Article Detail - JE Part A

Medicare provides coverage for Durable Medical Equipment (DME) to help beneficiaries with specific healthcare needs. A crucial aspect of DME coverage is the concept of "replacement." Replacement refers to the provision of a new or nearly identical item when the original DME item has been lost, stolen, or irreparably damaged. The Centers for Medicare & Medicaid Services (CMS) outlines these rules in the CMS Internet Only Manual (IOM), Publication 100-02, Benefit Policy Manual, Chapter 15, Section 110.2.C that defines the conditions under which replacement is covered and explains the requirements for healthcare providers.

Key Definitions and Criteria for Replacement

Replacement of DME is covered under specific circumstances, as outlined by CMS. These circumstances include:

• Loss or Theft: If a beneficiary's equipment is lost or stolen, Medicare may cover the cost of a replacement item.
• Irreparable Damage: When an item is damaged beyond repair due to accidents, natural disasters (e.g., fire, flood), or other incidents, a replacement may be authorized.

Suppliers may be required to submit documentation confirming details of the incident (e.g., police report, insurance claim report or beneficiary statement).

However, replacement is not typically covered for items in the frequent and substantial servicing payment category or for inexpensive and routinely purchased rental items.

Replacement Due to Irreparable Wear: The Role of Reasonable Useful Lifetime (RUL)

Medicare also covers replacement for items at the end of the RUL. The Reasonable Useful Lifetime (RUL) of the equipment determines when a replacement is justified. The RUL refers to the estimated period during which an item remains useful before it should be replaced.

• RUL Calculation: The RUL is determined based on the date the equipment was delivered to the beneficiary, not its age. This ensures that the RUL reflects the actual use of the equipment by the beneficiary.
• Replacement During RUL: Medicare does not cover replacement of items within their RUL period, except for a documented change in medical condition to substantiate the medical need. However, repairs may be covered, provided the repair costs do not exceed the cost of replacing the item. Once the RUL has been reached, Medicare may approve a replacement.

If no program instructions provide specific guidance on the RUL of an item, Medicare Administrative Contractors (MACs) are responsible for setting the RUL, which cannot be less than five years.

Steps to Determine If Replacement is Covered

Before proceeding with replacing an item, healthcare providers should ask several key questions to determine if the replacement is covered under Medicare.

1. Has the beneficiary previously had a similar item?
   • If the beneficiary has never had a similar item, the claim can proceed without further documentation. If the beneficiary has had a similar item, further steps must be followed:
     • Check the RUL: Determine if the equipment has reached its RUL.
     • If RUL has been reached: The replacement can be billed without an Advance Beneficiary Notice (ABN).
     • If RUL has not been reached: An ABN should be obtained to inform the beneficiary of the potential noncoverage, and the claim must be billed with the appropriate modifier.
2. Has there been a change in the beneficiary’s medical condition?
   • A change in the beneficiary’s medical condition may require a different or more advanced item. If necessary, a similar or the same item can be replaced. There must be documentation in the ordering practitioner’s record to substantiate the need of replacement item.
3. Has the original item been lost, stolen, or irreparably damaged?
   • In cases of loss, theft, or irreparable damage, the supplier may provide a replacement. Suppliers should ensure they have documentation on file confirming details of the incident (e.g., police report, insurance claim report or beneficiary statement).

Importance of a Treating Practitioner’s Order

In many cases, Medicare requires an order from the treating practitioner to confirm the medical necessity for the replacement. This order ensures that the replacement item is appropriate for the beneficiary's health needs and complies with Medicare’s coverage guidelines.
By carefully adhering to these guidelines and evaluating each case individually, healthcare providers can ensure compliance with Medicare’s DME replacement policies and help beneficiaries receive the appropriate coverage for their Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) needs.

Resolving Denials

A common cause of denials in DMEPOS claims is when the billed item is considered the "same as" or "similar to" an item the beneficiary already possesses and is still within its RUL. To resolve denials in such cases, suppliers should submit a Redetermination Request with supporting documentation. This may include:

• Evidence that the item was lost or stolen or was irreparably damaged.
• Medical records from the prescribing physician or practitioner, particularly if there has been a change in the beneficiary’s condition that justifies the need for a new item.

Same or Similar Denials: Claims are often denied when an item is deemed the same or similar to one already in the beneficiary’s possession. Some common examples of "same or similar" items include:

• E0196 (gel pressure mattress) vs. E0277 (powered pressure-reducing air mattress)
• E0250 (hospital bed, fixed height) vs. E0261 (semi-electric hospital bed)

Before providing an item, it is essential for healthcare providers to check for same or similar using the Same or Similar functionality in the Noridian Medicare Portal (NMP). This will help in determining whether an ABN should be obtained or if further documentation is necessary.