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Medical Equipment
Guidelines
HP Provider Relations
October 2011
Agenda
– Medical Equipment Services
• Provider Code Sets
• Spend-down
• Fee Schedule
– Claim Attachments
• Date of Service
• Rolling 12-Month Period
– Prior Authorization
• Capped Rental
– Denials and Resolutions
• Repair and Replacement
• Mail Order Incontinence, Ostomy,
and Colostomy Supplies
• Preferred Diabetic Supply List
• Manual Pricing
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– Billing the Member
Medical Equipment Guidelines
October 2011
– Helpful Tools
– Questions
Objectives
Following this session, providers will:
– Understand medical equipment guidelines
– Understand guidelines for billing the member
– Be familiar with spend-down
– Understand the claim attachment process
– Be familiar with the Prior Authorization form and prior
authorization inquiry process
– Understand the top denials and resolutions
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Medical Equipment Guidelines
October 2011
Describe
Medical Equipment Services
Provider Code Sets
– The IHCP established provider code sets for DME (Durable
Medical Equipment), specialty 250, and HME (Home Medical
Equipment) specialty 251
– Enrolling in the 251 specialty does not cover services in the
250 specialty, and enrolling in the 250 specialty does not cover
services in the 251 specialty
– Providers must ensure that they are enrolled as the correct
provider type and specialty
– Type and specialty can be verified using the Provider Profile
option on the Web interChange
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Medical Equipment Guidelines
October 2011
Viewing Provider Code Sets
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Medical Equipment Guidelines
October 2011
Viewing Provider Code Sets
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Medical Equipment Guidelines
October 2011
Viewing Provider Code Sets
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Medical Equipment Guidelines
October 2011
Viewing Provider Code Sets
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Medical Equipment Guidelines
October 2011
Viewing Provider Code Sets
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Medical Equipment Guidelines
October 2011
Viewing Provider Code Sets
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Medical Equipment Guidelines
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Fee Schedule
Access the fee schedule to determine:
– Reimbursement rates
– Pricing effective dates
– Prior authorization requirements
– Program coverage
• Applies to Traditional Fee-for-Service
Medicaid and Care Select
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Medical Equipment Guidelines
October 2011
Accessing the Fee Schedule
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Medical Equipment Guidelines
October 2011
Accessing the Fee Schedule
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Medical Equipment Guidelines
October 2011
Accessing the Fee Schedule
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Medical Equipment Guidelines
October 2011
Accessing the Fee Schedule
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Medical Equipment Guidelines
October 2011
Accessing the Fee Schedule
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Medical Equipment Guidelines
October 2011
Understanding Fee Schedule Instructions
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Medical Equipment Guidelines
October 2011
Date of Service for Billing
– The date of service is the date the
equipment is delivered, not ordered
• Date of service for items that are mailed is
the date the item is shipped
– For the Indiana Health Coverage
Programs (IHCP) to reimburse for
medical equipment, the member
must be eligible on the date of
service (date of delivery)
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Medical Equipment Guidelines
October 2011
Rolling 12-Month Period
Is not:
– Based on a 12-month calendar year
– Based on a fiscal year
– Renewable on January 1 of each year
Is:
– Based on the first date that services are rendered by a particular
provider
– Renewable one unit at a time beginning 365 days after the date
that services are rendered by a particular provider
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Medical Equipment Guidelines
October 2011
Capped Rental
– Certain procedure codes are limited to 15 months of continuous rental
– The IHCP evaluates requests from providers for approval of capped
rental items
• In long-term need situations, a decision may be made to classify the item as
“purchase” instead of “rental”
– Continuous rental is defined as rental without interruption for a period
of more than 60 days
• A change in provider does not cause an interruption in the rental period
– The provider must service the item at no cost to the IHCP during the
rental period
• Once the equipment is considered purchased, any nonwarranty repairs are billable
