AMARILLO, TX – The DME industry has been in existence since the 1970s. The industry primarily serves the elderly, meaning that DME suppliers have largely been dependent on Medicare. DME suppliers have primarily billed Medicare on an assignment basis. That is, (i) the supplier provides the product to the Medicare beneficiary, (ii) the supplier takes assignment from the beneficiary and bills Medicare, (iii) Medicare pays the supplier 80% of the allowable, and (iv) the supplier collects the other 20% from the beneficiary.

Under this “assignment” model, the successful DME supplier had to be proficient at billing and collecting from Medicare. While the assignment model will remain with us, we are witnessing a transition to a non-assignment model. Under the non-assignment model, a non-participating supplier will (i) collect money up front from the beneficiary and (ii) submit a claim to Medicare on behalf of the beneficary in order for the beneficiary to receive reimbursement from Medicare. There are several factors behind this transition:

• Subject to certain restrictions, the supplier can charge the beneficiary whatever the supplier wants to.
• The supplier receives its money up-front.
• Many Baby Boomers are willing to pay cash for Cadillac products rather than be relegated to a “Cavalier” product paid for by Medicare.

Part One addressed (i) the anti-discrimination rule, (ii) participating vs. non-participating, and (iii) billing nonassigned. Part Two addressed selling products for cash at retail. Part Three addresses Frequently Asked Questions.

Frequently Asked Questions

Question – Can a supplier accept assignment on the concentrator and not accept assignment for the portable gaseous system? If so, can the supplier then have a price of “x” dollars per tank, applicable to all payors? Assume that the supplier transfills its own tanks; it nevertheless does not seem feasible for any patient to be allowed an unlimited number of tanks.
Answer – During the rental period the content for the portable is included in the payment for the concentrator.  It may be better to provide nonassigned on the concentrator and assigned on the portable equipment.

Question – If a supplier does not have to obtain an ABN monthly for billing nonassigned rentals, what does the patient have to sign monthly?
Answer – A payment authorization that allows a supplier to submit monthly claims.

Question – If the customer agrees to purchase a nebulizer from a supplier for cash, is the customer able to receive covered nebulizer medications from a pharmacy?
Answer – The nebulizer medications should be covered if the patient meets Medicare medical necessity coverage criteria for the nebulizer and all of the following information is 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, and the date the patient obtained the equipment.

Question – If a supplier does not accept assignment for an item and charges above Medicare’s allowable, may secondary (non-supplemental) pick up the extra? Is there a modifier that will trigger this?
Answer – If the supplier does not accept assignment on an item, the billed amount will be whatever amount the supplier chooses to set. The secondary will not typically pay the difference between the billed and allowed charge. This is typically disallowed by secondary payers. There is no modifier to trigger this.

Question – If a supplier is participating, is it able to bill nonassigned?
Answer – No, Medicare participating suppliers are required to accept assignment for all items or services provided to a Medicare FFS patient.

Question – If all nonassigned claims have a signed ABN, is there still a risk for the supplier to have to pay back recoupments?
Answer – The intake process should be the same for assigned and nonassigned items.  If the patient does not meet medical necessity criteria and the supplier chooses to provide and bill nonassigned, an ABN should be issued and assuming the ABN is valid, the supplier should not have liability. The supplier should not routinely be obtaining an ABN for all nonassigned claims.  An ABN should be issued only when the supplier reasonably believes that the claim will be denied.  In the instance that a nonassigned claim is reviewed and payment denied, the supplier will usually be required to refund the amount collected back to the Medicare beneficiary unless a valid ABN was obtained.

Question – Is the supplier obligated to obtain all the same paperwork (medical necessity, face to face, etc.) if the supplier is going to file nonassigned?
Answer – A supplier should evaluate all patients against the LCD and policy article requirements. If a patient meets all Medicare requirements, an ABN cannot be used. A nonassigned claim can be filed with appropriate notification to the patient.

Question – Will a nonassigned claim cross over to secondary/supplement that will pay the 20%?
Answer – Nonassigned claims process the same way as assigned. If it is a nonassigned claim, the supplier has no obligation to file a secondary claim. There is no guaranty the secondary insurer will pay the patient as Medicare does. A supplier wwill be obligated to send any secondary payments to the patient.

