Justify It: K0108
CRT's Miscellaneous Code Can Be a Huge Funding Challenge
- By Laurie Watanabe
- May 01, 2016
What do battery wiring harnesses, front shroud assemblies
and manual wheelchair crossbraces have in common?
That’s an easy question for a complex rehab technology (CRT)
funding specialist: Those components are (or can be) coded K0108, the
miscellaneous HCPCS code for CRT.
HCPCS codes are supposed to include products that are strictly
defined and therefore similar in nature. The K0108 code, though, is
anything but specific. It’s the default code for products that don’t fit
into any of the others, and as a result, the code encompasses an array of
components and systems that otherwise have little in common, besides
being designed for wheelchair use.
Therein lies the challenge. Getting K0108 components funded in a
timely manner can be an enormous task for ATPs and funding specialists,
which can cause ripple effects for the rest of the complex rehab
team, including clinicians, caregivers, and seating & mobility clients.
K0108: A “Black Hole of Sorts”
For all the infamy surrounding K0108, its actual definition is brief and
Rita Stanley, VP of government relations for Sunrise Medical, said
the official definition for K0108 is “Wheelchair component or accessory,
not otherwise specified.”
But that seems to be the only simple and straightforward thing about
Stanley continued, “You just stepped on one of the biggest landmines
in the area of complex rehab. What is officially coded — and remains
valid — by the Medicare contractor (PDAC) as K0108 is a minuscule
list of items; a list of wheelchair accessories or replacement components
that do not match an existing HCPCS code is quite extensive. The reason this code has generated so much attention is that it is a
black hole of sorts. Manufacturers and suppliers often are at odds with
Medicare and other payors regarding whether an item fits an existing
code or not. There are numerous examples where a payor insists that
the supplier use a specific code for billing, yet the descriptor for the
code and the reimbursement for the code are incongruent with the
item being provided. Stakeholders have tried numerous times to resolve
these coding conflicts with little progress.”
From the perspective of a CRT provider’s funding department, an
astonishing number of components, both commonly used and rarely
used, can fall into the K0108 code.
Paul Komishock, general manager, Pride Mobility Products, said of
the code, “From a practical standpoint, it refers to any part or product
that doesn’t fit into an existing code. From a CRT standpoint, it could
be anything from a replacement straw in a sip ’n’ puff to a combination
head array/sip ’n’ puff alternate drive device.”
Jim Stephenson, rehab reimbursement & coding manager for
Invacare Corp., offered real-world examples of K0108 products, noting
that many spring from repair and replacement situations.
“For a standard elevating legrest, if you get those as a
pair, it’s an E1010,” he said. “But if you have to replace one of
them — one of them is a K0108. A joystick with an integrated
controller, meaning the controller or the brains of the
power chair are also in the joystick box, that box is a K0108.
A display is K0108. If you’re replacing a van seat, it’s K0108.
Shrouds are K0108; switches are K0108. So are axles, footboards,
cylinders, hub locks. If somebody needs to replace the framework of an
adjustable height arm, but the armpad is still usable, that arm assembly
becomes K0108 because it’s not a complete code without the armpad.
“If you’re providing pieces and parts of a complete component, a lot
of times if you’re just doing a partial piece of that component, that’s
going to be a K0108.”
Common K0108 Problems
Stephenson added that another common K0108 situation arises when
a seating & mobility team creates a hybrid system to meet the needs of
a particular client. It’s not an unusual situation with alternative driving
controls for power chairs: The ATP and the clinician will piece together
a hybrid system by using components taken from two or more systems.
When the systems are taken apart and built into a new system, that’s
a K0108 situation.
By definition, CRT clients have positioning and mobility needs that
are so complex that straight-out-of-the-box products may not
be fully suitable. So the K0108 code is a commonly used one,
and often it’s used multiple times per client.
Dan Fedor, compliance director for The VGM group,
acknowledged that a claim for a complex wheelchair often
includes multiple K0108 items. The biggest funding K0108
problem he hears from providers, Fedor said, is that the reimbursement
rate for K0108 is terribly inconsistent. While the Centers for Medicare & Medicaid Services (CMS) is supposedly using gap-fill methodology
to determine K0108 payment, gap filling itself is highly controversial
due to the old age of the data being used, and the fact that much of
today’s new technology can’t be accurately compared to the technology
of decades ago.
