Code red: CMS notifies non-contract suppliers of problem

Thursday, January 6, 2011

BALTIMORE - Within days of competitive bidding's start date, CMS notified non-contract, grandfathered suppliers that there might be a "problem" when they submit claims for purchased accessories and supplies for use with grandfathered equipment.

CMS did not detail the problem, stating only that it was discovered "through testing of the Medicare claims processing system."

The agency has created a temporary solution that will allow suppliers to continue to receive payment for these items: They have to append affected HCPCS codes with the "KY" modifier. The affected codes are, for CPAP, A4604, A7030-39, A7044-46 and E0561-62; for hospital beds, E071-72, E0280 and E0310; and for walkers, E0154-58.

To secure payment, suppliers must use the modifier on claims with dates of service on or after Jan. 1, 2011. Claims submitted for the affected codes without the modifier will be denied. Also, claims submitted with the modifier for codes other than the affected codes will be denied.

CMS states: "The correct payment for covered accessories and supplies used in conjunction with a grandfathered item under a competitive bidding program is 80%  of the single payment amount calculated for the item for the Competitive Bidding Area in which the beneficiary maintains a permanent residence. However, payments made under this temporary solution will result in payment on a fee schedule basis rather than payment using the single payment amounts. In order to mitigate the need to adjust claims in the future, suppliers should submit the applicable single payment amount for the accessory or supply as their submitted charge on the claim."

Suppliers may submit appeals of denied claims for accessories and supplies used with grandfathered items to the appropriate DME MAC for consideration.

To read the bulletin in full, go to;5a37bc6a.1101.