January 27, 2009
Medicare Billing Requirements and Policies for Replacement of Oxygen Equipment and Oxygen Contents
This message is for suppliers and home health agencies that furnish oxygen and oxygen equipment to Medicare beneficiaries
Suppliers of oxygen and oxygen equipment need to be aware of the procedures for submitting claims for oxygen and oxygen equipment following the enactment of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) on July 15, 2008.
Section 144(b) of MIPPA took effect on January 1, 2009, and repeals the requirement for you to transfer title to oxygen equipment to the beneficiary after the 36 month payment cap mandated by the Deficit Reduction Act of 2005. Section 144(b) of MIPPA also establishes new payment rules and supplier responsibilities following the 36 month payment period. See MLN Matters number SE0840 for additional information about these new rules. This listserv message provides specific instructions for submitting claims for oxygen contents and replacement of oxygen equipment.
REPLACEMENT OF OXYGEN EQUIPMENT
New HCPCS Modifier for Replacement of DME
Effective January 1, 2009, the following modifiers was added to the Healthcare Common Procedure Coding System (HCPCS):
RA – Replacement of a DME item;
This modifier is to be used on claims for replacement of oxygen equipment with dates of service on or after January 1, 2009. HCPCS modifier RP, which was discontinued effective December 31 2008, remains in effect for claims with dates of service prior to January 1, 2009.
- If oxygen equipment is replaced because the equipment has been in continuous use by the patient for the equipment’s reasonable useful lifetime or is lost, stolen, or irreparably damaged, the patient may elect to obtain a new piece of equipment. Irreparable damage refers to a specific incident of damage to equipment such as equipment falling down a flight of stairs as opposed to equipment that is worn out over time. In these situations, a new 36-month rental period and new reasonable useful lifetime is started on the date that the new, replacement item is furnished. Claims for the replacement of oxygen equipment for the first month of use only are billed using the HCPCS code for the new equipment and either the RA or RP HCPCS modifier depending on the date that the equipment is furnished.
- You must include on the claim for the first month of use a narrative explanation of the reason why the equipment was replaced and supporting documentation must be maintained in your files. For example, if equipment is stolen, you should keep a copy of the police report in your files. For lost or irreparably damaged equipment, you should maintain any documentation that supports the narrative account of the incident. For reasonable useful lifetime replacements, the narrative explanation should include the date that the beneficiary received the equipment being replaced.
- When submitting claims electronically for replacement of oxygen equipment, you may use, for the narrative explanation, loop 2400 (line note), segment NTE02 (NTE01=ADD) of the ASC X12, version 4010A1 professional electronic claim format. If you are billing using the Form CMS-1500 paper claim, you may report this information in item 19 of the claim form.
- If you are a home health agency submitting claims electronically for replacement of oxygen equipment, you may use, for the narrative explanation, loop 2300, segment NTE (billing note) of the ASC X12, version 4010A1 institutional electronic claim format. If you are a home health agency billing using the UB-04 paper claim, you may report this information in Form Locator 80 (Remarks).
- A new certificate of medical necessity (CMN) is required in situations where oxygen equipment is replaced because the equipment has been in continuous use by the patient for the equipment’s reasonable useful lifetime or is lost, stolen, or irreparably damag