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INTRODUCTION

Part B of Medicare is intended to fill some of the gaps in medical insurance coverage left under Part A. After the beneficiary meets the annual deductible, Part B will pay 80% of the "reasonable charge" for covered services, the reimbursement rate determined by Medicare; the beneficiary is responsible for the remaining 20% as "co-insurance." Unfortunately, the "reasonable charge" is often less than the provider's actual charge. If the provider agrees to "accept assignment," he agrees to accept Medicare's "reasonable charge" rate as payment in full and the patient is only responsible for the remaining 20%. If the provider does not accept assignment, the patient will be responsible for paying a portion of the difference between Medicare's reimbursement rate (the reasonable charge) and the provider's actual charge.

Since 1972, individuals receiving Social Security retirement benefits, individuals receiving Social Security disability benefits for 24 months, and individuals otherwise entitled to Medicare Part A, are automatically enrolled in Part B unless they decline coverage. Others must enroll in Part B by filing a request at the Social Security office during certain designated periods.

The major benefit under Part B is payment for physicians' services. In addition, home health care, durable medical equipment, outpatient physical therapy, x-ray and diagnostic tests are also covered. Since January 1, 1998 home care is covered under Part B if the individual does not meet the Part A prior institutional requirements, received coverage under Part A for the maximum annual 100 visits, or only has Part B.

The following is a list of items and services which can be covered under Part B:

1. Physicians' services;

2. Home Health Care;

3. Services and supplies, including drugs and biologicals which cannot be self-administered, furnished incidental to physicians' services;

4. Diagnostic x-ray tests, diagnostic laboratory tests, and other diagnostic tests;

5. X-ray therapy, radium therapy and radioactive isotope therapy;

6. Surgical dressings, and splints, casts and other devices used for fractures and dislocations;

7. Durable medical equipment;

8. Prosthetic devices;

9. Braces, trusses, artificial limbs and eyes;

10. Ambulance services;

11. Some outpatient and ambulatory surgical services;

12. Some outpatient hospital services;

13. Some physical therapy services;

14. Some occupational therapy;

15. Some outpatient speech therapy;

16. Comprehensive outpatient rehabilitation facility services;

17. Rural health clinic services;

18. Institutional and home dialysis services, supplies and equipment;

19. Ambulatory surgical center services;

20. Antigens and blood clotting factors;

21. Qualified pyschologist services;

22. Therapeutic shoes for patients with severe diabetic foot disease;

23. Influenza, Pneumococcal, and Hepatitis B vaccine;

24. Some mammography screening;

25. Some pap smear screening, breast exams, and pelvic exams;

26. Some other preventive services including colorectal cancer screening, Diabetes training tests, bone mass measurements, and prostate cancer screening.

Medicare Part B is fairly comprehensive but far from complete. There are certain items and services which are excluded from coverage. Excluded services include:

1. Services which are not reasonable or necessary;

2. Custodial care;

3. Personal comfort items and services;

4. Care which does not meaningfully contribute to the treatment of illness, injury, or a malformed body member;

5. Prescription drugs which do not require administration by a physician;

6. Routine physical checkups;

7. Eyeglasses or contact lenses in most cases

8. Eye examinations for the purpose of prescribing, fitting, or changing eyeglasses or contact lenses;

9. Hearing aids and examinations for hearing aids;

10. Immunizations except for influenza, pneumococcal and hepatitis B vaccine;

11. Cosmetic surgery;

12. Most dental services

13. Routine foot care.

Part B Premium, Deductible and Co-pays

Medicare's Part B is optional and is financed largely by monthly premiums paid by individuals enrolled in the program. Participants may have this premium automatically deducted from their Social Security check. Since 2007, for the first time in the history of the Medicare program, the premium has been income based.

Click this link for this year's Part B premium breakdown by income.

Part B has an annual deductible requirement, as well. Each year, before Medicare pays anything, the patient must incur medical expenses equal to the deductible, based on Medicare's approved "reasonable charge," not on the provider's actual charge.

As described above, a major problem with Medicare Part B is the difference between the cost of medical items or services, particularly physicians' services, and the Medicare approved "reasonable charge." When an item or service is determined to be coverable under Medicare, it is reimbursed at 80% of the "reasonable charge" for that item or service, the patient is responsible for the remaining 20%. Unfortunately, the "reasonable charge," a rate set by Medicare, is often substantially less than the actual charge. The result of the "reasonable charge" reimbursement system is that Medicare payment, even for items and services covered by Part B, is often inadequate. The patient is left with out-of-pocket expenses.

When a physician accepts "assignment," he or she agrees to accept the Medicare approved amount as full payment. Medicare will pay 80% and the patient will pay the 20% co-payment. When a physician does not accept assignment the patient is liable for the co-payment plus a balance above the Medicare fee schedule amount. However, under federal law there is a set limit as to the amount a physician may balance bill. A physician may balance bill only 115% of the Medicare fee schedule amount. For example, assume that you go to a doctor who does not accept assignment; his actual charge may be $100, but the Medicare fee schedule is only $70. The doctor may only bill you 115% of the fee schedule amount or $80.50. If the doctor bills above $80.50 he is violating federal law.

Connecticut Information:

Many Connecticut senior centers and Social Security offices have lists of Connecticut physicians and medical equipment suppliers who accept Medicare assignment. Also, the State Department of Social Services, Elderly Services Division has a list and will assist in finding the names of physicians who accept assignment in specific areas. If the patient's physician is not on the list, encourage him or her to accept assignment.

Connecticut residents may be eligible for the State's mandatory Medicare assignment program, ConnMAP. This program requires Part B providers to accept assignment for Connecticut citizens of limited income. Applications are available at most senior centers and at the Connecticut Department of Social Services, Elderly Services Division in Hartford.

Connecticut citizens who are at least 65 years old or who are disabled may also qualify for the State's prescription drug program, ConnPACE. If they have quite low incomes, the State of Connecticut will pay for part of the cost of eligible patient's prescription drugs. Again, applications are available at most senior centers and at the State Department of Social Services, Elderly Services Division in Hartford. NOTE: Patients eligible for ConnPACE are automatically eligible for ConnMAP.


AMBULANCE SERVICES

Quick Screen:
When Should Medicare Coverage Be Available for Ambulance Transportation

Coverage Criteria:

  1. Travel by ambulance must be the only safe means of transportation available.  It is not sufficient that alternative transportation cannot be arranged.  It is necessary to show that the patient’s health would have been jeopardized had he or she been transported any other way.
  2. Transportation by ambulance must be:
  • From any location to the nearest hospital or skilled nursing facility that can provide the appropriate level of care for the patient’s illness or injury;
  • From a hospital or skilled nursing facility to the beneficiary’s home;
  • From a hospital to a skilled nursing facility;
  • From a skilled nursing facility to a hospital;
  • From a hospital to another hospital or from a skilled nursing facility to another skilled nursing facility if the original institution could not provide the appropriate level of care for the patient’s illness or injury;
  • Round trip transportation from a skilled nursing facility to another provider for medically necessary care not available in the skilled nursing facility.
  • Round trip transportation from a patient’s home or skilled nursing facility to the closest facility that provides renal dialysis for patients living with end-stage renal disease.
  1. Non-emergency transportation will only be covered if the ambulance supplier obtains a physician’s certification indicating that ambulance transportation is necessary because other means of transportation are medically contraindicated.
  2. The transportation must be provided by a Medicare-certified provider.

Other Important Points: 

  1. Medicare does not cover wheelchair van transportation.
  2. Medicare usually does not pay for paramedic intercepts.
  3. Medicare will not pay for transportation from the patient’s home to the patient’s physician office.
  4. Ambulance providers often do not inform patients that they do not think Medicare will pay for the transportation.  In a non-emergency situation, it is a good idea to ask whether the transportation will be covered before taking the trip.

Billing Information:

  1. Most medically reasonable and necessary ambulance transportation is covered by and billed to Medicare Part B.  Thus the Medicare payment is subject to Part B deductible and co-insurance.
  2. If the patient is an inpatient at a hospital or skilled nursing facility (SNF) on the day of the ambulance transportation (not the day of discharge), the transportation may be arranged by and billed to the hospital or SNF.
  3. If the patient is enrolled in hospice and the ambulance transportation is related to the terminal illness, it should be arranged by and billed to the hospice provider. 

Appeal:

Ambulance transportation is frequently inappropriately denied Medicare coverage.  If a Medicare beneficiary’s transportation meets the coverage guidelines described above, but were denied Medicare coverage, appeal!  Review the Medicare Summary Notice to determine the reason for the denial and follow the directions regarding how to appeal.  Send a letter with the appeal request explaining why the transportation was medically necessary.  Also, if possible, attach a supportive letter from the beneficiary’s physician.


