Reasonable Useful Lifetime - Clarification

Original Effective Date: 12/12/2002
Revision Effective Date: 11/01/2013

In a Summer 2001 DMERC Dialogue article (pg. 5), Medicare coverage of replacement durable medical equipment (DME) was discussed. The article stated that replacement of DME may be covered when an item is "worn beyond repair." This statement was only partially correct.

Medicare guidelines governing the replacement of DME, orthotics, and certain prosthetics (see exceptions below) specify that the reasonable, useful lifetime is determined by the Carrier, but in no case, can it be less than five (5) years. Replacement during the first five years of use, during the "reasonable useful lifetime," is covered if the item is lost, irreparably damaged or the patient's medical condition changes such that the current equipment no longer meets the patient's needs. Replacement due to irreparable wear during the period of reasonable useful lifetime is not covered.

The term "irreparable damage" is often confused with "irreparable wear." Irreparable damage, like loss or theft, is a rare, unexpected event that is an exception to the reasonable useful lifetime rule. Medicare considers irreparable damage to have occurred when an item is damaged beyond repair by a specific incident or accident. For example, a power wheelchair falls off of a van while traveling down the highway. If the cost to repair the wheelchair exceeds the cost of a new wheelchair, Medicare would cover the replacement.

Accidental damage must be distinguished from wear. Wear is deterioration sustained from day-to-day usage over time and a specific event cannot be identified that caused the deterioration. For example, the drive motor in a power wheelchair breaks down after 3 years of use because the patient uses the power wheelchair on a daily basis to go to work and school and for mobility in their home environment. There is no specific incident that can be identified that caused the motor to stop other than the daily "wear" on the motor. In this example, Medicare would not cover a replacement wheelchair because the statutory 5-year period of useful lifetime has not expired. However, Medicare would cover repair of the wheelchair up to but not exceeding the cost of replacement of the wheelchair.

There are two exceptions to the above guidance that apply to limb prostheses and external breast prostheses. For limb prostheses, a recent change to the reasonable useful lifetime rule was made when the Benefits Improvement and Protection Act of 2000 amended §1834(h)(1) of the Social Security Act by adding a provision (1834 (h)(1)(G)(i)) that requires Medicare payment to be made for the replacement of prosthetic devices which are artificial limbs, or for the replacement of any part of such devices, without regard to continuous use or useful lifetime restrictions if an ordering physician determines that the replacement device, or replacement part of such a device, is necessary.

Payment may be made for the replacement of a prosthetic device which is an artificial limb, or replacement part of a device if the ordering physician determines that the replacement device or part is necessary because of any of the following:

  • A change in the physiological condition of the patient;
  • An irreparable change in the condition of the device, or in a part of the device; or
  • The condition of the device, or the part of the device, requires repairs and the cost of such repairs would be more than 60 percent of the cost of a replacement device, or, as the case may be, of the part being replaced.

This provision supersedes the 5-year replacement rule with regard to prosthetic devices and applies to items replaced on or after April 1, 2001.

External breast prostheses represent the other exception to the 5-year rule. The Centers for Medicare and Medicaid Services (CMS) Transmittal AB-01-123 instructs the Durable Medical Equipment Regional Carriers to consider the useful lifetime of silicone breast prostheses to be 2 years, and for fabric, foam or fiber-filled breast prostheses, to be 6 months. However, a breast prosthesis may be replaced at any time if it is lost, irreparably damaged (this does not include ordinary wear and tear), or if there is a change in the patient's medical condition requiring a different type of item.

            Last Updated Thu, 08 Jun 2017 14:33:37 +0000