– A complete list of procedure codes for capped rental can be found in
the Indiana Health Coverage Programs Provider Manual, Chapter 8,
Section 4
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Medical Equipment Guidelines
October 2011
Capped Rental
The allowed charge is the lower of the 1993 Medicare rental fee
schedule amount or the actual submitted charge
– The IHCP pays claims until the number of rental payments made
reaches the capped rental number of 15 months
– When the 15-month rental period has been exhausted, the
DME/home medical equipment (HME) is considered purchased and
becomes the property of the Office of Medicaid Policy and Planning
(OMPP)
– Providers should base their decisions to rent or purchase DME or
HME on the least expensive option available for the anticipated
period of need
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Medical Equipment Guidelines
October 2011
Capped Rental
– Medicare capped rental policy for DME
• The policy states that the capped rental period is 13 months

After 13 months, the member owns the DME
– Medicare will pay for reasonable and necessary maintenance and
service of the DME item
• This policy change applies to DME items in which the first month of rental is on or
after January 1, 2006
– At this time, Medical Policy has not been directed to make changes
to the IHCP’s capped rental policy
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Medical Equipment Guidelines
October 2011
Repair and Replacement
– Repair of purchased equipment may require prior authorization
based on the Healthcare Common Procedure Coding System
(HCPCS) codes
– The IHCP does not pay for repair of equipment still under
warranty
– The IHCP does not authorize payment for repair necessitated by
member misuse or abuse, whether intentional or unintentional
– The rental provider is responsible for repairs to rental equipment
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Medical Equipment Guidelines
October 2011
Repair and Replacement
– The IHCP does not cover payment for
maintenance charges of properly
functioning equipment
– The IHCP does not authorize
replacement of medical equipment more
than once every five years per member
• More frequent replacement is allowed only if there
is a change in the member’s medical needs that is
documented in writing and significant enough to
warrant a change in equipment; such requests
require PA
– A long-term care (LTC) facility’s per diem
rate includes repair costs for equipment
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Medical Equipment Guidelines
October 2011
Mail Order Incontinence, Ostomy, and
Colostomy Supplies
Contracted vendors
– OMPP contracted with three vendors to provide incontinence,
ostomy, and urological supplies to fee-for-service members
– The three contracted vendors are:
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•
Binson’s Home Health Care Center
1-888-217-9610
binsons.com
•
Healthcare Products Delivery, Inc (HPD)
1-800-291-8011
hpdinc.net
•
J & B Medical
1-866-674-5850
jandbmedical.com
Medical Equipment Guidelines
October 2011
Mail Order Incontinence, Ostomy, and
Colostomy Supplies
– Members must obtain supplies via mail order
• The contracted vendor may make other arrangements in emergency situations
– A full listing of codes affected by this change is available in the IHCP
Provider Manual, Chapter 6, Section 5.
– The annual maximum allowable reimbursement is $1,950 per
member per rolling 12-month period
– The contracted vendor service applies to the Fee-for-Service and
Care Select programs
– Only paid Crossovers and TPL claims are excluded from the program
• If Medicare or the TPL denies the claim, the services are limited to the three
contracted vendors
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Medical Equipment Guidelines
October 2011
Mail Order Incontinence, Ostomy, and
Colostomy Supplies
– The following programs and claim
types are not affected by the
contract:
• 590 Program
• Medical Review Team (MRT)
• Pre-Admission Screening Resident Review
(PASRR)
• Long Term Care (LTC)
• Waiver
– Risk-based managed care (RBMC)
members are excluded
– Supplies for these members are
billed to the appropriate managed
care entity (MCE)
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Medical Equipment Guidelines
October 2011
Changes to the Preferred Diabetic Supply List
Effective for claims with dates of service on or after January 1, 2011,
all Indiana Medicaid and Healthy Indiana Plan members using a blood
glucose monitor were required to convert to one of the preferred blood
glucose monitors and corresponding test strips
Preferred Diabetic Supply List
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Blood glucose monitor
Corresponding test strip
Freestyle Lite System Kit
Freestyle Lite Test Strips
Freestyle Freedom Lite System Kit
Freestyle Lite Test Strips
Precision Xtra Meter
Precision Xtra Test Strips
Accu-chek Aviva Care Kit
Accu-chek Aviva
Medical Equipment Guidelines
