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A QUICK SCREEN TO AID IN IDENTIFYING COVERABLE CASES

Medicare claims for durable medical equipment are suitable for coverage, and appeal if they have been denied, if they meet the following criteria:

  1. The equipment has been prescribed as medically necessary by your physician. Most items require a Certificate of Medical Necessity (CMN) filled out by a physician; and
  2. It must be able to withstand repeated use. Medicare expects a piece of equipment to last 5 years and will not usually pay for like or similar equipment within that time frame; and
  3. It must be primarily and customarily used for a medical purpose; and
  4. It must generally not be useful to a person in the absence of illness or injury; and
  5. It must be appropriate for use at home. Under a provision of federal law, a skilled nursing facility is not considered home; and
  6. The durable medical equipment supplier must be a Medicare-certified provider.

ADDITIONAL HINTS:

  1. The attending physician is ALWAYS the key to obtaining Medicare benefits; obtain a statement from the beneficiary's physician stating that the durable medical equipment prescribed is medically necessary, is part of his course of treatment, and explaining its therapeutic value to the beneficiary.
  2. 2. The equipment must not only be medically necessary for the beneficiary, it must also generally be used for medical purposes. Thus, an air conditioner, while perhaps medically necessary for the individual patient, is not generally considered to be for medical purposes and is, therefore, not covered. (Water mattresses, now used for non-medical purposes but originally created for patients, will be coverable if medically necessary.)
  3. Iron lungs, oxygen tents, hospital beds, and wheelchairs are included in Medicare's definition of durable medical equipment.
  4.  Some prosthetic devices, braces, artificial limbs and eyes are covered by Medicare Part B as "medical and other health services," not as durable medical equipment.
  5. A seat lift chair mechanism will be covered by Medicare as durable medical equipment if:
    • It is prescribed by a physician; and
    • it is included in the physician's course of treatment; and
    • it is likely to effect improvement OR arrest or retard deterioration of the patient's condition; and
    • the alternative would be chair or bed confinement; and
    • the seat lift is the type which can be controlled by the patient and effectively assist him in standing up and sitting down without other assistance. (Seat lifts which operate by a spring release mechanism with a sudden, catapult-like motion will NOT be covered.
  6. Durable medical equipment costs are payable under Medicare Part B. You must therefore be enrolled in Part B and Medicare payment is subject to the Part B deductible and co-insurance requirements.

More information – Medicare Coverage of Power Mobility Devices: Tips and Reminders


Payment Policy

Medicare pays for:

  • Inexpensive items (not to exceed $150);
  • Wheelchairs, hospital beds, some walkers;
  • Certain customized items;
  • Prosthetic and orthotic devices
  • Capped rental items;
  • Oxygen and oxygen equipment.

DME, when furnished in the Medicare home under the home health benefit and under the Medicare Part B DME benefit, is paid on the basis of a fee schedule.  Based on an individual consideration of each item, DME requiring custom fabrication may be paid for in a lump-sum amount and are not subject to prevailing charges or fee schedules.

Prosthetic and orthotic devices– excluding items requiring frequent and substantial servicing; customized items; parenteral/enteral nutritional supplies and equipment; and intraocular lenses – are paid for on the basis of a fee schedule and on a lump-sum basis.

Capped rental items (such as oxygen, nebulizers, and manual wheelchairs) that exceed $150 in costs are paid for on a rental fee schedule that is calculated to limit the monthly rental to 10% of the average allowed purchase price on an assigned claim for new equipment during a base period.  For each remaining month, the monthly rental is limited to 7.5% of the average allowed purchase price.  After paying the rental fee schedule amount for 15 months, no further payment is made except for a six-month maintenance and servicing fee.  

Purchase of capped rental items: starting in the 10th month, with respect to an item that is a capped rental, the supplier must give the beneficiary the option to purchase the equipment.  Medicare contractors will make no further rental payments to the supplier after the 11th rental month for capped rental items until the supplier notifies the contractor that it has contacted the beneficiary and given the beneficiary the option to purchase or to continue renting the capped rental.  If the beneficiary declines or fails to respond to the option to purchase, the contractor continues to make rental payments until the 15th month rental cap has been reached.   If the beneficiary decides to purchase the item, the contractor continues to make rental payments until a total of 13 continuous rental months have been paid.  Where the beneficiary has elected the purchase option, on the first day after the 13th continuous month of the rental payments, the supplier must transfer title to the capped rental item to the beneficiary.  If the beneficiary decides to continue renting the item, after the 15th rental month, the title to the equipment remains with the medical equipment supplier and the supplier can not charge the beneficiary any additional rental payments other than maintenance and service fees.

