Community: Residing at Home/Retail Suppliers

The Retail Supplier must submit an application to the National Supplier Clearinghouse for a Medicare provider number and agrees to comply with specific standards and guidelines in order to receive payment from the Medicare program. All DME and Retail Supplies are reimbursed under the Medicare Part B program guidelines.

Accreditation is mandated for all supplier locations, and non-accredited suppliers will have their Medicare privileges revoked.

Types of Suppliers:

• National DME/Medical Suppliers (walk-in and/or catalog mail order services)
• Local DME/Medical Providers (generally walk-in and/or delivery service)
• Closed Pharmacy Providers (available to LTC residents only)
• Local Pharmacy Providers (generally walk-in services)

Role and responsibility of supplier

Retail supplier provides DME and medical supplies, including ostomy, dressings, urological supplies and NPWT devices to Medicare beneficiaries, and submit claims on behalf of the beneficiary.

Supplier Responsibilities:

• Submit claims to Durable Medical Equipment Medicare Administrative Contractors (DME-MACs) based on beneficiary state of residence for all assigned and non-assigned claims.
• Collect 20% Co-payment.
• Maintain file that includes physician order and other pertinent information for each patient.
• No obligation to take Assignment unless they are a Participating Supplier

Supplier Payment Options¹

Medicare offers two payment options for suppliers to collect payment for Medicare sales:

• Medicare Assignment
• Medicare Non-Assignment

Decision individually based on the Provider’s business model, acquisition cost, and Medicare allowable fee.

Medicare Assignment

Definition: Agreement between supplier and beneficiary (customer) where supplier agrees to accept the Medicare allowable fee as payment in full.

• Beneficiary obtains product from supplier.
• Supplier bills DME-MAC and receives 80% of allowable.
• Beneficiary pays supplier remaining 20% of allowable.
• The Medicare allowable constitutes payment in full.
• Decision to accept Assignment can be made on a claim by claim basis.
• Suppliers are required to secure all supporting documentation required to file claims.
• Claims must be filed within one year of the date of service.

Medicare Non-assignment

Definition: Beneficiary purchases supplies as a “cash” transaction and pays the price set by the supplier.

• Supplier MUST submit claim to DME-MAC on behalf of beneficiary.
• Medicare directly reimburses beneficiary 80% of allowable fee.
• Beneficiary out-of-pocket expense is the difference between 80% of allowable and amount paid. The cash outlay is offset by the amount paid by Medicare.
• No fee can be charged to file the claim.
• Claims must be filed within one year of date of service.

Medicare Policies (LCD)²

For any item to be covered by Medicare, it must 1) be eligible for a defined Medicare benefit category, 2) be reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member, and 3) meet all other applicable Medicare statutory and regulatory requirements. For the items addressed in this medical policy, the criteria for "reasonable and necessary" are defined by the following indications and limitations of coverage and/or medical necessity.

For an item to be covered by Medicare, a written signed and dated order must be received by the supplier before a claim is submitted to the DME-MAC. If the supplier bills for an item addressed in this policy without first receiving the completed order, the item will be denied as not medically necessary.

Ostomy Policy

Ostomy supplies are covered for use on patients with a surgically created opening (stoma) to divert urine, or fecal contents outside the body.

Ostomy supplies are appropriately used for:

• Colostomies 569.62, V44.3, V55.3
• Ileostomies V44.2, V55.2
• Urinary ostomies V44.6, V55.6
• Use for other conditions will be denied as noncovered.

Ostomy supplies are not separately payable when a patient is in a covered home health episode. Ostomy supplies must be provided by the home health agency and payment is included in the home health Medicare payment rate. It is not appropriate to bill these to the DME-MAC.

No maximum quantity limits have been established for extended wear skin barriers, including Eakin Cohesive^® Seals, or adhesive remover wipes.

The medical necessity for use of a greater quantity of supplies than the amounts listed must be clearly documented in the patient’s medical record and may be requested by the DME-MAC. If adequate documentation is not provided when requested, the excess quantities will be denied as not medically necessary.

Provision of ostomy supplies should be limited to a one-month supply for a patient in a nursing facility and a three-month supply for a patient at home.

* Disclaimer. Usual Maximum Quantity based on individual patient needs and physician order.

Documentation Requirements

Section 1833(e) of the Social Security Act precludes payment to any provider of services unless "there has been furnished such information as may be necessary in order to determine the amounts due such provider" (42 U.S.C. section 1395l(e)). It is expected that the patient’s medical records will reflect the need for the care provided. The patient’s medical records include the physician’s office records, hospital records, nursing home records, home health agency records, records from other healthcare professionals and test reports. This documentation must be available to the DME-MAC upon request.

Physician Order

For an item to be covered by Medicare, a written signed and dated order must be received by the supplier before a claim is submitted to the DME-MAC. If the supplier bills for an item addressed in this policy without first receiving the completed order, the item will be denied as not medically necessary.

An order for each item billed must be signed and dated by the treating physician, kept on file by the supplier, and made available to the DME-MAC upon request. Items billed to the DME-MAC before a signed and dated order has been received by the supplier must be submitted with an EY modifier added to each affected HCPCS code.

The order must include the type(s) of supplies ordered and the approximate quantity to be used per unit of time. A new order is required if there is an increase in the quantity of the supply used per month and/or the type of supply used.
The supplier must enter the ICD-9-CM diagnosis code for the ostomy on each claim submitted for ostomy supplies. If there is more than one ostomy, enter the appropriate codes.

Billing Miscellaneous HCPCS Codes (A4421) and Individual Consideration (I.C.)³

Claims filed for miscellaneous HCPCS codes as well as items without prices on the fee schedule are individually considered and must include the following documentation:

• Narrative description of the item.
• Brand name and model name/number of the item.
• Manufacturer’s retail price/list catalog (in the absence of a manufacturer’s retail price list/catalog manufacturer’s invoice will be accepted and a reasonable mark up for retail will be considered).
• Statement defining the medical necessity of the item for the particular patient.

Disclaimer. The reimbursement information provided by ConvaTec is intended to provide general information relevant to coding and reimbursement of ConvaTec products only. Coverage and payment policies for the same insurer, such as Medicare, can vary from one region to another and may change from time to time because of ongoing changes in government and insurance industry rules and regulations. Please confirm HCPCS codes with the Pricing, Data Analysis and Coding (PDAC) contractor or your local DME MAC before processing claims. ConvaTec does not guarantee coverage or payment of its products.