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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 (see update below);

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

9. Hearing aids and examinations for hearing aids; (see update below)

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

11. Cosmetic surgery;

12. Most dental services (but see update below, which contains a brief and hearing decision pertinent to coverage of medical-related dental services);

13. Routine foot care (see update below).


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 (also see related articles and updates)



Medicare ambulance claims are suitable for coverage, and appeal if they have been denied, if they meet the following 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 your health would have been jeopardized had you been transported any other way.


2.         Transportation by ambulance must be:


        From your home to a "local" hospital or skilled nursing facility, or if you are not in the locality or "service area" of an institution which has appropriate facilities, to the nearest institution that does;

        To your home from a local hospital or skilled nursing facility, or from the nearest institution with appropriate facilities;

         From a skilled nursing facility to a hospital or from a hospital to a skilled nursing facility if the discharging institution is within the service area of the admitting institution; if the discharging institution is outside the service area of the admitting institution, the admitting institution must be the nearest one with appropriate facilities;

         From a skilled nursing facility to a skilled nursing facility, or from a hospital to a hospital, if the discharging institution was not an appropriate facility and the admitting institution is the closest one with appropriate facilities.


NOTE:  Partial payment for ambulance services may be available even when the ambulance trip exceeds the distance limitations described above.  For example, when a beneficiary is transported from a distant hospital or skilled nursing facility to his or her residence, payment may be based on the amount that would have been payable had the beneficiary been transported to his or her residence from the nearest institution with appropriate facilities.


3.         The ambulance must be provided by a Medicare-certified provider.


4.         Non-emergency transportation is covered only if the ambulance supplier obtains a physician’s written order certifying that the beneficiary must be transported in an ambulance because other means of transportation are contraindicated prior to the transportation or within 48 hours for unscheduled transportation.




1.         An "ambulance" is defined by Medicare as a vehicle specially designed for transporting the sick or injured, that contains a stretcher and other lifesaving equipment required by law, and is staffed with personnel trained to provide first aid treatment.  Medicare does not consider a wheelchair van to be an "ambulance" and will therefore not cover transportation via wheelchair van or cover ambulance transportation for a patient who could have been safely transported by a wheelchair van.


2.         The fact that a particular physician does not have staff privileges in a hospital is not a consideration in determining whether the hospital has appropriate facilities.  Thus, ambulance service out of your locality to a distant hospital solely to obtain the services of specific physician does not make the hospital in which the physician has staff privileges the nearest hospital with appropriate facilities.


3.         Ordinarily, ambulance service to a physician's office is not covered.  Coverage for transportation to a physician's office or other "outside supplier" may be allowed, however, when the ambulance must make an emergency stop at the physician's office on the way to the hospital.


4.         Round trip ambulance transportation for an ESRD beneficiary living at home to the nearest treatment facility capable of furnishing the necessary dialysis service is covered regardless of whether the dialysis facility is located at a hospital.


5.         Ambulance services 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 requirement.



IMPORTANT INFORMATION REGARDING PARAMEDICS: Medicare usually does not pay for Paramedic Services unless they are provided by a Medicare-certified ambulance company while providing coverable transportation services.  This means that if a patient is transported by a volunteer ambulance and paramedic services are provided by a professional, Medicare-certified company, Medicare will not pay for the paramedic services even if the ambulance transportation is clearly medically necessary and reasonable.


There is an exception to this coverage limitation if the paramedic intercept services are provided in a rural area.  However, a number of conditions have to be met.  The paramedic intercept services have to be provided under a contract with one or more volunteer ambulance companies.  The volunteer ambulance company must be certified and be prohibited by State law from billing for any service.  The paramedic services company must be Medicare certified and must bill all recipients of their services regardless of whether or not those recipients are Medicare beneficiaries.  The payment made will be the difference between basic life support services and advanced life support services or about $150.00.






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.


  • 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.


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




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, click here.


For additional information on diabetes from the American Diabetes Association, click here.


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.



  • A beneficiary with renal disease, which is defined as having chronic renal insufficiency [and the medical condition of a beneficiary who has been discharged from the hospital after a successful renal transplant within the last 6 months.] Chronic renal insufficiency means a reduction in renal function not severe enough to require dialysis or transplantation (glomerular filtration rate (GFR) 13-50 ml/min1.73m2).

  • 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.


  • 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.


  • 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.


  • 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.



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 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.




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.




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.


Payment Policy


Please note:  There are several potential changes to this section as a result of the Deficit Reduction Act, however there is a distinct possibility that this law will be repealed, and the changes will not be permanent.  Read about the possible changes HERE.

  • For inexpensive or customized items, Medicare pays 80% of its approved charge.

  • Wheelchairs, hospital beds, some walkers, etc., are considered capped rental items.  The capped rental policy allows one to rent for 10 continuous months followed by either a rental option or a purchase option as follows:

Rental Option:  After the initial 10 month rental, Medicare pays 5 more months of rental payments (total of 15) then pays for lifetime use of the equipment with only a maintenance/service assessment every six months thereafter.  The equipment remains the property of the supplier.

Purchase Option: After the initial 10 month rental, Medicare pays for 3 more months of rental payment (total of 13) followed by 80% of the purchase price and any subsequent maintenance.  The equipment belongs to the beneficiary.

  • Payment may also be made for repairs, maintenance, and delivery as well as for expendable and non-reusable items essential to the effective use of the equipment.  However, routine periodic servicing such as testing, cleaning, regulating, and checking of the beneficiary's equipment is not covered.  More extensive maintenance as recommended by the manufacturer and performed by authorized technicians is covered as repairs.  This might include breaking down sealed components and performing tests that require specialized testing equipment not available to the beneficiary.

Note: Suppliers must give beneficiaries entitled to electric wheelchairs the option of purchasing at the time the supplier first furnishes the item.  No rental payment will be made for the first month until the supplier notifies the carrier that the beneficiary has been given the option to either purchase or rent.  If the beneficiary chooses to purchase, payment will be made on a lump sum purchase basis.

  • In making a decision to rent or purchase the equipment, beneficiaries should know that, for purchased equipment, they are responsible for 20% of the service charge each time the equipment is actually serviced and, for unassigned claims, the balance between the Medicare allowed amount and the supplier's charge.  However, for equipment that is rented for 15 months, the beneficiary's responsibility for such service is limited to 20% coinsurance on  maintenance and servicing fee payments twice per year, whether or not the equipment is actually serviced.

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:

  • 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 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.


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 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:; and


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: 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. 




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, there is 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.




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


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

  • 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 Competitive Bidding Areas Zip Codes?opendocument.  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:  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:

  • 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.




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,, will be an important source of contract-supplier information.


(All information as of July 2008)


Additional Resources on the competitive bidding program


Part B toolkit -

Competitive Bid Home -

CMS page on Competitive Bidding - Supplier

Provider Educational Products and Resources (including Tip Sheets and a list of MLN Matters Articles on 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


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 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).




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.)



  • 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 2010, the cap amounts are $1860.00 for physical therapy and speech therapy combined, and another $1860.00 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 on the CMS website.  This fact sheet provides general information and guidance to speech-language pathologists (SLPs) on enrollment and billing procedures.


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.


Quick Reference Information: Medicare Preventive Services [PDF 475KB] (Revised January 2010):



  • 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.



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




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.




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.



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




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. 




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 memorandum at




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




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.



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




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. 



  • 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 services on 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  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:



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