Page 129 - Medicare Benefit Policy Manual

determine the reasonable useful lifetime of equipment, but in no case can it be less than 5
years. Computation of the useful lifetime is based on when the equipment is delivered to
the beneficiary, not the age of the equipment. Replacement due to wear is not covered
during the reasonable useful lifetime of the equipment. During the reasonable useful
lifetime, Medicare does cover repair up to the cost of replacement (but not actual
replacement) for medically necessary equipment owned by the beneficiary. (See
subsection A.)

Charges for the replacement of oxygen equipment, items that require frequent and
substantial servicing or inexpensive or routinely purchased items which are being rented
are not covered.

Cases suggesting malicious damage, culpable neglect, or wrongful disposition of
equipment should be investigated and denied where the DME MACs determines that it is
unreasonable to make program payment under the circumstances. DME MACs refer
such cases to the program integrity specialist in the RO.

D. Delivery

Payment for delivery of DME whether rented or purchased is generally included in the
fee schedule allowance for the item. See Pub. 100-04, Medicare Claims Processing
Manual, Chapter 20, “Durable Medical Equipment, Prosthetics and Orthotics, and
Supplies (DMEPOS),” for the rules that apply to making reimbursement for exceptional
cases.

110.3 - Coverage of Supplies and Accessories
(Rev. 1, 10-01-03)
B3-2100.5, A3-3113.4, HO-235.4, HHA-220.5

Payment may be made for supplies, e.g., oxygen, that are necessary for the effective use
of durable medical equipment. Such supplies include those drugs and biologicals which
must be put directly into the equipment in order to achieve the therapeutic benefit of the
durable medical equipment or to assure the proper functioning of the equipment, e.g.,
tumor chemotherapy agents used with an infusion pump or heparin used with a home
dialysis system. However, the coverage of such drugs or biologicals does not preclude
the need for a determination that the drug or biological itself is reasonable and necessary
for treatment of the illness or injury or to improve the functioning of a malformed body
member.

In the case of prescription drugs, other than oxygen, used in conjunction with durable
medical equipment, prosthetic, orthotics, and supplies (DMEPOS) or prosthetic devices,
the entity that dispenses the drug must furnish it directly to the patient for whom a
prescription is written. The entity that dispenses the drugs must have a Medicare supplier
number, must possess a current license to dispense prescription drugs in the State in
which the drug is dispensed, and must bill and receive payment in its own name. A
supplier that is not the entity that dispenses the drugs cannot purchase the drugs used in