Medicare & Insurance Billing

I. Guide to Medicare Coverage

Who qualifies for Medicare benefits?

• Individuals 65 years of age or older
• Individuals under 65 with permanent kidney failure (beginning three
  months after dialysis begins), or
• Individuals under 65, permanently disabled and entitled to Social
  Security benefits (beginning 24 months after the start of disability
  benefits)

The Different Benefits of Traditional Medicare

• Medicare Part A benefits cover hospital stays, home health care and
  hospice services.
• Medicare Part B benefits cover physician visits, laboratory tests,
  ambulance services and home medical equipment.
• While oftentimes you do not have to pay a monthly fee to have Part
  A benefits, the Part B program requires a monthly premium to stay enrolled.
  In 2008 that premium will range between $96.40 and 238.40 per month depending
  on your income. Typically, this amount will be taken from your Social
  Security check.

What Can You Expect to Pay?

• Every year, in addition to your monthly premium, you will have to
  pay the first $135 of covered expenses out of pocket and then 20 percent
  of all approved charges if the provider agrees to accept Medicare payments.
• Unfortunately, your medical equipment provider cannot automatically
  waive this 20 percent or your deductible without suffering penalties
  from Medicare. Your provider must attempt to collect the coinsurance and deductible
  if
  those charges are not covered by another insurance plan; however, certain
  exceptions can be made if you suffer from qualifying financial hardships.
• If you have a supplemental insurance policy, that plan may pick up
  this portion of your responsibility after your supplemental plan‹??s
  deductible has been satisfied.
• If your medical equipment provider does not accept assignment with
  Medicare you may be asked to pay the full price up front, but they will
  file a claim on your behalf to Medicare. In turn, Medicare will process
  the claim and mail you a check to cover a portion of your expenses if
  the charges are approved.

Other possible costs:

• Medicare will pay only for items that meet your basic needs.
  Oftentimes you will find that your provider offers a wide selection of
  products that vary slightly in appearance or features. You may decide
  that you prefer the products that offer these additional features. Your
  provider should give you the option to allow you to privately pay a
  little extra money to get the product that you really want.
• 
  To take advantage of this opportunity, a new form has been approved by
  the Centers for Medicare and Medicaid Services (CMS) that allows
  patients to upgrade to a piece of equipment that they like better than
  other standard options for which they may otherwise qualify.
• 
  The Advance Beneficiary Notice, or ABN, must detail how the products
  differ, and requires a signature to indicate that you agree to pay the
  difference in the retail costs between two similar items. Your provider
  will typically accept assignment on the standard product and apply that
  cost toward the purchase of the fancier item, thus requiring less money
  out of your pocket.

Purpose of ABN

• The Advance Beneficiary Notice also will be used to notify you ahead
  of time that Medicare will probably not pay for a certain item or service
  in a specific situation, even if Medicare might pay under different
  circumstances. The form should be detailed enough that you understand
  why Medicare will probably not pay for the item you are requesting.
• The purpose of the form is to allow you to make an informed decision
  about whether or not to receive the item or service knowing that you
  may have additional out-of-pocket expenses.

Durable Medical Equipment (DME) Defined

• 
  In order for any item to be covered under Medicare, it typically has to
  meet the test of durability. Medicare will pay for medical equipment
  when the item:
  • Withstands repeated use (excludes many disposable items such as underpads)
  • Is used for a medical purpose (meaning there is an underlying condition which the item should improve)
  • 
    Is useless in the absence of illness or injury (thus excluding any item
    preventive in nature such as bathroom safety items used to prevent
    injuries)
  • Used in the home (which excludes all items that are needed only when leaving the confines of the home setting)

Understanding Assignment (a claim-by-claim contract)

• When providers accept assignment, they are agreeing to accept Medicare‹??s
  approved amount as payment in full.
• You will be responsible for 20 percent of that approved amount. This
  is called your coinsurance.
• You also will be responsible for the annual deductible, which is
  $135.00 for 2008.
• If a provider does not accept assignment with Medicare, you will
  be responsible for paying the full amount upfront. The provider will
  still file a claim on your behalf and any reimbursement made by Medicare
  will be paid to you directly. (Providers must still notify you in advance,
  using the Advance Beneficiary Notice, if they do not believe Medicare
  will pay for your claim.)

