LEEDer Group Inc.
8508 North West 66th St.
Miami, Florida 33166 USA

Phone Toll-free: 866.814.0192 or 305.436.5030
Fax Toll-free: 866.818.0373 or 305.436.0086
E-mail Address: orders {at] LEEDerGroup [dot] com

Provider Alert Repair Replace

This CMS article provides hints for Maintenance and repair filings.

Reimbursement Services HELPFUL HINTS FOR FILING DME Maintenance, Repair, and Replacement Overview. The following information describes DMERC medical policy regarding repair, maintenance, and replacement of Durable Medical Equipment (DME). This is to be used as a guide.

  • For an item to be covered by Medicare, the following conditions apply:
    (1) item must be eligible for a defined Medicare benefit category;
    (2) item must be reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member; and (3) the item must meet all applicable Medicare statutory and regulatory requirements.

Please contact your Supplier Manual, local carrier or your DMERC medical director for specific instructions. General Coverage Guidelines Medicare generally provides reimbursement for repair, maintenance, and replacement of medically necessary DME that a beneficiary owns or is purchasing. This may include DME that was in use before the patient received DME coverage through Medicare. Reimbursement for repair, maintenance, or replacement of rented DME is included in the monthly rental payment allowance, and thus Medicare will not typically provide separate reimbursement. This includes equipment under the frequent and substantial servicing, capped rental, and oxygen payment categories. (Exceptions to capped rental equipment will be discussed below.)

Medicare will not provide separate reimbursement for maintenance and service for DME covered under a manufacturer or supplier warranty agreement unless the charges are specifically excluded from the warranty.

Maintenance Patient-Owned Equipment Medicare generally does not provide separate reimbursement for routine, periodic maintenance of patient-owned equipment, such as testing, cleaning, and regulating of equipment. These routine services are expected to be performed by the patient as part of the general care regimen required to maintain a piece of equipment. More extensive maintenance, such as breaking open sealed components and specialized testing, would be considered covered under repairs. These services are usually required to be performed by authorized technicians, based on the manufacturer’s recommendations. Rental Equipment Payment for maintenance of rental equipment is included under the monthly rental allowance for these items. Thus, no separate payment may be made for maintenance of items under the frequent and substantial servicing, capped rental (prior to 15 months), or oxygen payment categories. For capped rental items only, after the 15 months of the capped rental period have been reached, Medicare will provide separate reimbursement for equipment maintenance once every six months for the duration of medical need if the patient did not elect to purchase the item. In this situation, the supplier that maintains ownership of the equipment is responsible for the maintenance and servicing. (If the patient opted to purchase the capped rental item, please refer to the section for Patient-Owned Equipment.) To report maintenance of capped rental equipment only, the supplier may report the HCPCS code for the capped rental item using modifier: –MS Six month maintenance and servicing fee for reasonable and necessary parts and labor which are not covered under any manufacturer or supplier warranty The payment allowance for maintenance and servicing is equivalent to the Medicare’s monthly rental allowance (in months 4 to 15) for that piece of equipment. Repair Patient-Owned Equipment Medicare provides coverage for repairs to DME that is owned or being purchased by a patient. These repairs must be necessary to make the equipment operable. Repair charges may be reported using HCPCS code: E1340 Repair or nonroutine service for durable medical equipment requiring the skill of a technician, labor component, per 15 minutes If a claim is submitted for repair charges only, the type of equipment being repaired should be indicated on the claim. Also, the repair claim must indicate that the equipment is patient-owned. Payment allowances for the repair HCPCS code are based on a fee schedule (for fifteen minute labor increments) which is adjusted for geographical cost differences. While the patient-owned item is being repaired, a temporary replacement piece of equipment will be covered for one month. Suppliers may report HCPCS code: K0462 Temporary replacement for patient-owned equipment being repaired, any type The claim for replacement equipment should include a description of the equipment being used as a temporary replacement (manufacturer, brand name, model name or number) and explanation of the necessity for the item. This code should not be billed for rental equipment. Reimbursement for the temporary replacement equipment is based on Medicare’s established rental allowance for the piece of equipment in question. Rental Equipment Reimbursement for repair of rental equipment is included in the monthly rental allowance for that item. Thus, for capped rental items, Medicare will not provide separate payment for repairs even after the 15-month rental period has been reached if the patient has not elected to purchase the equipment. Medicare does not provide separate reimbursement for temporary replacement of rental items. A temporary replacement for a rental item may be provided under the usual monthly rental allowance. Replacement of DME Medicare guidelines concerning coverage of replacement items specify that the useful lifetime is determined by the DMERC for each piece of equipment. However, the “reasonable useful lifetime” cannot be less than five years. Useful lifetime is based on the date of delivery to the beneficiary, not the actual age of the equipment.

