At a time when many providers of power wheelchairs and other forms of DME are finding it tough to keep their doors open due to shrinking Medicare reimbursement rates and the constant threat of Medicare audits and payment reviews, the DME MACs have issued a reminder: Generally speaking, Medicare expects DME to last five years.
According to a bulletin sent out by the DME MACs, this latest reminder was issued because the Medicare contractors have been receiving questions about a Centers for Medicare & Medicaid Services Fact Sheet called, “Power Mobility Devices: Complying with Documentation & Coverage Requirements.”
The June 8 bulletin quotes the Fact Sheet as stating, “Under a special rule established for certain patient-owned equipment, such as a power wheelchair for which the title has been transferred to the patient after 13 continuous months of rental, the supplier must replace the equipment free of charge if it does not last the full five-year period – i.e., is no longer serviceable or needs substantial repairs.”
Policy for Replacement Equipment
Replacement equipment subsequently provided by the supplier does not have to be new, but must be “properly working,” the bulletin added.
The Fact Sheet refers to policies within the 2005 Deficit Reduction Act, which say suppliers must replace a capped rental item if it’s deemed incapable of lasting the reasonable useful lifetime period of five years.
Suppliers are required to provide the replacement equipment at no charge to the Medicare beneficiary or the Medicare program itself.
Factoring in the Costs of Accumulated Repairs
Accumulated repair costs can be used to determine whether the equipment in question should be declared unable to fulfill the reasonable useful lifetime, the bulletin said.
“In making this determination,” the bulletin reported, “the carrier may consider whether the accumulated costs of repair exceed 60 percent of the cost to replace the item…. Accumulated repair costs refer to all repair claims from all suppliers for a given item after the rental period ends. These repair costs represent the total of all repair costs after the beneficiary assumed ownership of the item.”
The bulletin also stated that the reasonable useful lifetime of DME is five years unless stated otherwise.
“The DME MACs encourage suppliers to provide DME items of sufficient quality to last for the entire five-year reasonable useful life,” the bulletin said.
Providers voiced concern over the costs of repair and service – for which they would not be separately reimbursed – when Medicare originally announced it intended to eliminate the first-month purchase option for many of the power wheelchairs it buys. Despite vehement protests from both providers and a number of consumer advocacy groups, the policy went into effect on Jan. 1, 2011.