“I’m starting to hear more and more about the pricing as far as what
they’re allowing,” Fedor said of Medicare K0108 payments to providers.
“Since it is a miscellaneous code, that’s one of the challenges for a
provider. You’re putting out, let’s say, a $1,000 item. Based on history,
[Medicare has] paid between 60 and 70 percent of the Manufacturer’s
Suggested Retail Price (MSRP); they set the allowable at 60 to 70
percent of the MSRP. But that’s not a guarantee.”
Fedor related the ongoing case of a provider who received far less
than that for a costly K0108 item he’d delivered to his client.
“A VGM member I was working with submitted [a claim for a product that cost] $1,197 MSRP, a miscellaneous K0108.
Medicare came back with an allowable of $8.31. We know
that’s an error; they probably thought [the MSRP] was $11
instead of $1,197. But this is the challenge. The provider and
I called Medicare directly to see if they would just readjust
it, and they said it has to go to redetermination. That takes 60 days for
something that is an obvious error.”
Fedor added that providers’ options in that situation are
“I’ve had providers ask me: ‘I’m getting paid 50 or 60
percent of MSRP, can I appeal that?’ You can, but I’ve never
seen anyone win that.”
And even if a provider decides to appeal, the
burden of work falls on the providership’s staff.
Not to mention that the clock continues to run:
Equipment has been delivered, but no reasonable
payment has been received.
“We obviously know that $8 on a $1,000 item was a miscalculation,”
Fedor said. “But they wouldn’t fix it right then and there, wouldn’t let
it go through a reopening because it wasn’t an error on modifiers or
something like that. So they said it has to go to redetermination.
“They deliver the product, they file the claim assuming they can get
60 to 70 percent of MSRP off this $1,000 item, and they got the $8. And
that was the allowed amount: [Medicare] paid 80
percent of the $8. It’s 60 days, probably, before they
get this fixed; they deserve another $700 on this.
So $700 out for 60 days on one line item, and then
their time to have to do that.”
While Fedor acknowledged this had happened
to one provider, he’s heard from enough of them to
detect a K0108 payment trend.
“We’ve noticed over the past two years that the
allowed amount on K0108 has been decreasing,” he
said. “It used to be about 80 percent of MSRP, and
now on average we’re seeing 60 percent of MSRP.”
The uncertainty of not knowing how much
they’ll be paid — combined with how frequently
K0108 codes are included on claims — makes it
very difficult for providers to efficiently run their
“You’re rolling the dice; you don’t know how
much you’re going to get,” Fedor said.
What’s a K0108 Alternative?
Since the current K0108 payment rate is unpredictable
— and, according to conversations Fedor
has had with providers, also dropping as a whole
— what would be a good alternative?
Creating more codes to at least reduce the
number of K0108 items might seem like a good
idea. Practically speaking, though, it’s another story.
“With CRT there are a wide variety of items
that do not have a code assigned to them that still
provide important clinical benefits,” Komishock
said. “K0108s also cover any item that doesn’t
have a code that’s used on a wheelchair. So while
a K0108 might be used for a combination sip ’n’
puff/head array, it can also be used for a replacement
“From a payor standpoint, a miscellaneous code
is difficult to automate for payment, since it can
apply to so many different items. At the same time
it allows the payors to accurately assess what an
item is and what it does. The existence of an actual
code is by no means a guarantee that it will be an
accurate representation of what is actually being
provided. Any code description that contains the
words ‘any type’ can sometimes too broadly define
an item, and limit any real variations that may actually exist among
products in a particular code.”
Stephenson affirmed that just adding codes isn’t a solution.
“There’s just such a vast amount of different things that generating
or publishing a code specifically for every single item out there is
impossible,” he explained. “It’s fairly common stuff a lot of times, but you can’t build a code for these 5/8" screws and this bag
of 1" bolts. You would have such a ridiculous number of
codes, and I think it would just be too much to police.
