Beneficiary-Owned Equipment When Billing for Accessories and Supplies

Suppliers must ensure that the beneficiary-owned equipment information is on file with Medicare Fee- for-Service (FFS) to avoid denials. Suppliers are reminded that additional documentation is required in situations where supplies and accessories are provided for a piece of equipment not paid for by Medicare FFS. In addition, drugs used with a nebulizer or external infusion pump would be considered supplies to a covered piece of DME.

Examples of items beneficiary owned are Positive Airway Pressure (PAP) devices, BiPAPs, nebulizers, all glucose monitors, and humidifiers, etc.

When the beneficiary-owned item is not on file with Medicare FFS and claims for supplies and accessories used with that item are billed to the DME MAC, the beneficiary owned information must be placed on file with Medicare for base item in order to qualify for accessories or supplies.

The information required is:

  • Beneficiary owned item HCPCS; approximate purchased month and year
    • Good example: Bene-owned E0601 pur Jan 2023 (approximate)

Methods to Place Information on File for Claims Processing

If a denial is received with Reason Code 16, Remark Code M124:

  • Contact the Supplier Contact Center to request a telephone reopening
    • Request beneficiary owned equipment information be placed on file for base item for the accessories or supplies being billed
    • If telephone reopening is unavailable, supplier contact center will provide guidance on next step to resolve
    • Submit appeal/redetermination through the NMP appeals process when required (supplier contact center will provide that guidance)
  • Review claim, was narrative entered for beneficiary owned base item?
    • If answer is no, and claim denied as unprocessable, add required beneficiary information to claim and resubmit as new claim. This does not add beneficiary owned equipment information to history for beneficiary on subsequent claims and will need to be added through telephone reopenings
  • Written reopening
  • Add required information to the narrative of every claim line for supplies used with base item not on file with Medicare until item has been placed on file
    • Item 19 of the 1500 claim form or the 2400/NTE segment of an electronic claim. Claims lacking any one of the elements above will be denied for missing information.

Once the beneficiary-owned item is placed on file either through telephone reopenings or appeals, subsequent supply claims do not require a narrative.

Avoiding Denials

To avoid a denial for missing indication of whether the beneficiary owns the equipment that requires the accessory or supply, (and the supplier does not know if the equipment is owned or being rented), utilize the same or similar function on the Noridian Medicare Portal (NMP) or the Interactive Voice Response (IVR) system to verify if the base item is on file with Medicare.


Last Updated Jan 05 , 2024