Beneficiary payment for capped rental items: if a beneficiary purchases a capped rental item, he or she is responsible for servicing the equipment.  And, with respect to the purchase, you are responsible for the 20% coinsurance amount, and on unassigned claims, the beneficiary is responsible for the balance between the Medicare allowed amount and the supplier’s charge.  If the beneficiary decides to rent the item, his or her responsibility is limited to a 20% coinsurance amount on a maintenance and servicing fee payable twice per year even if the equipment is not actually serviced.

Electric Wheelchairs:  beneficiaries have the option to rent or purchase physician-prescribed electric wheelchairs.  If the beneficiary decides to purchase the chair, Medicare will pay 80% of the allowable purchase price in a lump-sum amount.  The beneficiary is responsible for the 20% coinsurance amount and, for unassigned claims, the balance between the Medicare allowed amount and the supplier’s charge.  If the beneficiary decides to rent the electric wheelchair, after the 10th month of the rental, the beneficiary has the option to convert the rental agreement to a purchase agreement.  If the purchase option is elected after the 10th month of rental, the Medicare contractor will make 3 more monthly payments to the supplier.  At that point, the beneficiary is responsible for a 20% coinsurance amount, and for unassigned claims, the balance between the Medicare allowed amount ant the supplier’s charge.  After these additional rental payments are made, title to the equipment is transferred to the beneficiary.  

If the beneficiary decides to continue renting the item, after the 15th rental month, the title to the equipment remains with the medical equipment supplier and the supplier can not charge the beneficiary any additional rental payments. If the beneficiary decides to rent the item, his or her responsibility is limited to a 20% coinsurance amount on a maintenance and servicing fee payable twice per year even if the equipment is not actually serviced.

For power operated vehicles (POV) used as wheelchairs, the allowed payment amount, including all medically necessary accessories, is the lowest of the actual charge for the POV or the fee schedule amount for the POV.

Oxygen and oxygen equipment:  Medicare contractors pay a monthly fee schedule amount per beneficiary.  Generally, the fee covers the equipment, its contents and supplies.  Purchase is not made for equipment of this type.  When portable oxygen is prescribed, the fee schedule amount for portable equipment is added to the fee amount for stationary oxygen rental.

Purchase of oxygen equipment:  on or after June 1, 1989June 1, 1989, Medicare no longer pays for oxygen equipment that is purchased.  If the beneficiary owns stationary liquid or gaseous oxygen equipment, the Medicare contractor pays the monthly oxygen contents fee.  For owned oxygen concentrators, Medicare contractors do not pay a contents fee.  Whether the beneficiary owns or rents an oxygen concentrator or a stationary gaseous or liquid oxygen system and has either rented or purchased a portable system, Medicare contractors pay the portable oxygen contents fee.


CMS Moves Forward with its Competitive Bidding Program for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS)

October 1, 2010 marked the kick-off of CMS's additional beneficiary education efforts to explain its new Competitive Bidding Durable Medical Equipment, Prosthetics, Orthotics, and Supplies program (DMEPOS). The program will be phased in beginning January 1, 2011. If you live in the geographic areas listed below, starting January 1, 2011, you will need to obtain your DMEPOS items from certified DMEPOS suppliers, including the repair and replacement of your DMEPOS. CMS will be putting on its website information to explain the new program and the initial areas of the USA in which the DMEPOS program and its requirements will be focused.

According to CMS, "[I]f you have Original Medicare and travel to (or live in) certain ZIP codes in the areas listed below, you will almost always need to use a supplier that contracts with Medicare when you buy or rent certain equipment or supplies for Medicare to help pay. In addition, consult CMS' information page at: http://www.cms.gov/DMEPOSCompetitiveBid/ (external link opens in new window).

