Patient Resource Center / Insurance & Billing Guide

Insurance and Billing Guide

Medicare, Medicaid, and private health insurance plans generally pay for a large portion or even all of the cost of many Prosthetic Limbs, Orthopedic Braces & Prescription Footwear. These services are sometimes referred to as durable medical equipment or home medical equipment. The guide below will help you understand the Medicare guidelines related to our services . Most health insurance plans have similar rules to Medicare, but you should know that all private health insurance plans vary and the specific rules of your plan may differ from these Medicare guidelines. We accept most of the major health insurance plans including Medicare, Arkansas Medicaid, Missouri Medicaid, and most Blue Cross Blue Shield plans. We would be happy to work with you and your insurance company to help you understand how your plan works as it relates to our services that are needed by you or a loved one.

Quick reference directory:

Guide to Medicare Coverage
Medicare Coverage for specific types of prosthetic limbs, orthopedic
braces, & prescription footwear home medical equipment
Medicare Supplier Standards

I. Guide to Medicare Coverage

Who qualifies for Medicare benefits?

Individuals 65 years of age or older
Under 65 with permanent kidney failure (beginning 3 months after dialysis begins), or
Under 65, permanently disabled and entitled to Social Security benefits (beginning 24 months after the start of disability benefits)

The Different Benefits of Traditional Medicare

Medicare Part A benefits cover hospital stays, home health and hospice services
Medicare Part B benefits cover Dr. visits, labs, ambulance services and home medical equipment (including prosthetic and orthotic services).
While oftentimes you do not have to pay a monthly fee to have Part A benefits, the Part B program requires a monthly premium to stay enrolled. In 2009 that premium is set at $96.40 per month. Typically this amount will be drafted out of your Social Security check.

What Can You Expect to Pay?

Every year in addition to your monthly premium, you will have to pay the first $135 of covered expenses out of pocket and then 20% of all approved charges if the provider agrees to accept Medicare payments. Many patients choose to purchase supplemental insurance policies, which generally cover these out-of-pocket expenses.
Your prosthetic and orthotic provider cannot automatically waive this 20% or your deductible without suffering penalties from Medicare. They must attempt to collect the coinsurance and deductible if they are not covered by another insurance plan; however certain exceptions can be made if you suffer from qualifying financial hardships. If you have some type of supplemental insurance, that plan may pick up this portion of your responsibility, once your supplemental plan’s deductible has been satisfied.

Other possible costs:

Medicare will only pay for items that meet your basic needs as prescribed by a physician. Oftentimes you will find that your provider offers a wide selection of products that vary slightly in appearance or features. You may decide that you prefer the products that offer these additional features. Your provider should give you the option to pay a little extra money to get a product that you really want.
To take advantage of this opportunity, a new form has been approved by the Centers for Medicare and Medicaid Services (CMS) that allows patients to upgrade to a piece of equipment that they like better than other standard options prescribed by their physician.
The Advance Beneficiary Notice, or ABN, must detail how the products differ, and requires a signature to indicate that you agree to pay the difference in the retail costs between two similar items. Your provider will typically accept assignment on the standard product and apply that cost toward the purchase of the fancier item, thus requiring less money out of your pocket.

Purpose of ABN

The Advance Beneficiary Notice will also be used to notify you ahead of time that Medicare will probably not pay for a certain item or service in a specific situation, even if Medicare might pay under different circumstances. The form should not be generic and you should understand why Medicare will not pay for the item you are requesting.
The purpose of the form is to allow you to make an informed, consumer decision about whether or not to receive the item or service knowing that you may have additional out-of-pocket expenses.

Durable Medical Equipment (DME) ... Defined

In order for any item of to be covered under Medicare, typically it has to meet the test of durability. Medicare will pay for medical equipment when the item:
Withstands repeated use Is used for a medical purpose (meaning there is a condition which the item will improve)
Is useless in the absence of illness or injury (thus excluding any item preventative in nature)
Used in the home (which excludes all items that are needed only when leaving the confines of the home setting)

Understanding Assignment (a claim by claim contract)

When a provider accepts assignment they are agreeing to accept Medicare’s approved amount as payment in full.
You will be responsible for 20% of that approved amount (this is called your coinsurance).
You will also be responsible for the annual deductible, which is $135 for 2009.
(Providers must still notify you in advance, using the Advance Beneficiary Notice, if they do not believe Medicare will pay for your claim.)

Mandatory Submission of Claims

Every provider is required to submit a claim for covered services within one year from the date of service. If an item is a non-covered item by the Medicare program, the provider is not required to submit a claim, but may do so at a patient’s request.

The role of the physician with respect to Prosthetics and Orthotics:

Every item billed to Medicare requires a physician’s initial order and or a special form called a Detailed Written Order (DWO), and sometimes additional documentation will be required.
Nurse Practitioners, Physician Assistants, Interns, Residents and Clinical Nurse Specialists can also order prosthetics and orthotics and sign DWOs CMNs when they are treating a patient.
All physician’s have the right to refuse to complete documentation for items they did not order, so make sure you consult with your physician before requesting an item.

