Canceled Orders for Customized Items

When an order for a customized item is canceled, the beneficiary passes away before the scheduled delivery or the beneficiary's condition changed and the item is no longer reasonable and necessary or appropriate, suppliers are eligible for reimbursement for the labor and parts invested in the customization process.

The allowed amount is based on the services furnished and materials used, up to the date the supplier learned of the beneficiary's death or of the cancellation of the order or that the item was no longer reasonable and necessary or appropriate.

To facilitate this reimbursement process, the following guidelines must be adhered to:

  1. Claim Narrative: When submitting a claim for reimbursement, it is imperative to include a clear and concise claim narrative that describes the reason for the cancellation. This narrative should provide specific details, such as the cause of cancellation (e.g., death, order cancellation), and should be placed in Item 19 of the CMS-1500 claim form or within the NTE segment of loop 2400 when submitting an electronic claim.
  2. Date of Service (DOS): The DOS indicated on the claim must correspond to either the date when the order was officially canceled or the date of the beneficiary's death. Ensuring accurate DOS information is vital to expedite the reimbursement process.

For more comprehensive guidance and additional information regarding the reimbursement process for canceled orders of customized items, please consult the CMS Internet Only Manual (IOM), Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, Section 20.3


Last Updated Nov 22 , 2023