The definition of replacement is found in the CMS Benefit Policy Manual (Internet-only manual 100-02), Chapter 15, Section 110.2.C. That section generally defines replacement as the provision of an entire identical or nearly identical item when it is lost, stolen or irreparably damaged.
Beneficiary owned items or a capped rental item may be replaced in cases of loss or irreparable damage. Irreparable damage may be due to a specific accident or to a natural disaster (e.g., fire, flood). Contractors may request documentation confirming details of the incident (e.g., police report, insurance claim report).
Replacement of items due to irreparable wear takes into consideration the Reasonable Useful Lifetime (RUL) of the item. The RUL of DME is determined through program instructions. In the absence of program instructions, carriers may determine the RUL, but in no case can it be less than five (5) years. If the item has been in continuous use by the beneficiary on either rental or purchase basis for its RUL, the beneficiary may elect to obtain a replacement.
Medicare does not cover replacement for items in the frequent and substantial servicing payment category, oxygen equipment, or inexpensive or routinely purchased rental items.
A treating physician/practitioner's order and/or new CMN, when required, is needed to reaffirm the medical necessity of the item for replacement of an item.
There are special rules for the replacement of artificial arms, legs and eyes.
Adjustments and repairs of prostheses and prosthetic components are covered under the original order for the prosthetic device.
Medicare payment may 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 a treating physician/practitioner determines that the replacement device, or replacement part of such a device, is necessary.
Claims involving the replacement of a prosthesis or major component (foot, ankle, knee, socket etc.) must be supported by a new treating physician/practitioner's order and documentation supporting the reason for the replacement. The reason for replacement must be documented by the treating physician/practitioner, either on the order or in the medical record, and must fall under one of the following.
- Change in patient's physiological condition resulting in need for a replacement. Examples include but are not limited to, changes in beneficiary weight, changes in the residual limb, beneficiary functional need changes
- An irreparable change in device condition, or in a part of device resulting in need for a replacement
- Device condition, or part of device that requires repairs and cost of such repairs will be more than 60 percent of a replacement device cost, or of the part being replaced
The prosthetist must retain documentation of the prosthesis or prosthetic component replaced, the reason for replacement, and a description of the labor involved irrespective of the time since the prosthesis was provided to the beneficiary. This information must be available upon request. It is recognized that there are situations where the reason for replacement includes but is not limited to changes in the residual limb; functional need changes; or irreparable damage or wear/tear due to excessive beneficiary weight or prosthetic demands of very active amputees.
- RA - Replacement of a DME item, due to loss, irreparable damage or when item has been stolen (This is used on first month rental claim for a replacement item. A narrative explaining the reason for replacement, if prior to end of reasonable useful lifetime is reached, is also required on first month rental claim.)
- RB - Replacement of a part of DME as part of a repair
When billing a replacement accessory for the main piece of equipment, suppliers must bill the RB modifier (replacement of a part of DME, orthotic or prosthetic item furnished as part of a repair) and provide a detailed explanation as to why the accessory is being replaced. This information is to be placed in Item 19 on the CMS-1500 claim form or in the NTE segment, 2400 loop for electronic claims. Effective for claims received on or after April 1, 2011, if the RB modifier and description are not given, claims will be rejected as incorrect coding.
Loaner Equipment and Repairs Modifiers - HCPCS K0462
Medicare will pay for a temporary replacement of a DMEPOS item while it is being repaired. In these situations, the DME supplier provides the beneficiary a "loaner" piece of equipment and bills Medicare HCPCS K0462 (Temporary Replacement for Patient Owned Equipment Being Repaired, Any Type).
Starting October 1, 2019, the DME MACs will begin denying loaner equipment HCPCS K0462 for missing information if it does not include the following in the narrative section of the claim.
- Narrative description, manufacturer, and brand name/number of equipment being repaired
- Narrative description, manufacturer, and brand name/number of replacement equipment
- Description of what was repaired
- Description of why repair took more than one day to complete
Narrative example for a temporary PAP device out for repair.
- "Blower broken on PAP, Pur-06/15, loaner-ResMed S8 Elite II. PBO."
NOTE: There is no fee schedule for HCPCS K0462. Payment is determined as the equivalent of one month's rental for the type of equipment owned by the beneficiary.
Last Updated Sep 17, 2019