Region C Council Members Palmetto GBA Region C DMERC Supplier Education Date: April 6, 2006 Location: Palmetto GBA Columbia, SC

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1 To: From: Region C Council Members Palmetto GBA Region C DMERC Supplier Education Date: April 6, 2006 Location: Palmetto GBA Columbia, SC REHAB 1 Patient has a severe neurological condition and is home bound, needs a power wheelchair, has home health and therapy but is on a vent (example) will there be any types of exceptions for these types of patients when relating to a face to face with physician? Response: Since the requirement for the face to face examination is in statute and regulation, the DME PSCs do not have the authority to make exceptions. 2 If patient has had a power chair in the past and was able to use it successfully and it is broken and needs to be replaced there is not a F 2 F required for replacement but what if the patient has been without a chair and bed bound for several years because no one would help them get a chair? Could this be done without a F 2 F since it is a replacement? Response: If the patient had a power wheelchair that had been covered by Medicare, then a face to face examination would not be required, even if the patient had not used the chair for some time. 3 ICD 9 codes relating to seating. Are there going to be additional diagnosis added or is there a way some patients could be looked at as individuals relating to condition rather than just diagnosis? ie: patient has severe arthritis/severely debilitated & needs specialty back and cushion rather than just a general use cushion and back. The diagnosis would not qualify for the higher level back and cushion but condition/time up in chair and decreased sensation relating to the severity of illness does. What can be done to help these types of individuals? Response: There are no imminent plans to add additional ICD 9 codes to the Wheelchair Seating policy. Coverage of wheelchair cushions for diagnoses other than those specified in the policy could be considered on an individual case basis through the appeals process. There would need to be detailed documentation supporting the medical necessity for the cushion for the individual patient.

2 4 Oxygen supplier with the new rental for 36 months is this by the patient or supplier? If a patient lives in one state and moves to another will the second supplier be able to bill the full 36 months? Response: Region C has not received instructions from CMS regarding changes due to the Deficit Reduction Act signed by the President on February 8, Repairs for patients who have items from another company that is now out of business. Can these item be converted to purchase so the patient can get the equipment repaired? Many are Medicare / Medicaid and can not be billed non assigned. Response: Page 8.9 of the Region C Supplier Manual states: If a DME supplier goes out of business, the supplier retains title to rented equipment. If there is a change in supplier, and if the original supplier does not claim the item from the beneficiary, the beneficiary retains possession but not ownership. If the original supplier takes possession of the capped rental item after 15 months, Medicare cannot pay for the rental or purchase of the item from the new supplier. 6 GZ modifiers Are this supposed to edit as a PR denial? We are trying to get denials to bill secondary but can not get the correct denials. Response: Per page 7.2 of the Region C. Supplier Manual, If a beneficiary agrees to be financially liable by signing an ABN, you may collect the difference between the charges for the upgraded item and the charges for the non upgraded item from the beneficiary. The GZ modifier indicates that the beneficiary did not sign an ABN, therefore, the beneficiary is not liable. DME 7 For manual wheelchairs, what are the requirements for the In Home Assessment? Can this be completed the same as the canes and walkers in the beneficiary s home, verbally in the supplier s office, or verbally via the telephone? Response: For manual wheelchairs, there is no requirement for an in person, in home assessment of whether the patient s home can accommodate the wheelchair. Relevant information may be obtained from discussions with the beneficiary and/or caregiver. This information must be documented in the supplier s records and available to the DME PSC on request.

