In exchange for 36 rental payments, suppliers assume responsibility for a Medicare patient’s oxygen equipment for five years, the equipment’s stipulated reasonable useful lifetime (RUL). Upon expiration of the RUL, suppliers can deliver new equipment to continuing patients, and Medicare will start a new billing cycle. After all, these machines wear out and need replacement.
The process, however, is notoriously frustrating. Patient and physician cooperation, confusion over required documentation, and denied claims for new equipment are common pain points. Luckily, a few tweaks to the oxygen restart process can help suppliers avoid common pitfalls, increase revenue, and provide better service to longstanding patients.
Use Medicare Same or Similar Searches to Calculate the End Date of the Reasonable Useful Lifetime (RUL)
The initial CMN date on file with Medicare for stationary oxygen concentrators (E1390) establishes the start of the five-year RUL for both the stationary and any portable equipment provided. Suppliers often calculate the RUL based on internal billing data and initiate replacement without first confirming their own initial date agrees with Medicare’s records. If the date used does not agree to Medicare records, the DME MAC will deny claims for the new equipment.
Fortunately, online portals make it easy to validate the correct dates using same or similar information. Suppliers should search based on patient location: use the Noridian Medicare Portal for those in Jurisdictions A and D and myCGS for those in Jurisdictions B and C.
The following example shows the information returned:
The process, however, is notoriously frustrating. Patient and physician cooperation, confusion over required documentation, and denied claims for new equipment are common pain points. Luckily, a few tweaks to the oxygen restart process can help suppliers avoid common pitfalls, increase revenue, and provide better service to longstanding patients.
Use Medicare Same or Similar Searches to Calculate the End Date of the Reasonable Useful Lifetime (RUL)
The initial CMN date on file with Medicare for stationary oxygen concentrators (E1390) establishes the start of the five-year RUL for both the stationary and any portable equipment provided. Suppliers often calculate the RUL based on internal billing data and initiate replacement without first confirming their own initial date agrees with Medicare’s records. If the date used does not agree to Medicare records, the DME MAC will deny claims for the new equipment.
Fortunately, online portals make it easy to validate the correct dates using same or similar information. Suppliers should search based on patient location: use the Noridian Medicare Portal for those in Jurisdictions A and D and myCGS for those in Jurisdictions B and C.
The following example shows the information returned:
In this example, the initial CMN date is June 16, 2016, so the RUL of the current equipment expired five years later on June 15, 2021.
Bill Missed Payments Before Starting a Patient on New Equipment
Medicare reimburses up to 36 rental months during each RUL. Providing new equipment to a continuing patient for which a supplier has received less than 36 payments forfeits the revenue for unpaid rental months. As such, suppliers should bill missed rental months before providing new equipment. Suppliers can retroactively bill claims up to 12 months after the date of service, so long as the customer actually used the equipment for the dates billed. Claims must include a narrative directing Medicare to “Please extend the CMN to allow for remaining payments due to a break in billing or service.”
Same or similar query results also return the number of rental months paid during the current RUL. In the example results above, Medicare paid for 33 monthly rentals. Therefore, the supplier should retroactively bill three additional rental months under the current CMN before starting a new rental. Assuming the supplier has not billed for service dates since month 36 of the RUL and the patient continues to use the equipment, they could bill for April, May, and June 2021 dates of service.
Because extending the active rental cycle of the CMN does not alter the initial date, suppliers do not extend the reasonable useful lifetime when billing missed rental months. As soon as all rentals are captured, suppliers can immediately restart the rental anytime the initial date is over five years.
Moreover, suppliers should take care not to confuse length of need with rental months paid in the same or similar query detail. Recertified oxygen rentals always have a length of need of 36 months; that is how the Medicare claim processing system is configured to limit the maximum number of rental payments. When rental months paid do not equal length of need, however, suppliers must generate additional claims.