  • Medicare will provide coverage for replacement of equipment during the reasonable useful lifetime if:

• Equipment is lost
• Equipment has suffered irreparable damage (often defined as the item costing more to repair than to replace)
• New equipment is required due to a change in the patient’s condition

  • Irreparable damage is defined by Medicare as an item being damaged beyond repair by a specific incident or accident, resulting in the cost to repair the item exceeding the cost of a new, replacement item.
  • Excessive wear is defined by Medicare as “deterioration sustained from day-to-day usage over time and a specific event cannot be identified which caused the deterioration.”
Replacement due to excessive wear during the reasonable useful lifetime is typically not covered by Medicare. Medicare would cover the cost of repair up to, but not exceeding, the cost of replacement. Note that the length of continuous use alone does not justify coverage of a replacement item. Each claim for replacement equipment is subject to individual consideration by the DMERC to determine if excessive wear or irreparable damage has occurred. The DMERC must also determine whether the equipment continues to meet the patient’s medical needs.

Documentation requirements:

• Claims for replacement items due to a change in the patient’s condition must be supported by a physician’s order.
• Medicare may provide coverage for replacement items required due to loss or irreparable damage in the absence of a physician’s order. It must be determined that the originally ordered item continues to meet the patient’s medical needs.
• While not specifically required for claims for replacement items due to excessive wear, a physician’s order may facilitate DMERC review of the claim.

Replacement items (or parts) should be billed with the appropriate HCPCS code and the following modifiers as applicable:
• -NU New equipment
• -UE Used durable medical equipment
• -RR Rental Also, all replacement items should be reported with an -RP modifier to designate that the item is a replacement.

When a replacement piece of equipment is obtained, payment will be made on a rental or purchase basis consistent with the DME payment category for that item. When a change in capped rental equipment occurs due to a change in the patient’s medical condition, a new 15-month capped rental period begins. Replacement of Accessories Medicare generally provides equipment-specific guidelines for replacement, and frequency allowances for accessories used with DME.

Depending on the piece of equipment and its corresponding payment category, replacement accessories may be separately payable under Medicare.
• Generally, Medicare only provides separate payment for replacement accessories for patient-owned equipment. For example, replacement accessories for items under the frequent and substantial servicing payment category, such as ventilators, are not separately payable under Medicare. The cost of any replacement accessories is included in Medicare’s monthly rental allowance for that piece of equipment.
DMERC policy makes exceptions for the payment of replacement accessories for rented items, such as accessories for a continuous positive airway pressure device (CPAP). Medicare has determined that the CPAP device cannot perform its intended function without certain accessories, such as the mask and tubing. Under these exceptions, Medicare will provide separate payment for replacement accessories even while the equipment is being rented. As these guidelines and policies vary widely by the equipment in question, suppliers should reference specific DMERC local medical review policies as appropriate. Provision/Delivery of Replacement Accessories: Medicare guidelines state that “suppliers/manufacturers may not automatically deliver DMEPOS to beneficiaries unless the beneficiary, physician, or designated representative has requested additional supplies/equipment. The reason is to assure that the beneficiary actually needs the DMEPOS.” Suppliers must have received a request from the beneficiary for additional supplies or a replacement accessory prior to providing that item to the beneficiary. Suppliers may not initiate a replacement order, or automatically deliver supplies/accessories on a predetermined routine basis. (Medicare Carriers Manual §3010) For example, a supplier may not automatically deliver a CPAP mask to a beneficiary once every three months based solely on the replacement allowance guidelines stated in the CPAP coverage policy. Prior to delivery, the supplier must receive a request from the beneficiary for a replacement item, and confirm that the physician order is still effective for that item. Note: Inclusion or exclusion of a code for a specific product or supply does not imply any health insurance coverage or reimbursement policy. All referenced information and codes were taken from HCPCS. Please refer to DMEPOS Supplier Manual for complete explanations. 1013355 SB 1/24/03 PEOPLE. PRODUCTS. PROGRAMS. © 2003 Respironics, Inc. SM FOR MORE INFORMATION FROM RESPIRONICS CONCERNING Reimbursement Contact Website/Phone Information & Fee Schedules Respironics Website www.respironics.com Educational Materials & Questions Customer Service 1-800-345-6443; follow the automated (coding, coverage and payment) prompts to select the Insurance Reimbursement Information option Government Relations Consulting Services 1-724-387-4475