Article Detail - JA DME

Following proper coding and billing guidelines is crucial when billing for Durable Medical Equipment (DME) hospital bed upgrades. A hospital bed upgrade occurs when a supplier provides a bed that exceeds Medicare's standard coverage—such as offering an E0265 (fully electric hospital bed) instead of an E0260 (semi-electric hospital bed) or an E0250 (fixed-height hospital bed). Medicare will only cover the cost of the equipment deemed a medical necessity, but upgrades may be provided in certain circumstances. There are three typical scenarios for which an upgrade is provided.

1. The physician ordered the upgrade
2. The beneficiary requested the upgrade
3. The supplier provides the upgrade for convenience

Because Medicare will only pay for the medically necessary items, it is pertinent to determine what the beneficiary qualifies for based on the Local Coverage Determination (LCD). Items that are not deemed medically necessary may be provided as an upgrade. For example, the physician wrote the order for, and the beneficiary meets coverage requirements for a semi-electric hospital bed (E0260); however, the supplier only has a total electric bed (E0265) in stock. The supplier may choose to provide the beneficiary with the E0265 for their convenience and bill the E0265 as an upgrade.

When billing upgrades, suppliers must ensure the proper modifiers are appended to the claim lines. If the supplier wants to collect the difference in cost for the E0265, the supplier must obtain a properly executed Advance Beneficiary Notice of Noncoverage (ABN).

• GA: Waiver of liability statement issued as required by payer policy (used when an ABN is on file).
• GK: Reasonable and necessary item/service associated with a GA or GZ modifier.
• GL: Medically unnecessary upgrade provided instead of non-upgraded item, no charge, no ABN.

Billing Example 1: Upgrade with Beneficiary Payment

Scenario: The beneficiary wants a fully electric bed (E0265), but Medicare only covers a semi-electric bed (E0260).

Steps:

1. Obtain a signed ABN from the beneficiary.
2. Submit two claim lines:
   • Line 1: Bill the E0265 with a GA modifier (denied as not medically necessary. The difference between what Medicare covers, and the upgrade is beneficiary liability).
   • Line 2: Bill the E0260 with a GK modifier (physician ordered, medically necessary equipment processed and reimbursed by Medicare).

Example 1 Outcome:

• Medicare pays for the medically necessary E0260.
• The beneficiary pays the difference between E0265 and E0260, plus any deductible or coinsurance.

Billing Example 2: Upgrade at No Extra Charge

Scenario: The supplier provides a fully electric bed (E0265) but does not charge the beneficiary for the difference.

Steps:

1. Submit one claim line:
   • Line 1: E0260 with GL modifier.
     1. No ABN is required
   • Include a narrative description of the upgraded item (E0265).

Example 2 Outcome:

• Medicare pays for E0260.
• The supplier absorbs the cost difference.

Billing Medicare FFS for a hospital bed upgrade like E0265 requires careful attention to documentation, modifier usage, and billing. By following CMS guidelines, suppliers can ensure compliance and proper reimbursement.