While CMS has provided significant Medicare reimbursement relief for rural suppliers (as well as for those in non-contiguous areas such as Alaska, Hawaii, and Puerto Rico) via the recent ESRD/DMEPOS Final Rule, rates are set to remain largely unchanged for all other suppliers until the next bidding round goes into effect, which CMS expects to take place at the start of 2021.
HME suppliers have another option to provide products and services at higher reimbursement rates by electing to serve Medicare beneficiaries on a “billing non-assigned” basis. With former CBAs once again open to suppliers for the next two years, suppliers looking to re-enter those markets may be especially interested in this option.
With a December 31 deadline for suppliers wishing to become non-participating, thereby allowing them to bill non-assigned for 2019, we are sharing a primer on billing non-assigned from well-known HME legal and educational experts Jeff Baird and Cara Bachenheimer.
- July 2016 Webinar: Responding to Reimbursement Cuts: Billing Non-Assigned & Other Options – there is no charge to view the replay.
- DME Supplier Participation and Assignment Reminders – Celerian; note that Noridian provides identical guidance
- 2019 Open Enrollment Period – Palmetto
Primer on Billing Medicare Non-Assigned During Gap Period Starting Jan 1, 2019
by Jeffrey Baird, chairman of the Health Care Group, Brown & Fortunato and Cara Bachenheimer, head of the Government Affairs Practice, Brown & Fortunato – AAHomecare General Counsel
It has been common practice for suppliers to provide DME on an assigned basis. Medicare paid the suppliers directly and the patients only had to pay their copayments and deductibles. It is becoming cost-prohibitive for many suppliers to continue with the “assignment model.” Many DME suppliers are electing to be non-participating and are “billing non-assigned.” If a non-participating supplier provides a product on a non-assigned basis, this means that the supplier (i) is not agreeing to accept the Medicare allowable as payment in full, (ii) can collect directly from the patient, and (iii) can charge more than the Medicare allowable. 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 can collect up-front from the patient (i.e., bill non-assigned). This article explains the basics of Medicare “participation” and filing claims on assigned versus unassigned basis.
Participating vs. Non-Participating
Participating – A DME supplier elects to become a “participating supplier” by completing the Medicare Participating Physician or Supplier Agreement. When a DME supplier is a participating supplier, the supplier agrees to accept assignment on all claims for Medicare products and services and agrees to be paid the Medicare-allowed amount as full payment, less any unmet deductible and coinsurance. The supplier is precluded from charging the beneficiary more than the deductible or coinsurance based upon the Medicare payment amount.
Non-Participating – When a DME supplier is a “non-participating supplier,” the supplier “may accept assignment on a claim-by-claim basis.” If a non-participating supplier accepts assignment on a claim, it agrees to be paid the Medicare-allowed amount as full payment for that particular DME claim, except for any unmet deductible and coinsurance. If a non-participating supplier does not accept assignment, the supplier can collect directly from the patient for Medicare covered products and services and charge more than the Medicare allowable in such cases. In this instance, the supplier is required to file the claim with Medicare on a non-assigned basis on behalf of the patient, and any Medicare reimbursement is sent directly to the patient.
Switching from Participating Supplier to Non-Participating Supplier – If a participating supplier elects to become a non-participating supplier for the next calendar year, the supplier must submit a written request to the National Supplier Clearinghouse (NSC). The request must be on company letterhead, contain the organization’s tax ID and be signed by the authorized or delegated official on file with the NSC. This request must be sent to the NSC by December 31 of the current year in order for it to take effect for the following calendar year.
Price That the Supplier Can Charge – If a noncontract supplier sells an item, on a non-assigned basis, to a patient for cash, and Medicare reimburses the item as a “sale item,” not as a “capped rental item,” the supplier can sell the item to the patient for an amount in excess of the Medicare fee schedule, and Medicare will pay the patient 80% of the fee amount (less the patient’s deductible).
Renting a Capped Rental Item – Assume that an item is reimbursable by Medicare as a “capped rental item.” Assume that the non-participating supplier rents the item, on a non-assigned basis, to a patient. In this situation, the supplier can collect a rental amount from the patient that is higher than the Medicare fee schedule, and Medicare will pay 80% of the Medicare fee schedule rental payment to the patient on a monthly basis.
Term of ABN – Assume that an item is reimbursable by Medicare as a “capped rental item.” Assume that the supplier rents the item, on a non-assigned basis, to a patient. Assume that the supplier concludes that an ABN is appropriate. The question is this: “Is it sufficient for the supplier to issue one ABN at the beginning of the rental term, or must the supplier issue an ABN every month of the rental term?” A single ABN is good for one year. A new ABN would be required if the rental extends beyond one year, or if the reason for expected Medicare denial changes. For example, assume an initial ABN is issued because the patient has not met the “face to face” visit requirement. Subsequently, the patient has a physician visit and meets that requirement, but still fails to meet the medical coverage criteria. A new ABN would need to be obtained with the new reason for the expected Medicare denial of coverage. Note: Although a single ABN is good for one year, the supplier must still have beneficiary complete a signature authorization for the claim form every month for items rented on a non-assigned basis.