  • Charlotte-Gastonia-Concord (North Carolina and South Carolina)
  • Cincinnati-Middletown (Ohio, Kentucky, and Indiana)
  • Cleveland-Elyria-Mentor (Ohio)
  • Dallas-Fort Worth-Arlington (Texas)
  • Kansas City (Missouri and Kansas)
  • Miami-Fort Lauderdale-Pompano Beach (Florida)
  • Orlando – Kissimmee (Florida)
  • Pittsburgh (Pennsylvania)
  • Riverside-San Bernardino-Ontario (California)

For the most up-to-date list of Medicare contract suppliers in your area, follow the steps below:

  1. Visit www.medicare.gov and select "Facilities & Doctors.”
  2. Select "Find Suppliers of Medical Equipment” and enter your ZIP code.
  3. Select the "New” yellow icon in the upper right corner of the page.
  4. Under "What Kinds of items are included,” select the product category of the item you need to view or print a list of Medicare contract suppliers.

OR, call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048. A customer service representative can help you find a supplier.

FURTHER DETAILS

This program was delayed by the passage of HR 6331, the Medicare Improvements for Patients and Providers Act (MIPPA), in July 2008. MIPPA terminates all contracts and requires CMS to rebid the initial 10 areas, and it extends the timeline for expansion to 80 areas until 2011. For 2009, Medicare payment for items that were to have been subject to this program will be cut 9.5%.

The Centers for Medicare & Medicaid Services (CMS) is sending notification letters to beneficiaries who may need to change suppliers in order for Medicare to pay for their equipment and supplies. The letter encourages each beneficiary to check with their supplier to make sure that the supplier meets the new requirements. The letter also provides instructions for the beneficiary to find another supplier, if necessary.

A copy of the notification letter along with additional information on Medicare's new accreditation and surety bond requirements for DMEPOS suppliers may be found at http://www.cms.gov/Partnerships/03_DMEPOS_Toolkit.asp#TopOfPage (external link opens in new window). As a prelude to its competitive bidding program for DMEPOS, CMS is requiring that certain suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) meet Medicare's quality standards, including that certain suppliers become accredited by October 1 and obtain a surety bond by October 2, 2009. In addition, CMS has developed a tool kit of information about the DEMPOS competitive bidding program.

Medicare beneficiaries should ask their suppliers if they are approved by Medicare so they can continue to get their equipment and supplies covered by Medicare and to avoid service interruptions. In order to receive Medicare coverage, beneficiaries will have to use certified DMEPOS suppliers. In some instances, beneficiaries may have to find a different supplier, one that is a Medicare-approved supplier

The implementation of the DMEPOS program was delayed by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). CMS is now in the process of implementing congressionally required re-bidding under the DMEPOS program. CMS will provide updates and information to partners as soon as possible. If beneficiaries have questions, they may call 1-800-MEDICARE (1-800-633-4227). Information about the DMEPOS competitive bidding program is also available on the Center for Medicare Advocacy's website at: http://cma.benfredaconsulting.com/2010/12/medicare-changes-effective-january-1-2011/.

As required by Section 302 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), the Centers for Medicare & Medicaid Services (CMS) have published final regulations (72 Fed. Reg. 17,992 et seq [April 10, 2007], amending 42 C.F.R., parts 411 and 414; available at: http://www.cms.gov/quarterlyproviderupdates/downloads/cms1270f.pdf – .pdf, external link, opens in new window) establishing the requirements for a new competitive bidding program for certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS). The program began on July 1, 2008, but, as noted above, was delayed by MIPPA. It is an outgrowth of Congressional and agency efforts to reign in the costs of DMEPOS, particularly items that have been identified as costly or over utilized.

On May 20th, CMS announced the winning suppliers for the first round of the competitive bidding process. These 325 suppliers began serving the ten first-round competitive bidding areas (CBAs) on July 1, 2008, but MIPPA required CMS to cancel the contracts and rebid the agreements.