DIABETES SELF-MANAGEMENT TRAINING (DSMT)

WHEN SHOULD MEDICARE COVERAGE BE AVAILABLE FOR DIABETES SELF-MANAGEMENT TRAINING? A QUICK SCREEN FOR IDENTIFYING COVERABLE CASES

WHO'S COVERED

A beneficiary who has had any one of the following medical conditions within the twelve month period preceding the orders for the training:

  • New onset diabetes;

  • Poor glycemic control (HbA1C of $9.5 within 90 days of training);

  • Change in treatment regimen from no medication to medication or from oral medication to insulin;

  • High risk for complications based on poor glycemic control; documented acute episodes of severe hypo- or hyperglycemia within the past year necessitating third party assistance for emergency room visit or hospitalization;

  • High risk based on one of the following documented complications: lack of feeling in the foot or other foot complications; pre-proliferative or proliferative retinopathy, or prior laser treatment of the eye; kidney complications related to diabetes.

Note: Beneficiaries who are inpatients in a hospital, skilled nursing facility, hospice or nursing home are not eligible for services under this benefit, as it must be provided in an outpatient setting.

WHAT'S COVERED

  • Initial Training: up to ten hours within 12 months to provide individuals with necessary skills (including skill to self-administer injectable drugs) and knowledge to participate in the management of his or her own condition.

  • Follow-up Training: up to one hour each year.

CONDITIONS FOR COVERAGE

  • Physician's or qualified non-physician practitioner's orders.

  • Plan of care (POC) which includes content, number, frequency and duration of services.

  • Services reasonable and necessary for treatment of diabetes (certification on POC).

  • Group training if available within two months of doctor's orders.

  • Certified provider (may include physicians, individuals or entities that meet the applicable standards of the National Diabetes Advisory Board, or that are recognized by an organization that represents individuals with diabetes as meeting standards for furnishing the services).

PAYMENT AMOUNT DETERMINATIONS

Payment for DMST services will be made under the Medicare Part B physician fee schedule.

BLOOD GLUCOSE MONITORS AND BLOOD TESTING STRIPS

These will be covered without regard to whether the beneficiary has Type I or Type II diabetes or whether or not the beneficiary uses insulin. Blood testing strips and blood glucose monitors will be classified as durable medical equipment, and payment for the blood-testing strips will be reduced by 10 percent.

  • Monitors with voice synthesizers are covered for patients with bilateral best corrected visual acuity of 20/200 or worse.

  • The most regularly consumed supplies are the test strips and lancets used in conjunction with the glucose monitor. Generally, coverage is available for up to 100 lancets and 100 test strips every 3 months for a non-insulin dependent diabetic and 100 lancets and 100 test strips every month for an insulin dependent diabetic.

  • When greater than the usual quantities are required to assure appropriate glycemic control, the physician must document in the patient's medical record the reasons for the higher than usual testing frequency. The patient must forward to the supplier a log of test results corroborating higher testing frequency. Suppliers must receive a written order from the physician before they may submit claims to Medicare for reimbursement.

  • The physician must see and evaluate the patient within 6 months prior to ordering (and renewing prescriptions for) higher than usual quantities.

For information on Connecticut education programs recognized by the American Diabetes Association, and more visit the Diabetes Association Website. (external link opens in new window).


MEDICAL NUTRITION THERAPY SERVICES (MNT) FOR BENEFICIARIES WITH DIABETES OR RENAL DISEASE

Pursuant to § 105 of the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), as of January 1, 2002, medical nutrition therapy services are available for beneficiaries with diabetes or renal disease.

WHO'S COVERED

  • A beneficiary with diabetes, which is defined as diabetes mellitus Type I (an autoimmune disease that destroys the beta cells of the pancreas, leading to insulin deficiency) and Type II (familial hyperglycemia). The diagnostic criterion for a diagnosis of diabetes is a fasting glucose greater than or equal to 126 mg/dl. These definitions come from the Institute of Medicare 2000 Report, The Role of Nutrition in Maintaining Health in the Nation's Elderly.

WHAT'S COVERED

  • An initial visit for an assessment; follow-up visits for interventions; and reassessments as necessary during the 12 month period beginning with the initial assessment ("episode of care") to assure compliance with the dietary plan.

  • A specific, maximum number of hours will be reimbursable in an episode of care. The maximum number of hours will be set forth in a future Center for Medicare and Medicaid Program Memorandum.

  • The number of hours covered for diabetes may be different than the number of hours covered for renal disease.

CONDITIONS FOR COVERAGE

  • The treating physician must make a referral and indicated a diagnosis of diabetes or renal disease.

  • Services may be provided either on an individual or group basis without restrictions.

  • When follow-up Diabetes Self-management Tranining (DSMT) and Medical Nutrition Therapy (MNT) services are provided within the same time period, hours from both benefits will be counted toward the maximum number of covered hours allowed during the episode of care.

  • MNT services must be provided by a professional as defined below.

LIMITATIONS ON COVERAGE

  • MNT services are not covered for beneficiaries receiving maintenance dialysis for which payment is made under § 1881 of the Act.

  • If a beneficiary has both renal disease and diabetes, they may receive only the number of hours covered under this benefit for either renal disease or diabetes, whichever is greater.

  • A beneficiary cannot receive MNT if they have received an initial DSMT within the last 12 months unless the need for reassessment and additional therapy has been documented by the treating physician as a result of a change in diagnosis or medical condition or the beneficiary receiving DSMT is subsequently diagnosed with renal disease.

  • If a beneficiary diagnosed with diabetes has been referred for both follow-up DSMT and MNT services, the number of hours the beneficiary may receive is limited to the number of hours covered under either follow-up DSMT or MNT services annually, whichever is greater.

CERTIFIED PROVIDER

For Medicare Part B coverage of MNT, only a registered dietitian or nutrition professional may provide the services. This must be an individual licensed or certified in a State as of December 21, 2000; or an individual whom, on or after December 22, 2000:

  • Holds a bachelor's or higher degree granted by a regionally accredited college or university in the united States (or an equivalent foreign degree) with completion of the academic requirements of a program in nutrition or dietetics, as accredited by an appropriate national accreditation organization recognized for this purpose;

  • Has completed at least 900 hours of supervised dietetics practice under the supervision of a registered dietitian or nutrition professional; and

  • Is licensed or certified as a dietitian or nutrition professional by the State in which the services are performed. In a State that does not provide for licensure or certification, the individual will be deemed to have met this requirement if he or she is recognized as a "registered dietitian" by the Commission on Dietetic Registration or its successor organization, or meets the requirements of the first two bullets of this section.

PAYMENT FOR MEDICAL NUTRITION THERAPY

Payment will be made under the Medicare Part B physician fee schedule for dates of service on or after January 1, 2002, to a registered dietitian or nutrition professional that meets the above requirements. Part B deductible and co-insurance rules apply. As with the DSMT benefit, payment is only made for MNT services actually attended by the beneficiary and documented by the provider and for beneficiaries that are not inpatients of a hospital or skilled nursing facility.


DURABLE MEDICAL EQUIPMENT

A QUICK SCREEN TO AID IN IDENTIFYING COVERABLE CASES

Medicare claims for durable medical equipment are suitable for coverage, and appeal if they have been denied, if they meet the following criteria:

1. The equipment has been prescribed as medically necessary by your physician. Most items require a Certificate of Medical Necessity (CMN) filled out by a physician; and

2. It must be able to withstand repeated use. Medicare expects a piece of equipment to last 5 years and will not usually pay for like or similar equipment within that time frame; and

3. It must be primarily and customarily used for a medical purpose; and

4. It must generally not be useful to a person in the absence of illness or injury; and

5. It must be appropriate for use at home. Under a provision of federal law, a skilled nursing facility is not considered home; and

6. The durable medical equipment supplier must be a Medicare-certified provider.

ADDITIONAL HINTS:

1. The attending physician is ALWAYS the key to obtaining Medicare benefits; obtain a statement from the beneficiary's physician stating that the durable medical equipment prescribed is medically necessary, is part of his course of treatment, and explaining its therapeutic value to the beneficiary.

2. The equipment must not only be medically necessary for the beneficiary, it must also generally be used for medical purposes. Thus, an air conditioner, while perhaps medically necessary for the individual patient, is not generally considered to be for medical purposes and is, therefore, not covered. (Water mattresses, now used for non-medical purposes but originally created for patients, will be coverable if medically necessary.)

3. Iron lungs, oxygen tents, hospital beds, and wheelchairs are included in Medicare's definition of durable medical equipment.

4. Some prosthetic devices, braces, artificial limbs and eyes are covered by Medicare Part B as "medical and other health services," not as durable medical equipment.

5. A seat lift chair mechanism will be covered by Medicare as durable medical equipment if:

a. It is prescribed by a physician; and

b. it is included in the physician's course of treatment; and

c. it is likely to effect improvement OR arrest or retard deterioration of the patient's condition; and

d. the alternative would be chair or bed confinement; and

e. the seat lift is the type which can be controlled by the patient and effectively assist him in standing up and sitting down without other assistance. (Seat lifts which operate by a spring release mechanism with a sudden, catapult-like motion will NOT be covered.)

6. Durable medical equipment costs are payable under Medicare Part B. You must therefore be enrolled in Part B and Medicare payment is subject to the Part B deductible and co-insurance requirements.

More information – Medicare Coverage of Power Mobility Devices: Tips and Reminders

Payment Policy

Medicare pays for:

  • Inexpensive items (not to exceed $150);
  • Wheelchairs, hospital beds, some walkers;
  • Certain customized items;
  • Prosthetic and orthotic devices
  • Capped rental items;
  • Oxygen and oxygen equipment.