Mandatory Submission of Claims

• Every provider is required to submit a claim for covered services within one year from the date of service

The role of the physician with respect to home medical equipment:

• Every item billed to Medicare requires a physician‹??s order
  or a special form called a Certificate of Medical Necessity (CMN), and
  sometimes additional documentation will be required.
• Nurse Practitioners, Physician Assistants, Interns, Residents and
  Clinical Nurse Specialists can also order medical equipment and sign
  CMNs when they are treating a patient.
• All physicians have the right to refuse to complete documentation
  for equipment they did not order, so make sure you consult with your
  physician before requesting an item from a provider.

Prescriptions Before Delivery:

• For some items, Medicare requires your provider to have completed
  documentation (which is more than just a call-in order or a prescription
  from your doctor) before these items can be delivered to you:
  
  • Decubitus care (wheelchair cushions and pressure-relieving surfaces
    placed on a hospital bed)
  • Seat lift mechanisms
  • TENS Units (for pain management)
  • Power Operated Vehicles/Scooters
  • Electric or Power Wheelchairs
  • Negative Pressure Wound Therapy
    (wound vacs)

How does Medicare pay for and allow you to use the equipment?

1. Typically there are four ways Medicare will pay for a covered item:
   
   • Purchase it outright; then the equipment belongs to
     you,
   • Rent it continuously until it is no longer needed, or
   • Consider it a ‹??capped‹?? rental in which Medicare
     will rent the item for a total of 13 months and consider the item
     purchased after having made 13 payments.
     
     • Medicare will not allow you to purchase these items outright
       (even if you think you will need it for a long period of time).
     • This is to allow you to spread out your coinsurance instead
       of paying in one lump sum.
     • It also protects the Medicare program from paying too much
       should your needs change earlier than expected.
   • If
     you have oxygen therapy, Medicare will make rental payments for a total
     of 36 months during which time this fee covers all service,
     accessories, and oxygen contents.
     • Beyond the 36 months,
       Medicare will limit payments to replacement of accessories, and allows
       a small fee for monthly content and to check the equipment every six
       months.
2. After an item has been purchased for you, you will be responsible for calling your provider any time
   that item needs to be serviced or repaired. When necessary, Medicare
   will pay for a portion of repairs, labor, replacement parts, and for
   temporary loaner equipment to use during the time your product is in
   for servicing. All of this is contingent on the fact that you still
   need the item at the time of repair and continue to meet Medicare‹??s
   coverage criteria for the item being repaired.

II. Medicare Coverage for specific types of home medical
equipment

BiPaps/Respiratory Assist Devices

• For a respiratory assist device to be covered, the treating physician
  must fully document in your medical record symptoms characteristic of
  sleep-associated hypoventilation, such as daytime hypersomnolence, excessive
  fatigue, morning headaches, cognitive dysfunction, dyspnea, etc.
• A respiratory assist device is covered for those patients with clinical
  disorder groups characterized as (I) restrictive thoracic disorders
  (i.e., progressive neuromuscular diseases or severe thoracic cage abnormalities),
  (II) severe chronic obstructive pulmonary disease (COPD), (III) central
  sleep apnea (CSA), or (IV) obstructive sleep apnea (OSA).
• Various tests may need to be performed to establish one of the above
  diagnosis groups.
• Three months after your therapy is begun, both your physician and
  you will be required to respond in writing to questions regarding your
  continued use along with how well the machine is treating your condition.