STATEMENT ON THE DMEPOS COMPETITIVE BIDDING PROGRAM BY CENTERS FOR MEDICARE & MEDICAID SERVICES

The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), enacted on July 15, 2008, made limited changes to the competitive bidding program for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS), including a requirement that the Secretary conduct a second competition to select suppliers for Round 1 in 2009. The Centers for Medicare & Medicaid Services (CMS) issued an interim final rule with comment period (IFC) on January 16, 2009. The rule incorporates into existing regulations specific statutory requirements contained in MIPPA related to the competitive bidding program.

The Administration delayed the effective date for the IFC to allow CMS officials the opportunity for further review of the issues of law and policy raised by the rule. Based upon its review and on the need to ensure that CMS is able to meet the statutory deadlines contained in MIPPA, the Administration has concluded that the effective date should not be further delayed. The rule became effective April 18, 2009. However, thereis no immediate effect on the Medicare DMEPOS benefit and Medicare beneficiaries may continue to use their current DMEPOS suppliers at this time.

During the comment period, CMS received many suggestions by a range of stakeholders to make further improvements to the competitive bidding program, such as ensuring that CMS' processes for collecting and evaluating bids are fair and transparent. CMS will be issuing further guidance on the timeline for and bidding requirements related to the Round 1 re-bid. In finalizing these guidelines, CMS will continue to seek input from all affected stakeholders to ensure program implementation consistent with the legislative requirements.

DETAILS ON COMPETITIVE BIDDING

The competitive bidding program requires beneficiaries who permanently reside in designated CBAs to obtain competitively bid items from a contract supplier unless an exception applies. In this instance a recognized exception permits some suppliers to be grandfathered into the process allowing them to continue providing certain rented durable medical equipment (DME) items and services even though they are not contracted suppliers.

The MMA requires that the competitive bidding program is to be phased in beginning with high cost and high volume items, or those with the largest savings potential. The items will be chosen based on: total Medical expenditures (allowable charges) for the item; growth in Medicare expenditures; number of suppliers of the item; savings potential; and findings, reports and studies by the Office of Inspector General (OIG) or the Government Accountability Office (GAO).

Advocates and beneficiary groups are concerned about the impact of the new process on access to DMEPOS. They fear that beneficiaries will not be able to use favored and trusted suppliers with whom they have established relationships and who know their particular DMEPOS items.

Competitive Bidding Areas

The ten (10) Metropolitan Statistical Areas (MSAs) selected by formula as Competitive Bidding Areas (CBAs) for the initial phase of the process are: (i) Charlotte-Gastonia-Concord, NC-SC; (ii) Cincinnati-Middletown, OH-KY-IN; (iii) Cleveland-Elyria-Mentor, OH; (iv) Dallas-Fort Worth-Arlington, TX; (v) Kansas City, MO-KS, (vi) Miami-Fort Lauderdale-Miami Beach, FL; (vii) Orlando-Kissimmee, FL; (viii) Pittsburgh, PA; (ix) Riverside-San Bernardino-Ontario, CA; and (x) San Juan, PR.

After 2009, CMS will designate additional CBAs and 70 additional MSAs. Some areas may be exempt, such as rural areas and areas with low population density that are not competitive, provided there is no significant national market through mail order for a particular item or service.

New Terms

The competitive acquisition program for DMEPOS introduces new terms, including:

  • Contract Supplier – An entity that is awarded a contract by CMS to furnish items under a competitive bidding program
  • Non-Contract Supplier – A supplier that is not awarded a contract by CMS to furnish items included in a competitive bidding program
  • Grandfathered Supplier – A non-contract supplier that chooses to continue to furnish grandfathered items to a beneficiary in a CBA
  • Referral Agents – Physicians, practitioners, or providers who prescribe DMEPOS (in essence, "order” or "refer”) for their patients
  • Grandfathered Item – Any one of the items for which payment is made on a rental basis prior to the implementation of a competitive bidding program and for which payment is made after implementation of a competitive bidding program to a grandfathered supplier that continues to furnish the items in accordance with the rules of the competitive bidding process
  • Single Payment Amount – The allowed payment for an item furnished under a competitive bidding program

Competitive Bidding Implementation Contractor

CMS has contracted with Palmetto GBA as its Competitive Bidding Implementation Contractor (CBIC). The functions of the CBIC are to prepare the request for bids (RFB), perform bid evaluations, and ensure that suppliers meet all applicable financial and quality standards. In addition, the contractor is to conduct an education program for beneficiaries, suppliers, and referral agents. CMS also announced on May 8, 2008 that they will be establishing a website to enable beneficiaries and others to search for certified suppliers in their CBA.