DME, when furnished in the Medicare home under the home health benefit and under the Medicare Part B DME benefit, is paid on the basis of a fee schedule.  Based on an individual consideration of each item, DME requiring custom fabrication may be paid for in a lump-sum amount and are not subject to prevailing charges or fee schedules.

Prosthetic and orthotic devices– excluding items requiring frequent and substantial servicing; customized items; parenteral/enteral nutritional supplies and equipment; and intraocular lenses – are paid for on the basis of a fee schedule and on a lump-sum basis.

Capped rental items (such as oxygen, nebulizers, and manual wheelchairs) that exceed $150 in costs are paid for on a rental fee schedule that is calculated to limit the monthly rental to 10% of the average allowed purchase price on an assigned claim for new equipment during a base period.  For each remaining month, the monthly rental is limited to 7.5% of the average allowed purchase price.  After paying the rental fee schedule amount for 15 months, no further payment is made except for a six-month maintenance and servicing fee.  

Purchase of capped rental items: starting in the 10th month, with respect to an item that is a capped rental, the supplier must give the beneficiary the option to purchase the equipment.  Medicare contractors will make no further rental payments to the supplier after the 11th rental month for capped rental items until the supplier notifies the contractor that it has contacted the beneficiary and given the beneficiary the option to purchase or to continue renting the capped rental.  If the beneficiary declines or fails to respond to the option to purchase, the contractor continues to make rental payments until the 15th month rental cap has been reached.   If the beneficiary decides to purchase the item, the contractor continues to make rental payments until a total of 13 continuous rental months have been paid.  Where the beneficiary has elected the purchase option, on the first day after the 13th continuous month of the rental payments, the supplier must transfer title to the capped rental item to the beneficiary.  If the beneficiary decides to continue renting the item, after the 15th rental month, the title to the equipment remains with the medical equipment supplier and the supplier can not charge the beneficiary any additional rental payments other than maintenance and service fees.

Beneficiary payment for capped rental items: if a beneficiary purchases a capped rental item, he or she is responsible for servicing the equipment.  And, with respect to the purchase, you are responsible for the 20% coinsurance amount, and on unassigned claims, the beneficiary is responsible for the balance between the Medicare allowed amount and the supplier’s charge.  If the beneficiary decides to rent the item, his or her responsibility is limited to a 20% coinsurance amount on a maintenance and servicing fee payable twice per year even if the equipment is not actually serviced.

Electric Wheelchairs:  beneficiaries have the option to rent or purchase physician-prescribed electric wheelchairs.  If the beneficiary decides to purchase the chair, Medicare will pay 80% of the allowable purchase price in a lump-sum amount.  The beneficiary is responsible for the 20% coinsurance amount and, for unassigned claims, the balance between the Medicare allowed amount and the supplier’s charge.  If the beneficiary decides to rent the electric wheelchair, after the 10th month of the rental, the beneficiary has the option to convert the rental agreement to a purchase agreement.  If the purchase option is elected after the 10th month of rental, the Medicare contractor will make 3 more monthly payments to the supplier.  At that point, the beneficiary is responsible for a 20% coinsurance amount, and for unassigned claims, the balance between the Medicare allowed amount ant the supplier’s charge.  After these additional rental payments are made, title to the equipment is transferred to the beneficiary.  

If the beneficiary decides to continue renting the item, after the 15th rental month, the title to the equipment remains with the medical equipment supplier and the supplier can not charge the beneficiary any additional rental payments. If the beneficiary decides to rent the item, his or her responsibility is limited to a 20% coinsurance amount on a maintenance and servicing fee payable twice per year even if the equipment is not actually serviced.

For power operated vehicles (POV) used as wheelchairs, the allowed payment amount, including all medically necessary accessories, is the lowest of the actual charge for the POV or the fee schedule amount for the POV.

Oxygen and oxygen equipment:  Medicare contractors pay a monthly fee schedule amount per beneficiary.  Generally, the fee covers the equipment, its contents and supplies.  Purchase is not made for equipment of this type.  When portable oxygen is prescribed, the fee schedule amount for portable equipment is added to the fee amount for stationary oxygen rental.

Purchase of oxygen equipment:  on or after June 1, 1989, June 1, 1989, Medicare no longer pays for oxygen equipment that is purchased.  If the beneficiary owns stationary liquid or gaseous oxygen equipment, the Medicare contractor pays the monthly oxygen contents fee.  For owned oxygen concentrators, Medicare contractors do not pay a contents fee.  Whether the beneficiary owns or rents an oxygen concentrator or a stationary gaseous or liquid oxygen system and has either rented or purchased a portable system, Medicare contractors pay the portable oxygen contents fee.

CMS Moves Forward with its Competitive Bidding Program for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS)

October 1, 2010 marked the kick-off of CMS's additional beneficiary education efforts to explain its new Competitive Bidding Durable Medical Equipment, Prosthetics, Orthotics, and Supplies program (DMEPOS). The program will be phased in beginning January 1, 2011. If you live in the geographic areas listed below, starting January 1, 2011, you will need to obtain your DMEPOS items from certified DMEPOS suppliers, including the repair and replacement of your DMEPOS. CMS will be putting on its website information to explain the new program and the initial areas of the USA in which the DMEPOS program and its requirements will be focused.

According to CMS, "[I]f you have Original Medicare and travel to (or live in) certain ZIP codes in the areas listed below, you will almost always need to use a supplier that contracts with Medicare when you buy or rent certain equipment or supplies for Medicare to help pay. In addition, consult CMS' information page at: http://www.cms.gov/DMEPOSCompetitiveBid/ (external link opens in new window).

  • Charlotte-Gastonia-Concord (North Carolina and South Carolina)
  • Cincinnati-Middletown (Ohio, Kentucky, and Indiana)
  • Cleveland-Elyria-Mentor (Ohio)
  • Dallas-Fort Worth-Arlington (Texas)
  • Kansas City (Missouri and Kansas)
  • Miami-Fort Lauderdale-Pompano Beach (Florida)
  • Orlando – Kissimmee (Florida)
  • Pittsburgh (Pennsylvania)
  • Riverside-San Bernardino-Ontario (California)

For the most up-to-date list of Medicare contract suppliers in your area, follow the steps below:

  1. Visit www.medicare.gov and select "Facilities & Doctors.”
  2. Select "Find Suppliers of Medical Equipment” and enter your ZIP code.
  3. Select the "New” yellow icon in the upper right corner of the page.
  4. Under "What Kinds of items are included,” select the product category of the item you need to view or print a list of Medicare contract suppliers.

OR, call 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048. A customer service representative can help you find a supplier.

FURTHER DETAILS

This program was delayed by the passage of HR 6331, the Medicare Improvements for Patients and Providers Act (MIPPA), in July 2008. MIPPA terminates all contracts and requires CMS to rebid the initial 10 areas, and it extends the timeline for expansion to 80 areas until 2011. For 2009, Medicare payment for items that were to have been subject to this program will be cut 9.5%.

The Centers for Medicare & Medicaid Services (CMS) is sending notification letters to beneficiaries who may need to change suppliers in order for Medicare to pay for their equipment and supplies. The letter encourages each beneficiary to check with their supplier to make sure that the supplier meets the new requirements. The letter also provides instructions for the beneficiary to find another supplier, if necessary.

A copy of the notification letter along with additional information on Medicare's new accreditation and surety bond requirements for DMEPOS suppliers may be found at http://www.cms.gov/Partnerships/03_DMEPOS_Toolkit.asp#TopOfPage (external link opens in new window). As a prelude to its competitive bidding program for DMEPOS, CMS is requiring that certain suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) meet Medicare's quality standards, including that certain suppliers become accredited by October 1 and obtain a surety bond by October 2, 2009. In addition, CMS has developed a tool kit of information about the DEMPOS competitive bidding program.

Medicare beneficiaries should ask their suppliers if they are approved by Medicare so they can continue to get their equipment and supplies covered by Medicare and to avoid service interruptions. In order to receive Medicare coverage, beneficiaries will have to use certified DMEPOS suppliers. In some instances, beneficiaries may have to find a different supplier, one that is a Medicare-approved supplier

The implementation of the DMEPOS program was delayed by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). CMS is now in the process of implementing congressionally required re-bidding under the DMEPOS program. CMS will provide updates and information to partners as soon as possible. If beneficiaries have questions, they may call 1-800-MEDICARE (1-800-633-4227). Information about the DMEPOS competitive bidding program is also available on the Center for Medicare Advocacy's website at: http://www.medicareadvocacy.org/2010/12/medicare-changes-effective-january-1-2011/.

As required by Section 302 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), the Centers for Medicare & Medicaid Services (CMS) have published final regulations (72 Fed. Reg. 17,992 et seq [April 10, 2007], amending 42 C.F.R., parts 411 and 414; available at: http://www.cms.gov/quarterlyproviderupdates/downloads/cms1270f.pdf – .pdf, external link, opens in new window) establishing the requirements for a new competitive bidding program for certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS). The program began on July 1, 2008, but, as noted above, was delayed by MIPPA. It is an outgrowth of Congressional and agency efforts to reign in the costs of DMEPOS, particularly items that have been identified as costly or over utilized.