October 2011
Preferred Diabetic Supply List Billing
Effective for claims with dates of service on or after January 1, 2011:
– Professional claims, including paper CMS-1500, electronic 837P, and
Medicare crossover claims for blood glucose monitors and diabetic
test strips, must be submitted to the fee-for-service (FFS) medical
benefit for all Indiana Medicaid and Healthy Indiana Plan members
– The modifiers NU (indicating a new product) and RR (indicating a
rental product) are no longer used
– Claims with a date of service of January 1, 2011, and after which
contain either of these modifiers are denied
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For claims with dates of service prior to January 1, 2011, the NU or RR modifier is still
required for claims payment
Medical Equipment Guidelines
October 2011
Preferred Diabetic Supply List Billing
Effective for claims with dates of service on or after January 1, 2011:
– Claims for the following procedure codes require the NDC or NDC and
modifier, depending on the vendor of the product being dispensed:
E0607 – Home blood glucose monitor
• A4253 – Blood glucose test or reagent strips for home blood glucose monitor, per 50
strips
•
– Claims billed for an NDC included on the Preferred Diabetic Supply
List (PDSL) do not require the addition of modifier U1

If modifier U1 is included with a preferred blood glucose monitor or diabetic test strip
NDC, the claim will be denied for edit 4300 – Invalid NDC-to-procedure code
combination
Claims billed for a blood glucose monitor or diabetic test strip not
listed on the PDSL require the addition of modifier U1, along with the
NDC and appropriate procedure code
•
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Claims billed for an NDC not on the PDSL are denied with edit 4300 – Invalid NDC-toprocedure code combination when modifier U1 is not included
Medical Equipment Guidelines
October 2011
Preferred Diabetic Supply List Billing
Effective for claims with dates of service on or after January 1, 2011:
CMS-1500 Form
– Enter the NDC qualifier of N4
– Enter the NDC 11-digit numeric code
– Enter the drug description
– Enter the NDC Unit qualifier
•
F2 – International Unit
•
GR – Gram
•
ML – Milliliter
•
UN – Unit
– Enter the NDC Quantity (Administered Amount) in the format 9999.99
•
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Refer to the IHCP Provider Manual, Chapter 8, Section 4
Medical Equipment Guidelines
October 2011
Preferred Diabetic Supply List Billing
NDC edits
– Edit 217 – NDC number is missing
 Verify
the NDC and resubmit the claim
– Edit 218 – NDC number is not in a valid format
 Verify
 See
the NDC was submitted in the proper 5-4-2 format
BT200731 for additional NDC information
– Edit 4004 – This NDC is not on file. Please verify that the NDC was filed
correctly
 Verify
the NDC submitted on the claim is the NDC from the product
– Edit 4300 – Invalid NDC-to-procedure code combination
submitted on the claim does not belong to the procedure on the claim – verify
and resubmit
 NDC
– Edit 4360 – Diabetic test strips and monitors are limited to specific products
the products billed are included in the PDSL – see BT201055 for additional
information
 Verify
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Medical Equipment Guidelines
October 2011
Manual Pricing
Effective for dates of service July 1, 2011, and after
– Maximum reimbursement rates for DME and prosthetics procedure
codes that are currently manually priced are based on Medicare’s
established fee schedule, if available
– If a rate cannot be established based on Medicare’s fee schedule, a
rate may be established using acquisition cost information
– If a rate cannot be established, procedure codes that remain manually
priced are reimbursed at 75 percent of the manufacturer’s suggested
retail price (MSRP)
• Providers
are required to submit documentation of the MSRP with the claim
• MSRP information may be downloaded from the manufacturer’s website
• Providers are still required to submit a manufacturer's cost invoice with their
claims for DME and prosthetics procedure codes that remain manually priced
Note: Refer to BT201114
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Medical Equipment Guidelines
October 2011
Learn
Billing the Member
Billing the Member
The following circumstances are the only
situations in which an IHCP provider may bill
a member:
–
The service rendered is noncovered by
the IHCP
–
The member has exceeded the program
limitations for a particular service; for
example, the services were denied during
prior authorization (PA)
–
Before receiving the service, the member
must understand that the service is not
covered under the IHCP, and the member
is responsible for the charges associated
with the service
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Medical Equipment Guidelines
October 2011
Billing the Member
–
A signed waiver must be
maintained in the member’s
record that the member
voluntarily chose to receive a
