In the ongoing battle for who decides what is medically necessary, doctors often order supplies in excess of Medicare coverage. Medicare considers any item that goes beyond the covered quantity an upgrade, even when prescribed. Suppliers caught in the middle have two choices when filling orders for excess supplies: charge the patient or give them away for free.

Billing Patients for Upgrades

In addition to billing Medicare for the covered supplies, suppliers can charge the beneficiary directly for excess supplies provided they obtain a properly executed Advance Beneficiary Notice (ABN) from the patient. The supplier then includes two lines on the Medicare claim:

1. Line 1 includes the total number of units provided and the GA modifier.
2. Line 2 includes the covered number of units provided and the GK modifier.

For example, assume a doctor orders a non-insulin dependent diabetic patient to test two times per day. Because Medicare only covers one test per day, the patient needs twice the allowed testing strips over the same testing period. In this scenario, the patient needs four boxes of testing strips, not two, for a 90-day period. If the supplier cannot find coverage justification for the higher testing frequency, they can still dispense all four boxes, billing Medicare for two and charging the patient directly for the extra.

After obtaining an ABN from the patient, the supplier will include the following on the Medicare claim:

• Line 1 – A4253NUKSGA; QTY = 4.
• Line 2 – A4253NUKSGK; QTY = 2.

The GA modifier indicates the supplier has a signed ABN from the patient for excess quantities; this line must be reported on the claim first. The GK modifier identifies the covered items or quantities.
The patient pays the following amounts:

1. 20 percent copay for the allowed units on line 2, and
2. The difference between the usual and customary charge on line 1 and line 2.

Suppliers cannot pass the contractual write-off amount for the covered supplies to the patient.

Free Upgrades

Alternatively, the supplier can provide the excess items or quantities at no additional charge to the beneficiary. Medicare does not require ABNs for free upgrades. The supplier includes a single line on the claim including the covered quantity of supplies and the GL modifier. The supplier also needs to include a claim narrative telling Medicare auditors how many units the patient actually received.

Using the same example as above, the supplier will include the following on the Medicare claim:

1. Line 1 - A4253NUKSGL; QTY = 2, and
2. Claim narrative disclosing the patient received four boxes of strips.

The GL modifier indicates the beneficiary received an upgrade ‑ a luxury item, or in this example, a more liberal supply.

In all cases, the proof of delivery must reflect the actual quantities delivered to the patient.

These upgrade protocols apply to virtually any supply HCPCS with a set limit on quantity (e.g., urological, surgical, ostomy, CPAP, and diabetic supplies). They do not apply to supply allowances which are based on units of time instead of quantity. Supply allowances cannot be limited by quantity when Medicare pays a fixed amount to cover whatever the patient needs for a given day or week or month as is the case for enteral administration kits, infusion sets, CGM supplies, and the like.

SOURCE LINKS
https://cgsmedicare.com/jc/pubs/news/2022/01/cope24725.html
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Communication between patients entering hospice with active DME rentals, the DME supplier, and the hospice provider is not great. The patient is usually in no condition to keep everyone informed, the hospice does not have access to the patient’s complete medical history, and the DME supplier is usually the last to know about the hospice care.

When CMS released the Patient Notification of Hospice Non-Covered Items, Services, and Drugs form (the Form) in November 2020, they indirectly provided an excellent tool to coordinate care and get everyone on the same page.

The Form

The Form is a beneficiary notice CMS requires hospice providers to complete, but only if the beneficiary requests it. In doing so, the hospice provider explicitly lists terminal diagnoses, unrelated illnesses and conditions, and items and services unrelated to the terminal illness.

That last part is important because it is a clear declaration of which services are not included in hospice reimbursement. If DME items are listed, suppliers have a strong foundation for continued billing. Suppliers may need to pick up equipment or contract separately with the hospice provider for items not listed.
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Using the Form to Improve Health Care Coordination

CMS requires the hospice to complete this form, but only when the beneficiary specifically requests it. Beneficiaries – and many hospice providers – probably don’t know it exists. To maximize the benefit, DME suppliers will have to assume the role of unofficial educator.