Breast Prostheses

• Breast Prostheses are covered after a radical mastectomy. Medicare
  will cover:
  
  • One silicone prosthesis every two years or a mastectomy form
    every six months.
  • Mastectomy bras are covered as needed.
• There is no coverage for replacement prostheses due to wear and tear
  before the specified time frames. However, Medicare will cover replacement
  of these items due to:
  
  • Loss
  • Irreparable damage, or
  • Change in medical condition (e.g. significant weight gain/loss)
• Patients are allowed only one prosthesis per affected side; others
  will be denied as not medically necessary even if attempting symmetry
  (an ABN should be provided in this circumstance).
• Mastectomy sleeves which are used to control swelling are not covered
  in the home setting because they do not meet Medicare‹??s definition
  of a prosthesis; however, it is possible that they may be covered under
  the hospital per diem if you request one during your hospital stay.

Cervical Traction

• Cervical traction devices are covered only if both of the criteria below are met:
  
  1. The patient has a musculoskeletal or neurologic impairment requiring traction equipment.
  2. 
     The appropriate use of a home cervical traction device has been
     demonstrated to the patient and the patient tolerated the selected
     device.

Commodes

• A commode is only covered when the patient is physically incapable of utilizing regular toilet facilities. For example:
  
  1. The patient is confined to a single room, or
  2. The patient is confined to one level of the home environment and there is no toilet on that level, or
  3. The patient is confined to the home and there are no toilet facilities in the home.
• Heavy-duty commodes are covered for patients weighing over 300 pounds.

Compression Stockings

• 
  Gradient compression stockings worn below the knee are covered only
  when used for the treatment of open venous stasis ulcers. They are not
  covered for the prevention of ulcers, prevention of the reoccurrence of
  ulcers or treatment of lymphedema without ulcers.

CPAPs

• Continuous Positive Airway Pressure (CPAP) Devices are covered only
  for patients with obstructive sleep apnea (OSA).
• 
  Patients must have an overnight sleep study performed in a sleep
  laboratory to establish a qualifying diagnosis. In March of 2008, home
  sleep testing was approved as an acceptable means of diagnosing this
  condition when your physician deems this testing is appropriate.
• Medicare will also pay for replacement masks, cannulas, tubing and
  other necessary supplies.
• After the first three months of use, you will be required to verify
  if you are benefiting from using the device and how many hours a day
  you are using the machine.

Diabetic Supplies

• For
  diabetics, Medicare covers the glucose monitor, lancets,
  spring-powered
  lancing devices, test strips, control solution, and
  replacement batteries for the meter.
• Medicare does not cover insulin injections or diabetic pills unless
  covered through a Medicare Part D benefit plan.
• Diabetics can obtain up to a three-month supply at a time.
• Medicare will approve up to one test per day for non-insulin-dependent
  diabetics and three tests per day for insulin-dependent diabetics without
  additional verification.
  
  • Patients who test above these guidelines are required to be seen
    and evaluated by their physician within six months of ordering these
    supplies.
  • In addition, patients must send their provider evidence of compliant
    testing (e.g. a testing log) every six months to continue getting
    refills at the higher levels.
• If at any time your testing frequency changes, your physician will
  need to give your provider a new prescription.

Glasses

• Medicare covers one complete pair of glasses after the last cataract
  surgery. These can include:
  
  • frames
  • two lenses
  • tint, anti-reflective coating, and/or UV (when the doctor specifically
    orders these services for a medical need)

Hospital Beds

• A hospital bed is covered if one or more of the following criteria
  (1-4) are met:
  
  1. The patient has a medical condition which requires positioning
     of the body in ways not feasible with an ordinary bed. Elevation
     of the head/upper body less than 30 degrees does not usually require
     the use of a hospital bed, or
  2. The patient requires positioning of the body in ways not feasible
     with an ordinary bed in order to alleviate pain, or
  3. The patient requires the head of the bed to be elevated more
     than 30 degrees most of the time due to congestive heart failure,
     chronic pulmonary disease, or problems with aspiration. Pillows
     or wedges must have been considered and ruled out, or
  4. The patient requires traction equipment which can only be attached
     to a hospital bed.
• Specialty beds that allow the height of the bed to vary are covered
  for patients that require this feature to permit transfers to a chair,
  wheelchair, or standing position.
• A semi-electric bed is covered for a patient who requires frequent
  changes in body position and/or has an immediate need for a change in
  body position.
• Heavy-duty/extra-wide beds can be covered for patients who weigh
  over 350 pounds.
• The total electric bed is not covered because it is considered a convenience
  feature. If the patient prefers to have the total electric feature, the provider
  usually can apply the cost of the semi-electric bed toward the monthly
  rental price of the total electric model by using an Advance Beneficiary
  Notice (ABN). The patient would be responsible to pay the difference in the
  retail charges between the two items every month.