Anything that’s custom is almost always K0108.”
Fedor pointed out the problems offered by another
type of CMS-related payment referred to as “cost-plus.”
“Medicare might come up next with what Medicaid’s doing, and say,
‘Miscellaneous codes are cost-plus. Show me your acquisition costs,
and we’ll give you a percentage above that.’ I don’t think the industry
would want that. When you do cost-plus, it depends on the plus. Some
of the Medicaids are cost plus 10 percent, which isn’t good.”
One of the many questions about a cost-plus system would be
whether Medicare would calculate a “plus” amount that would accurately
take into account all the work that went into the product listed
on the claim form. What about systems or components that had to
be altered to meet a particular client’s needs? Or created from scratch
because of the complexity of a client’s posture or limited ability to reach
and control a switch?
On the positive side, Fedor said, with a cost-plus system, providers
would at least know what they would be getting paid.
“Let’s say Medicare comes out with a cost-plus 30 [percent],” he
said. “Then as a provider, you could plan. You could say, ‘My cost is
$1,000, so I know exactly what I’m getting.’ You can make an educated
decision and say, ‘It’s cost-plus 30, and I can do this job.’ Just like the fee
schedule: You know what the fee schedule is, so you can decide: ‘Can
I put a headrest on the chair or not?’ Can I accept this miscellaneous
code knowing I’m going to make 30 percent?”
Clearly, the current system — in which payments are
so inconsistent that providers are being paid different
amounts for supplying exactly the same K0108 item
— is flawed. But so is the idea of adding dozens of new
codes, or opting for a “cost-plus” model. Is there any
“Miscellaneous and otherwise not specified codes are necessary for
items with very small utilization, which often is the case for CRT items,”
Stanley said. “However, the issues and challenges associated with this
type of code are significant for all stakeholders, including payors.
“I support a transparent and predictable process for obtaining
defined codes for items to reflect technological difference, and
differences in clinical application. This allows appropriate pricing and
coverage policies to be developed. When utilization is too small to
justify unique HCPCS codes, I support segmenting the miscellaneous
codes into smaller buckets to allow better tracking of utilization. The
angst at this point regarding obtaining new HCPCS codes is problems
associated with capped rental and the gap-filling process used to
develop payment. Inadequate reimbursement for items is creating real
barriers to access generally, but is nearly eliminating innovation and
the ability to introduce new products that improve the lives of people
living with disabilities.”
K0108 Best Practices
Current K0108 payment practices are clearly not ideal, but there are still
ways to improve your chances in the miscellaneous code environment.
“When billing with K0108, it’s important to tell the funding source exactly what the item is,” Komishock said. “For Medicare,
any time a K0108 is billed, it should include the manufacturer
name, the model/part number (if one exists), and the
MSRP, if it exists. In cases where it does not, that should be
indicated. Many denials are due to either missing information
about what the item is, or clinical documentation on how the
item is benefiting a particular beneficiary. Remember that when a payor
sees this code, it could be an almost infinite number of items. The more
they know about what it is and what it does, the better the informed
decision they can make about it.”
Stephenson said the current claims structure makes it challenging to
document as thoroughly as providers should.
“There are a lot of things that fall under K0108, so it’s possible to have
five or six K0108s on one chair,” he said. “When [providers] go to bill it,
they get 80 characters to summarize five or six K0108s. And you have to
provide manufacturer and model number, justification. Eighty characters
doesn’t go very far. In fact, 80 characters very rarely covers one.
“K0108 in my opinion should be able to be filed on paper just because
filing electronically is unfair. They just don’t provide enough space to
input all the information that’s necessary in order to bill a K0108.”
Stephenson suggests that providers abbreviate judiciously on claims.
“If you’re billing multiple miscellaneous accessories, each should be
billed on a separate claim line,” he said. “If you have five items that are
K0108, you can’t just do one line of K0108 with a quantity of five. Each
one has to be its own separate line item. They allow you to use abbreviations;
the only thing is you can’t abbreviate model numbers. Brand
names can be abbreviated using the first five letters.”
