Part B - Durable Medical Equipment and the Deficit Reduction Act

Changes to Payment for Durable medical Equipment
Due to the Deficit reduction Act

Per the Centers for Medicare and Medicaid Services (CMS), The Deficit Reduction Act (DRA) is meant to reduce Medicare expenditures and reduce beneficiary liability for coinsurance. The immediate effects for users of durable medical equipment have to do with changes in payment and ownership.

Capped Rentals

Wheelchairs, hospital beds, some walkers, etc., are considered capped rentals. Medicare previously allowed beneficiaries to rent capped rentals for ten continuous months followed by either a rental option or a purchase option. As of January 01, 2006, per the Deficit Reduction Act, this rule changed. Per the DRA, for beneficiaries for which the first rental month occurred on or after January 01, 2006, after a thirteen month period of continuous use during which rental payments are made by Medicare, the supplier must transfer title to the equipment to the beneficiary. As was the case before the DRA, beneficiaries may still elect to obtain power-driven wheelchairs on a lump-sum purchase agreement basis. Payment for reasonable and necessary maintenance and servicing of beneficiary-owned equipment is made for parts and labor not covered by the supplier or manufacturer’s warranty.

Special Rules for Oxygen Equipment

Per the DRA, as of January 01, 2006, at the end of a 36 month rental period, the supplier must transfer title for the stationary and portable oxygen equipment to the beneficiary. In the case of beneficiaries using oxygen equipment on December 31, 2006, the 36-month rental period began on January 01, 2006. Medicare will pay for beneficiary-owned stationary or portable gaseous or liquid systems, as long as the oxygen remains medically necessary. Medicare will also pay for reasonable and necessary maintenance and servicing of beneficiary-owned oxygen equipment that is not covered by the supplier’s or manufacturer’s warranty.