On May 20th, CMS announced the winning suppliers for the first round of the competitive bidding process. These 325 suppliers began serving the ten first-round competitive bidding areas (CBAs) on July 1, 2008, but MIPPA required CMS to cancel the contracts and rebid the agreements.

STATEMENT ON THE DMEPOS COMPETITIVE BIDDING PROGRAMBY CENTERS FOR MEDICARE & MEDICAID SERVICES

The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), enacted on July 15, 2008, made limited changes to the competitive bidding program for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS), including a requirement that the Secretary conduct a second competition to select suppliers for Round 1 in 2009. The Centers for Medicare & Medicaid Services (CMS) issued an interim final rule with comment period (IFC) on January 16, 2009. The rule incorporates into existing regulations specific statutory requirements contained in MIPPA related to the competitive bidding program.

The Administration delayed the effective date for the IFC to allow CMS officials the opportunity for further review of the issues of law and policy raised by the rule. Based upon its review and on the need to ensure that CMS is able to meet the statutory deadlines contained in MIPPA, the Administration has concluded that the effective date should not be further delayed. The rule became effective April 18, 2009. However, thereis no immediate effect on the Medicare DMEPOS benefit and Medicare beneficiaries may continue to use their current DMEPOS suppliers at this time.

During the comment period, CMS received many suggestions by a range of stakeholders to make further improvements to the competitive bidding program, such as ensuring that CMS' processes for collecting and evaluating bids are fair and transparent. CMS will be issuing further guidance on the timeline for and bidding requirements related to the Round 1 re-bid. In finalizing these guidelines, CMS will continue to seek input from all affected stakeholders to ensure program implementation consistent with the legislative requirements.

DETAILS ON COMPETITIVE BIDDING

The competitive bidding program requires beneficiaries who permanently reside in designated CBAs to obtain competitively bid items from a contract supplier unless an exception applies. In this instance a recognized exception permits some suppliers to be grandfathered into the process allowing them to continue providing certain rented durable medical equipment (DME) items and services even though they are not contracted suppliers.

The MMA requires that the competitive bidding program is to be phased in beginning with high cost and high volume items, or those with the largest savings potential. The items will be chosen based on: total Medical expenditures (allowable charges) for the item; growth in Medicare expenditures; number of suppliers of the item; savings potential; and findings, reports and studies by the Office of Inspector General (OIG) or the Government Accountability Office (GAO).

Advocates and beneficiary groups are concerned about the impact of the new process on access to DMEPOS. They fear that beneficiaries will not be able to use favored and trusted suppliers with whom they have established relationships and who know their particular DMEPOS items.

Competitive Bidding Areas

The ten (10) Metropolitan Statistical Areas (MSAs) selected by formula as Competitive Bidding Areas (CBAs) for the initial phase of the process are: (i) Charlotte-Gastonia-Concord, NC-SC; (ii) Cincinnati-Middletown, OH-KY-IN; (iii) Cleveland-Elyria-Mentor, OH; (iv) Dallas-Fort Worth-Arlington, TX; (v) Kansas City, MO-KS, (vi) Miami-Fort Lauderdale-Miami Beach, FL; (vii) Orlando-Kissimmee, FL; (viii) Pittsburgh, PA; (ix) Riverside-San Bernardino-Ontario, CA; and (x) San Juan, PR.

After 2009, CMS will designate additional CBAs and 70 additional MSAs. Some areas may be exempt, such as rural areas and areas with low population density that are not competitive, provided there is no significant national market through mail order for a particular item or service.

New Terms

The competitive acquisition program for DMEPOS introduces new terms, including:

  • Contract Supplier – An entity that is awarded a contract by CMS to furnish items under a competitive bidding program
  • Non-Contract Supplier – A supplier that is not awarded a contract by CMS to furnish items included in a competitive bidding program
  • Grandfathered Supplier – A non-contract supplier that chooses to continue to furnish grandfathered items to a beneficiary in a CBA
  • Referral Agents – Physicians, practitioners, or providers who prescribe DMEPOS (in essence, "order” or "refer”) for their patients
  • Grandfathered Item – Any one of the items for which payment is made on a rental basis prior to the implementation of a competitive bidding program and for which payment is made after implementation of a competitive bidding program to a grandfathered supplier that continues to furnish the items in accordance with the rules of the competitive bidding process
  • Single Payment Amount – The allowed payment for an item furnished under a competitive bidding program

Competitive Bidding Implementation Contractor

CMS has contracted with Palmetto GBA as its Competitive Bidding Implementation Contractor (CBIC). The functions of the CBIC are to prepare the request for bids (RFB), perform bid evaluations, and ensure that suppliers meet all applicable financial and quality standards. In addition, the contractor is to conduct an education program for beneficiaries, suppliers, and referral agents. CMS also announced on May 8, 2008 that they will be establishing a website to enable beneficiaries and others to search for certified suppliers in their CBA.

In general, competitively bid items that are related and are used to treat a similar medical condition will be grouped into product categories, for example, hospital bed and accessories. Suppliers do not have to bid on all product categories, but for those product categories for which they bid, the supplier must bid on every item in the product category. In addition, contract suppliers will be required to furnish all items within a product category.

Initial Ten (10) Product Categories

CMS has identified the following items for its initial ten product categories:

  1. Oxygen supplies and equipment

  2. Standard power wheelchairs, scooters, and related accessories

  3. Complex rehabilitative power wheelchair and related accessories

  4. Mail-order diabetic supplies

  5. Enteral nutrients, equipment, and supplies

  6. Continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), and related accessories

  7. Hospital beds and related accessories

  8. Negative pressure wound therapy (NPWTP) pumps and related accessories

  9. Walkers and related accessories

  10. Support surfaces (group 2 and 3 mattresses and overlays)

Grandfathering Certain Contractors

As indicated above, the competitive bidding rules provide for "grandfathering” the provision of certain rental items for which payment is made on a rental basis prior to the implementation of a competitive bidding program and for which payment is made after implementation of a competitive bidding program to a grandfathered supplier that continues to furnish the items as provided under the payment regulations. Items that may be grandfathered include:

  • Certain inexpensive or routinely purchased brand-name items

  • An item requiring frequent and substantial servicing

  • Oxygen and oxygen equipment and other DME described in the regulations

The competitive bidding process also allows for the grandfathering of certain special physicians/practitioners – nurses, physician assistants, clinical nurse specialists, and physical therapists and occupational therapists in private practice – to receive payment for certain competitively bid items furnished to their own patients as part of the professional service even though they have not submitted a bid and have not been selected as a contract supplier.

Beneficiaries who are renting an item of DME, or oxygen and oxygen equipment, that meets the definition of a grandfathered item may elect to obtain the item from a grandfathered supplier. The rules also contain special provisions for small suppliers, including forming networks of small suppliers.

Grandfathered Suppliers' Tip Sheet

On May 28, 2008, CMS published a tip sheet for "Grandfathered Suppliers" under the DMEPOS competitive bidding program. Grandfathered DMEPOS suppliers are non-contract suppliers that elect to continue to provide certain rented DME or oxygen and oxygen equipment at the time the DMEPOS competitive bidding program begins in a given CBA. The grandfathering exception may also apply to beneficiaries who transition from a Medicare Advantage (MA) plan. The full tip sheet is available at  http://www.cms.gov/DMEPOSCompetitiveBid/Downloads/DMEPOS_Grandfathered _Suppliers_Tip_Sheet.pdf (.pdf, external link opens in new window)

Eligible Grandfathered Suppliers

An eligible grandfathered suppler is a supplier that was providing certain rented DME, or oxygen and oxygen equipment at the time a competitive bidding program began in a CBA. That supplier may elect to become a grandfathered supplier and continue renting DME or oxygen and oxygen equipment to the Medicare beneficiaries to whom they were renting prior to the beginning of the competitive bidding program.

Grandfathered items include inexpensive or routinely purchased items provided on a rental basis; items requiring frequent and substantial servicing; oxygen and oxygen equipment (not including oxygen contents, supplies, or accessories furnished for use with beneficiary-owned equipment); and capped rental items provided on a rental basis.

Beneficiary Election to Use a Grandfathered Supplier

Beneficiaries renting oxygen, oxygen equipment, or DME when the competitive bidding program becomes effective may choose to continue to rent those items from a grandfathered supplier. They can indicate their choice by responding to the written notification sent by the grandfathered supplier. The notice is to be sent to the beneficiary at least 30 days prior to the start date of the competitive bidding program. Beneficiaries may elect to change from a grandfathered supplier to a contract supplier at any time, and the contract supplier is required to accept the beneficiary as a customer.

  • Transfer of Title for Oxygen Equipment and Capped Rental DME

    Title for oxygen equipment transfers to the beneficiary on the first day following the 36 continuous months during which Medicare payment is made to rent the equipment. Title to capped rental equipment transfers to the beneficiary on the first day following the 13 continuous months during which Medicare payment is made to rent the equipment. These transfer-of-title requirements apply to all suppliers without regard to their grandfathered status.