In general, competitively bid items that are related and are used to treat a similar medical condition will be grouped into product categories, for example, hospital bed and accessories. Suppliers do not have to bid on all product categories, but for those product categories for which they bid, the supplier must bid on every item in the product category. In addition, contract suppliers will be required to furnish all items within a product category.

Initial Ten (10) Product Categories

CMS has identified the following items for its initial ten product categories:

  1. Oxygen supplies and equipment

  2. Standard power wheelchairs, scooters, and related accessories

  3. Complex rehabilitative power wheelchair and related accessories

  4. Mail-order diabetic supplies

  5. Enteral nutrients, equipment, and supplies

  6. Continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), and related accessories

  7. Hospital beds and related accessories

  8. Negative pressure wound therapy (NPWTP) pumps and related accessories

  9. Walkers and related accessories

  10. Support surfaces (group 2 and 3 mattresses and overlays)

Grandfathering Certain Contractors

As indicated above, the competitive bidding rules provide for "grandfathering” the provision of certain rental items for which payment is made on a rental basis prior to the implementation of a competitive bidding program and for which payment is made after implementation of a competitive bidding program to a grandfathered supplier that continues to furnish the items as provided under the payment regulations. Items that may be grandfathered include:

  • Certain inexpensive or routinely purchased brand-name items

  • An item requiring frequent and substantial servicing

  • Oxygen and oxygen equipment and other DME described in the regulations

The competitive bidding process also allows for the grandfathering of certain special physicians/practitioners – nurses, physician assistants, clinical nurse specialists, and physical therapists and occupational therapists in private practice – to receive payment for certain competitively bid items furnished to their own patients as part of the professional service even though they have not submitted a bid and have not been selected as a contract supplier.

Beneficiaries who are renting an item of DME, or oxygen and oxygen equipment, that meets the definition of a grandfathered item may elect to obtain the item from a grandfathered supplier. The rules also contain special provisions for small suppliers, including forming networks of small suppliers.

Grandfathered Suppliers' Tip Sheet

On May 28, 2008, CMS published a tip sheet for "Grandfathered Suppliers" under the DMEPOS competitive bidding program. Grandfathered DMEPOS suppliers are non-contract suppliers that elect to continue to provide certain rented DME or oxygen and oxygen equipment at the time the DMEPOS competitive bidding program begins in a given CBA. The grandfathering exception may also apply to beneficiaries who transition from a Medicare Advantage (MA) plan. The full tip sheet is available at  http://www.cms.gov/DMEPOSCompetitiveBid/Downloads/DMEPOS_Grandfathered _Suppliers_Tip_Sheet.pdf (.pdf, external link opens in new window)

Eligible Grandfathered Suppliers

An eligible grandfathered suppler is a supplier that was providing certain rented DME, or oxygen and oxygen equipment at the time a competitive bidding program began in a CBA. That supplier may elect to become a grandfathered supplier and continue renting DME or oxygen and oxygen equipment to the Medicare beneficiaries to whom they were renting prior to the beginning of the competitive bidding program.

Grandfathered items include inexpensive or routinely purchased items provided on a rental basis; items requiring frequent and substantial servicing; oxygen and oxygen equipment (not including oxygen contents, supplies, or accessories furnished for use with beneficiary-owned equipment); and capped rental items provided on a rental basis.

Beneficiary Election to Use a Grandfathered Supplier

Beneficiaries renting oxygen, oxygen equipment, or DME when the competitive bidding program becomes effective may choose to continue to rent those items from a grandfathered supplier. They can indicate their choice by responding to the written notification sent by the grandfathered supplier. The notice is to be sent to the beneficiary at least 30 days prior to the start date of the competitive bidding program. Beneficiaries may elect to change from a grandfathered supplier to a contract supplier at any time, and the contract supplier is required to accept the beneficiary as a customer.

