CMS Issues Provider Education Document on DRA

BALTIMORE–CMS has published a provider education document about
the changes in Medicare payment for home oxygen equipment and other
DME capped rentals based on the Deficit Reduction Act.

The DRA, signed into law in February, caps rental of home oxygen
equipment at 36 months, then transfers equipment ownership to the
beneficiary. The law also reduces the rental cap of certain other
DME items from 15 to 13 months (see HomeCare
Monday, Jan. 9). Both provisions are effective Jan. 1,
2006. Capped rental items furnished before that date will continue
to be paid under current rules prior to the DRA changes, according
to the CMS transmittal.

Regarding payment for oxygen and oxygen equipment, according to
the document released Friday, the 36-month cap applies to all
claims for the following HCPCS codes:

E0424-stationary gaseous oxygen system
E0431-portable gaseous oxygen system
E0434-portable liquid oxygen system
E0439-stationary liquid oxygen system
E1390-oxygen concentrator, single delivery port
E1391-oxygen concentrator, dual delivery port
E1392-portable oxygen concentrator
E1405-oxygen and water vapor enriching system with heated
delivery
E1406-oxygen and water vapor enriching system without heated
delivery

On the first day after the month for which the 36th monthly
payment is made, the supplier must transfer title for the
stationary and/or portable oxygen equipment to the beneficiary. On
the same day as the title transfer, monthly payments can begin for
oxygen contents used with patient-owned gas and liquid oxygen
equipment, CMS said.

The HCPCs codes for oxygen contents are:

E0441-Stationary gaseous contents used with patient owned
gaseous stationary system
E0442-Stationary liquid contents used with patient owned liquid
stationary system
E0443-Portable gaseous contents used with patient owned gaseous
portable system
E0444-Portable liquid contents used with patient owned liquid
portable system

Medicare also will continue to pay for “reasonable and necessary
maintenance and servicing” of beneficiary-owned
equipment–including oxygen concentrators–the document said. This
includes parts and labor not covered by a supplier’s or
manufacturer’s warranty. The 36-month count begins on Jan. 1, 2006,
for beneficiaries who were already receiving oxygen prior to that
date; any months before January 2006 won’t be included in the
count.

Regarding other DME capped rental items, since 1991, suppliers
have been required to offer beneficiaries the option of taking over
ownership after 15 months of continuous use. In addition, suppliers
have been required to give beneficiaries the option of obtaining
power wheelchairs on a lump sum purchase basis. That lump sum
purchase option is unchanged by the DRA’s new 13-month rental cap
for other DME. “However,” the document said, “in those cases where
a beneficiary does not elect this option, the new rules regarding
transfer of ownership also apply to power wheelchairs for which the
first rental month occurs on or after Jan. 1, 2006.”

Effective for other capped rental items for which the first
rental month is on or after Jan. 1, 2006, suppliers must transfer
title to the beneficiary on the first day after the 13th continuous
month of use during which payment is made.

Additional program billing and claims processing instructions
will be issued later this year, the agency said. For now, CMS said,
providers should continue to use the KH, KI and KJ modifiers as
previously instructed for capped rental DME. These modifiers do not
need to be submitted on claims for oxygen and oxygen equipment.
Providers also should continue to use the BP, BR and BU modifiers
as previously instructed for capped rental periods that began
before Jan. 1, 2006.

To view the CMS transmittal, click
here.