3 8 If a cmn is received by a supplier with a nonspecific ICD 9 code (i.e., missing the 4 th or 5 th digit), is the supplier required to 1. Send the CMN back to the physician to have the ICD 9 corrected? 2. Contact the physician s office verbally to confirm the correct ICD 9 (with 4 th or 5 th digit), document the response and change the claim to reflect the correct ICD 9 code? Response: In the situation described, the supplier may contact the physician s office verbally to determine the correct ICD 9 code with the highest level of specificity. That ICD 9 code should be entered on the claim. The CMN should be submitted with the ICD 9 code entered by the physician. It will not hit ICD 9 specificity edits if the correct ICD 9 code is used on the claim. 9 In light of the Deficit Reduction Act of 2005, will grandfathering rules apply for capped rental items that were setup prior to January 1, Has Palmetto received any direction on how to proceed with applying the Deficit Reduction Act? Response: Region C has not received instructions from CMS regarding changes due to the Deficit Reduction Act signed by the President on February 8, INFUSION/ENTERAL/PARENTAL 10 Given the announcement that CMNs for coverage of External Infusion Pump, TPN and enteral will be replaced with DIFs, we note that the home infusion therapy supplier will be responsible for completing the DIF based on the patient's medical record. However, it is not clear to what degree the supplier can use its expertise and experience to interpret the medical record. If the medical record does not contain the "magic words" that trigger Medicare coverage (for example, patient requires parenteral nutrition for a long and indefinite duration or at least 90 days), but a knowledgeable supplier would interpret the record as meeting coverage criteria, would the decision to put the patient on service survive an audit? Or, is the supplier limited to mechanically following the record, and if the magic words aren t there, the supplier shouldn t put the patient on service? Response: The supplier may use their expertise and experience to determine how to answer the question on the DIF concerning the nature and permanence of the patient s medical condition. If the DME PSC reviews a specific case, it will look at the totality of the medical documentation that is provided to determine whether the coverage criteria are met. The presence of magic words, even in the patient s medical record, does not guarantee coverage if it is not supported by the rest of the documentation. 11 We are getting non covered denials for hcpc code B4185. This is a valid code and the cmn has the B4184 or B4186 listed. Per last Q&A's, the cmns were going to be crosswalked to the B4184 and B4186. Example: Document CCN: Response: The problem is not related to The CMN crosswalk. It is a problem with the hard coded pricing logic that is being updated by the Medicare system maintainer.

4 12 We continue to have claim denials for overlapping dates of service for enteral therapy. Per the Proof of Delivery Section, procedure for refills, it states that providers can call patients up to 7 days prior to next usage period and can ship the item up to 5 days prior to the next usage period. It states that providers "should not ship items more than 5 days prior to the next usage period and that the ship date should be the date of service. The DMERCS shall allow for processing of claims refills shipped/delivered prior to patient's exhausting their current supply." We have supplied multiple examples of past denials. Current denials received this week are: CCN , , , , We have also submitted these denials through Redetermination and have received payment for the formula on some claims but the B4035 (supply kits) are still denying for overlapping dates of service. Example: CCN , , and Response: These claims denied in error: CCN (1/9/06 2/7/06) Associate denied claim incorrectly. Since this claim was the 14th claim billed with overlap dates, we should have allowed the 3 days overlap from the previous claim with dates 1/1/06 1/12/06. CCN (11/21/05 12/18/05) Claim denied in error. This was the first claim billed with overlapping dates which we should have allowed the 5 days overlap from the previous claim with dates 10/27/05 11/23/05. CCN This claim denied in error and was adjusted under DCN for full payment on both lines. It was the 4th claim billed with overlapping dates for B4150 and B4035 which we should have initially allowed the 3 day overlap from previous paid claim with DOS 4/28/05 8/26/05 under CCN These claims denied correctly: CCN (1/1/06 1/8/06 & 1/4/06 1/31/06) DOS 1/1/06 1/8/06 denied correctly since it is an exact duplicate of CCN DOS 1/4/06 1/31/06 denied in error. We should have allowed the 5 day overlap from the previous claim with dates 1/1/06 1/8/06. CCN (1/12/06 2/10/06) Claim denied correctly since it overlapped 5 days from the last claim billed. This claim is the 9th claim billed with overlapping dates

5 which means we can only allow 3 days overlap for subsequent claims. This claim overlapped 5 days from previous claim with dates 1/13/06 1/16/06). CCN (1/6/06 2/4/06) Claim denied correctly since it overlapped 5 days from the last claim billed. This claim is the 6th claim billed with overlapping dates. At this point, we should only allow 3 days overlap. This claim overlapped 5 days from previous claim with dates 1/1/06 1/10/06. CCN (7/28/05 8/26/05 & 7/30/05 8/26/05) Original claim denied incorrectly, however, adjustment was processed correctly. Line 1 for B4150 (7/28/05 8/26/05) processed with payment. Whereas, Line 2 for B4035 (7/30/05 8/26/05) denied correctly for duplicate services. This is the 9th claim billed with overlapping dates which only allows a 3 day overlap. Line 2 overlap 5 days from previous claim with dates 7/30/05 8/26/ We have claims that have been sent for Redetermination and it has taken over 120 days for payment decisions to be made. If this timeframe going to shorten after the transition? CCN no , Response: According to DCN# , the redetermination was received on 11/21/05 and completed 01/21/06 (60 day turn around). RESPIRATORY Nebulizer Medications: 14 The DMERCs have not provided direction on billing for code J7627, Budesonide compounded. Could you provide clarification on how we are to bill? Response: An article is in the process of being published now. Invoice pricing will be evaluated quarterly and used to establish a payment rate. Payment will based on the invoice cost of the active and inactive ingredients + vial costs for KO and KP. The KQ allowance is established at a rate for the raw drug only since it is the second drug of a multiple drug unit dose. The vial cost and diluent would be considered in the allowance of the primary drug under KO and KP modifiers. For additional information regarding submission of invoice for pricing, please see the article titled Invoice Submission for Drug Payment. This article was published on March 15, 2006 on the Palmetto GBA DME site ( From the DME homepage, click on What s New.

