Article Detail - JD DME

Posted August 31, 2012

In 2011, CMS added sections to the Program Integrity Manual (Internet Only Manual 100-8) Chapter 5 establishing the requirements for the provision of refills of supplies effective 8/2/2011. The DME MACs published a bulletin article announcing these new requirements along with guidance for documenting compliance. These requirements are applicable to all DMEPOS items and supplies provided on a recurring basis.

A key element of these requirements is the supplier's responsibility to monitor utilization of supplies and only provide a refill when the beneficiary's supply on hand is "approaching exhaustion". Given the range of products affected by this requirement, numerous inquiries were received asking for specifics about how to assess for this criterion. In June 2012, a revised bulletin was published by the DME MACs with documentation guidance to address this issue. This FAQ addresses questions about the June 2012 bulletin.

Q1: Why separate consumable items from more durable ones?

A: Separating consumable from non-consumable supplies was based on calls from suppliers and inquiries received from our respective Provider Outreach and Education representatives at webinars and seminars. Specifically suppliers were asking, in light of the refill requirements in the LCD requiring suppliers to determine "…existing supplies are approaching exhaustion", how should suppliers document "approaching exhaustion" for items that are "used up" (e.g., diabetic test strips) versus items that are no longer functional (e.g., PAP and RAD supplies). Based on the questions, it made sense to segregate those two types of items in the documentation section.

Q2: Some DME items like infusion pumps and enteral and parenteral nutrition pumps also have non-consumable items as supplies. What items are considered to be durable or non-consumable supplies?

A: Supplies used with RAD and PAP devices and mastectomy bras were the initial supply items identified as non-consumable or durable and not requiring routine, scheduled replacement. Some items such as external infusion pumps or enteral and parenteral nutrition pumps have supplies provided in all-inclusive supply kit allowances. These supply kit allowances are considered payable as noted in the applicable local coverage determinations (LCDs) to cover all costs of supplies necessary for effective use of the base product.

Q3: Why is it necessary to monitor utilization for durable supplies?

A: The DMDs recognize that providers of durable or non-consumable supplies are not accustomed to monitoring the utilization and condition of these items; however, the Program Integrity Manual (PIM) §5.2.6 refill requirements preclude the automatic dispensing (refill) of any supply item. All items and supplies provided on a recurring basis must be monitored and only replaced when replacement is genuinely needed.

Q4: Why are the documentation guidelines for non-consumable items so vague?

A: We understand that many suppliers would prefer explicit, prescribed instructions. The DMDs deliberately did not provide specific guidance as to how a supplier might assess the need for replacement of non-consumable supplies leaving as much flexibility to the supplier's discretion as possible. The PIM §5.2.6 refill requirement requires a determination that the need for the refill is justified. Recognizing that there are differing products and business practices, allowing each supplier to decide how to best assess and document the need for replacement was the most appropriate course.

Q5: Explain what is meant by the term "non-functional".

A: For purposes of this requirement, non-functional means that the item is no longer able to be used safely or effectively for the purpose for which it was intended. There are numerous reasons that would render durable supplies non-functional. Breakage, wear, or contamination (not all-inclusive) are some common examples. When the item becomes unusable for reasons such as damage, wear, soiling or contamination that is unable to be removed with recommended cleaning, etc., the item can be considered as nonfunctional and may be replaced. All problems with the proper function of an item may not justify replacement (refill) of the item. For example, contrast the above situations with problems with function caused by improper fit or incorrect use such as might occur with a CPAP mask leak. Mask leak may be due to a non-functioning mask OR an ill-fitting or incorrectly worn interface. The latter would not necessitate replacement but rather reassessment of fit and possible adjustment by the physician or supplier.

Q6: What about maintenance or care for the item?

A: Appropriate replacement (refill) assumes reasonable effort to maintain the items per the manufacturer's instructions. With basic care these items remain useable and uncontaminated for extended periods. For example, we all recognize that improper or neglected care can render items dirty and contaminated; however, the solution is proper care and cleaning, not frequent replacement. As noted above, when the item becomes unusable for reasons such as damage, wear, soiling or contamination that is unable to be removed with recommended cleaning, etc., the item can be considered as nonfunctional and may be replaced.

Q7: What is the effective date of the revision? The article says 8/2/11 - is this retroactive?

A: The documentation guidance is effective 8/2/11. These clarifications are not new requirements but simply provide additional explanations of the existing requirements that were published in August 2011, concurrent with the PIM §5.2.6 addition. This PIM section makes no distinction between supplies that are "used up" and those that are not. The PIM requires an assessment of whether or not supplies are "approaching exhaustion" and requires that suppliers not automatically ship new supplies. The June 2012 bulletin revision is an explanation of how to apply the existing "approaching exhaustion" requirement to non-consumable items.

Q8: Why are so many new requirements being published?

A: As part of our error reduction strategies, the DME MAC Medical Directors have begun including explicit statements about long-standing Medicare payment rules in many policies. Previously these requirements were only found in our DME MAC Supplier Manual and/or in CMS publications. Lack of familiarity with these requirements often leads to complaints that "new" and "more restrictive" rules have been put in place when the only thing new is a heightened awareness of the existing applicable payment policy. The refill guidance is one example of this.

Q9: Must the supplier physically inspect the item?

A: It depends on the problem reported. Some issues may require physical inspection by the supplier while others may be resolved through instructions to the beneficiary for adjustment or other accommodations.

Q10: Can the cleanliness state of the item be a reason to deem it non-functional (patient has not followed cleaning instructions and the part is now questionable from a health standpoint, even with a thorough cleaning)?

A: Yes, once the supplier determines that the item is no longer functional. Suppliers are reminded that they are responsible for instructing the beneficiary in the proper cleaning and care of the equipment and supplies.

Q11: What documentation must be created to ensure that the claim would pass an audit?

A: Document the reason(s) the item is no longer functional.

Q12: How does this revision affect the provision of a three-month supply?

A: Non-consumable supplies may be replaced when they are non-functional. The usual maximums listed in the LCD should not be construed as a routine or automatic replacement schedule or amount. If an item is still working and in good condition, there is no need to replace it. For example, many of the accessories/supplies used with positive airway pressure (PAP) devices do not require routine replacement at the "usual maximum" frequency listed in the LCD if cleaned and maintained according to the manufacturer's recommendations. Suppliers are required to confirm and document the amount and condition of supplies before sending out replacements.

Q13: Does this bulletin change the utilization guidelines in the LCD?

A: The guidance does not change the usual maximums or the replacement frequencies outlined in the LCD. It simply reiterates what has been published in the past by the DME MACs and CMS about replacements. Replacement is not automatic and suppliers need to assess and document the quantity and/or condition of the remaining supply. If it's something used up, ask how much is left. If it's something that can stop working effectively, ask about those common things that indicate it's not working effectively.

Q14: Under this provision, if the item becomes dysfunctional PRIOR TO the old "replacement schedule," will the replacement part be covered?

A: It may be. As noted in the questions above, assuming the non-functional status is not due to a correctable issue (e.g., fitting, adjustment, improper use), when a durable supply becomes non-functional, it is eligible to be replaced. If this results in exceeding the usual maximum allowable outlined in the LCD, suppliers should have sufficient documentation to explain why the amount exceeds the usual maximum supplies.

Q15: During the trial period, it is not unusual for a patient to need a different mask after trying one and it being "dysfunctional." Will Medicare pay for a new mask under this condition?

A: No. The mask is still functional, just not appropriate for that patient. It is a long-held position that Medicare will only pay for a replacement when the item is non-functional.