DME suppliers should proactively check eligibility monthly for active rental patients. Once alerted to a hospice stay, the supplier should fax the hospice agency a list of all active equipment and supplies with a blank copy of CMS’s Hospice Non-Covered Items form, asking them to complete the form, provide a copy to the beneficiary, and provide a copy for the DME supplier’s patient file. Doing so benefits hospice providers, too, because it is a straight-forward way to coordinate care and ensure they are not responsible for items not covered in their own reimbursement rates.

Suppliers should continue to bill to Medicare with a “GW” modifier for any item the hospice lists on the form as excluded. Absent payment arrangements from the hospice, suppliers should discontinue service and schedule the pick-up of any item the hospice deems related (and therefore does not appear on the Form).

By using the Hospice Non-Covered Items form as a tool to clearly document the hospice’s assessment specific to equipment and supplies, DME suppliers can avoid cash flow disruptions and improve overall care coordination.

SOURCE LINKS
MLN Article on the Implementation of the Election Statement
https://www.cms.gov/files/document/mm12015.pdf 
Model Statement Form
https://www.cms.gov/files/document/model-hospice-election-statement-addendum-july-2021.pdf

CMS introduced claim processing edits earlier this year to identify suppliers billing products and services without appropriate accreditation. Using the new protocol, DME MACs include supplier alerts on payment remittances for problematic claims, and those that fail to remedy the underlying issues risk losing Medicare billing privileges.

During processing, DME MACs will cross-reference billed products with the supplier’s PECOS records to ensure qualification for billing. If accreditation records do not support billing, DME MACs may pay claims conditionally and include the following alerts on the remittance advice:

• CO-185 states the supplier is not eligible to bill the service.
• N790 flags the accreditation and product mismatch.
• N369 states that, although the claim has been processed, it is deficient according to state legislation/regulation.

Suppliers must resolve any discrepancies quickly to avoid future denials, or worse, suspension of billing privileges by the National Supplier Clearinghouse, the agency tasked with enforcing supplier standards.

In addition to periodic review of PECOS records, suppliers should alert payment posters to relay warning messages included on remittances.

SOURCE LINKS
CMS Fact Sheet on Accreditation Edits
https://www.cms.gov/outreach-and-education/medicare-learning-network-mln/mlnproducts/downloads/dmepos_basics_factsheet_icn905710.pdf
NSC Bulletin regarding informational accreditation messaging
https://www.palmettogba.com/palmetto/nsc.nsf/DIDC/9J0TMQ5G3M~Supplier%20Enrollment~Standards%20and%20Compliance

Beginning April 1, 2022, DME MACs and Medicare Advantage Plan carriers will reduce all payments by 1 percent as part of the phased-in return of Medicare sequestration. Sequestration deductions will increase to 2 percent on July 1, 2022, marking the full reinstatement of the “budget balancing” initiative.

Congress suspended sequestration in 2020 as part of its public health emergency relief efforts. Though the cuts were originally scheduled to resume on January 1, 2022, Congress extended the relief through March 31, 2022 and included a phase-in for its return.

Medicare Sequestration Plus PAYGO Equals 6 Percent

In the same legislation that extended the Medicare sequester, the Protecting Medicare and American Farmers From Sequestration Cuts Act, Congress also punted the pending mandatory 4-percent PAYGO cut triggered by passage of the American Rescue Plan Act of 2021 (ARP). As it stands, the PAYGO cut is likely to begin on January 1, 2023, and it will be in addition to Medicare sequestration. Without congressional intervention, the combined cuts will evaporate 6 percent from supplier payments in less than 12 months.

SOURCE LINKS
https://www.congress.gov/bill/117th-congress/senate-bill/610/text