  • Capped Rental DME Furnished Prior to January 1, 2006

    Applicable to all suppliers irrespective of grandfathered status, a supplier that provided capped rental DME that was rented in a month prior to January 1, 2006 is responsible for supplying the equipment and for maintenance and servicing after the 15-month rental period for those beneficiaries that chose the rental option.

  • Obtaining Accessories and Supplies for Grandfathered Items

    Accessories and supplies may be provided by the same grandfathered supplier that provides the items, if they are used in conjunction with and are necessary for the effective use of a grandfathered item. Payment for these items is based on the single payment amount if the item is a competitively bid item for the CBA in which the beneficiary maintains a permanent residence. If not a competitively bid item, payment will be made in accordance with the standard payment rules. Accessories and supplies comprise such things as tubes, hoses, and masks with respiratory equipment, and administration sets with infusion pumps. In addition, accessories and supplies for beneficiary-owned equipment that are competitively bid items must be furnished by a contract supplier.

Referral Agent Tip Sheet

Under the DMEPOS competitive bidding program, referral agents include such entities as Medicare-enrolled providers, physicians, treating practitioners, discharge planners, social workers, pharmacists, and home health agencies that refer beneficiaries for services in a CBA. Referral agents have the responsibility to help the Medicare beneficiary select qualified and appropriate DMEPOS suppliers. Similarly, the referral agent is to be the beneficiary's initial contact upon receipt of a prescription for a competitively bid item. They are to assist beneficiaries who reside in a CBA or who are visiting a CBA. Note that the beneficiary's choice of treating physician or treating practitioner is not affected by the DMEPOS competitive bidding program. The full referral agent tip sheet is available at http://www.cms.gov/DMEPOSCompetitiveBid/Downloads/DMEPOS_Referral _Agent_Tip_Sheet.pdf (.pdf, external link opens in new window).

  • Beneficiary Information Needed by the Referral Agent

    A referral agent must determine if the Medicare beneficiary resides in a CBA or will be obtaining a competitively bid item in a CBA. To do this the referral agent must compare the beneficiary's ZIP code to the list of ZIP codes for the CBAs, which is available at http://www.dmecompetitivebid.com/Palmetto/Cbic.nsf/docsCat/DMEPOS Competitive Bidding Areas Zip Codes?opendocument (external link opens in new window). If the beneficiary resides in one of the ZIP codes included in a CBA or is visiting a CBA, the referral agent determines if the DMEPOS item to be supplied to the beneficiary is included in any of the competitively bid product categories. If the DMEPOS item falls into one of the competitively bid product categories, the referral agent informs the beneficiary that it does, and that they need to obtain the item from a contract supplier. The referral agent is then to refer the beneficiary to the "supplier locator tool,” available at: www.medicare.gov (external link opens in new window). In assisting a beneficiary, a referral agent may prescribe, in writing, a particular brand or mode of delivery for a competitively bid item if it is necessary to avoid an adverse medical outcome. The need for this must be documented by the prescribing entity.

  • Using Contract-Suppliers

    Beneficiaries must obtain competitively bid items of DMEPOS from a contract-supplier unless an exception, such as a grandfathered supplier, exists. Otherwise, Medicare will not pay for the item. If an exception does not apply, the beneficiary is not liable for payment unless the non-contract supplier obtains a signed Advance Beneficiary Notice (ABN) from the beneficiary before furnishing the item.

  • Mail Order Purchase of Diabetic Testing Supplies

    A beneficiary may purchase diabetic testing supplies from a mail order contract supplier for the area in which he or she maintains a permanent residence. Such supplies may also be purchased from any enrolled Medicare supplier if the diabetic testing supplies are provided at a storefront. Medicare's payment, and the beneficiary's coinsurance, will be less when the diabetic supplies are obtained from a mail order contract supplier.

  • Repair and/or Replacement under the DMEPOS Supplier Program

    A beneficiary may obtain repairs and replacements from any Medicare-enrolled supplier. When base equipment (e.g., wheelchairs or hospital beds) must be replaced in its entirety, the replacement must be obtained from a contract supplier.

Physicians' and Other Treating Practitioners' Tip Sheet

On May 31, 2008, CMS issued a tip sheet to explain how certain physicians and other treating practitioners can provide certain types of competitively bid items in a CBA to their patients without submitting a bid and being selected as a contract-provider. As stated above, under the DMEPOS competitive bidding program, beneficiaries residing in designated CBAs must obtain competitively bid items from a contract-supplier, unless an exception applies. The tip sheet explains the exception for physicians and other treating practitioners who are enrolled Medicare DMEPOS suppliers.

Under the exceptions program, these physicians and other treating practitioners can provide certain types of competitively bid items in a CBA to their own patients without submitting a bid and being selected as a contract-supplier. The exception also includes podiatric physicians, nurse practitioners, physician assistants, and clinical nurse specialists. The physicians' and other practitioners' tip sheet can be found at: http://www.cms.gov/DMEPOSCompetitiveBid/downloads/DMEPOS_Physicians _and_Other_Practitioners_Tip_Sheet.pdf (.pdf, external link opens in new window).

  • Covered DMEPOS Items

The DMEPOS items that the physicians and other treating practitioners can provide as described above are limited to crutches, canes and walkers, folding manual wheelchairs, blood glucose monitors, and infusion pumps that are DME. Note, however, that for the first phase of competitive bidding, effective on July 1, 2008, walkers are the only items of this set for which competitive bidding has been completed. In addition, these items must be billed to a DME Medicare Administrative Contractor using the DMEPOS billing number that is assigned to the physician, the treating practitioner (if possible), or a group practice to which the physician or treating practitioner has reassigned the right to receive Medicare payment.

  • Medicare Assignment

Physicians and other treating practitioners must accept assignment if they provide competitively bid equipment to Medicare patients who reside in a CBA. Under the Medicare assignment program, participating physicians and suppliers agree to accept the Medicare reasonable charge amount with the beneficiary being responsible for a 20% co-payment. Physicians and other treating practitioners can determine if a Medicare beneficiary resides permanently in a CBA by comparing the beneficiary's ZIP code to the list of ZIP codes for the CBAs referred to earlier.

Repair and Replacement of Beneficiary-Owned Items

  • Repair Only – A beneficiary who owns a competitively bid item that needs to be repaired may have the repairs performed by either a contract supplier or a non-contract supplier. Medicare will pay for reasonable and necessary labor that is not otherwise covered under a manufacturer's or supplier's warranty.
  • Repair and Replacement – If a part needs to be replaced to make the beneficiary-owned equipment serviceable and the replacement part is also a competitively bid item for the CBA in which the beneficiary maintains a permanent residence, the part may be obtained from either a contract supplier or a non-contract supplier. In these situations, Medicare pays the single payment amount provided under the competitive bidding program for the replacement part.
  • Replacement Only – Beneficiaries who are permanent residents within a CBA are required to obtain replacement of all items subject to competitive bidding from a contract supplier – including replacement of base equipment and replacement of parts or accessories for base equipment that are being replaced for reasons other than servicing of the base equipment. Beneficiaries who are not permanent residents of a CBA, but require a replacement of a competitively bid item while visiting in a different CBA, must obtain the replacement item from a contract supplier. The supplier will be paid the fee schedule amount for the state in which the beneficiary is a permanent resident.

Mail Order Diabetic Supplies under the Program

Medicare beneficiaries who are permanent residents in a CBA may purchase their diabetic testing supplies from a mail order contract supplier for the area in which the beneficiary is a permanent resident or from a non-contract supplier in cases where the supplies are not furnished on a mail order basis. These supplies will be reimbursed at the single payment amount for the CBA where the beneficiary maintains a permanent residence. For diabetic supplies that are not furnished through mail order, suppliers will be paid the fee schedule amount.

Competitive Bidding and Advance Beneficiary Notice Information

In general, if a non-contract supplier in a CBA furnishes a competitively bid item to any Medicare beneficiary, Medicare will not make payment unless there is an applicable exception, regardless of whether the beneficiary maintains a permanent residence in the CBA or another area. In these circumstances, the beneficiary is not liable for payment unless the non-contract supplier in a CBA obtains an ABN signed by the beneficiary.

A signed ABN indicates that the beneficiary was informed in writing prior to receiving the item that there would be no Medicare coverage due to the supplier's contract status and that the beneficiary understands that he or she will be liable for all costs that the non-contract supplier may charge for the item. CMS has stated on some of its training phone calls that waiver of liability provisions apply when beneficiaries are not provided an ABN.

No Administrative and Judicial Review of Process

There is no administrative or judicial review under the DMEPOS competitive bidding process for the following: establishment of payment amounts; awarding of contracts; designation of CBAs; phase-in of the competitive bidding program; selection of items for competitive bidding; or the bidding structure and number of contract suppliers selected for a competitive bidding program. In addition, a denied claim is not appealable if the denial is based on a determination by CMS that a competitively bid item was furnished in a CBA in a manner not authorized under the competitive bidding program.

