Article Detail - JD DME

Original Effective Date: 06/23/2011
Revision Effective Date: 11/01/2013

Coverage of drugs used with external infusion pumps may have differing denials. It is important for suppliers of these drugs to understand the issues related to coverage and denials. Understanding coverage necessarily starts with a discussion of benefit category. Fee-for-Service Medicare is a defined benefit program. Without a statutorily defined benefit, there can be no reimbursement from Medicare. External infusion pumps are covered under the DME benefit, however, there is no separate, specific benefit established for the payment of drugs used in external infusion pumps. Drugs used in conjunction with a covered pump are considered a supply item for the pump and are eligible for reimbursement only on that basis. This means that all infusion drug claims not associated with an external infusion pump will receive a statutorily non-covered denial.

Coverage must also take into consideration the applicable reasonable and necessary (R&N) criteria (also known as medical necessity criteria). National and Local Coverage Determinations (NCD and LCD) contain the R&N rules that are applicable to pumps and infusion drugs. For external infusion pumps, the LCD lists the only covered drugs. For many of the drugs, additional specific R&N criteria also apply. Reimbursement for the pump and drug is possible only when a listed drug is provided to a beneficiary meeting all the criteria specified in the LCD. Failure to meet these criteria results in a not reasonable and necessary denial.

Four possible scenarios can result when billing the DME MAC for drugs used with an external infusion pump:

• Billing for an infusion drug alone (no pump being used). There is no statutory infusion drug benefit to allow coverage. All infusion drugs and any associated supplies will be denied as statutorily noncovered.
• Billing for a pump with an infusion drug not listed in the LCD. The pump is eligible for coverage under the DME benefit, but because the drug is not listed in the LCD, all items (the pump, drug, and any associated supplies) will be denied as not reasonable and necessary.
• Billing for a pump with a drug listed in the LCD but the R&N criteria for the drug are not met. The pump, drug, and any associated supplies will be denied as not reasonable and necessary.
• Billing for a pump with a drug listed in the LCD where the R&N criteria for the drug are met. The pump, drug and any associated supplies are payable if other conditions of coverage are met.

Billing Instructions – ABNs and Modifiers

When the beneficiary does not meet the R&N criteria in an LCD, if the supplier elects to hold the beneficiary financially liable, suppliers may execute an Advance Beneficiary Notice of Non-coverage (ABN) for all items addressed by the policy. Refer to the Supplier Manual for additional information on the use of ABNs.

There are several modifiers associated with the billing of external infusion pumps, infusion drugs, and associated supplies. Each modifier has specific associated usage criteria that are discussed in the Documentation Requirements section of the LCD. Incorrect or inappropriate application of modifiers can result in claim denials or improper assignment of liability. For items addressed by the External Infusion Pump LCD, the modifiers are:

• EY – No physician or other licensed health care provider order for this item or service. Use this modifier when the supplier does not have a compliant detailed written order. Use of an EY modifier in this LCD results in an R&N denial.
• GA – Waiver of liability statement issued as required by payer policy, individual case. Use this modifier when the R&N criteria in the LCD are not met, i.e. scenarios 2 & 3 above, and the supplier elected to obtain an ABN. Use of a GA modifier results in an R&N denial with beneficiary liability.
• GY - Item or service statutorily excluded or does not meet the definition of any Medicare benefit. Use this modifier for items that fall into scenario 1 above. There items receive a statutory denial with beneficiary liability. An ABN is not required in order to hold the beneficiary financially liable; however, it may be used as a voluntary notice.
• GZ – Item or service expected to be denied as not reasonable and necessary. Use this modifier when the R&N criteria in the LCD are not met, i.e. scenarios 2 & 3 above, and the supplier elected not to obtain an ABN. Use of a GZ modifier results in an R&N denial with supplier liability.
• KX - Requirements specified in the medical policy have been met. In this LCD, this modifier is used only with external insulin pumps and supplies. Use this modifier when the R&N criteria in the LCD are met, i.e. scenario 4 above. Use of the KX modifier results in payment for the items addressed in this LCD.
• JB - Administered Subcutaneously. In this LCD, this modifier is used with immune globulins used for the treatment of primary immune deficiency administered with an external pump (E0779) via the subcutaneous route. Immune globulins not administered subcutaneously must meet the criteria in the Intravenous Immune Globulin LCD.

Vancomycin

Vancomycin does not require the use of a covered external infusion pump for administration. As discussed above, the type of denial associated with claims for vancomycin depends on whether or not an external infusion pump is billed with the drug. Scenarios 1 and 2 above apply to vancomycin:

• If vancomycin is billed without a covered pump, a statutorily non-covered denial will be applied as described in scenario 1. A GY modifier is used
• If vancomycin is billed with a covered pump, the pump, all associated supplies, and the vancomycin will be denied as not R&N as described by scenario 2. The GA or GZ modifier is used depending upon whether an ABN is executed. Use of the GY modifier is incorrect.

Refer to the External Infusion Pumps LCD, Policy Article, and Supplier Manual for additional information.