AMARILLO, TX – In a traditional nursing home, the patient is commonly classified as a “custodial care” patient. This is the patient’s “home.” He lives there. The custodial care patient does not receive skilled nursing care designed to rehab the patient so that he can leave the facility and go home. On the other hand, a skilled nursing facility (“SNF”) serves a different purpose than the traditional nursing home.
A patient will be admitted to the SNF (normally after being discharged from the hospital). The patient will stay in the SNF for a limited number of days. While in the SNF, the patient will receive rehab services designed to strengthen the patient so that he can return home. Medicare does not pay for custodial care. Conversely, Medicare does pay for skilled nursing care…up to a certain number of days.
It is common for a brick and mortar facility to have both custodial care and SNF patients. Such a facility is certified as a SNF. Inside the facility, a Medicare patient may use up his Part A eligibility as a SNF patient…but is not strong enough to return home. And so after his Part A eligibility runs out, the patient remains in the facility as a custodial care patient. The question then arises: “Can a DME supplier bill Medicare Part B for products delivered to a patient residing in a SNF certified facility after the patient’s Part A benefits have run out?
DME suppliers are only permitted to bill Medicare for DME dispensed to patients at locations that qualify as the patient’s “home.” This restriction comes from the definition of “durable medical equipment” outlined in the Social Security Act:
The term “durable medical equipment” includes iron lungs, oxygen tents, hospital beds, and wheelchairs . . . used in the patient’s home (including an institution used as his home other than an institution that meets the requirements of subsection (e)(1) of this section or section 1819(a)(1)), whether furnished on a rental basis or purchased, and includes blood-testing strips and blood glucose monitors for individuals with diabetes. . . Social Security Act, §1861(n); 42 USC §1395x(n).
Section 1861(e)(1) of the Social Security Act, referenced above, defines hospitals and Section 1819(a)(1), also referenced above, defines SNFs (in relevant part) as “an institution (or a distinct part of an institution) which is primarily engaged in providing to residents—
- skilled nursing care and related services for residents who require medical or nursing care, or
- rehabilitation services for the rehabilitation of injured, disabled, or sick persons”. Social Security Act, §1819(a)(1); 42 U.S.C. 1395i–3(a)(1).
Subject to certain exceptions, based on this statutory language a SNF cannot qualify as a patient’s “home” and, therefore, DME dispensed to beneficiaries in a SNF is not payable under Medicare Part B.
Exceptions to General Prohibition
Medicare does allow separate billing for certain Part B services rendered to Medicare beneficiaries in a SNF Part A covered stay:
- physician’s professional services;
- certain dialysis-related services, including covered ambulance transportation to obtain the dialysis services;
- certain ambulance services, including ambulance services that transport the beneficiary to the SNF initially, ambulance services that transport the beneficiary from the SNF at the end of the stay (other than in situations involving transfer to another SNF), and roundtrip ambulance services furnished during the stay that transport the beneficiary offsite temporarily in order to receive dialysis, or to receive certain types of intensive or emergency outpatient hospital services;
- erythropoietin for certain dialysis patients;
- certain chemotherapy drugs;
- certain chemotherapy administration services;
- radioisotope services; and
- customized prosthetic devices.
See SNF Consolidated Billing: Overview on Skilled Nursing Facility (SNF) Consolidated Billing (CB), https://www.cms.gov/Medicare/Billing/SNFConsolidatedBilling/index.
For Medicare beneficiaries that are in a SNF but not in a Part A covered stay, a supplier can bill Medicare Part B for the following items and services:
- Prosthetics, orthotics and related supplies
- Urinary incontinence supplies
- Ostomy supplies
- Surgical dressings
- Oral anticancer drugs
- Oral antiemetic drugs
- Therapeutic shoes for Diabetics
- Parenteral/enteral nutrition (including E0776BA, the IV pole used to administer parenteral/enteral nutrition and supplies)
- Immunosuppressive drugs
CGS DME Supplier Manual, Ch. 6, Sec. 11, https://www.cgsmedicare.com/jc/pubs/pdf/chpt6.pdf.
SNF Billing Medicare Part B for DME
The Medicare Claims Processing Manual (“CPM”) differentiates between different types of SNF patients. For SNF patients covered under Medicare Part A, the majority of services, including DME, are required to be provided by the SNF and payment is included in the SNF PPS rate. CPM, Ch. 6, Sec. 10. Thus, Part B reimbursement for DME is not possible. SNF Part B “Inpatients” include patients who receive services whose “benefit days are exhausted, or who are not entitled to have payment made for services under Part A”. CPM, Ch. 7, Sec. 10. SNF Part B “Outpatients” are those patients who reside “in the non-Medicare-certified portion of an institution that is not primarily engaged in the provision of skilled services.” CPM, Ch. 7, Sec. 10.1. With respect to billing for DME, the CPM states:
A SNF may not bill for DME furnished to its Part A inpatients as necessary DME must be supplied to the beneficiary as part of SNF services. A SNF may not bill for DME furnished to its Part B inpatients or outpatients. However, a SNF may qualify as a supplier and enroll with the National Supplier Clearinghouse. In such cases, the SNF is given a separate supplier number to bill outpatient DME to the DME MAC. The DME MAC will furnish guidelines and payment will be made directly to the SNF as a supplier. CPM, Ch. 7, Sec. 60.
2020 Look Ahead for DME Suppliers
Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C. and Andrea Stark, MiraVista, LLC
Moderated by: Liz Beaulieu, HME News
Thursday, February 6, 2020
1:00 p.m. EST
This has become an annual event. Towards the beginning of each year, Andrea Stark (MiraVista) and Jeff Baird (Brown & Fortunato) team up with Liz Beaulieu (HME News) to present the “hot topics” that DME suppliers will face during the coming year. On February 6, 2020, Andrea, Jeff and Liz will present their 10th “Look Ahead” webinar. With reduced reimbursement, the looming next round of competitive bidding, aggressive audits, and the growth of managed care, the DME industry is having to remake itself. In this webinar, Andrea and Jeff will discuss (i) the most important topics that today’s DME supplier will face and (ii) how the supplier can modify its business model to succeed in 2020 and beyond. In an interactive “back and forth” manner, Andrea and Jeff will discuss the following “hot topics”:
- Competitive Bidding Round 2021
- Standardized Written Orders (required for all 2020 deliveries)
- Rural Rate Decreases
- CMS-Mandated Six Year Self-Audits for Single Claim Audit Samples
- Relaxation of Stark and the Anti-Kickback Statute
- Managed Care Plans
Register for 2020 Look Ahead for DME Suppliers.
Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Amarillo, Texas. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or email@example.com.