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Vol. 5, No. 5 Sept/Oct 1997 |
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Funding Assistive Technology
Medicare Coverage Of Assistive Technology
Persons who are at least 65 years old, permanently disabled, or who have end-stage kidney disease may qualify for Medicare. Medicare is composed of Part A and Part B coverage. All Medicare beneficiaries are covered under Part A, which pays for hospitalization. Part B, however, requires a monthly premium and an annual deductible. Part B coverage includes doctors’ services, home health care, and assistive technology. The Medicare term for assistive technology is “durable medical equipment” (DME).[1] DME may be rented or purchased.
As a general matter, payment under Part B will not be made for any item that is not “reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.” If an item is covered, repair and maintenance of that item may also be covered.
What Does “Durable Medical Equipment” Include?
“Durable medical equipment” is defined as equipment furnished by a supplier or home health care agency that:
(1) Can withstand repeated use;
(2) Is primarily or customarily used to serve a medical purpose;
(3) Generally is not useful to a person without an illness or injury; and
(4) Is appropriate for home use.
Iron lungs, oxygen, hospital beds, wheel chairs, walkers, and seat lifts are examples of DME. Certain items, such as most eyeglasses and hearing aids, are excluded by law. Medicare now publishes a quarterly appendix listing the procedures and services it covers. For items that are not listed, a Medicare carrier makes its own medical necessity determination. Coverage for equipment that is not primarily medical in nature, such as a bathtub lift, may be denied because it is deemed a “convenience” item. However, you may be successful in appealing the denial.
What If Equipment Has Both Medical And Non-medical Purposes?
If the equipment serves both medical and non-medical purposes, it is not generally classified as DME. For example, even though air conditioning may be prescribed to facilitate the blood circulation of a patient with heart disease, it is not primarily designed for a medical purpose and thus it is excluded from Medicare coverage.
Similarly, water beds have both medical and non-medical purposes. However, because they were originally designed to prevent skin breakdown in bed-confined patients, a specialized mattress may be covered under Medicare if it is medically required.
The distinction between covered and non-covered items is not always logical. Even if you are using equipment for a vocational or otherwise non-medical purpose, it may be covered if it is equipment generally used for a medical purpose.
How Do I Prove That Durable Medical Equipment Is Reasonable And Necessary?
Unless the DME is documented to be reasonable and necessary for diagnosing or treating illness or injury or improving the functioning of a malformed body member, coverage will be denied. You should obtain a detailed doctor’s prescription for the equipment which outlines how the equipment’s purpose and/or design meets these criteria.
If Equipment Is Covered, Will Medicare Pay The Entire Amount Charged?
Medicare will pay 80% of the reasonable cost of covered items. You are responsible for the other 20%, as well as the annual Medicare Part B deductible. In certain well-documented cases of financial hardship, the supplier may waive the 20% co-payment.
It is important to determine whether the supplier “takes assignment.” If so, that means the supplier agrees to accept as payment in full the reasonable cost of the equipment as determined by Medicare. You would then only be responsible for 20% of the reasonable cost of the item, assuming you had already paid your annual deductible.
If the supplier does not take assignment, Medicare will still only pay 80% of the reasonable cost of the item as determined by Medicare. You would then be responsible for any remaining balance.
Who Decides Whether The Equipment Will Be Rented Or Purchased?
You decide whether to rent or buy equipment. However, Medicare payment is based on the carrier’s determination of whether it would be cheaper and more practical to pay on a lease-purchase, lump sum, or rental basis. Even if you purchased the equipment, Medicare may decide to pay on a rental basis.
A carrier is required to notify you or the supplier as promptly as possible of the method of payment and maximum amount payable. In deciding whether to make rental payments as opposed to buying the equipment, the carrier will consider:
(1) How long the equipment will be needed;
(2) The criteria for reasonable charges;
(3) The maintenance that the equipment will require;
(4) The administrative costs involved in renting inexpensive items (less than $150);
(5) The average length of time that such equipment is rented; and
(6) Health Care Financing Administration guidelines.
Rental will be considered practical if the total expected rental charges are less than the purchase price. It is important to remember that Medicare’s payment will be based on the reasonable purchase price, which may be less than the price charged.
If Medicare decides to purchase the equipment and you cannot afford the 20% co-payment, you may plead financial hardship. However, financial hardship can be established only in extreme cases, and only where the supplier doesn’t offer installment arrangements.
