Medicare has issued a series of rules surrounding its Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bid Program. These include straightening out issues concerning repairs, replacements, upgrades and so forth. The main purpose of these is to spell out whether a contract supplier must be used, or if the beneficiary has a wider choice of suppliers when they live in or travel to a competitive bid area (CBA), and to clarify the transition rules as Round 2 goes into effect on Monday, July 1, 2013.
The basic rules are:
Repair: If a beneficiary owns a piece of equipment, and it needs to be repaired, Medicare will pay for the labor and parts not otherwise covered under a manufacturer’s or supplier’s warranty. And regardless of where the beneficiary resides or travels to, Medicare will pay any Medicare-enrolled supplier for the repair, even if it is made to a competitively bid item. This is helpful for those beneficiaries who have used a particular supplier, even if they did not win in the competition and whom the beneficiary is familiar with, to make repairs to their item. But read the next paragraph.
Replacement: This gets a little tricky because of Medicare’s definition of “replacement.” Basically, if a part is needed to fix an item or component of an item, it’s considered a repair part, and the rule above holds. But if a whole component of an item is replaced, it may be considered not as a “repair,” but as a “replacement.” And if the replacement is made to an item subject to the competitive bid program in a competitive bid area, it must be made by a contract supplier. And in these circumstances, Medicare will not pay anything for a replacement made by a non-contract supplier.
But it’s really difficult to tell if something is a “repair” or a “replacement.” So, for example, certain, specific items (for example, tires, batteries, and wheels) which are replaced in their entirety are considered repairs. But if a seat cushion or some back cushions on wheelchairs are changed out, these are considered “replacements.”
One way to help sort these rather arbitrary distinctions is to list the items involved in the Round 2 competitive bid program and indicate whether they can ever be eligble for “repair.”
None of the following classes of items or supplies can be considered for “repair,” but only for replacement, and a contract supplier must always be used:
Diabetic supplies by mail
Oxygen, oxygen equipment, and supplies
Enteral nutrients, equipment and supplies
Continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), and related supplies and accessories
Negative pressure wound therapy (NPWT) pumps and related supplies and accessories
These classes of items may be eligible for repair:
Standard (power and manual) wheelchairs, scooters, and related accessories
Complex, Rehabilitative Power Wheelchairs and Related Accessories (Group 2)
Hospital beds and related accessories
Walkers and related accessories
Support surfaces (Group 2 mattresses and overlays)
A beneficiary’s should either make certain that any work on one of these items is indeed a repair, which Medicare will pay for, or only use contract suppliers, as Medicare will pay either for a repair or a replacement if performed by one of these suppliers.
Upgrades: Medicare has a rather narrow definition of “upgrade,” and it characterizes an upgrade as a piece of equipment or a component to a piece of equipment that is not medically necessary for the beneficiary. Typically, these involve a deluxe model or feature. One example Medicare gives is that if the physician orders a wheelchair with fixed leg rests and the supplier furnishes medically unnecessary swing away elevating leg rests at the request of the beneficiary, the swing-aways would be an upgrade. Medicare does not cover upgrades under any circumstances. On the other hand, if a beneficiary’s medical condition changes such that he or she needs to have their standard joystick on their power wheelchair changes to a specialty sip and puff interface, this is seen as a “replacement.” And if the beneficiary is in a competitive bidding area, and they use a contract supplier, this is covered and would be paid for by Medicare.
One important beneficiary protection regarding upgrades is that a beneficiary is not liable for the additional cost of an upgraded item or component unless the beneficiary makes an informed decision by signing an Advance Beneficiary Notice of Noncoverage (ABN) to pay out of pocket for the cost of the upgrade. The beneficiary has no financial liability whether to a contract or non-contract supplier in a competitive bid area (CBA), or for that matter, to any Medicare-enrolled supplier anywhere, for the incremental cost of upgrading, unless prior to receiving the upgraded item, the supplier obtains a signed ABN from the beneficiary.
And note that Medicare requires that where upgrades are involved with competitively bid items (in a competitive bid area, of course), that these be done only by contract suppliers for it to make payment. At first this seems contradictory as Medicare won’t pay for these upgrades themselves, but it does pay for the basic, medically necessary item. So this rule was apparently put in place both to prevent any “gaming” of the system, and it is also used to establish the Medicare approved amount of the basic item. So beneficiaries in a competitive bid area should be certain, that if they are getting an upgrade to any of the items on the competitive bid program list, that the get this from a contract supplier.
Grandfathering: This is the term Medicare uses to describe the situation where a beneficiary’s current supplier of durable medical equipment or oxygen and oxygen equipment has failed to win in the competition, but has agreed with Medicare to become “grandfathered in,” so that they can continue to rent to or supply beneficiaries where they have already placed equipment with a beneficiary. If your current supplier is NOT “grandfathered in” they must make arrangements with you to pick up their equipment, and you have to make arrangements with a contract supplier to replace it. And Medicare wants to make it extremely clear that enteral nutrition items CANNOT be grandfathered. A Medicare beneficiary must obtain related enteral accessories, nutrition, and supplies only from a contract supplier for Medicare to pay. A special transitional rule is in effect for enteral pumps and supplies.
Enteral Transitions: Medicare uses a “15 month” rule regarding enteral nutrition (“tube feeding”) pumps. If a beneficiary had rented an enteral nutrition pump for at least 15 continuous months at the time Round 2 goes into effect on July 1, 2013, the supplier that provided the item in the 15th month of the rental period is responsible for furnishing, maintaining, and servicing the enteral equipment as long as it is medically necessary. (This is true whether or not that supplier becomes a contract supplier.) If the enteral nutrition pump was rented for less than 15 continuous months at the time of the implementation of the competitive bid program on July 1, 2013, the rental of the pump must transition to a contract supplier. Basically, the former supplier, unless they have become a competitive bid supplier, must pick up the pump in July. This pick-up should occur no earlier that the anniversary date of the pump, which is the date of the month on which the item was first delivered to the beneficiary. For example, if the equipment was first rented on October 15, 2012, the anniversary for pick-up would be July15, 2013, and the equipment in this example should not be picked up before July 15, 2013.
However, beginning July 1, 2013, the beneficiary living in or traveling to a competitive bid area must obtain all related enteral accessories, nutrients, and supplies from a contract supplier only.
If more information is needed on any of these topics, note that Medicare issued a series of helpful fact sheets in March of this year. Search www.cms.gov for “Billing Procedures for Upgrades 900983,” “Repairs and Replacements 905283,” or “Enteral Nutrition 901005,” for these.
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