Up to now, DME suppliers have shouldered the burden of increasingly
harsh Medicare policies. The suppliers have shielded their patients from
the pain being inflicted by competitive bidding, plummeting reimbursement,
and out-of-control audits. Financially, it is difficult for DME suppliers to
continue to do this. Out of necessity, suppliers are having to shift the burden,
of complying with the increasingly harsh Medicare policies, to their patients.
This is unpleasant … but it is the “new normal.”
What we are now witnessing are DME suppliers are electing to be nonparticipating
and “billing non-assigned.” If a non-participating supplier
provides a product on a non-assigned basis, this means that the supplier is
not agreeing to accept the Medicare allowable as payment in full, can collect
directly from the patient, and can charge more than the Medicare allowable
in such cases. The supplier must file the claim with Medicare on behalf of the
patient and any Medicare reimbursement will go directly to the patient.
The bottom line is that the non-participating supplier (that is not a competitive
bid contract supplier taking care of competitive bid patients) can collect
up-front from the patient (i.e., bill non-assigned). But as is often the case, the
“devil is in the details.” So let’s talk about some of the “details.”
Recoupment Risk to DME Supplier. Assume that the supplier provides the
item non-assigned and submits a claim to Medicare on behalf of the patient.
Assume that Medicare reimburses the patient but subsequently audits the
claim. Assume that following the audit, Medicare demands recoupment
of the claim. Is the supplier at risk of being required to repay the patient?
Unfortunately, there is little published guidance from Medicare on the risk of
liability for non-assigned claims. The DME supplier’s intake process should be
the same for assigned and non-assigned items.
If the patient does not meet medical necessity criteria and the supplier chooses
to provide and bill non-assigned, an Advance Beneficiary Notice should be
issued. Assuming the ABN is valid, the supplier should not have recoupment
exposure. If the patient did meet medical necessity criteria and the supplier
chooses to file a non-assigned claim, then the supplier may be liable if the claim
is audited and a recoupment action ensues. The supplier should not routinely
obtain an ABN for all non-assigned claims. An ABN should be issued only when
the supplier reasonably believes that the claim will be denied. In the instance that
a non-assigned claim is reviewed and payment denied, the supplier will likely be
required to refund the amount collected back to the Medicare beneficiary.
Retail Supplier With No PTAN. Items that require a prescription prior to
dispensing should be labeled as such. Any item labeled as a prescription
device or supply requires a prescription prior to dispensing, regardless of
whether it is being sold by a Medicare supplier or “retail” company (e.g., online
company) with no PTAN. State licensing requirements govern who can/cannot
sell prescription items. The seller of a prescription-only item should retain the
prescription in its records. If the supplier is not a Medicare supplier, it does
not need to meet Medicare requirements; however, Medicare requirements are
different than state licensure requirements.
Electronic Signatures for Monthly Rental. Medicare should accept an
electronic signature that meets the requirements of the Uniform Electronic
Transactions Act (“UETA”). In the past, there were instances when CMS took
the approach that electronic signatures are not sufficient for certain documents
and attempted to require blue ink documents. Notwithstanding what
has happened in the past, as long as the UETA is followed, CMS should be
required to accept electronic documentation. However, there is some risk that
CMS may still question the use of an electronic signature.
Collecting Rent on Non-Assigned Basis. A non-participating supplier can
choose to not accept assignment for a Medicare rental item, and can collect its
usual rental charge up front from the patient and submit a claim to Medicare
on a non-assigned basis. This results in Medicare paying 80% of the Medicare
allowable to the patient. The supplier needs to follow Medicare requirements
when filing non-assigned claims.
Obligation to Service Oxygen Patient During 60 Months. The DME supplier
can choose not to service oxygen for Medicare beneficiaries after the initial
five years. However, suppliers are obligated to provide oxygen equipment once
they submit the first rental claim through the five year mark, unless the patient
chooses to change suppliers. A DME supplier cannot force patients to go to
another supplier mid-rental.
PTAN Required to Bill Commercial Insurers? Suppliers that do not bill
the Medicare program will lose their supplier number after 12 months of
no billing. Commercial insurers determine what their criteria are for a DME
supplier to be able to participate with that insurance. Many commercial
insurers require suppliers to have a PTAN. The DME supplier needs to review
the commercial insurer’s DME supplier requirements. Most state Medicaid
programs require that DME suppliers be enrolled with Medicare.
Paying Cash for Capped Rental Item. A DME supplier can only use an ABN and
sell a capped rental item on a non-assigned basis if the patient chooses option 2
on the ABN to NOT have the claim submitted to Medicare. A claim with a capped
rental HCPCS code and the NU modifier will reject and never be processed by
Medicare. If a patient chooses to have the claim filed with Medicare, then the
supplier cannot sell the capped rental item and must follow Medicare rules.
Billing Commercial Insurance Patients Non-Assigned. ABNs do not apply
to commercial payers. The DME supplier needs to review its contract (with the
commercial insurer) to determine if the supplier can provide products to the
commercial insurer’s covered lives on a non-assigned basis. As a general rule,
a supplier cannot provide products to commercial insurance covered lives on a
Signed Authorization for Submission of Claim. The DME supplier must have
a signed authorization for submission of a claim. There is no “set” form for this
authorization; it can be language included as part of the delivery ticket … or
for monthly rentals on a non-assigned basis, a separate form can be signed. The
supplier can use language from the 1500 form on a document created by supplier
as follows: “I authorize the release of any medical or other information necessary
to process this claim. I also request payment of government benefits to me.”
Commercial Insurer Prohibition Against Billing Non-Assigned. The DME
supplier will not be discriminating against a Medicare patient so long as the
supplier only makes a particular product available to patients for whom the
supplier is paid a threshold price, whether that payment amount is collected
from the patient on a non-assigned claim, or from the payer (with the patient
co-pay) for assigned claims. In the circumstance that a commercial payer
requires that the DME supplier accept assignment, the supplier can decline
to make a particular product available unless the reimbursement meets the
threshold amount established for that item (unless the insurance contract