Lymphedema Pumps

• Lymphedema Pumps are covered for treatment of true lymphedema as
  a result of a:
  
  • Primary Lymphedema resulting from a congenital abnormality of
    lymphatic drainage or Milroy‹??s disease, or
  • Secondary lymphedema resulting from the destruction of or damage
    to formerly functioning lymphatic channels such as:
    
    • radical surgical procedures with removal of regional groups
      of lymph nodes (for example, after radical mastectomy),
    • post-radiation fibrosis,
    • spread of malignant tumors to regional lymph nodes with lymphatic
      obstruction,
    • or other causes
  • Before you can be prescribed a pump, your physician must monitor
    you during a four-week trial period where other treatment options
    are tried such as medication, limb elevation and compression garments.
    If, at the end of the trial, there is little or no improvement,
    a lymphedema pump can be considered.
  • The doctor must then document an initial treatment with a pump
    and establish that the treatment can be tolerated.
• Lymphedema pumps also are covered for the treatment of chronic venus
  insufficiency (CVI).
  
  • Before you can be prescribed a pump for this condition, your
    physician must monitor you during a six month trial period where
    other treatment options are tried such as medication, limb elevation
    and compression garments. If at the end of the trial the stasis
    ulcers are still present, a lymphedema pump can be considered.
  • The doctor must then document an initial treatment with a pump
    and establish that the treatment can be tolerated, that there is
    a caregiver available to assist with the treatment in the home,
    and then the doctor must prescribe the pressures, frequency, and
    duration of prescribed use.

Medicare-covered drugs (other than Medicare Part D coverage)

• As of February, 2001, all providers of Medicare-covered drugs are
  required to accept assignment on these items.
• Traditional Medicare Part B insurance will cover some nebulizer drugs,
  some infused drugs using a pump, specific immunosuppressive drugs, select
  oral anti-cancer medications and most parenteral nutrition.
• The Medicare Part D plans may provide additional coverage of other
  oral medications, inhalers and similar drugs.

Mobility Products: Canes, Walkers, Wheelchairs, and Scooters

• Essentially the new Mobility Assistive Equipment regulations will
  ensure that Medicare funds are used to pay for:
  
  • Mobility needs for daily activities within the home
  • Least costly alternative/lowest level of equipment to accomplish
    these tasks.
  • Most medically appropriate equipment (to meet the needs, not
    the wants)
• Medicare requires that your physician and provider evaluate your
  needs and expected use of the mobility product you will qualify for.
• They must determine which is the least level of equipment needed
  to help you be mobile within your home to accomplish daily activities
  by asking the following questions:
  
  • Will a cane or crutches allow you to perform these activities
    in the home?
  • If not, will a walker allow you to accomplish these activities
    in the home?
  • If not, is there any type of manual wheelchair that will allow
    you to accomplish these activities in the home?
  • If not, will a scooter allow you to accomplish these activities
    in the home?
  • If not, will a power chair allow you to accomplish these activities
    in the home?
• Keep in mind if you have another higher level product in mind that
  will allow you to do more beyond the confines of the home setting, you
  can discuss with your provider the option to upgrade to a higher level
  or more comfortable product by paying an additional out of pocket fee
  using the Advance Beneficiary Notice (ABN) to select the product you
  like best.
• A face-to-face examination with your physician is required prior to
  the initial setup of a power chair or scooter.
• Your home must be evaluated to ensure it will accommodate the use
  of any mobility product.

Nebulizers

• Nebulizer machines, medications, and related accessories are usually
  covered for patients with obstructive pulmonary disease, but can also
  be covered to deliver specific medications to patients with HIV, CF,
  brochiectasis, pneumocystosis, complications of organ transplants, or
  for persistent thick or tenacious pulmonary secretions.
• Patients can obtain up to a three month‹??s supply of nebulizer
  medications and accessories at a time.

