Earlier this week Noridian Administrative Services released revised requirements for items provided on a recurring basis, thatnow requires the DME companies to assess whether the beneficiary's current supplies remain functional. The update states that the provider can provide a replacement/refill only when the supply item is no longer able to function.

The revised rule also requires the provider to document the functional condition of the item being refilled in sufficient detail to demonstrate the cause of the dysfunction that necessitates replacement.

The update is effective for dates of service on or after August 2, 2011 and is a major change for the previous rule, which simply required the supplier to contact the patient prior to delivering recurring supplies, document their request and the fact that their current supply was "approaching exhaustion". The main purpose of the previous rule was to prevent providers from automatically sending refills.

The new rule seems like it was tailor made for CPAP and Respiratory Assist Device masks, tubing filters and other supplies but the update indicates that the following bid item policies are subject to these new requirements: 

Other non-bid items include External Breast Prosthesis, Glucose Monitors, Immunosuppressive Drugs, Intravenous Immune Globulin, Oral Anticancer Drugs, Oral Antiemetic Drugs, Ostomy Supplies, Parenteral Nutrition, Surgical Dressings, Tracheostomy Supplies, and Urologic Supplies.

Below is a partial description of Documentation Requirements:

For items that the patient obtains in person at a retail store, the signed delivery slip or copy of itemized sales receipt is sufficient documentation of a request for refill.

For items that are delivered to the beneficiary, documentation of a request for refill must be either a written document received from the beneficiary or a contemporaneous written record of a phone conversation/contact between the supplier and beneficiary. The refill request must occur and be documented before shipment. A retrospective attestation statement by the supplier or beneficiary is not sufficient. The refill record must include:

• Beneficiary's name or authorized representative if different than the beneficiary
• A description of each item that is being requested
• Date of refill request
• For consumable supplies i.e., those that are used up (e.g., ostomy or urological supplies, surgical dressings, etc.) - The Supplier should assess the quantity of each item that the beneficiary still has remaining to document that the amount remaining will be nearly exhausted on or about the supply anniversary date.
• For non-consumable supplies i.e., those more durable items that are not used up but may need periodic replacement (e.g., Positive Airway Pressure and Respiratory Assist Device supplies) - The supplier should assess whether the supplies remain functional, providing replacement (a refill) only when the supply item(s) is no longer able to function . Document the functional condition of the item(s) being refilled in sufficient detail to demonstrate the cause of the dysfunction that necessitates replacement (refill).

This information must be kept on file and be available upon request.

One CPAP/RAD contracted provider in Round One said, "This is another example of Medicare changing the documentation requirements long after I bid and accepted their contract. The only way I can document the 'functional condition of a CPAP Mask in sufficient detail to demonstrate the cause of the dysfunction' is to forgo shipping and have my employee schedule a visit and drive to the patient. I did not build that into my cost when I bid, and I am sure none of the Round 2 bidders added that cost into their bid price for CPAP supplies either. It looks like the only other way around this is to have the patient come into my store, which will really cause a drop in patient utilization, but also increase infection control problems for them."

The contracted provider, who asked to remain anonymous, added, "I am dealing with audits now for many CPAP patient supplies and this looks like more red tape and more excuses to delay payments based on documentation requirements subject to interpretation by adversarial contractors.

Click on the links below for access to the complete Noridian update and the previous PAP LCD.

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Click here for access to the revised rule posted 6/11/12

Click here for the previous PAP LCD printed 10/18/11

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