Question – If a patient pays all of his copayments up front can the supplier then bill the Recurring Rental each month and does the supplier have to obtain a signature each month?
Answer – The supplier cannot collect all rental “copayments” up front because a copayment is tied to the monthly rental charge. A supplier can charge its regular charge for the equipment and collect the full amount from the patient on a nonassigned basis for the first month, and then take assignment for all subsequent month rentals. A one-time claim authorization is effective for future month rentals when assignment is accepted. A separate authorization is required for each month rental billed on a nonassigned basis.

Question – Can a supplier send the beneficiary a bill after Medicare pays the Medicare portion?
Answer – If the supplier chooses to file a claim nonassigned, it is its decision when/how to collect from the beneficiary. If the supplier wants to wait to collect from the beneficiary until after Medicare pays the beneficiary, it can do so. However, it may be unwise to do so since the supplier’s best opportunity to collect from the beneficiary is before it hands the product to the beneficiary.

Question – Assume that the majority of the supplier’s non-Medicare payors do not allow nonassigned claims.  If the supplier decides to make the item nonassigned for Medicare, is the supplier in violation of anti-discrimination rule?
Answer – The supplier should not be discriminating against a Medicare patient so long as the supplier only makes that product available to patients for whom the supplier is paid the threshold price set, whether that payment amount is collected from the patient on a nonassigned claim, or from the payor (with patient co-pay) for assigned claims.

Question – Can a supplier set a percentage above cost as its threshold for accepting nonassignment rather than a specific dollar amount?
Answer – A supplier can set up any pricing it wants as long as it is the same for all.  Suppliers can make decisions on what to take assignment on based on any algorithm as long as it is the same for all payers.

Question – Can a supplier bill nonassigned for Items that require prior authorization through Medicare? If so, must the supplier obtain the prior authorization? Would obtaining the prior authorization mean that the supplier must accept assignment?
Answer – A supplier can bill nonassigned on an item that requires prior approval.  Obtaining prior approval does not mean that the supplier has to take assignment.  A supplier is required to follow Medicare guidelines for coverage regardless of assignment of claim.

Question – If a supplier starts a retail company with no PTAN or billing of insurance whatsoever, will the supplier be allowed to sell items, such as CPAP machines, that are “RX” only items? If so, will the supplier be required to maintain charts or records of patients so that the supplier can prove it received an RX prior to dispensing?
Answer – 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, “retail” company or online company with no PTAN. State licensing requirements govern who can/cannot sell RX items. The seller of a prescription-only item should retain the RX in its records.

Question – When a supplier bills nonassigned to Medicare, will the supplier still receive the Medicare Remittance Notice or will that only go to the patient?
Answer – Both the supplier and the patient will receive a copy of the remittance.

Question – If Medicare initially pays and then subsequently denies the nonassigned claim, is the supplier going to get a charge back or will the patient be asked to pay it back?
Answer – If the claim is denied in a post-pay audit and the supplier did not have a signed ABN for the reason of the denial, then the supplier will have to refund the amounts collected from patient.

Question – If a supplier has an AOB on file, will it still need the beneficiary to sign an authorization for every month of a nonassigned capped rental claim?
Answer – Yes.  An AOB is when the supplier is accepting assignment.

Question – Is the supplier on a nonassigned claim responsible to bill the beneficiary secondary insurance?
Answer – No, a supplier is not required to bill secondary insurance on a nonassigned claim.

Question – When the supplier bills nonassigned with coverage criteria met and the remit shows a denial on the claim, who is responsible to appeal for payment?
Answer – According to CGS, either the patient or the supplier can file the appeal.

Question – If a supplier has a Medicare patient walk in with all the medical documentation and the diagnosis qualifies for an item but Medicare allowable is low and the supplier does not want to accept assignment, what reason does the supplier state on the ABN for not accepting assignment?
Answer – An ABN is not required for a nonassigned claim unless the supplier has a reasonable basis to believe that Medicare will deny the claim.

Question – If the supplier has to go nonassigned on rental equipment, can it collect a signature up front on a form that states that the patient understands that he has agreed to go nonassigned for the 13 month capped rental, and that he reserves the right to change his mind at any time?
Answer – If the patient refuses to sign a claim authorization each month, then a supplier cannot submit the claim to Medicare. The supplier should notify the patient that it is not in his best interest as he will be billed and will receive no money from Medicare for the unassigned claim.

Question – Does a non-participating supplier need to post a notice that it is changing its policy on collecting upfront?
Answer – A non-participating supplier can choose to not accept assignment on a claim-by-claim basis. The supplier will likely continue to accept assignment on some items, and not on others. Therefore, the supplier should notify the patient in advance any time it will not accept assignment for an item.