Non-covered items (partial listing):

• Adult diapers
• Bathroom safety equipment
• Hearing aids
• Syringes/needles
• Van lifts or ramps
• Exercise equipment
• Humidifiers/Air Purifiers
• Raised toilet seats
• Massage devices
• Stair lifts
• Emergency communicators
• Low Vision aids
• Grab bars

Orthopedic Shoes

• Orthopedic shoes are covered when it is necessary to attach the shoe(s)
  to a leg brace.
• However, Medicare will only pay for the shoe(s) attached to the leg
  braces.
• Medicare will not pay for matching shoes or for shoes that are needed
  for purposes other than for diabetes or leg braces.

Ostomy Supplies

• Ostomy supplies are covered for people with a:
  
  • colostomy
  • ileostomy
  • urostomy
• Patients can obtain up to a three month‹??s supply of wafers, pouches, paste, and other necessary items at a time.

Oxygen

• Covered for patients with significant hypoxemia in the chronic stable
  state when:
  
  • patient has a chronic lung condition or disease or hypoxemia
    that might be expected to improve with oxygen therapy, and
  • patient‹??s blood gas levels or oxygen saturation levels
    indicate the need for oxygen therapy, and
  • alternative treatments have been tried or deemed clinically ineffective.
• Categories/Groups are based on the test results to measure your oxygen:
  
  • I 55≤ mmHg, or 88%≤ saturation
    
    • For these results you must return to your physician 12 months
      after the initial visit to continue therapy for lifetime or
      until the need is expected to end. Typically, you will not have
      to be retested when you return to your physician for the follow-up
      visit.
  • II 56-59 mmHg, or 89% saturation
    
    • For these results, you must be retested within 3 months of
      the first test to continue therapy for lifetime or until the
      need is expected to end.
  • III ≥60 or ≥90% not medically necessary.
  
  

  Oxygen will be paid as a rental for the first 36 months. After that
  time if you still need the equipment Medicare will no longer make
  rental payments on the equipment. If your deductible and copays are
  met, the equipment title will transfer to you. Medicare will then
  pay for refilling your oxygen cylinders and for repairs and service
  of your equipment. Medicare will also separately pay for oxygen accessories
  such as tubing, masks, and cannulas after the purchase price has been
  met.

Parenteral and enteral therapy

• 
  Parenteral therapy requires all or part of the gastrointestinal tract
  be missing. Nutritional formulas are delivered through a vein.
• 
  Enteral therapy is covered for patients who cannot swallow or take food
  orally. Nutrition must be delivered through a tube directly into the
  gastrointestinal tract.
• Medicare will not pay for nutritional formulas that are taken orally.

Patient Lifts

• A lift is covered if transfer between bed and a chair, wheelchair,
  or commode requires the assistance of more than one person and, without
  the use of a lift, the patient would be bed confined.
• An electric lift mechanism is not covered because it is considered
  a convenience feature. If you prefer to have the electric mechanism,
  your provider can usually apply the cost of the manual lift toward the
  purchase price of the electric model by using an Advance Beneficiary
  Notice (ABN). You would be responsible to pay the difference in the
  retail charges between the two items.

Seat Lift Mechanisms

• In order for Medicare to pay for a seat lift mechanism, patients
  must be suffering from severe arthritis of the hip or knee, or have
  a severe neuromuscular disease. In addition they must be completely
  incapable of standing up from any chair, but once standing they can
  walk either independently or with the aid of a walker or cane. The physician
  must believe that the mechanism will improve, slow down, or stop the
  deterioration of the patient‹??s condition.
• Transferring directly into a wheelchair will prevent Medicare from
  paying for the device.
• Medicare will only pay for the lift mechanism portion. The chair
  portion of the package is not covered, and you will be responsible for
  paying the full amount for the furniture component of the chair.

Support Surfaces

• Group 1 products are designed to be placed on top of a standard hospital
  or home mattress. They can utilize gel, foam