  • Transfer of Title for Oxygen Equipment and Capped Rental DME

    Title for oxygen equipment transfers to the beneficiary on the first day following the 36 continuous months during which Medicare payment is made to rent the equipment. Title to capped rental equipment transfers to the beneficiary on the first day following the 13 continuous months during which Medicare payment is made to rent the equipment. These transfer-of-title requirements apply to all suppliers without regard to their grandfathered status.

  • Capped Rental DME Furnished Prior to January 1, 2006

    Applicable to all suppliers irrespective of grandfathered status, a supplier that provided capped rental DME that was rented in a month prior to January 1, 2006 is responsible for supplying the equipment and for maintenance and servicing after the 15-month rental period for those beneficiaries that chose the rental option.

  • Obtaining Accessories and Supplies for Grandfathered Items

    Accessories and supplies may be provided by the same grandfathered supplier that provides the items, if they are used in conjunction with and are necessary for the effective use of a grandfathered item. Payment for these items is based on the single payment amount if the item is a competitively bid item for the CBA in which the beneficiary maintains a permanent residence. If not a competitively bid item, payment will be made in accordance with the standard payment rules. Accessories and supplies comprise such things as tubes, hoses, and masks with respiratory equipment, and administration sets with infusion pumps. In addition, accessories and supplies for beneficiary-owned equipment that are competitively bid items must be furnished by a contract supplier.

Referral Agent Tip Sheet

Under the DMEPOS competitive bidding program, referral agents include such entities as Medicare-enrolled providers, physicians, treating practitioners, discharge planners, social workers, pharmacists, and home health agencies that refer beneficiaries for services in a CBA. Referral agents have the responsibility to help the Medicare beneficiary select qualified and appropriate DMEPOS suppliers. Similarly, the referral agent is to be the beneficiary's initial contact upon receipt of a prescription for a competitively bid item. They are to assist beneficiaries who reside in a CBA or who are visiting a CBA. Note that the beneficiary's choice of treating physician or treating practitioner is not affected by the DMEPOS competitive bidding program. The full referral agent tip sheet is available at http://www.cms.gov/DMEPOSCompetitiveBid/Downloads/DMEPOS_Referral _Agent_Tip_Sheet.pdf (.pdf, external link opens in new window).

  • Beneficiary Information Needed by the Referral Agent

    A referral agent must determine if the Medicare beneficiary resides in a CBA or will be obtaining a competitively bid item in a CBA. To do this the referral agent must compare the beneficiary's ZIP code to the list of ZIP codes for the CBAs, which is available at http://www.dmecompetitivebid.com/Palmetto/Cbic.nsf/docsCat/DMEPOS Competitive Bidding Areas Zip Codes?opendocument (external link opens in new window). If the beneficiary resides in one of the ZIP codes included in a CBA or is visiting a CBA, the referral agent determines if the DMEPOS item to be supplied to the beneficiary is included in any of the competitively bid product categories. If the DMEPOS item falls into one of the competitively bid product categories, the referral agent informs the beneficiary that it does, and that they need to obtain the item from a contract supplier. The referral agent is then to refer the beneficiary to the "supplier locator tool,” available at: www.medicare.gov (external link opens in new window). In assisting a beneficiary, a referral agent may prescribe, in writing, a particular brand or mode of delivery for a competitively bid item if it is necessary to avoid an adverse medical outcome. The need for this must be documented by the prescribing entity.

  • Using Contract-Suppliers

    Beneficiaries must obtain competitively bid items of DMEPOS from a contract-supplier unless an exception, such as a grandfathered supplier, exists. Otherwise, Medicare will not pay for the item. If an exception does not apply, the beneficiary is not liable for payment unless the non-contract supplier obtains a signed Advance Beneficiary Notice (ABN) from the beneficiary before furnishing the item.

  • Mail Order Purchase of Diabetic Testing Supplies

    A beneficiary may purchase diabetic testing supplies from a mail order contract supplier for the area in which he or she maintains a permanent residence. Such supplies may also be purchased from any enrolled Medicare supplier if the diabetic testing supplies are provided at a storefront. Medicare's payment, and the beneficiary's coinsurance, will be less when the diabetic supplies are obtained from a mail order contract supplier.

