The DME industry, as we know it today, has been around for about 40 years. It is a young industry. For the first 30 years of its existence, there was little government oversight on the DME industry. This has changed.
- Today, the DME industry is caught in a “perfect storm”.
– Competitive Bidding
– Reimbursement cuts
– Stringent documentation requirements
– Aggressive auditors - Some suppliers will implement “economies of scale” that will allow the suppliers to succeed in the Medicare fee‐for‐service arena.
- However, these suppliers will be the exception.
- The successful supplier needs to go outside its comfort zone and look for new sources of business.
It is becoming cost‐prohibitive for many suppliers to continue with the “assignment model.”Up to now, DME suppliers have shielded their patients from the hardships inflicted on suppliers by decreasing reimbursement.
Financially, it is difficult for DME suppliers to do this. Out of necessity, the DME industry is having to shift some of the burdens to the patients.
What we are now witnessing is
(i) DME suppliers are electing to be non-participating and
(ii) DME suppliers are billing non-assigned.
Avoiding Discrimination
Anti‐Discrimination Rule:
CMS has an anti‐discrimination rule that states that CMS can terminate a DME supplier’s PTAN for a number of reasons, including if the supplier “places restrictions on the persons it will accept for treatment and it fails either to exempt Medicare beneficiaries from those restrictions or to apply them to Medicare beneficiaries the same as to all other persons seeking care.”
A supplier can set up any pricing it wants as long as it is the same for all. Suppliers can make decisions on what to take assignment on based on any algorithm as long as it is the same for all payers.
Participating VS Non-Participating
Participating Supplier
→ DME supplier elects to become a “participating supplier” by completing the Medicare Participating Physician or Supplier Agreement.
→ When a DME supplier elects to become a participating supplier, the supplier agrees to accept assignment on all claims for Medicare products and to be paid the Medicare‐allowed amount as full payment, less any unmet deductible and coinsurance.
Non‐Participating Supplier
⇒ When a DME supplier is a “non‐participating supplier,” the supplier “may accept assignment on a claim‐by‐claim basis.”
⇒ If a non‐participating supplier does not accept assignment, the supplier can collect directly from the patient for Medicare-covered products and services and charge more than the Medicare allowable in such cases.
⇒ The supplier must file the claim with Medicare on behalf of the patient and any Medicare reimbursement will go directly to the patient. The bottom line is that the non-participating supplier can collect up-front from the patient (i.e., bill non-assigned).
Billing Non‐Assigned
And so let’s talk about the “details.” that discusses frequently asked questions pertaining to billing non-assigned.
1. Crossover to Secondary/Supplement
Question:
Will a non-assigned claim cross over to secondary/supplemental insurance and will the insurer pay the 20%?
Answer:
Non-assigned claims process the same way as assigned claims. If it is a non-assigned claim, the supplier has no obligation to file secondary claims. There is no guaranty that the payor will pay the patient the same way that Medicare does.
2. Payment of Co-payments
Question: If a patient pays all of his co-payments up front, can we bill the recurring rental each month and do we have to obtain a signature each month?
We do not currently obtain a signature each month for recurring rentals.
Answer: The DME supplier cannot collect all rental co-payments up front because a co-payment is tied to the monthly rental charge. A supplier can charge its regular charge for the equipment and collect the full amount from the patient on a non-assigned basis for the first month, and then take the assignment for all subsequent monthly rentals.
3. Commercial Insurer Requiring Assignment
Question: The majority of our commercial payors do not allow non-assigned claims. If we decide to make the item non-assigned for Medicare, are we in violation of the anti-discrimination rule?
Answer: The DME supplier will not be discriminating against a Medicare patient so long as the supplier only makes the product available to patients for whom the supplier is paid the threshold price set, whether that payment amount is collected from the patient on a non-assigned claim, or from the payor (with patient co-pay) for assigned claims.
4. Percentage Above Cost as Threshold
Question: Can we set a percentage above our cost as our threshold for accepting non-assignment rather than a specific dollar amount?
Answer: A DME supplier can establish any pricing it desires as long as it is the same for all. Suppliers can make decisions on what to take assignment on based on any algorithm as long as it is the same for all payors.
5. Requirements Imposed on Competitive Bid Supplier
Question: Does a competitive bid supplier have to offer the complete product selection to Medicare beneficiaries regarding the HCPCS number that the supplier stocks?
Answer: A competitive bid supplier is required to be able to provide products in every HCPCS code in the product category. If a physician orders a particular brand of an item within an HCPCS code, a competitive bid supplier is required to provide it, go back to a physician to have the brand order changed, or assist the patient in obtaining the specific brand from another contracted supplier.
Switching From Participating Supplier to Non‐Participating Supplier
- To terminate an existing Medicare participating supplier agreement and become non‐participating, the supplier must notify the National Supplier Clearinghouse (“NSC”) in writing during the enrollment period.
- The annual participation enrollment period begins on November 15 and concludes on December 31
of each year.
What the Supplier Can Charge?
The supplier can charge the patient an amount higher than the Medicare fee schedule. While the supplier can charge the patient an amount lower than the Medicare fee schedule, the supplier needs to be aware of the federal statute that says that a supplier is prohibited from charging Medicare substantially in excess of the supplier’s usual and customary charges, unless there is good cause shown.
In addition, the supplier needs to also be aware of
(i) Medicaid statutes that say that the supplier must bill Medicaid it’s “usual and customary,” and
(ii) provisions in commercial insurance contracts that state that the supplier must give its “best price” to the insurer.
Limiting Charge
- According to CMS: “The provider may bill the beneficiary no more than the “limiting charge” for covered services.
- The “limiting charge” applies only to certain Medicare‐covered services and does not apply to DME.
Billing for Items on Same Day
↔ The supplier cannot submit some items assigned and others non‐assigned on the same claim.
↔ It is unclear if a supplier can have two separate claims, one assigned and one non‐assigned, with the same date of service, or if different dates of service are required.
Prior Authorization
♦ The supplier can bill non‐assigned on an item that requires prior approval.
♦ Obtaining prior approval does not mean that the supplier has to take an assignment.
Billing Secondary Insurance
The supplier is not required to bill secondary insurance on a non‐assigned claim.
Hospital‐Owned Supplier
If the supplier and the hospital are under the same Tax ID number (i.e., the supplier is a “department” of the hospital), and if the hospital is participating, then the supplier must be participating as well.
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