6 15 Do suppliers have to fax/mail in an invoice for every claim they provide an item that requires the invoice be sent? Response: We are not requiring invoices for every claim (based on observation bulk purchase) one invoice would cover many claims. However, we are asking for updated invoices based on the time period in which stock would be depleted and then replaced. We are currently targeting quarterly submissions. 16 How are the claims married to the invoice(s) for payment? Response: The new invoice sheet will allow you to document the HCN and CCN is known. However, we do not currently perceive it necessary to marry invoice to a specific claim, rather we are using the information to establish a fee specific to a HCPCS code. 17 Is a pricing average established for each provider based on their invoice or an overall average established? Response: This process is still being evaluated as we collect and evaluate the data. Currently we are using the median of the different components (active and inactive ingredients and vial costs). 18 Does the average price include payment for the (saline or sterile water) solution to mix the Budesonide powder in and the vial that holds the medication? Response: Yes 19 Manufactured brand price is set high enough to cover the cost of the above listed items; why is there such a difference in the allowed price for a pharmacist mixed medication versus a mass pharmacy produced brand? Pharmacy regulations/laws are the same for both. Response: Under DIMA, contractors are required to pay drugs based on the CMS ASP fees. In the absence of ASP pricing, contractors are required to price based on wholesale acquisition cost (WAC), and in the absence of WAC, prices are based on invoice. For Budesonide, there is a WAC allowance for the commercially available drug. For codes that do not distinguish between compounded and commercially manufactured preparations, the commercial sources are considered in the fee development when an ASP price is available. 20 Can this information be added to the NTE segment for claims payment? Response: Yes

7 21 What modifiers should be used on this code? Response: For HCPCS J7627, the KO, KP and KQ modifiers should be used as described in the policy depending on whether it is single drug or a multi drug compounded unit dose vial. 22 Can nebulizer supplies/accessories such as administration sets (A7004, A7003) be billed in supply quantities of a (1 month) or (3 month) supply as allowed for the nebulizer medications? Response: Yes, Nebulizer supplies and accessories can be dispensed in quantities of either 1 month or 3 months. CPAP/RAD 23 The CPAP policy has changed back to the old rule requiring the patient to be recorded during 2 hours of recorded sleep instead of the new rule allowing the patient to qualify based on 2 hours of recording time, off a device. The allowance for 2 hours of recording time did not change in the RAD policy. When we questioned DR Hughes on the Region A call why this happened he stated that it was because CMS told the Medical Directors that they had to come into compliance with the NCD which states 2 hours of recorded sleep time. This back and forth is going to create mass confusion among the physician and supplier communities as to what qualifies a patient for a CPAP/BI PAP. What steps can be taken to change the CPAP NCD to meet current policy in a timely manner? Response: A change in the CPAP policy would require that someone make a formal request to CMS to revise the NCD. The PSC medical directors made the decision to retain the somewhat looser criterion (i.e., two hours of recording) in the RAD policy since there is no national policy that addresses that. If physicians and suppliers think that it would be less confusing to change the RAD criterion to match the CPAP criterion, that could be done. 24 When is the DMERC going to publish instructions on the RAD policy regarding category change from FS to CR and the allowance to bill for related supplies? Response: There was an article published in the Spring 2006 DMERC Medicare Advisory, page 6 entitled Medicare System Edits for Respiratory Assist Devices (RADs) with Bi Level Capability and a Back Up Rate. Oxygen Moving to Cap/Purchase? Response: Region C has not received instructions from CMS regarding changes due to the Deficit Reduction Act signed by the President on February 8, 2006.

8 25 Have the DMERCs received any instruction from CMS regarding the Deficit Reduction Act and the move of Oxygen equipment from continuous rental to Cap/Purchase? Response: Region C has not received instructions from CMS regarding changes due to the Deficit Reduction Act signed by the President on February 8, Can the DMERCs provide their interpretation of what the DRA means for oxygen suppliers and our patients? Response: Region C has not received instructions from CMS regarding changes due to the Deficit Reduction Act signed by the President on February 8, 2006.