Once equipment has become damaged or inoperable, you must
determine whether you should repair the item or replace it.
Medicare has specific guidelines on this for you to follow.
The first question to ask is whether you are still receiving
rental payments from Medicare on the item. If you are, you cannot
charge for any maintenance since it is considered to be included in
the monthly rental price. If you are no longer receiving rental
payments on the item (past month 13 for capped rental items where
the first rental occurred on or after Jan. 1, 2006, and 36 months
for oxygen), then you will have to determine whether to repair or
replace the item based on the guidelines.
Medicare covers replacement of a beneficiary-owned piece of
equipment when the equipment has been lost or irreparably damaged.
A good example of irreparable damage would be what happened on the
Gulf Coast after Hurricane Katrina. Thousands of beneficiaries were
trapped by rising floodwaters and abandoned their HME equipment in
order to save their lives. When they returned, their equipment was
either damaged beyond repair or was simply gone with the wind.
In this case, a claim of irreparable damage would be justified,
and replacement equipment would be authorized. A “CR”
(catastrophe/disaster related) modifier would be used on the claim
to tell Medicare that it is a disaster-related claim. A new
physician order and/or CMN would also be required to reaffirm
medical necessity for replacement due to irreparable damage.
When filing a claim for equipment replacement prior to the
reasonable useful lifetime of five years, you would use the
“RP” (repair and replacement) modifier. If you use the
RP modifier you must maintain, at a minimum, the following
documentation in your files:
- Reason for replacement;
- New CMN when required;
- Applicable medical record;
- Police reports; and
- Written explanation from the beneficiary.
If there is any other supporting documentation, such as
pictures, collect it as well. Get as much documentation as you can
regarding why the item had to be replaced.
If the item has become inoperable due to deterioration from
day-to-day use over time, and a specific event cannot be identified
that caused the deterioration, then that is considered
“irreparable wear.” This is a very important
distinction. Basically, when an item breaks from normal wear and
tear, that is considered irreparable wear.
Say you have a beneficiary with a power wheelchair. He or she
uses the PWC every day and after three years, the motor no longer
operates. This would be considered irreparable wear, since there is
no specific event that caused the motor to break. If the PWC is
still under a manufacturer warranty, then the manufacturer would be
responsible for the repair. If the PWC is no longer under warranty,
then Medicare would cover the cost of repair up to, but not to
exceed, the cost of replacement.
If this PWC were six years old, then you would most likely want
to obtain a new CMN and get the beneficiary a new PWC since it had
passed the five-year “reasonable useful lifetime” of
the product. If you end up doing a repair, make sure the equipment
was initially paid for by Medicare. If the item was denied during
billing, then you will not be reimbursed for the repair from
Medicare.
Bill code E1340 for the labor you perform. Labor is divided into
15-minute increments. For example, if you do two hours of work, you
would bill eight units of labor. You will also need to add an HAO
(narrative) record along with the E1340 labor code (stating that
this is for repair of beneficiary-owned equipment), a description
of the equipment, the HCPC code and the date of purchase.
Remember, you have only 80 spaces to get all of this information
into the HAO record, so you must abbreviate. Here's an example of
an HAO record for an E1340 labor line (you will need to insert the
manufacturer information): “RPR'S to PT owned Mfr Make Model#
K0011 PWC PUR 041603.” This information only needs to be
referenced once per claim, so if you were billing for repair parts,
the information would already be present in the E1340 description
and would not need to be included in the K0108 HAO record.
If you have to replace parts on the PWC, you would use the HCPC
code K0108. You will use a separate K0108 for each repair part you
provide, and each should be billed on a separate claim line. You
will have to use an HAO record to describe what repair part was
used for each K0108. The HAO record should contain a description of
the item, the brand name, make/model and part number. You should
abbreviate everything but the part number. An example would be:
“toggle switch mfg pride md#frbxar986 replacement”.
Or a shorter version: “RPL toggle mfr pride md
frbxar986”.
Either way will work, and it lets Medicare know all of the
information they require for the claim.
As long as you use the above methodology, you should not have
any difficulty getting paid for the repair or replacement that you
have to do. Remember to get as much documentation as you can so in
an audit situation you will end up on top.
This month's column was co-authored by Kevin R.
Bunch.
Jane Bunch is vice president, HME consulting, for Atlanta-based
CareCentric. A reimbursement specialist, Bunch delivers educational
seminars worldwide, helps develop corporate compliance plans and
serves as a consultant for fraud and abuse cases. She can be
reached at 678/264-4495 or via e-mail at jane.bunch@carecentric.com.