Prescriptions Before Delivery:

For most items, Medicare requires your provider to have a prescription on file before they can deliver these items to you.

How does Medicare pay for and allow you to use prosthetics and orhotics?

Typically Medicare will purchase it outright, and the device belongs to you.
Once a device has been delivered to, you will be responsible to call contact your provider anytime your device needs to be serviced or repaired. Medicare will pay for a portion of repairs, labor, and replacement parts. All of this is contingent on the fact that you still need the item at the time of repair and meet Medicare’s criteria.

II. Medicare Coverage for specific types of prosthetics and orthotics

What are the circumstances in which medicare will cover a prosthesis or orthosis?
For any item to be covered by Medicare, it must

be eligible as a Medicare benefit,
be reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member, and
meet all other applicable Medicare rules and regulations. All items must meet the criteria for "reasonable and necessary" as generally defined in this section.

Medicare Specific Coverage criteria:

Therapeutic Shoes (Diabetic Shoes and Inserts)

Special therapeutic shoes, inserts and modifications can be covered for diabetic patients with the following foot conditions:
previous amputation of a foot or partial foot
history of foot ulceration
peripheral neuropathy with callus formation
foot deformity
poor circulation in either foot

Lower Limb Orthoses (Leg Braces & Knee Braces)
Lower limb orthoses are covered for ambulatory patients with weakness or deformity of the foot, knee and / or ankle, who require stabilization for medical reasons, and have the potential to benefit functionally. Various individual orthoses are subject to individual coverage criteria.

Replacement of a complete orthosis or component of an orthosis due to loss, significant change in the patient's condition, or irreparable accidental damage is covered if the device is still medically necessary. The typical useful life is 5 years. Changes in the patient’s condition or functional needs (such as weight loss / gain, improvement / worsening of the condition or increase / decrease in physical abilities) may justify replacement within 5 years.

Orthopedic Shoes

Orthopedic shoes are covered when it is necessary to attach the shoe(s) to a leg brace.
However, Medicare will only pay for the shoe(s) attached to the leg braces.
Unfortunately Medicare will not pay for matching shoes, or for shoes that are needed for purposes other than for diabetes or leg braces.

Upper Limb Orthoses (Arm and Hand Braces)
Medicare does not specify coverage criteria for upper limb orthoses. Orthoses for patients with weakness, deformity, or injury of their upper limb are covered if medically necessary. Check with your JP&O Orthotist to discuss your options.

Spinal Orthoses (Back and Neck Braces):
A spinal orthosis is covered when it is ordered for one of the following indications:

To reduce pain by restricting mobility of the trunk; or
To facilitate healing following an injury to the spine or related soft tissues; or
To facilitate healing following a surgical procedure on the spine or related soft tissue; or
To otherwise support weak spinal muscles and/or a deformed spine.

The typical useful life is 5 years. Changes in the patient’s condition or functional needs (such as weight loss / gain, improvement / worsening of the condition or increase / decrease in physical abilities) may justify replacement within 5 years.

Lower Limb Prostheses (Artificial Limbs)
Medicare will cover prosthetic devices to beneficiaries based on the needs of each amputee. A lower limb prosthesis is covered when the patient:

Will reach or maintain a defined functional state within a reasonable period of time; and
Is motivated to ambulate.

FUNCTIONAL LEVELS:

A determination of the medical necessity for certain components/additions to the prosthesis is based on the patient's potential functional abilities. Potential functional ability is based on the reasonable expectations of the prosthetist, and treating physician, considering factors including, but not limited to:

The patient's past history (including prior prosthetic use if applicable); and
The patient's current condition including the status of the residual limb and the nature of other medical problems; and
The patient's desire to ambulate.

Clinical assessments of patient rehabilitation potential must be based on the following classification levels:

Level 0: Does not have the ability or potential to ambulate or transfer safely with or without assistance and a prosthesis does not enhance their quality of life or mobility.

Level 1: Has the ability or potential to use a prosthesis for transfers or ambulation on level surfaces at fixed cadence. Typical of the limited and unlimited household ambulator.

Level 2: Has the ability or potential for ambulation with the ability to traverse low level environmental barriers such as curbs, stairs or uneven surfaces. Typical of the limited community ambulator.

Level 3: Has the ability or potential for ambulation with variable cadence. Typical of the community ambulator who has the ability to traverse most environmental barriers and may have vocational, therapeutic, or exercise activity that demands prosthetic utilization beyond simple locomotion.

Level 4: Has the ability or potential for prosthetic ambulation that exceeds basic ambulation skills, exhibiting high impact, stress, or energy levels. Typical of the prosthetic demands of the child, active adult, or athlete.

The typical useful life for prosthetic components is 3 years. The prosthetic socket (the part that interfaces with the limb) is routinely replaced as the patient’s limb changes / matures. Supplies such as liners, socks, etc. are covered as needed. Changes in the patient’s condition or functional needs (such as weight loss / gain, increase / decrease in physical abilities) may justify replacement within 3 years.