  • Repair and/or Replacement under the DMEPOS Supplier Program

    A beneficiary may obtain repairs and replacements from any Medicare-enrolled supplier. When base equipment (e.g., wheelchairs or hospital beds) must be replaced in its entirety, the replacement must be obtained from a contract supplier.

Physicians' and Other Treating Practitioners' Tip Sheet

On May 31, 2008, CMS issued a tip sheet to explain how certain physicians and other treating practitioners can provide certain types of competitively bid items in a CBA to their patients without submitting a bid and being selected as a contract-provider. As stated above, under the DMEPOS competitive bidding program, beneficiaries residing in designated CBAs must obtain competitively bid items from a contract-supplier, unless an exception applies. The tip sheet explains the exception for physicians and other treating practitioners who are enrolled Medicare DMEPOS suppliers.

Under the exceptions program, these physicians and other treating practitioners can provide certain types of competitively bid items in a CBA to their own patients without submitting a bid and being selected as a contract-supplier. The exception also includes podiatric physicians, nurse practitioners, physician assistants, and clinical nurse specialists. The physicians' and other practitioners' tip sheet can be found at: http://www.cms.gov/DMEPOSCompetitiveBid/downloads/DMEPOS_Physicians _and_Other_Practitioners_Tip_Sheet.pdf (.pdf, external link opens in new window).

  • Covered DMEPOS Items

The DMEPOS items that the physicians and other treating practitioners can provide as described above are limited to crutches, canes and walkers, folding manual wheelchairs, blood glucose monitors, and infusion pumps that are DME. Note, however, that for the first phase of competitive bidding, effective on July 1, 2008, walkers are the only items of this set for which competitive bidding has been completed. In addition, these items must be billed to a DME Medicare Administrative Contractor using the DMEPOS billing number that is assigned to the physician, the treating practitioner (if possible), or a group practice to which the physician or treating practitioner has reassigned the right to receive Medicare payment.

  • Medicare Assignment

Physicians and other treating practitioners must accept assignment if they provide competitively bid equipment to Medicare patients who reside in a CBA. Under the Medicare assignment program, participating physicians and suppliers agree to accept the Medicare reasonable charge amount with the beneficiary being responsible for a 20% co-payment. Physicians and other treating practitioners can determine if a Medicare beneficiary resides permanently in a CBA by comparing the beneficiary's ZIP code to the list of ZIP codes for the CBAs referred to earlier.

Repair and Replacement of Beneficiary-Owned Items

  • Repair Only – A beneficiary who owns a competitively bid item that needs to be repaired may have the repairs performed by either a contract supplier or a non-contract supplier. Medicare will pay for reasonable and necessary labor that is not otherwise covered under a manufacturer's or supplier's warranty.
  • Repair and Replacement – If a part needs to be replaced to make the beneficiary-owned equipment serviceable and the replacement part is also a competitively bid item for the CBA in which the beneficiary maintains a permanent residence, the part may be obtained from either a contract supplier or a non-contract supplier. In these situations, Medicare pays the single payment amount provided under the competitive bidding program for the replacement part.
  • Replacement Only – Beneficiaries who are permanent residents within a CBA are required to obtain replacement of all items subject to competitive bidding from a contract supplier – including replacement of base equipment and replacement of parts or accessories for base equipment that are being replaced for reasons other than servicing of the base equipment. Beneficiaries who are not permanent residents of a CBA, but require a replacement of a competitively bid item while visiting in a different CBA, must obtain the replacement item from a contract supplier. The supplier will be paid the fee schedule amount for the state in which the beneficiary is a permanent resident.

Mail Order Diabetic Supplies under the Program

Medicare beneficiaries who are permanent residents in a CBA may purchase their diabetic testing supplies from a mail order contract supplier for the area in which the beneficiary is a permanent resident or from a non-contract supplier in cases where the supplies are not furnished on a mail order basis. These supplies will be reimbursed at the single payment amount for the CBA where the beneficiary maintains a permanent residence. For diabetic supplies that are not furnished through mail order, suppliers will be paid the fee schedule amount.

