Page 128 - Medicare Benefit Policy Manual

for maintenance of rented equipment other than the maintenance and servicing fee
established for capped rental items. For capped rental items which have reached the 13-
month rental cap, contractors pay claims for maintenance and servicing fees after 6
months have passed from the end of the final paid rental month or from the end of the
period the item is no longer covered under the supplier’s or manufacturer’s warranty,
whichever is later. See the Medicare Claims Processing Manual, Chapter 20, “Durable
Medical Equipment, Prosthetics and Orthotics, and Supplies (DMEPOS),” for additional
instruction and an example.

A new CMN and/or physician’s order is not needed for covered maintenance.

In cases where one or more monthly rental payments have been made in accordance with
42 CFR 414.229 for a capped rental DME item, medical necessity for the equipment has
been established. In cases where one or more rental payments have been made for an
item classified as capped rental DME, and the supplier transfers title to the equipment
prior to the end of a 13 month period of continuous use per 42 CFR 414.230, Medicare
payment can be made for reasonable and necessary maintenance and servicing of the
beneficiary-owned DME. Under the regulations at 42 CFR 414.210(e)(1), reasonable and
necessary charges for maintenance and servicing are those made for parts and labor not
otherwise covered under a manufacturer’s or supplier’s warranty. Charges for routine
maintenance and servicing would not be covered. Charges for maintenance and servicing
that exceed the purchase price of the equipment (i.e., the capped rental monthly fee
multiplied by 10) would not be reasonable and necessary and should be denied.

C. Replacement

Replacement refers to the provision of an identical or nearly identical item. Situations
involving the provision of a different item because of a change in medical condition are
not addressed in this section.

Equipment which the beneficiary owns or is a capped rental item may be replaced in
cases of loss or irreparable damage. Irreparable damage refers to a specific accident or to
a natural disaster (e.g., fire, flood). A physician’s order and/or new Certificate of
Medical Necessity (CMN), when required, is needed to reaffirm the medical necessity of
the item.

Irreparable wear refers to deterioration sustained from day-to-day usage over time and a
specific event cannot be identified. Replacement of equipment due to irreparable wear
takes into consideration the reasonable useful lifetime of the equipment. If the item of
equipment has been in continuous use by the patient on either a rental or purchase basis
for the equipment’s useful lifetime, the beneficiary may elect to obtain a new piece of
equipment. Replacement may be reimbursed when a new physician order and/or new
CMN, when required, is needed to reaffirm the medical necessity of the item.

The reasonable useful lifetime of durable medical equipment is determined through
program instructions. In the absence of program instructions, A/B MACS (B) may