Article Detail - JA DME

Posted December 06, 2012

Once a beneficiary becomes Medicare eligible and is seeking payment for a DMEPOS item(s) obtained prior to their eligibility, all Medicare Fee-for-Service (FFS) payment and documentation rules are applicable to the DMEPOS item(s) on the date of service for the item(s).

Purchased items (including supplies)

If, at the time of transition to Medicare, the beneficiary owns a DMEPOS item that can be purchased under the Medicare program, Medicare can pay for reasonable and necessary supplies and repairs to that item. At the time of replacement of that entire item, Medicare treats the claim as a new, initial claim (not as a replacement). Therefore, all coverage and documentation requirements must be met to justify reimbursement for the item. Refer to the applicable local coverage determination and related policy article for specific information about coverage, coding and documentation. For durable medical equipment, only certain items can be paid for on a purchase basis under the Medicare program. Medicare payment can only be made for necessary supplies and repairs of beneficiary-owned equipment that Medicare can purchase, which includes items classified under the Medicare program as inexpensive or routinely purchased items, complex rehabilitative power wheelchairs, or customized items uniquely constructed or substantially modified for a specific patient. This applies in all situations, including situations where the equipment is purchased prior to Medicare eligibility.

Rental items

For rental items, i.e. the beneficiary does not own the item at the time of transition to Medicare: Medicare does not automatically assume payment for the item. Rental coverage by Medicare is treated as a new, initial claim (not as a replacement). Therefore, all coverage and documentation requirements must be met to justify reimbursement for the item. Refer to the applicable local coverage determination and related policy article for specific information about coverage, coding and documentation.

The disposition of the original item rests with the original payer, not Medicare. In addition to meeting Medicare's coverage requirements, Medicare requires that the Medicare-billed equipment be new or refurbished at the start of an initial rental.

All rented equipment must remain in good working order for the entire 5 year reasonable useful lifetime of the equipment. If the equipment does not last for the entire 5 year reasonable useful lifetime, the supplier must replace the equipment at no charge to Medicare or the beneficiary (42 CFR 414.210(e) (4)). When billing for the Medicare initial date of service, standard documentation requirements, including proof of delivery, apply (PIM 4.26, 5.8).

Results from recent reviews have uncovered several misconceptions about the documentation requirements for claims for a beneficiary who previously received equipment from a prior insurer. Some of these mistakes include:

1. Changes to the proof of delivery (POD) are not annotated. This is incorrect. Any changes or corrections on the POD must show that the beneficiary or caregiver has signed or initialed, and dated the changed document.

2. The proof of delivery provided is from the delivery with the previous payer which is not appropriate to demonstrate proof of delivery for a new Medicare item. For items that require a CMN, the "Delivery Date/Date of Service" on the claim must not precede the "Initial Date" on the CMN or DME Information Form (DIF) or the start date on the written order.

Suppliers must follow the standard documentation language regarding the elements required for proof of delivery based on the method of delivery. For more information refer to the Supplier Manual.