service that was not covered
by the IHCP
–
The waiver should state:
• Member’s name
• Reason for noncoverage
• Service requested
• Estimated charge
–
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The waiver must not contain
any conditional language; for
example, the words “if” or “and”
Medical Equipment Guidelines
October 2011
Billing the Member
– “Medicaid-pending” individuals are
responsible to pay the provider
• It is the patient’s responsibility to notify the
provider of Medicaid approved status
within 12 months of the date of service
• Providers may bill the patient if there is no
notification of Medicaid eligibility within
this time period
– Providers may also bill the
member when a spend-down is
applied to their claim
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Medical Equipment Guidelines
October 2011
Spend-down
– Member is eligible on the first of the month
– Providers may not refuse service to a member pending verification of
the status of spend-down for the month
– A provider may bill a member for the dollar amount identified beside
ARC 178 on the Remittance Advice (RA) statement
– The member is not obligated to pay the provider until the member
receives the Medicaid Spend-down Summary Notice listing the
amount applied to spend-down
• Notices are sent on the second business day following the end of the month
– Members cannot be billed for more than their spend-down amount
– Providers must bill their usual and customary charge to the Indiana
Health Coverage Programs (IHCP)
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Medical Equipment Guidelines
October 2011
Spend-down
– Providers may discharge a member from their care if a
member does not adhere to established payment
arrangements of outstanding copayments or spend-down
– Providers cannot be more restrictive with spend-down
members than with other patients
– The first claim processed by the IHCP applies to spend-down,
regardless of the date of service within the month
– The system uses the billed amount to credit spend-down
– Third-party liability (TPL) amounts are deducted from billed
amount prior to crediting spend-down
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Medical Equipment Guidelines
October 2011
Describe
Claim Attachments
Claim Attachment Feature
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Medical Equipment Guidelines
October 2011
Claim Attachment Feature
Attachment control number (ACN)
– Unique number assigned by provider
– Claim and document specific
– Each ACN can only be used one time
– Select the appropriate report type
• Report Type describes the document being sent
– Transmission Code defaults to BM (by mail)
• Electronic and emailed attachments are not accepted
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Medical Equipment Guidelines
October 2011
Claim Attachment Feature
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Medical Equipment Guidelines
October 2011
Claim Attachment Cover Sheet
– Available on IHCP home page, under Forms
– Complete cover sheet for each claim
– Include provider information
– Provide member ID
– List each ACN pertaining to specific attachment
– Indicate the number of pages of documentation submitted per
attachment (not including the cover sheet)
– Write ACN # and the assigned ACN on each page of
documentation corresponding to that number
– Mail cover sheet and supporting documentation to the address
at the bottom of the cover sheet
• HP, P.O. Box 7259, Indianapolis, IN, 46207
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Medical Equipment Guidelines
October 2011
Claim Attachment Cover Sheet
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Medical Equipment Guidelines
October 2011
Explain
Prior Authorization
Prior Authorization
Prior authorization by telephone, fax, or mail
– Verify eligibility to determine where to send the PA request
• ADVANTAGE Health Solutions – FFS
Prior Authorization Department
P.O. Box 40789
Indianapolis, IN 46240
1-800-269-5720 Fax: 1-800-689-2759
• ADVANTAGE Health Solutions – Care Select
Prior Authorization Department
P.O. Box 80068
Indianapolis, IN 46280
1-800-784-3981 Fax: 1-800-689-2759
• MDwise – Care Select
Prior Authorization Department
P.O. Box 44214
Indianapolis, IN 46244-0214
1-866-440-2449 Fax: 1-877-822-7186
– Prior authorization for risk-based managed care recipients should
be sent to the appropriate entity
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Medical Equipment Guidelines
October 2011
Prior Authorization
Prior authorization by telephone, fax, or mail
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Medical Equipment Guidelines
October 2011
Prior Authorization
278 prior authorization inquiry
– Allows the requesting provider to
inquire about all nonpharmacy prior
authorizations via the Web
• It does not matter if the PA was submitted via
paper, telephone, fax, or Web
– The requesting provider and the
named service provider may view a
PA without the PA number