Question – Assume that a supplier has a contract with a third party administrator to supply DME for its patients but the supplier must accept assignment. Is the supplier still able to bill nonassigned claims to Medicare for the same equipment?
Answer – The supplier will not be discriminating against a Medicare patient so long as it only makes that product available to patients for whom the supplier is paid the threshold price set, whether that payment amount is collected from the patient on a nonassigned claim, or from the payor (with patient co-pay) for assigned claims.

Question – If a supplier chooses to provide certain items nonassigned to Medicare beneficiaries with an ABN, is there an expectation that an attempt to meet Medicare guidelines was made?
Answer – The supplier should attempt to make sure Medicare guidelines are met for any product dispensed to a Medicare patient, whether assigned or nonassigned. If the supplier is aware that Medicare guidelines are not met, then the supplier should have the patient sign an ABN detailing what Medicare requirements are not met as the basis for an expected denial of coverage.

Question – Can a DME supplier that is a department of a participating hospital become a non-participating supplier if the supplier uses the same Tax ID as the hospital?
Answer – The NSC states that if the supplier and the hospital are under the same Tax ID number, and if the hospital is participating, then the DME supplier must be participating as well.

Question – Assume that a supplier contracts with multiple commercial insurances for which the supplier is unable to bill nonassigned and that do not reimburse what the supplier would consider to be acceptable reimbursement. If a particular insurance company does not meet this reimbursement, would the supplier either bill nonassigned or not provide the service?
Answer – The supplier should not be discriminating against a Medicare patient so long as it only makes that product available to patients for whom it is paid the threshold price set, whether that payment amount is collected from the patient on a nonassigned claim, or from the payor (with patient co-pay) for assigned claims.  In the circumstance that a commercial payor requires that the 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 contract requires otherwise).

Question – Do the Medicare Advantage plans require the same paperwork as traditional Medicare
Answer – Coverage and documentation requirements are established by the Medicare Advantage plan, which may or may not mirror traditional Medicare requirements.

AAHOMECARE’S EDUCATIONAL WEBINAR

Relaxation of Requirements Under Stark and the Anti-Kickback Statute

Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato

Tuesday, March 22, 2022

1:30-2:30 p.m. CENTRAL TIME
The federal Stark physician self-referral statute (“Stark”) and the federal anti-kickback statute (“AKS”) came into existence when health care was primarily operating under a fee-for-service (“FFS”) model that did not encourage provider collaboration nor tie reimbursement to achieving certain metrics. The FFS model has proven to be costly and inefficient. As a result, third party payors (including Medicare) are pushing health care delivery into a collaborative/value-based model that does (i) encourage provider collaboration and (ii) ties reimbursement, at least in part, to the achievement of certain metrics. Because of the shift of health care away from FFS towards a collaborative/value-based approach, CMS and the OIG recognized the need to modify Stark and the AKS. The goal of the modifications is to ensure that these two statutes do not unnecessarily impede the transition to collaborative/value-based care. The world of provider collaboration and value-based compensation results in referrals of patients among providers, sharing of risk by providers, and (among certain conditions) the sharing of value-based reimbursement. These activities ran up against the restrictions contained in Stark and the AKS. That is why, on November 20, 2020, CMS and the OIG issued a final rule that modified these two statutes. These modifications include (i) three new safe harbors to the AKS; (ii) modifications to existing AKS safe harbors; (iii) four new Stark exceptions; and (iv) modifications to existing Stark regulations and definitions.

By attending the webinar, you will:

• Understand the modifications to Stark and the AKS.
• Learn how to structure value-based arrangements to comply with the new Stark exceptions and AKS safe harbors.
• Understand how the modifications to the Personal Services and Management Contracts safe harbor to the AKS provide flexibility in structuring arrangements with referral sources
• Understand how the modifications to the Stark definition of commercial reasonableness expands the possibilities for joint ventures and service agreements.

Registration will soon be available for Relaxation of Requirements Under Stark and the Anti-Kickback Statute on Tuesday, March 22, 2022, 1:30-2:30 p.m. CT, with Jeffrey S. Baird, Esq. of  Brown & Fortunato.

Members:  $99
Non-Members:  $129

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas. He represents pharmacies, infusion companies, HME companies, manufacturers, and other health care providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or [email protected].

Lisa K. Smith, JD, is an attorney with the Health Care Group at Brown & Fortunato, a law firm with a national health care practice based in Texas. She represents pharmacies, infusion companies, HME companies, manufacturers, and other health care providers throughout the United States. Ms. Smith is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6370 or [email protected].