Tis the season to be rough on home medical equipment. Holiday travel. Storms of all kinds.
Or maybe the equipment is just plain old.
Suppliers are surely replacing a lot of equipment this time of year. Whether looking to update customers’ old equipment that is past its reasonable useful life (RUL) or managing increased demand to replace or repair lost or damaged items, claim form narratives are critical in the prevention of denials.
Replacement of Equipment After Reasonable Useful Lifetime
In the DME world, reasonable useful lifetime is generally set at five years unless the payer specifies a lesser value. Payers maintain records of prior equipment history to enforce these benefit maximums and prevent overpayments.
By default, the payer will deny claims for new equipment as:
Reasonable Useful Life Replacement Sample Narrative
Or maybe the equipment is just plain old.
Suppliers are surely replacing a lot of equipment this time of year. Whether looking to update customers’ old equipment that is past its reasonable useful life (RUL) or managing increased demand to replace or repair lost or damaged items, claim form narratives are critical in the prevention of denials.
Replacement of Equipment After Reasonable Useful Lifetime
In the DME world, reasonable useful lifetime is generally set at five years unless the payer specifies a lesser value. Payers maintain records of prior equipment history to enforce these benefit maximums and prevent overpayments.
By default, the payer will deny claims for new equipment as:
- Billed past the expected cap, or
- Same and similar to equipment in history.
Reasonable Useful Life Replacement Sample Narrative
Replacement of Lost, Stolen, or Irreparably Damaged Equipment
Payers expect the beneficiary to use their equipment throughout its useful lifetime and beyond. They will, however, make exceptions for early replacement when a qualifying incident leaves the beneficiary without access to functional equipment. Qualifying incidents include fire, disaster, theft, and other acts of mayhem not covered through auto, home, renters, or other insurance.
Like RUL replacements, suppliers should use the RA modifier on the first replacement claim to avoid denials for new equipment based on capped rental limitations or same and similar comparisons. The narrative must clearly:
Payers expect the beneficiary to use their equipment throughout its useful lifetime and beyond. They will, however, make exceptions for early replacement when a qualifying incident leaves the beneficiary without access to functional equipment. Qualifying incidents include fire, disaster, theft, and other acts of mayhem not covered through auto, home, renters, or other insurance.
Like RUL replacements, suppliers should use the RA modifier on the first replacement claim to avoid denials for new equipment based on capped rental limitations or same and similar comparisons. The narrative must clearly:
- Invoke special consideration under the loss, theft, or irreparable damage protocol.
- Establish the equipment being replaced, circumstances of the incident, and the original equipment initial date.
Skilled Technician Labor Billed With Repairs
Occasionally, patient-owned equipment breaks and requires the services of an expert technician. When suppliers perform these repairs, the labor attributable to the repair is billable using one of three HCPCS:
By default, labor claims will deny for missing information if the narrative does not provide sufficient details about the repair. The narrative must:
In the following example, a supplier spends an hour to replace the batteries and charger on a patient-owned power chair. The supplier would bill HCPCS K0739 with a quantity of four (15-minute units) to capture the full hour spent repairing the chair.
Occasionally, patient-owned equipment breaks and requires the services of an expert technician. When suppliers perform these repairs, the labor attributable to the repair is billable using one of three HCPCS:
- K0739 for repairs on beneficiary-owned DME.
- L4205 for repairs to beneficiary-owned orthoses.
- L7520 for repairs to beneficiary-owned prostheses.
By default, labor claims will deny for missing information if the narrative does not provide sufficient details about the repair. The narrative must:
- Identify the base item requiring the repair.
- Itemize each repair.
- Document the repair times for each repair.
In the following example, a supplier spends an hour to replace the batteries and charger on a patient-owned power chair. The supplier would bill HCPCS K0739 with a quantity of four (15-minute units) to capture the full hour spent repairing the chair.
Loaner Equipment for Lengthy Repairs
Medicare will reimburse suppliers for a temporary replacement device, billed as K0462, while a patient-owned item is repaired. Regardless of how long the equipment is in the shop, reimbursement equates to one month’s rental of the kaput device (as long as the customer is loaned an equivalent device). K0462 claims will deny for missing information when the narrative does not provide sufficient details about the lengthy repair. The narrative must document the:
In the following sample narrative, the supplier loaned the customer another CPAP while repairing a broken blower on the patient-owned CPAP purchased in June 2015. The repair took more than 24 hours because the replacement blower was on backorder.
Medicare will reimburse suppliers for a temporary replacement device, billed as K0462, while a patient-owned item is repaired. Regardless of how long the equipment is in the shop, reimbursement equates to one month’s rental of the kaput device (as long as the customer is loaned an equivalent device). K0462 claims will deny for missing information when the narrative does not provide sufficient details about the lengthy repair. The narrative must document the:
- Reason for the repair.
- Broken equipment is patient-owned.
- Base equipment (description and HCPCS).
- Approximate delivery date for the original equipment.
- Make, model, and HCPCS of the loaner equipment.
- Justification for why the repair took more than one day.
In the following sample narrative, the supplier loaned the customer another CPAP while repairing a broken blower on the patient-owned CPAP purchased in June 2015. The repair took more than 24 hours because the replacement blower was on backorder.
As we concluded in the first installment of this series, narratives are the supplier’s advocate at the time of claim processing. Use them to make a convincing argument for replacement and repair claims to avoid denials and reduce billing costs.
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