– All other providers must have the PA
number to view a PA
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Medical Equipment Guidelines
October 2011
Prior Authorization
278 Prior Authorization Inquiry
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Medical Equipment Guidelines
October 2011
Resolve
Denials and Resolutions
Denials and Resolutions
Denial – Edit 0217 – NDC Missing
– Cause:
• NDC information is missing
• NDC is not in the proper format
– Resolution:
• Resubmit the claim with the NDC
Denial – Edit 0218 – NDC is not in a valid format
– Cause:
• Qualifier, unit of measure, or NDC code is not in the correct format
– Resolution:
• Verify the information submitted is accurate
Refer to IHCP Provider Manual, Chapter 8, Section 4
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Medical Equipment Guidelines
October 2011
Denials and Resolutions
Denial – Edit 0593 – Medicare Denied Detail
– Cause:
• At least one detail is a Medicare-denied detail
• At least one detail contains Medicare coordination of benefits (COB) information
– Resolution:
• Submit separate claims for Medicare-denied details and Medicare-covered
details
Denial – Edit 3001 – Dates of service not on PA master file
– Cause:
• No prior authorization in IndianaAIM
– Resolution:
• Verify the date of service and procedure code billed are correct on the requested
PA
• Obtain amended/corrected PA if necessary
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Medical Equipment Guidelines
October 2011
Denials and Resolutions
Denial – Edit 4021 – Procedure Code vs. Program Indicator
– Cause:
• Procedure code billed is restricted to a specific program
– Resolution:
• Verify procedure code is covered for dates of service billed
• Verify procedure code is covered for the member program via the Fee Schedule
Denial – Edit 4033 – Invalid Procedure Code/Modifier Combination
– Cause:
• Modifier used is not compatible with procedure code billed
– Resolution:
• Verify modifier is valid and appropriate for procedure code
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Medical Equipment Guidelines
October 2011
Denials and Resolutions
Denial – Edit 0509 – Net Charge Out Of Balance
– Cause:
• Claim totals do not balance to the net charge entered on the claim
– Resolution:
• TPL claims:
 The net charge on a paper claim form in field 30 should equal the total
charge, field 28, less the TPL paid amount, field 29
 Field 22 should be blank
• Medicare Crossover claims:
 The total charge, field 28, and the net charge, field 30, should be the same
 Complete field 22 with paid amount and coinsurance and deductible
Note: These claims may be filed on Web interChange
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Medical Equipment Guidelines
October 2011
Denials and Resolutions
Denial – Edit 2003 – Recipient Ineligible on Dates of Service
– Cause:
• Member is not eligible for IHCP services being billed
– Resolution:
• Verify the claim was sent to the appropriate billing entity
 Fee-for-Service and Care Select to HP
 RBMC to the appropriate MCE
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Medical Equipment Guidelines
October 2011
Denials and Resolutions
Denial – Edit 6000 – Manual Pricing Required
– Cause:
Manual pricing is required
– Resolution: Submit Manual Pricing and MSRP
• Invoice requirements
 Date
 Billed amount per unit (for example, box, case, and so forth)
 Calories (enteral feeding)
 Procedure code
 Member name
 Member ID number
 Itemization of repairs
• Bulk Invoices – Illustrate calculations specific to the member
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Medical Equipment Guidelines
October 2011
Denials and Resolutions
Denial – Edit 6000 – Manual Pricing Required
– Resolution: Submit Manual Pricing
DME SUPPLY MANUFACTURING
1 SUPPLY ROAD
ANYWHERE, INDIANA
800-123-2345
INVOICE
4/27/09
BILL TO:
DME/HME SUPPLIES
200 STATE STREET
ANYWHERE, INDIANA
ITEM NUMBER/DESCRIPTION
EXTRA SET RT ANGLE HCPCS: B9998
5 sets in a box - ordered 1 box
59.90/5 = 11.98 each
Member rid# 123456789999 Abe Lincoln
**********COST INVOICE*************
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Medical Equipment Guidelines
October 2011
U/M
5/BOX
QTY
1
PRICE
59.90
TOTAL
59.90
Denials and Resolutions
Denial – Edit 6000 – Manual Pricing Required
Manufacturer
Name
HCPC Code and
Manufacturer
Description
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Medical Equipment Guidelines
Manufacturer’
s Suggested
Retail Price
October 2011
Find Help
Resources Available
Helpful Tools
Avenues of resolution
– IHCP website at indianamedicaid.com
– IHCP Provider Manual (Web, CD, or paper)
– Customer Assistance
• Local
• All
(317) 655-3240
others 1-800-577-1278
– Written Correspondence
• HP
Provider Written Correspondence
P. O. Box 7263
Indianapolis, IN 46207-7263
– Provider field consultant
• View a current territory map and contact information
online at indianamedicaid.com
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October 2011
Q&A