Don’t Chase Unnecessary Documentation
Contrary to what most suppliers expect, Medicare does not require the beneficiary to undergo another SAT or ABG test. Patients do not have to return to the doctor or have a face-to-face visit to restart their oxygen. To start a new billing period, suppliers should:
When preparing claims for the new equipment, be sure to:
Exchange Stationary and Portable Equipment at the Same Time
Again, Medicare contractors look to the stationary oxygen CMN initial date to calculate each customer’s five-year anniversary date, including patients that start using portable equipment on a different date. For example, patients that start using a stationary concentrator for nocturnal oxygen often progress to daytime use and subsequently require a portable machine to get around in the home. Nonetheless, suppliers should restart both the stationary and portable equipment at the expiration of the stationary machine’s RUL.
SOURCE LINKS
https://www.cgsmedicare.com/pdf/dme/oxygen_cmn_chart.pdf
https://www.cms.gov/medicare-coverage-database/details/lcd-details.aspx?LCDId=33797&ContrID=140
https://www.cms.gov/medicare-coverage-database/details/article-details.aspx?articleId=52514&ContrID=140
https://www.medicare.gov/coverage/oxygen-equipment-and-accessories.html
Bill Missed Payments Before Starting a Patient on New Equipment
Medicare reimburses up to 36 rental months during each RUL. Providing new equipment to a continuing patient for which a supplier has received less than 36 payments forfeits the revenue for unpaid rental months. As such, suppliers should bill missed rental months before providing new equipment. Suppliers can retroactively bill claims up to 12 months after the date of service, so long as the customer actually used the equipment for the dates billed. Claims must include a narrative directing Medicare to “Please extend the CMN to allow for remaining payments due to a break in billing or service.”
Same or similar query results also return the number of rental months paid during the current RUL. In the example results above, Medicare paid for 33 monthly rentals. Therefore, the supplier should retroactively bill three additional rental months under the current CMN before starting a new rental. Assuming the supplier has not billed for service dates since month 36 of the RUL and the patient continues to use the equipment, they could bill for April, May, and June 2021 dates of service.
Because extending the active rental cycle of the CMN does not alter the initial date, suppliers do not extend the reasonable useful lifetime when billing missed rental months. As soon as all rentals are captured, suppliers can immediately restart the rental anytime the initial date is over five years.
Moreover, suppliers should take care not to confuse length of need with rental months paid in the same or similar query detail. Recertified oxygen rentals always have a length of need of 36 months; that is how the Medicare claim processing system is configured to limit the maximum number of rental payments. When rental months paid do not equal length of need, however, suppliers must generate additional claims.
Don’t Chase Unnecessary Documentation
Contrary to what most suppliers expect, Medicare does not require the beneficiary to undergo another SAT or ABG test. Patients do not have to return to the doctor or have a face-to-face visit to restart their oxygen. To start a new billing period, suppliers should:
- Communicate with customer,
- Secure a new administrative initial CMN,
- Generate pickup and delivery tickets for the exchange, and
- Swap the equipment.
When preparing claims for the new equipment, be sure to:
- Include the RA modifier on the first claim, and
- Add a narrative that reads “Replace due to RUL Init mm/dd/yy.”
Exchange Stationary and Portable Equipment at the Same Time
Again, Medicare contractors look to the stationary oxygen CMN initial date to calculate each customer’s five-year anniversary date, including patients that start using portable equipment on a different date. For example, patients that start using a stationary concentrator for nocturnal oxygen often progress to daytime use and subsequently require a portable machine to get around in the home. Nonetheless, suppliers should restart both the stationary and portable equipment at the expiration of the stationary machine’s RUL.
SOURCE LINKS
https://www.cgsmedicare.com/pdf/dme/oxygen_cmn_chart.pdf
https://www.cms.gov/medicare-coverage-database/details/lcd-details.aspx?LCDId=33797&ContrID=140
https://www.cms.gov/medicare-coverage-database/details/article-details.aspx?articleId=52514&ContrID=140
https://www.medicare.gov/coverage/oxygen-equipment-and-accessories.html
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