“Fragmented” Billing for Non-Participating Suppliers

Posted April 05, 2013

Suppliers who enroll in the Medicare program have an option of being a participating or non-participating supplier. A supplier who enters into a participation agreement (CMS form 460) with Medicare agrees to accept assignment on all claims for Medicare services. Suppliers who do not enter into a participation agreement with Medicare (i.e., non-participating suppliers) may accept assignment on a claim-by-claim basis unless they are required by law to accept assignment.

The Centers for Medicare and Medicaid Services (CMS) Medicare Claims Processing Manual (Internet-only Pub. 100-04), Chapter 1, Section 30.3.2 advises that non-participating suppliers may not attempt to circumvent the Medicare allowed amount limitation by "fragmenting" bills. Bills are considered "fragmented" when a supplier accepts assignment for some services, and payment from the enrollee for other services performed at the same place and on the same date of service.

The Durable Medical Equipment Medicare Administrative Contractors (DME MACs) consider "fragmented" billing when a supplier bills the same Healthcare Common Procedure Coding System (HCPCS) code as some of the services assigned and some as non-assigned. In particular, there have been many questions regarding "fragmented billing" for External Breast Prostheses. For example, if a beneficiary receives two mastectomy bras (L8000) on the same day and at the same place, and the beneficiary assigns the claim to a supplier, the non-participating supplier may not bill one claim as non-assigned for an L8000 and another claim as assigned for an L8000. If so, this is considered fragmented billing. The non-participating supplier must choose to submit the two mastectomy bras (L8000) as either assigned or non-assigned claims.

However, if on the same day a beneficiary receives two mastectomy bras (L8000) and a silicone prosthetic (L8030) and the beneficiary assigns the claim to a non-participating supplier, the non-participating supplier may choose to either:

1.) Submit the claims as assigned or non-assigned for all services, or

2.) Submit one claim as assigned and the other as non-assigned (e.g., submit the prosthetic (L8030) as assigned on one claim and the mastectomy bras (L8000) as non-assigned on the other claim (or vice versa).

Suppliers may contact the National Supplier Clearinghouse for information on being a participating or non-participating supplier at 866-238-9652 from 9a.m. until 5p.m. EST to reach a customer service representative.

            Last Updated Thu, 25 May 2017 14:18:25 +0000