Medicare established coverage provisions for Cardiac Rehabilitation (CR) and Pulmonary Rehabilitation (PR) programs. The regulation at 42 CFR 410.49 includes coverage provisions for CR and PR items and services, physician standards and limitations to the sessions that may be covered.

Access the below related information from this page.

• Cardiac Rehabilitation (CP) Program
• Pulmonary Rehabilitation (PR) Program
• Audit Findings - OIG - Cardiac Medical Devices and Manufacturer Credit Billing Instruction
• CR, Intensive Cardiac Rehabilitation (ICR) and PR Orders

Cardiac Rehabilitation Program

Pulmonary Rehabilitation Program

Audit Findings - OIG

Cardiac Medical Devices and Manufacturer Credit Billing Instruction

The Office of Inspector General (OIG) has published several reports finding that Noridian providers for Jurisdiction E have incorrectly billed Medicare for replacement medical devices. It has been reported that many providers bill Medicare for replacement devices without accounting for the related credit which is refunded by the manufacturer. 

Education has been provided regarding hospital charges with respect to medical devices for inpatient and outpatient services. If a hospital receives a replacement medical device for free, the hospital should not be charging the patient or Medicare for that device. The hospital should not be including costs on the cost report or charges on the Medicare claim.

Common cardiac devices used to treat beneficiaries occasionally require replacement due to defects, recalls, batter depletions or mechanical complications. These items may be covered under manufacturer warranty; defibrillators, pacemakers and their associated electrical leads.

A recent audit for years 2012 -2014 found 191 claims incorrectly paid. There were 52 inpatient and 139 outpatient claims that did not comply with Medicare requirements for reporting manufacturer credits. This resulted in an overpayment of $2,132,458 that hospitals did not identify, refund or adjust the claims reviewed.

Medicare payment is reduced if the hospital receives a full or partial credit from the manufacturer. The following billing guidelines should be followed:

• Full credit for device - append modifier FB to procedure code (not the device code) that reports the service provided to replace the device
  • Equal or lesser priced replacement device bill token charge
  • Net cost incurred bill difference between usual charge of device and credit
• Partial credit for device - append modifier FC to procedure code (not the device code) that reports the service provided to replace the device
  • 50 percent or more credit received for the replacement device bill either a token charge ($0.01) or the difference between usual charge of device and credit
• Value code FD and amount used when device is provided as a clinical trial, free sample or furnished without cost
  • 49 Product replacement within Product Lifecycle - Replacement of product earlier than the anticipated lifecycle.
  • 50 Product replacement for known Recall of a Product - Manufacturer or FDA has identified the product for recall and replacement.
  • 53 Initial placement of medical device provided as part of a clinical trial or free sample - Outpatient claims

CMS recognizes that showing a charge for a device that has been furnished without cost is not optimal, but showing a token charge in this circumstance will allow claims for reasonable and necessary services to be adjudicated.

Hospitals should take advantage of warranty replacement devices and take corrective action to ensure correct billing practices by:

• Establishing internal controls to coordinate functions among various department to identify when the credit was received
• Review the manufacturer warranty and create an internal process to obtain a replacement, full or partial credit
• Follow the Medicare billing requirements for reporting manufacture credits for replaced medical devices
  • Submit the claim without the modifiers and the later correct the claim with the proper coding or
  • Hold claim until a determination is made on the level of credit.

CR, ICR, and PR Orders

To comply with federal statute, Medicare covered CR, ICR and/or PR services must be ordered by a Medical Doctor or Doctor of Osteopathy licensed in the state where the services are rendered. For either CR, ICR or PR, the medical director or supervising MD/DO must be present and immediately available during rehab activities.

The sole exception, per § 512.630, is for a provider or supplier of CR and ICR services to an Episode Payment Model beneficiary during an AMI and CABG episode, as defined in § 512.2, wherein CMS waives the physician definition to allow the functions of supervising physician, prescribing exercise, and establishing, reviewing, and signing an individualized treatment plan for CR and ICR services to be furnished under the direction of:

1. A physician, as defined in section 1861(r)(1) of the Act; or
2. A qualified nonphysician practitioner, as defined by CMS.

Questions regarding Advancing Care Coordination through Episode Payment Models and the Cardiac Rehabilitation Incentive Payment Model can be directed to epmrule@cms.hhs.gov.

Resources

• CMS Internet Only Manual (IOM), Publication 100-04, Medicare Claims Processing Manual, Chapter 4, Section 20.6.9, 20.6.10, and 61.3-61.3.6
• CMS Change Request (CR) 6850 - Cardiac Rehabilitation and Intensive Cardiac Rehabilitation
• CR 6823 - Pulmonary Rehabilitation (PR) Services
• CR 12613 - Updates to the Pulmonary Rehabilitation (PR), Cardiac Rehabilitation (CR), and Intensive Cardiac Rehabilitation (ICR) Conditions of Coverage
• Cardiac Rehabilitation Programs (20.10) National Coverage Determination (NCD)
• Billing and Coding: Pulmonary Rehabilitation Services (A56152)