Upper Limb Prostheses (Artificial Limbs)
Medicare does not specify coverage criteria for upper limb prostheses. Prostheses for patients with amputations of their upper limb are covered if medically necessary. Check with your JP&O Prosthetist to discuss your options.

Breast Prostheses
Are covered after a radical mastectomy. Medicare will cover:

One silicone prosthesis every 2 years or a mastectomy form every 6 months.
Mastectomy bras are covered as needed.
There is no coverage for replacement prostheses due to wear and tear prior to the listed timeframes. However, Medicare will cover replacement of these items due to:

Loss
Irreparable damage, or
Change in medical condition (e.g. significant weight gain/loss)

Patients are allowed only one prosthesis per affected side, others will be denied as not medically necessary even if attempting asymmetry (need ABN).

Mastectomy sleeves are not covered in the home setting because they do not meet Medicare’s definition of a prosthesis; however, it is possible that they may be covered under the hospital per diem if you request one during your hospital stay.

Compression Stockings

Gradient compression stockings worn below the knee are only covered when used for the treatment of open venous stasis ulcers. They are not covered for the prevention of ulcers, prevention of the reoccurrence of ulcers, or treatment of lymphedema w/o ulcers.

Medicare covers shoes and inserts as necessary but not more than one pair of shoes and three pairs of inserts per calendar year.

III. Medicare Supplier Standards

Below is a summary of the standards Medicare requires of home medical equipment providers. Our company meets or exceeds all of these standards.

A supplier must be in compliance with all applicable Federal and State licensure and regulatory requirements.
A supplier must provide complete and accurate information on the DMEPOS supplier application. Any changes to this information must be reported to the National Supplier Clearinghouse within 30 days.
An authorized individual (one whose signature is binding) must sign the application for billing privileges.
A supplier must fill orders from its own inventory, or must contract with other companies for the purchase of items necessary to fill the order. A supplier may not contract with any entity that is currently excluded from the Medicare program, any State health care programs, or from any other Federal procurement or nonprocurement programs.
A supplier must advise beneficiaries that they may rent or purchase inexpensive or routinely purchased durable medical equipment, and of the purchase option for capped rental equipment.
A supplier must notify beneficiaries of warranty coverage and honor all warranties under applicable State law, and repair or replace free of charge Medicare-covered items that are under warranty.
A supplier must maintain a physical facility on an appropriate site.
A supplier must permit CMS or its agents to conduct on-site inspections to ascertain the supplier's compliance with these standards. The supplier location must be accessible to beneficiaries during reasonable business hours, and must maintain a visible sign and posted hours of operation.
A supplier must maintain a primary business telephone listed under the name of the business in a local directory or a toll free number available through directory assistance. The exclusive use of a beeper, answering machine, or cell phone is prohibited.
A supplier must have comprehensive liability insurance in the amount of at least $300,000 that covers both the supplier's place of business and all customers and employees of the supplier. If the supplier manufactures its own items, this insurance must also cover product liability and completed operations. Failure to maintain required insurance at all times will result in revocation of the supplier's billing privileges retroactive to the date the insurance lapsed.
A supplier must agree not to initiate telephone contact with beneficiaries, with a few exceptions allowed. This standard prohibits suppliers from calling beneficiaries in order to solicit new business.
A supplier is responsible for delivery and must instruct beneficiaries on use of Medicare-covered items, and maintain proof of delivery.
A supplier must answer questions and respond to complaints of beneficiaries, and maintain documentation of such contacts.
A supplier must maintain and replace at no charge or repair directly, or through a service contract with another company, Medicare-covered items it has rented to beneficiaries.
A supplier must accept returns of substandard (less than full quality for the particular item) or unsuitable items (inappropriate for the beneficiary at the time it was fitted and rented or sold) from beneficiaries.
A supplier must disclose these supplier standards to each beneficiary to whom it supplies a Medicare-covered item.
A supplier must disclose to the government any person having ownership, financial, or control interest in the supplier.
A supplier must not convey or reassign a supplier number; i.e. the supplier may not sell or allow another entity to use its Medicare Supplier Billing Number.
A supplier must have a complaint resolution protocol established to address beneficiary complaints that relate to these standards. A record of these complaints must be maintained at the physical facility.
Complaint records must include: the name, address, telephone number and health insurance claim number of the beneficiary, a summary of the complaint, and any actions taken to resolve it.
A supplier must agree to furnish CMS any information required by the Medicare statute and implementing regulations.
All suppliers must be accredited by a CMS-approved accreditation organization in order to receive and retain a supplier billing number. The accreditation must indicate the specific products and services, for which the supplier is accredited in order for the supplier to receive payment of those specific products and services (except for certain exempt pharmaceuticals).
All suppliers must notify their accreditation organization when a new DMEPOS location is opened.
All supplier locations, whether owned or subcontracted, must meet the DMEPOS quality standards and be separately accredited in order to bill Medicare.
All suppliers must disclose upon enrollment all products and services, including the addition of new product lines for which they are seeking accreditation