Center for Medicare Advocacy

Advancing Access to Medicare and Healthcare

Durable Medical Equipment (DME)

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Table Of Contents
  1. Quick Guide to Identify Coverable Items
  2. DME Payment
  3. What Happened to Competitive Bidding?
  4. DMEPOS Resources:
  5. Articles and Updates

Quick Guide to Identify Coverable Items

Medicare claims for DME (Items that have a medical purpose and repeated use) 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:
    1. It is prescribed by a physician; and
    2. it is included in the physician’s course of treatment; and
    3. it is likely to effect improvement OR arrest or retard deterioration of the patient’s condition; and
    4. the alternative would be chair or bed confinement; and
    5. 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.

To find if your test, item, or service is covered under Medicare visit https://www.medicare.gov/coverage/durable-medical-equipment-coverage.html (site visited September 16, 2015)

For more information, see Medicare Coverage of Power Mobility Devices: Tips and Reminders (site visited September 16, 2015)

DME Payment

For a comprehensive list of items/equipment paid for by Medicare, see https://www.medicare.gov/coverage/durable-medical-equipment-coverage.html.

Some of the more common items paid for by Medicare include:

  • 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.

What Happened to Competitive Bidding?

All Competitive Bid Program Contracts Ended on December 31, 2018.

What Beneficiaries Should Know:

  • Equipment in process under the 13 month capped rental program should continue “business as usual”.
  • While providers who do not accept Medicare assignment cannot charge more than 15% higher than Medicare’s allowed charge. There is no such restriction (no limiting charge) for DME suppliers. (See Resource 7, below.) A Medicare enrolled supplier that does not accept assignment can charge without a prescribed limit. The beneficiary is responsible for the difference between what Medicare will pay and what the supplier will charge. Competitive Bid Program Contractors were required to accept assignment. Now that there are no contracts, fewer suppliers are accepting assignment. Make sure to ask if the supplier accepts assignment. Then get the answer in writing. If the answer is “no”, the beneficiary should confirm in writing what the charges will be.
  • If a supplier accepts assignment, the supplier should not be charging for delivery, set up or training (this cost is included in the Medicare payment). (See Resource 6, below.)
  • Repairs – CMS has “disassociated” the purchase of equipment by Medicare to require repairs and is now allowing for repairs to “stand on their own merit”, despite whether Medicare paid for the equipment originally. Beneficiaries should ensure the continued need for the equipment is updated in the medical record and ensure the need for the repair is also documented. The repair may be performed by any “authorized” repair place (CMS recommends working with the DMACs (Durable Medical Equipment Medicare Administrative Contractors) and suppliers to find an authorized repair place. (See Resource 4, below.)
  • The CBICs (Competitive Bid Implementation Contractors) are no longer available for oversight of suppliers. The DMACs will continue to pay claims based on rules and policies. Generally, the NSC (National Suppliers Clearinghouse) is responsible for oversight of Medicare enrolled suppliers adherence to “supplier standards”.
  • The first point of contact to resolve issues should be 1-800-MEDICARE. If a beneficiary is trying to resolve a problem, the caller should ask for the call to be “escalated”.
  • Second point of contact would be the DMACs. (See Resource 4, below.)
  • Third point of contact The Competitive Bidding Program Ombudsman’s Office is still active to monitor inquiries, to establish a baseline for a complaints process, and to inform CMS of beneficiary access problems. (See Resource 8, below.)
  • Why has CMS abruptly allowed all Competitive Bidding Contracts to expire after building the program for more than a decade, rather than extend the contracts? CMS states that, “this Administration wishes to pursue improvements to the program via rulemaking”. CMS further states they, “anticipate no negative implications for beneficiaries.” It already appears too late for that.

To help the Center for Medicare Advocacy track, report on, and seek resolution to access barriers, please report any problems obtaining DMEPOS to DMEPOS@MedicareAdvocacy.org

DMEPOS Resources:

  1. CMS Fact Sheet on the Temporary Gap Period, Effective January 1, 2019 through December 31, 2020. https://www.cms.gov/Outreach-and-Education/Outreach/Partnerships/Downloads/DMEPOS-Temporary-Gap-Period-Fact-Sheet.pdf
  2. Final Rule, published November 14, 2018. https://www.govinfo.gov/content/pkg/FR-2018-11-14/pdf/2018-24238.pdf
  3. Medicare supplier directory www.medicare.gov/supplier, or to locate a supplier, ask a question or file a complaint, call 1-800-MEDICARE (1-800-633-4227).
  4. To locate the correct DMAC for each state, see https://www.cms.gov/medicare-coverage-database/indexes/contacts-durable-medical-equipment-medicare-administrative-contractor-index.aspx
  5. Contact a state SHIP to help resolve local/state problems. https://www.shiptacenter.org/
  6. The Medicare Claims Processing Manual, for questions about payment for DMEPOS, including delivery and services charges (Section 60 of the Manual) https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c20.pdf
  7. For questions about assignment (and the lack of a limiting charge on some supplies and on Durable Medical Equipment) see https://www.medicare.gov/your-medicare-costs/part-a-costs/lower-costs-with-assignment
  8. For further assistance after 1-800-MEDICARE and DMACs, contact the Office of the Competitive Bidding Acquisition Ombudsman at CompetitiveAcquisitionOmbudsman@cms.hhs.gov
  9. Watch out for aggressive marketing by suppliers. Report suspected fraud for investigation via online form https://forms.oig.hhs.gov/hotlineoperations/report-fraud-form.aspx or phone 1-800-HHS-TIPS (1-800-633-4227)(TTY 1-877-486-2048).

Articles and Updates

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