Competitive Bidding and Advance Beneficiary Notice Information

In general, if a non-contract supplier in a CBA furnishes a competitively bid item to any Medicare beneficiary, Medicare will not make payment unless there is an applicable exception, regardless of whether the beneficiary maintains a permanent residence in the CBA or another area. In these circumstances, the beneficiary is not liable for payment unless the non-contract supplier in a CBA obtains an ABN signed by the beneficiary.

A signed ABN indicates that the beneficiary was informed in writing prior to receiving the item that there would be no Medicare coverage due to the supplier's contract status and that the beneficiary understands that he or she will be liable for all costs that the non-contract supplier may charge for the item. CMS has stated on some of its training phone calls that waiver of liability provisions apply when beneficiaries are not provided an ABN.

No Administrative and Judicial Review of Process

There is no administrative or judicial review under the DMEPOS competitive bidding process for the following: establishment of payment amounts; awarding of contracts; designation of CBAs; phase-in of the competitive bidding program; selection of items for competitive bidding; or the bidding structure and number of contract suppliers selected for a competitive bidding program. In addition, a denied claim is not appealable if the denial is based on a determination by CMS that a competitively bid item was furnished in a CBA in a manner not authorized under the competitive bidding program.

Conclusion

Advocates and beneficiaries should be mindful of the implementation of this new process. In particular, it will be important for beneficiaries to use suppliers who meet the competitive bidding process requirements. They should be reminded of the requirement to use contract suppliers who are approved for the CBA in which they reside. Likewise, advocates and beneficiaries should read carefully each ABN issued for these beneficiaries to assure that they are using only contract suppliers.

In addition, the tip sheets described above provide necessary answers in this emerging environment. Advocates and beneficiaries should check the DMEPOS website frequently for developments. Similarly, the "supplier-locator tool” on the Medicare beneficiary website, www.medicare.gov (external link, opens in new window), will be an important source of contract-supplier information.

(All information as of July 2008)

Additional Resourceson the competitive bidding program (all external links open in new window)

Part B toolkit – http://www.cms.gov/Partnerships/03_DMEPOS_Toolkit.asp.

Competitive Bid Home – www.dmecompetitivebid.com

CMS page on Competitive Bidding – www.cms.gov/DMEPOSCompetitiveBid/

Medicare.gov Supplier Directory – www.medicare.gov/Supplier/Include/DataSection/Questions/SearchCriteria.asp

Provider Educational Products and Resources (including Tip Sheets and a list of MLN Matters Articles on competitive bidding) – www.cms.gov/DMEPOSCompetitiveBid/03_Provider_Educational_Products _and_Resources.asp


Replacement of Items Not Under Competitive Bidding

A capped rental item, which has been in continuous use, on either a rental or purchased basis, may be replaced if it is lost or irreparably damaged within 5 years, which is considered the "useful lifetime." The useful lifetime is based upon when the equipment is delivered to the patient, not the age of the equipment. If the patient elects to obtain a new piece of equipment, payment is made on a rental or purchase basis or a lump-sum purchase basis if a purchase agreement has been entered into. Expenses for replacement equipment required because of loss or irreparable damage will be reimbursed without a physician's order, if the equipment as originally ordered still fills the patient's needs. However, claims involving replacement equipment necessitated because of wear or a change in the patient's condition must have a new physician's order.

Payment will not be made for the replacement of rental equipment except capped rental items. However, replacement of purchased equipment can be made for:

  • Inexpensive or routinely purchased items

  • Customized items

  • Items available under the capped rental policy (some examples include wheelchairs, hospital beds and some walkers.)

  • Certain prosthetic devices (which replace all or part of an internal body organ, or replace all or part of the function of a permanently inoperative or malfunctioning internal body organ. Some examples include Parenteral and Enteral Nutrition (PEN), insertion trays, catheters, drainage bags, skin barriers, lumbar-sacral orthosis (LSO), prostheses (leg, foot, breast, knee, ankle), cardiac pacemakers, prosthetic lenses, maxillofacial devices, and devices which replace all or part of the ear or nose.)

  • Limited orthotic devices (items used for the correction or prevention of skeletal deformities. Some examples include a shoe that is an integral part of a leg brace or special shoe and inserts used for the prevention or management of foot ulcers in diabetics.)

Payment will not be made for the purchase and replacement of:

  • Frequently serviced items

  • Oxygen equipment


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