Conclusion

Advocates and beneficiaries should be mindful of the implementation of this new process. In particular, it will be important for beneficiaries to use suppliers who meet the competitive bidding process requirements. They should be reminded of the requirement to use contract suppliers who are approved for the CBA in which they reside. Likewise, advocates and beneficiaries should read carefully each ABN issued for these beneficiaries to assure that they are using only contract suppliers.

In addition, the tip sheets described above provide necessary answers in this emerging environment. Advocates and beneficiaries should check the DMEPOS website frequently for developments. Similarly, the "supplier-locator tool” on the Medicare beneficiary website, www.medicare.gov (external link, opens in new window), will be an important source of contract-supplier information.

(All information as of July 2008)

Additional Resourceson the competitive bidding program (all external links open in new window)

Part B toolkit – http://www.cms.gov/Partnerships/03_DMEPOS_Toolkit.asp.

Competitive Bid Homewww.dmecompetitivebid.com

CMS page on Competitive Biddingwww.cms.gov/DMEPOSCompetitiveBid/

Medicare.gov Supplier Directorywww.medicare.gov/Supplier/Include/DataSection/Questions/SearchCriteria.asp

Provider Educational Products and Resources (including Tip Sheets and a list of MLN Matters Articles on competitive bidding) – www.cms.gov/DMEPOSCompetitiveBid/03_Provider_Educational_Products _and_Resources.asp

Replacement of Items Not Under Competitive Bidding

A capped rental item, which has been in continuous use, on either a rental or purchased basis, may be replaced if it is lost or irreparably damaged within 5 years, which is considered the "useful lifetime." The useful lifetime is based upon when the equipment is delivered to the patient, not the age of the equipment. If the patient elects to obtain a new piece of equipment, payment is made on a rental or purchase basis or a lump-sum purchase basis if a purchase agreement has been entered into. Expenses for replacement equipment required because of loss or irreparable damage will be reimbursed without a physician's order, if the equipment as originally ordered still fills the patient's needs. However, claims involving replacement equipment necessitated because of wear or a change in the patient's condition must have a new physician's order.

Payment will not be made for the replacement of rental equipment except capped rental items. However, replacement of purchased equipment can be made for:

  • Inexpensive or routinely purchased items

  • Customized items

  • Items available under the capped rental policy (some examples include wheelchairs, hospital beds and some walkers.)

  • Certain prosthetic devices (which replace all or part of an internal body organ, or replace all or part of the function of a permanently inoperative or malfunctioning internal body organ. Some examples include Parenteral and Enteral Nutrition (PEN), insertion trays, catheters, drainage bags, skin barriers, lumbar-sacral orthosis (LSO), prostheses (leg, foot, breast, knee, ankle), cardiac pacemakers, prosthetic lenses, maxillofacial devices, and devices which replace all or part of the ear or nose.)

  • Limited orthotic devices (items used for the correction or prevention of skeletal deformities. Some examples include a shoe that is an integral part of a leg brace or special shoe and inserts used for the prevention or management of foot ulcers in diabetics.)

Payment will not be made for the purchase and replacement of:

  • Frequently serviced items

  • Oxygen equipment


THE OUTPATIENT PROSPECTIVE PAYMENT SYSTEM

As of August 1, 2000, Medicare changed the way it pays for outpatient hospital and community health center services. This system, called the outpatient prospective payment system (OPPS), changed how much Medicare beneficiaries pay and how much Medicare pays for outpatient services, such as emergency room visits or one day surgery services. This payment system was one of the many changes made by the Balanced Budget Act of 1997 (BBA).

Under OPPS, the beneficiary must continue to pay the Part B deductible ($110 per year in 2005) and, depending upon the service received, either a 20% coinsurance amount (as before the BBA) or a fixed co-payment amount for each service. The fixed co-payment amount is determined by taking into account a number of factors including the national median charge for the particular service received and the hospital wages in which the service was provided.

Depending upon what service was received and what hospital provided the service, the beneficiary's out-of-pocket costs may be higher than they were before the BBA for the same service. Hospitals may choose to lower the fixed co-payment amount for a particular service to a minimum of 20% but if they do, they must keep the lower co-payment for one calendar year and they must charge all Medicare patients that lower amount.

The Medicare, Medicaid and SHIP Benefit Improvement and Protection Act of 2000 (BIPA) places a cap of 57% on the fixed co-payment amount for services received after April 1, 2001. That cap will be incrementally lowered each year until it reaches 40% for services received in the year 2006 and thereafter. Medigap insurance will still cover co-insurance amounts. If the beneficiary has a Medigap policy that covered out-of-pocket costs before the BBA changes, the same policy should also cover the out-of-pocket costs under the new payment system.

Medicare does not pay for all outpatient department services under the new prospective payment system. For example, Medicare continues to pay for clinical diagnostic laboratory services, ambulance services, dialysis and outpatient therapy under the old system. In addition, Medicare will not pay at all for some surgical procedures if they are given on an outpatient basis (for example, fixing a fractured hip). Even if the beneficiary can get these services on an outpatient basis, Medicare considers them inpatient services and will not pay for them on an outpatient basis. Beneficiaries should check with their hospital or doctor to make sure that Medicare will pay for the procedure they are receiving on an outpatient basis.


MEDICARE COVERAGE OF HOME OXYGEN THERAPY

Medicare provides for coverage of home oxygen therapy under the Part B durable medical equipment benefit. This coverage includes the rental of the oxygen delivery system and the cost of oxygen itself, including portable units. On October 1, 1985, the Health Care Financing Administration (HCFA) established rigid coverage criteria requiring patients to demonstrate medical necessity through specific laboratory evidence. HCFA requires that medical necessity be established through arterial blood gas (ABG) studies. When ABG studies are not available or medically contraindicated, oxygen saturation levels may be determined by ear oximetry readings. However, HCFA and Medicare Part B carriers discourage the use of oximetry testing.

The coverage criteria creates three categories:

1) An ABG-PO2 at or below 55 or oxygen saturation at or below 88%, is presumed to establish coverage,

2) An ABG-PO2 at 56-59 or oxygen saturation at 89% will establish coverage if one of three specified conditions are also shown, these include:

• Dependent edema suggesting congestive heart failure, or

• Pulmonary hypertension, or cor pulmonale, or

• Erythrocythemia with a hematocrit › 56%

3) An ABG-PO2 at 60 or above or oxygen saturation at or above 90% creates a presumption that oxygen is not medically necessary.

Although it is stated that the presumption is rebuttable, in practice HCFA automatically denies coverage for anyone who does not meet the ABG or oximetry standards.

The oxygen coverage criteria have been established as a national coverage determination which is codified at Section 60-4 of the Medicare Coverage Issues Manual (HCFA Pub.-6). This means that the restrictive coverage criteria are binding on all coverage determinations from the initial decision through an ALJ hearing. See, 42 U.S.C. § 1395ff(b)(3)(A).


OUTPATIENT THERAPY SERVICES

A QUICK SCREEN TO AID IN IDENTIFYING COVERABLE CASES

Physical, Speech and Occupational Therapy services are suitable for Medicare Part B coverage, and appeal if they have been denied, if they meet the following criteria:

1. The services were ordered, and the orders are periodically reviewed, by the patient's treating physician.

2. The services are "medically necessary". This means that the services provided are considered a specific and effective treatment for the patient's condition under accepted standards of medical practice.

3. The services are sufficiently complex, or the condition of the patient is such, that the services required can be safely and effectively performed only by, or under the supervision of, a qualified therapist. (Services which do not require the performance or supervision of a skilled therapist are not coverable, even if they are in fact performed or supervised by a skilled therapist.)

OTHER IMPORTANT POINTS

  • Many Medicare denials are based on the lack of expectation of a significant improvement in the patient's condition within a reasonable and predictable period of time. However, "restoration potential" is not required by law and a maintenance program can be covered if skilled services are necessary to prevent further deterioration or preserve current capabilities.

  • Services that can ordinarily be performed by non-skilled personnel should be considered skilled services if, because of medical complications, a skilled therapist is required to perform or supervise the services.

  • The doctor is the patient's most important ally. If it appears that Medicare coverage will be denied, ask the doctor to write stating that the standards described above are met. Attach this statement to any Medicare claim submission or appeal. (Keep a copy for your records.)

  • Don't be satisfied with a Medicare determination unreasonably limiting care or coverage; appeal for the benefits the patient deserves. It will take some time, but you will probably win your case.

IMPORTANT NOTE ABOUT PAYMENT: The Balanced Budget Act of 1997 instituted an annual Medicare payment cap on outpatient physical, speech, and occupational therapy services. This cap quickly became a problem for many beneficiaries with long term conditions. A moratorium was placed on the cap, and extended through December 31, 2002 by the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA). The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 placed another 2-year moratorium on the Medicare payment cap on outpatient physical, speech, and occupational therapy services. HOWEVER, because no legislation was passed to address the caps prior to the end of 2005, the THERAPY PAYMENT CAPS ARE IN PLACE.

For 2014, the cap amounts are $1920.00 for physical therapy and speech therapy combined, and another $1920.00 for occupational therapy. The cap does not apply to therapy services furnished in hospital-based outpatient departments.

