schedule Amount for the Medically Necessary Item  Bid Item in Product Category S Bid Item in Product Category U Contract Supplier for Category U Y Lower of the Actual Charge or Fee Schedule Amount for the Medically Necessary Item   Beneficiary Liability under the Competitive Bidding Program   Under the competitive bidding program, a beneficiary has no financial liability to a non contract supplier that furnishes an item included in the competitive bidding program for a competitive bidding area, unless, prior to receiving the item, the beneficiary selects  Option 1 on the ABN and signs the notice.  Similarly, beneficiaries who receive an upgraded item from a non -contract supplier in a competitive bidding area are not financially liable for the item unless, prior to giving the beneficiary the upgraded item, the supplier obtains a valid ABN on which the enrollee has selected Option 1 and signed the notice.  In the case of upgrades, for a beneficiary to be liable for the extra cost of an item that exceeds their medical needs, the beneficiary must, select Option  1 and sign a valid ABN prior to receiving the item.  See Chapter 20, section 120 of the Medicare Claims Processing Manual for additional information on ABN upgrades.  40.12 - Billing Procedures Related to Downcoding under the Competitive Bidding Program  (Rev. 1532, Issued: 06- 11-08, Effective: 07-01-08, Implementation: 07-07-08)  The following downcoding guidelines describe situations where Medicare reduces the level of payment for the prescribed item based on a medical necessity partial denial of coverage for the additional, not medically necessary, expenses associated with the prescribed item. For beneficiaries who reside in a CBA and for whom Medicare determines that the prescribed item should be downcoded to an item that is reasonable and necessary unde r Medicares coverage requirements, the subsequent scenarios and chart detail the type of supplier that can furnish the item and the payment for the item.    Downcodes from a non- bid item to a bid item  In this situation, Medicare payment will be made to any Medicare enrolled supplier on an assigned or unassigned basis.  Medicare payment will be equal to 80 percent of the single payment amount for the medically necessary bid item.    Downcodes from a bid item to a non- bid item Medicare payment in this downcoding scenario will be made to a contract supplier 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 non -bid item.    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 be made to a contract supplier for the product category U on an assignment -related basis.  Medicare payment would be equal t o 80 percent of the single payment amount for the medically necessary bid item in product category S.   Downcoding Scenarios for Beneficiaries Residing in 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 Single Payment 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 Single Payment Amount for Category S for the Medically Necessary Item   The following scenarios and chart desc ribe situations where the prescribed item for a beneficiary that does not reside in a CBA, but travels to a CBA is downcoded to an item that is reasonable and necessary under Medicares coverage requirements.    Downcodes from a non- bid item to a bid item  In this situation, Medicare payment will be made to any Medicare enrolled supplier on an assigned or unassigned 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 bi d item.    Downcodes from a bid item to a non- bid item  Medicare payment in this downcoding scenario will only be made to a contract supplier 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 non -bid item.    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