There is additional information involved when the K0108 is part of
a repair. “Not only do you have to identify what the K0108 is, but you
have to describe the piece of equipment that’s being repaired, what
the HCPCS code is for the item that’s being repaired, the date that the
piece of equipment was originally purchased on top of the K0108,”
Stephenson said. “You can abbreviate: If you’re replacing an armpad,
you can do RPL K0019 BBR, which stands for Broken Beyond Repair.
RPL stands for replace, and K0019 is the code for HCPCS. So you can
abbreviate it down to a pretty small amount, but still — 80 characters
doesn’t go very far.”
Since providers frequently are asked to provide additional documentation
for K0108s — in part because of the small amount of space on the
claim form — Stephenson recommends using a bullet-point format.
“When providers document for K0108, they should make sure
to document by bullet points and reference it back to the claim,” he
said. “Let’s say they have a claim and it’s five lines of K0108s. In their
documentation, they may want to say, ‘Claim line 1: what it is, model
number and the reason why it needed to be repaired.’ Then next bullet,
‘Claim line number 2 is K0108 for…’ and keep it separated so that it’s
easy to follow and understand as opposed to just providing one big
narrative. Bite-sized chunks are a lot easier to digest for a review staff.
“There’s a lot of times where people get denied, and they go back and
review their documentation and they say, ‘I don’t say how they missed
this; it’s right here at the bottom of this paragraph!’ [Reviewing claims]
is a production-based job; they have to review so many
claims an hour. So they’ll get into speed-reader mode
where they’ll read the first sentence of every paragraph
all the way through the document and say, ‘Okay, I got
the general idea of what they’re saying.’ But if you said
anything of great importance at the bottom of a paragraph at the end
of the report, you’ve just increased the likelihood that it’s going to get
overlooked. You want to make their jobs as easy as possible.”
“There are two very important aspects of documentation regarding
K0108,” Stanley said. “The first, and maybe the most challenging, is to
explain clearly why the item does not fit a defined HCPCS code. The
second step is the medical justification. If the product is needed for a
repair or replacement, it is important to explain why it is necessary. If it
is a new item, clinicians need to follow best practice in terms of the clinical
justification. It is important to include information such as Has the
person used this item successfully in the past? Or is it needed because what
was used in the past no longer meets the person’s needs? And why?
“Documentation is a lot like showing your work regarding an answer
to a mathematical equation. Claim reviewers are not allowed to use
inference. They must only use the information provided to reach a
decision. So it is important to write complete sentences that paint the
strongest picture of the person and their medical needs.”
The Future of Miscellaneous Codes
Stephenson’s final word on K0108 claims concerns the very understandable
temptation to write them off if Medicare denies them or asks
for more documentation.
“My advice is don’t ever just give in,” he said. “When you give in, it
kind of sets a precedent for Medicare: ‘Well, everybody is walking away
from this $5.51 item.’ Next thing you know, it’s not going to be covered.
In your next chair you’re going to have about 10 of those $5.51 parts to
where it adds up, and it’s now $55 instead of $5. How many of those are
you going to let slide?”
That said, he understands that providers need to make daily decisions
about which claims are worth investing more time in.
“If you fight to the end of the earth for a $5.51 item, you’re probably
going to spend $100 in human resources and supplies and paper,” he
admitted. “By the time you print out 10 copies of something, you’re
pretty close to $5. You have to weigh it out. The dollars and cents to
chase that money is going to cost you more than what you’re going to
get back, so that’s a good business decision to say, ‘It’s not worth my
time and effort. With my $15-an-hour billing person, I’m going to chase
something that’s worth $500 instead of something that’s $5.’ You chase
the big-ticket items first.”
But pursuing what’s owed you on a K0108 has one up side: More
of the work rests with the provider rather than, for example, the
prescribing physician. “There are no face-to-face rules,” Stephenson
said. “Providers can document the reasons for these things. There’s no
prescription required for replacement items. It’s an easier process for
K0108 from that perspective, just because providers can do most of the
work themselves. You have a little more control.”
This article originally appeared in the May 2016 issue of Mobility Management.