Additional Information:

A Medicare Billing for Speech-Language Pathologists in Private Practice Fact Sheet (January 2010) is now available in downloadable format from the Centers for Medicare and Medicaid Services' Medicare Learning Network at http://www.cms.gov/MLNProducts/downloads/SpeechLangPathfctsht.pdf (.pdf, external link opens in new window) on the CMS website. This fact sheet provides general information and guidance to speech-language pathologists (SLPs) on enrollment and billing procedures.


PHYSICIANS' FEES: MEDICARE LIMITS ON CHARGES

When an item or service is determined to be coverable under Medicare Part B, it is reimbursed at 80% of a payment rate approved by Medicare, known as the "approved charge." The patient is responsible for the remaining 20%. Unfortunately, the "approved (or "reasonable") charge," is often substantially less than the actual charge. The result of this reimbursement system is that Medicare payment, even for items and services covered by Part B, is often inadequate. The patient is left with out-of-pocket expenses. When a physician accepts "assignment," he or she agrees to accept the Medicare approved charge as full payment for the services provided. Medicare pays 80% of the approved charge. Either the patient or supplemental insurance pays the remaining 20% co-payment. No further payment is due to the physician.

When a physician does not accept assignment, however, he or she may "balance bill" the patient above the Medicare approved charge. "Balance bill" refers to a physician's charge above the Medicare approved rate. Federal law sets a limit known as the "Limiting Charge" on the amount a physician may balance bill. The Limiting Charge is based upon a percentage of the Medicare approved charge for physician services.

Generally, a physician who does not accept assignment may not charge a total of more than 115% of the Medicare approved amount. The patient's Explanation of Medicare Benefits (EOMB), the written notice which is sent to patients after a Medicare claim is processed, will state the approved charge for the doctor's services. The Limiting Charge should be listed on the EOMB; if it is not the patient can calculate it by multiplying the Medicare approved charge by 115%.

For example, assume the patient goes to a doctor who does not accept assignment. The doctor's actual charge is $600, but the Medicare approved charge allows only $349.37. The doctor's total bill may not exceed $401.89 (115% x $349.47); this is the Limiting Charge. Medicare will pay $279.50 (80% of the $349.37 approved charge). The physician cannot charge the patient more than $122.39 ($401.89 minus Medicare payment of $279.50). If the doctor bills above $401.89 he is billing above the Limiting Charge and is violating federal law.

Again, a Medicare beneficiary is usually correct in assuming that the Limiting Charge is 115% of the approved charge noted on the EOMB; the actual limiting charge will be stated on the EOMB. In a few instances it will be more or less than 115% of the approved charge. If this seems to be the case, or if other questions arise, you can obtain specific Limiting Charge information by calling United Health Care at 1-800-982-6819. If you have any questions or trouble obtaining Limiting Charge information, please call the Center for Medicare Advocacy at 1-800-262-4414.

Important Note: As of September 1990 all Medicare Part B providers must submit claims directly to Medicare on behalf of their Medicare patients.


MEDICARE PREVENTIVE BENEFITS

Quick Reference Information: Medicare Preventive Services [PDF 475KB] (RevisedJanuary 2010): http://www.cms.gov/MLNProducts/downloads/MPS_QuickReferenceChart_1.pdf  (.pdf, external link opens in new window)

MEDICARE COVERED PREVENTIVE SERVICES INCLUDE: (see below for further details)

  • Initial Preventive Physical Examination (IPPE)

  • Ultrasound Screening for Abdominal Aortic Aneurysm (AAA)

  • Cardiovascular Disease Screenings

  • Diabetes Screening Tests

  • Diabetes Self-Management Training (DSMT)

  • Human Immunodeficiency Virus(HIV) Screening Tests

  • Medical Nutrition Therapy (MNT)

  • Screening Pap Tests

  • Screening Pelvic Exam

  • Screening Mammography

  • Bone Mass Measurements

  • Colorectal Cancer Screening

  • Prostate Cancer Screening

  • Glaucoma Screening

  • Smoking and Tobacco-Use Cessation Counseling

  • Influenza Virus Vaccine

  • Pneumococcal Vaccine

  • Hepatitis B (HBV) Vaccine

Initial Preventive Physical Examination (IPPE)

The IPPE is also known as the "Welcome to Medicare Physical Exam" or "Welcome to Medicare Visit." All Medicare beneficiaries are entitled to it when fist eligible for Medicare Part B on or after January 1, 2005. The benefit is available only once in the lifetime of a beneficiary. The IPPE must be furnished no later than 12 months after the effective date of initial Medicare Part B coverage. Co-payments apply. There is a deductible for the IPPE received prior to January 1, 2009. No deductible applies for the IPPE received on or after January 1, 2009; however, a deductible can be charged for a screening EXG and its interpretation which are considered optional services that may be performed as a result of a referral from an IPPE.

ANNUAL SCREENING MAMMOGRAPHY

Medicare will cover annual mammograms for female beneficiaries age 40 and over. The Part B annual deductible is waived for these services.

SCREENING PAP SMEAR AND PELVIC EXAM

Medicare will cover one pelvic exam, including a clinical breast exam, and pap test every two years. Women who are at high risk for cervical cancer can have these tests covered on an annual basis. The Part B annual deductible is waived for these services.

COLORECTAL CANCER SCREENING

Medicare will cover the following colorectal cancer screening tests:

  • one screening fecal-occult blood test every year for individuals over age 50;

  • one screening flexible sigmoidoscopy every 4 years for individuals over age 50;

  • one screening colonoscopy every 2 years for high risk individuals, and

  • other tests, procedures and modifications as Medicare finds appropriate.

COLONOSCOPY SCREENING

Certain colonoscopy screening once every 10 years or within 4 years of screening flexible sigmoidoscopy.

DIABETES SELF-MANAGEMENT TRAINING

Medicare will cover outpatient diabetes self-management training services if the physician who is managing the individual's diabetic condition certifies that the services are needed under a comprehensive plan of care to provide the individual with necessary skills and knowledge to participate in the management of the individual's condition.

DIABETES SCREENING TESTS

Medicare will provide coverage for home blood glucose monitors and testing strips for all diabetics without regard to a person's use of insulin. Medicare does not cover syringes or insulin.

Coverage of diabetes screening tests provides for a fasting plasma glucose test (other tests as the Secretary deems appropriate) and is limited to individuals at high risk for diabetes. This is defined as having any of the following risk factors – htn, dyslipidemia, obesity (BMI>30), previous identified impaired glucose tolerance, OR at least two of the following: overweight (BMI 25 – 30), family history of DM, history of gestational DM or delivery of baby > 9 lbs., age 65 or older. Frequency covered is no more than twice per year.

Human Immunodeficiency Virus(HIV) Screening Tests

On December 8, 2009 the Centers for Medicare & Medicaid Services (CMS) announced its final decision to cover Human Immunodeficiency Virus (HIV) infection screening for Medicare beneficiaries who are at increased risk for the infection, including women who are pregnant and Medicare beneficiaries of any age who voluntarily request the service. More information about Medicare's new HIV screening benefit is available in CMS' final decision memorandumat http://www.cms.gov/mcd/viewdecisionmemo.asp?id=229 (external link opens in new window).

CHOLESTEROL TEST

Coverage of cardiovascular screening blood tests covers a cholesterol (lipids and triglycerides) test once every two years at most.

BONE MASS MEASUREMENT

Medicare will cover bone mass measurement procedures for the following high-risk persons:

  • an estrogen-deficient woman at clinical risk for osteoporosis;

  • an individual with vertebral abnormalities;

  • an individual receiving long-term glucocorticoid steroid therapy;

  • an individual with primary hyperparathyroidism;

  • an individual being monitored to assess the response to, or efficacy of, an approved osteoporosis drug therapy.

PROSTATE CANCER SCREENING TESTS

Medicare will cover an annual prostate cancer screening test for men over age 50. The test could consist of any (or all) of the following procedures:

  • a digital rectal exam;

  • a prostate-specific antigen blood test; and

  • other procedures as Medicare finds appropriate for the purpose of early detection of prostate cancer.

GLAUCOMA SCREENING

Glaucoma Screening for persons at risk of glaucoma (includes those with family history of glaucoma or with diabetes).

MEDICAL NUTRITION THERAPY

Medical Nutrition therapy services for patients with diabetes or kidney disease.

Smoking and Tobacco-Use Cessation Counseling

Covers two individual tobacco cessation counseling attempts per year. Each attempt may include up to four sessions, with a total annual benefit thus covering up to eight sessions per Medicare patient who uses tobacco.

COVERAGE CONTINUES TO BE AVAILABLE FOR:

  • Influenza vaccines;

  • Pneumococcal vaccines;

  • Hepatitis B vaccine.

Note about payment:

While Medicare coverage is available for the above services, payment may not cover all the costs due to the Medicare Outpatient Payment System. Contact your provider for specific details.