If you are low-income you may be eligible for the Qualified Medicare Beneficiary program. Under this program the State pays your Medicare premiums, deductibles and co-payments. Alternatively you may be eligible for the Specified Low-Income Medicare Beneficiary program in which the State pays your Medicare Part B premium (under this program the State does not pay co-insurance, deductibles, or Part A premiums). You can apply for these programs at the State Medicaid office.
Can I Determine In Advance Whether Medicare Will Cover The Purchase Of Equipment?
Medicare will not generally make a pre-purchase determination as to whether the desired equipment is reasonable and necessary and therefore covered under Medicare. This means that you risk coverage denial in purchasing DME. However, because some items are frequently subject to unnecessary use, in 1990 Congress decided to require advance authorization for certain types of equipment. These include seatlift mechanisms and motorized scooters.
It is best to arrange with a medical equipment supplier to accept Medicare assignment. Then the supplier can submit the claim to Medicare before providing you with the equipment. If Medicare denies the claim, you will have lost nothing.
Is There Any Benefit To Purchasing Used Equipment?
If used equipment is purchased, Medicare will waive the usual 20% co-payment. However, the cost of the used equipment must be at least 25% less than the cost of the equipment new. Also, a warranty must be provided with commercially supplied used equipment. If you purchase used equipment from a private source, you must certify that it is acceptable.
If you rent new equipment and later decide to purchase it, it will then be considered “used” equipment.
What Happens When A Request For Payment For Part B Benefits Is Submitted?
When a request for payment for DME under Part B is submitted, the carrier will make an initial determination. The initial determination includes decisions about whether items are covered, whether the deductible has been met, whether charges are reasonable, whether coinsurance has been properly applied, and whether the DME is medically necessary. The carrier will also determine the amount of benefit payable and to whom it should be paid.
If your claim is denied, within six months of the initial determination you may request a paper review. Your request must be in writing and filed with the carrier, the Social Security Administration, or the Health Care Financing Administration.
If you are not satisfied with the review determination, you may request a “fair hearing” before a carrier or hearing officer if the amount at issue is at least $100. (A more informal hearing may be requested if the amount is less than $100.) The fair hearing must be requested within six months of the review determination. You may appear at the hearing or waive your right to do so.
Following the fair hearing decision, if the amount at issue is at least $500, you may obtain a hearing before an administrative law judge. If the amount at issue is at least $1,000, you may ask a court to review an adverse decision by an administrative law judge.
It often happens that claims which were initially denied are permitted on appeal. Thus, it is usually a good idea to appeal your claim.
What If My Claim Is Submitted But Is Not Processed Promptly?
The carrier must act on a claim with reasonable promptness. That means that if an initial determination is not made within 60 days of receiving your claim, you may request that a hearing officer make the initial determination.
Medicare standards also dictate that carriers should respond to written inquiries within 30 days.
Are There Special Requirements For Some Types Of Durable Medical Equipment?
Some equipment must meet special requirements to qualify as DME. For example, power-operated vehicles that may be used as wheelchairs may be covered if a wheelchair is medically necessary and the patient cannot operate a manual wheelchair. A specialist must evaluate the patient’s condition and prescribe the vehicle to assure that the patient needs it and can use it safely.
A seatlift chair is covered under Medicare when prescribed by a doctor for a patient with a neuromuscular disease such as Muscular Dystrophy. The patient’s condition must be so severe that the alternative would be chair or bed confinement. Medicare frequently denies coverage for seatlift chairs, but the reversal rate of these claims denials on appeal is high. Medicare will only pay for the seatlift mechanism and not the chair itself.
Will Medicare Cover Durable Medical Equipment If I Am In A Nursing Home Or Hospital?
Medicare covers DME for use in the home, which may include an institution used as a home. However, it does not cover DME for use in institutions that meet the statutory definition of a hospital or skilled nursing facility.
This article was prepared by the Community Legal Aid Society, Inc. (CLASI). CLASI maintains specialized legal advocacy units such as the Disabilities Law Program and Elder Law Program. This is the first in a series of CLASI authored articles which will appear as a regular column in The AT Messenger.
[1] This article will not address prosthetics, braces, or artificial limbs and eyes which may be covered under a different portion of Medicare. Prosthetics include equipment which replaces all or part of an internal body organ or function, such as a pacemaker or cochlear implant.