Supplies and Accessories – Assume that an item is reimbursable by Medicare as either a “rental” item or a “capped rental” item; the item is not reimbursable as a “sale” item. Assume that the supplier sells the item, on a non-assigned basis, to a patient for cash. For supplies and accessories used with beneficiary-owned equipment (equipment that is owned by the beneficiary, but was not paid for by the DME MAC/fee-for-service Medicare), Medicare will pay for them, however all of the following information must be submitted with the initial claim in Item 19 on the CMS-1500 claim form or in the NTE segment for electronic claims:
- HCPCS code of base equipment
- A notation that this equipment is beneficiary-owned
- Date the patient obtained the equipment
Claims for supplies and accessories must include all three pieces of information listed above. Claims lacking any one of the above elements will be denied for missing information. Medicare requires that supplies and accessories only be provided for equipment that meets the existing coverage criteria for the base item. In addition, if the supply or accessory has additional, separate criteria, these must also be met. In the event of a documentation request from the DME MAC or a redetermination request, the supplier must provide information justifying the medical necessity for the base item and the supplies and/or accessories. Refer to the applicable Local Coverage Determination(s) and related Policy Article(s) for information on the relevant coverage, documentation, and coding requirements. Note: drugs and biologicals are mandatory assignment items so the supplier is required to accept assignment for those items, and cannot bill nebulizer drugs on a non-assigned basis.
Repairs – Repairs to equipment that a beneficiary owns are covered when necessary to make the equipment serviceable. If the expense for repairs exceeds the estimated expense of purchasing (or renting another item of equipment for the remaining period of medical need), no payment can be made for the amount of the excess. When billing for repairs, include the HCPCS code and date of purchase of the item being repaired (if the HCPCS code is not available, include the manufacturer’s name, product name, and model number of the equipment), the manufacturer’s name, product name, model number, and MSRP of the repair item provided, and the justification for the repair.
A supplier is required to obtain an Advance Beneficiary Notice, or ABN, signed whenever it expects that Medicare will not pay for the item or service provided, regardless of whether it is an assigned or unassigned claim. A request for payment signed by the beneficiary must be filed on or with each claim for charge based reimbursement. Suppliers may obtain and retain in their files a one-time payment authorization from a beneficiary (or the beneficiary’s representative) applicable to any current and future services. Once the supplier has obtained the beneficiary’s one-time authorization, later claims can be filed without obtaining an additional signature from the beneficiary. These claims may be on an assigned or non-assigned basis with the exception of DME rentals. According to CGS Jurisdiction C DME MAC Supplier Manual, Chapter 6, the one-time authorization for DME rental claims is limited to assigned claims. This last statement indicates that the supplier will have to obtain a beneficiary signature authorization each month for items rented on a non-assigned basis.
What the Supplier Can Charge
While the supplier can charge the patient an amount higher or lower than the Medicare fee schedule, the supplier needs to be aware of the federal statute that says that a supplier is prohibited from charging Medicare substantially in excess of the supplier’s usual and customary charges, unless there is good cause shown. The supplier needs to also be aware of (i) Medicaid statutes that say that the supplier must bill Medicaid its “usual and customary,” and (ii) provisions in commercial insurance contracts that state that the supplier must give its “best price” to the insurer.
According to CMS: “The provider may bill the beneficiary no more than the “limiting charge” for covered services. Should the provider bill more than the limiting charge for a covered service, the provider will have violated the non-participating agreement and may be subject to fines or penalties. When a provider does not accept assignment on a Medicare claim, he/she is not required to file a claim to the beneficiary’s secondary insurance. NOTE: The “limiting charge” applies only to certain Medicare-covered services and does not apply to some supplies and durable medical equipment.” The limiting charge applies to all of the following services/supplies, regardless of who provides or bills for them, if the services/supplies are covered by the Medicare program and are provided:
- Physicians’ services;
- Services and supplies furnished incident to a physician’s services that are commonly furnished in a physician’s office;
- Outpatient physical therapy services furnished by an independently practicing physical therapist;
- Outpatient occupational therapy services furnished by an independently practicing occupational therapist;
- Diagnostic tests; and
- Radiation therapy services (including x-ray, radium, and radioactive isotope therapy, and materials and services of technicians)
Therefore, items provided by a DME supplier are not subject to the “limiting charge” provisions.
Billing for Items on Same Day
A supplier cannot submit some items assigned and others non-assigned on the same claim. It is unclear if a supplier can have two separate claims, one assigned and one non-assigned, with the same date of service, or if different dates of service are required. Examples:
- Billing nutrition assigned, billing supply kits non-assigned.
- Over the quantity of items and there is no support of medical necessity for the increase in quantity.
Changing from Assigned to Non-Assigned
If the supplier is non-participating, then it can change to non-assigned during the rental period. The supplier should give the patient at least 30 days advance notice, so the patient can look for another supplier that will accept assignment if it wants to. Also, if the supplier changes to non-assigned for rental equipment, the supplier will probably have to obtain a beneficiary claim authorization signature each month.
There are more details and requirements for billing non-assigned, based on the items and services the DME supplier is providing. We recommend that DME providers seek legal counsel to make sure they are in compliance with all the Medicare requirements.