The Centers for Medicare and Medicaid Services (CMS) released a quick reference chart of Medicare's Preventive serviceson November 16, 2009, through its "MedLearn" series. The chart enumerates the several preventive benefits available under the traditional Medicare program, beneficiary eligibility, frequency of coverage, and applicable co-payments and deductibles. The chart also provides useful coding information which can be relevant when there are billing issues. See http://www.cms.gov/MLNProducts/downloads/MPS_QuickReferenceChart_1.pdf (.pdf, external link opens in new window). The scope of the CMS information makes it a useful supplement to the Center's discussion of Medicare preventive services which can be found at: http://www.medicareadvocacy.org/FAQ_PartB.htm#MEDICARE%20PREVENTIVE%20BENEFITS.

Items Not Normally Covered Under Medicare

  • Dental Services

Medicare coverage of dental services is limited.  Over the years, litigation and other efforts to clarify and expand Medicare’s coverage of dental services have not been successful.  At best, non-routine dental services, in association with exacerbating medical conditions, have sometimes garnered coverage following lengthy appeals.

 

Medicare Statute

 

The Medicare statute excludes coverage of dental services in the following language: 

No payment may be made [by Medicare] . . . for any expenses incurred for items or services – . . . where such expenses are for services in connection with the care, treatment, filling, removal, or replacement of teeth or structures directly supporting teeth . . .  42 U.S.C. § 1395y(12).

 

This language excludes coverage of ordinary dental services, and Congress placed it in a section of the Medicare statute that excludes coverage of a number of other medical services that are generally considered to be routine, For this reason, the Medicare statute can be read as allowing coverage of dental services that are not "routine," such as the special care necessitated by the effects of radiation and chemotherapy treatments prescribed to treat oral, head and neck cancer.

 

Medicare Agency Policy

 

The Medicare Benefits Policy Manual (MBPM), CMS Pub 100-02 at www.cms.gov/manuals, allows for exceptions to the usual exclusion of dental services.  It specifies that a service should be covered if it is "incident to and an integral part of a covered service performed by the dentist."  An application of this "incident to and an integral part of" rule that is provided in the Manual is reconstruction of a ridge that can be used to prepare the mouth for dentures if it is done at the same time as surgical removal of a tumor, but not if it occurs afterwards. MBPM, Chap. 15, § 150.

 

The MBPM also allows Medicare coverage of certain other dental services that are related to cancer treatment.  For example, Medicare will cover the extraction of teeth to prepare the jaw for radiation treatment of neoplastic disease.  However, the MBPM manual warns that coverage of such extractions is an exception to the usual rule that the dental service must be "incident to and an integral part of a covered procedure or service performed by the dentist."   MBPM, Chap.16, § 140.  Coverage of such an extraction is considered an exception because the extraction does not occur simultaneously with the radiation treatment.  Thus, the Centers for Medicare & Medicaid Services (CMS) admits that the "incident to and an integral part of" requirement is not applied consistently.

 

Increasing the Possibilty of Coverage

 

The likelihood of obtaining Medicare coverage for non-routine dental care can be increased by taking certain steps.  First, a treatment plan established at the outset by the primary physician providing covered medical services should include provision for ancillary dental care.  As dental services are needed, the physician should state that the services are incident to and necessary for the patient's primary treatment, and prescribe the specific dental services.  This will take such dental services out of the exclusion for routine care, and show that they are "incident to and an integral part of" a covered course of treatment.

 

In order to obtain a successful decision, it may be necessary for the beneficiary to go through a number of unsuccessful lower levels of administrative appeal before reaching the ALJ or federal court levels.  At these higher levels of appeal, the beneficiary or her advocate will have an opportunity to overcome the presumption that Medicare never covers dental services.   Testimony and medical records from the beneficiary's physicians should be presented to show that the dental services were ordered and supervised by them as part of the claimant's covered treatment.   Legal arguments can be made that 1) the controlling Medicare statute, as shown by its legislative history, excludes only coverage of routine dental services; 2) the manual requirement that services be "incident to and an integral part of" covered services was met; or if not met, 3) the interpretations of the statute in the manual are too inconsistent and unreasonable to be given deference.

 

Additional Resources

The Medicare Statute Excludes Coverage of "Routine" Eyeglasses

When Congress established the Medicare program in 1965 it excluded coverage of certain items and services it believed were routinely needed and low in cost.  Such excluded items included physical examinations, drugs, hearing aids, dental services, and eyeglasses.  The statute still excludes payment for most eyeglasses, in the following language:

where such expenses are for routine physical checkups, eyeglasses (other than eyewear described in section 1861(s)(8)) or eye examinations for the purpose of  prescribing, fitting, or changing eyeglasses, procedures performed (during the course of any eye examinations) to determine the refractive state of the eyes, hearing aids or examinations therefore, or immunizations (except as otherwise allowed under section 1861(s)(10) and subparagraph (B), (F), (G), (H), or (K) of paragraph (1)).

The exception to the eyeglass exclusion mentioned here is for "prosthetic devices . . . including one pair of conventional eyeglasses or contact lenses furnished subsequent to each cataract surgery with insertion of an intraocular lens." 

The Medicare regulations parrot the limitations on coverage of eyeglasses in the Medicare statute.

The Centers for Medicare & Medicaid Services (CMS) Allows Coverage of Some Optical Devices in Its Policy Manuals

The Medicare Benefit Policy Manual, Pub. 100-02 (MBPM) elaborates on the primary statutory exception to the exclusion of eyeglasses, which is eyeglasses or contact lenses following cataract surgery.  In addition to the intraocular lens inserted during the surgery, the policy allows coverage after surgery for:

1. prosthetic bifocal lenses in frames; 2. prosthetic lenses in frames for far vision and prosthetic lenses in frames for near vision; 3. when prosthetic contact lenses for far vision have been prescribed, those contact lenses plus prosthetic lenses in frames for near vision and prosthetic lenses in frames for when the contacts have been removed; and 4. lenses with ultraviolet absorbing or reflecting qualities if medically reasonable and necessary.  

While Medicare covers post-surgical eyeglasses, it will pay for only standard frames.  It allows the patient to be charged the difference between the cost of standard frames and deluxe frames, if chosen by the patient.  The program does not cover cataract sunglasses.  Furthermore, Medicare does not cover the cost of the refractive services necessary to prescribe post-surgical eyeglasses under the general exclusion of such services in the statute.

Although intraocular lenses (IOLs) inserted during cataract surgery are covered under the statute, Medicare policy denies coverage for astigmatism-correcting IOLs that combine the functions of conventional IOLs and post-surgical prosthetic eyeglasses, (which are covered).  CMS has also denied coverage of IOL models not fully approved by the FDA.

The Center for Medicare and Medicaid Services (CMS) issues National Coverage Determinations (NCDs) that are binding in decisions on claims up to the Administrative Law Judge level of appeal.  The Medicare NCD Manual allows coverage of some technologies that serve optical functions but are deemed not to fall into the category of routine eyeglasses.  It provides that hard contact lenses (scleral shells or shields) used as artificial eyes or in treating dry eye with artificial tears are covered. CMS has also stated that hydrophilic (soft) contact lenses used as bandages for the treatment of corneal pathology such as dry eyes, corneal ulcers and erosion, etc. will be covered by Medicare. Although hydrophilic contact lenses are covered as treatment when prescribed for patients lacking the eye's natural lens ("aphakic" patients), they are categorized by CMS as non-covered eyeglasses within the exclusionary language of the Medicare statute when used to treat nondiseased eyes with spherical ametrophia, refractive astigmatism, and/ or corneal astigmatism.

  • Hearing Aids

The exclusion of some hearing aids is specified in the Medicare statute, which states that payment is prohibited:

where such expenses are for routine physical checkups, eyeglasses . . . or eye examinations for the purpose of prescribing, fitting, or changing eyeglasses, procedures performed . . . to determine the refractive state of the eyes, hearing aids or examinations therefore,…

Despite this indication that the coverage exclusion applies only to hearing aids needed in routine situations, the Medicare regulations do not limit the exclusion of hearing aids.  Coverage is excluded broadly, for: 

(d) Hearing aids or examination for the purpose of prescribing, fitting, or changing hearing aids.

The Medicare policy manual, which controls initial decisions on coverage that are made by the Medicare claims processing contractors, excludes coverage of all hearing aids. It states:

Hearing aids are amplifying devices that compensate for impaired hearing.  Hearing aids include air conduction devices that provide acoustic energy to the cochlea via stimulation of the tympanic membrane with amplified sound.  They also include bone conduction devices that provide mechanical energy to the cochlea via stimulation of the scalp with amplified mechanical vibration or by direct contact with the tympanic membrane or middle ear ossicles.

Although hearing aids are not covered, the policy manual does allow Medicare coverage of prosthetic devices to aid hearing in certain circumstances.  Prosthetic devices are defined as "devices that produce perception of sound by replacing the function of the middle ear, cochlea or auditory nerve."[5]  The following are considered by Medicare to be prosthetic devices:

Cochlear implants and auditory brainstem implants, i.e., devices that replace the function of cochlear structures or auditory nerve and provide electrical energy to auditory nerve fibers and other neural tissue via implanted electrode arrays. 

Osseointegrated implants, i.e., devices implanted in the skull that replace the function of the middle ear and provide mechanical energy to the cochlea via a mechanical transducer.

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