Funding Focus

Maintenance Fees 101

• By Kelly Riley
• Sep 01, 2010

Not long ago, the primary challenge for HME companies in providing maintenance and service on oxygen equipment was simply catching up with the patient. I recall seeing open orders for routine maintenance stay on the list for months as patients dragged their feet in setting up appointments with our technicians or were not home when the technicians arrived at the scheduled time. (Too many times due to an emergency trip to the casino or to play canasta!)

As of July 1, 2010, maintenance and service became even more complicated. On Oct. 30, 2009, CMS issued a final rule extending maintenance and service reimbursements through June 30, 2010, under the same methodology as 2009. However, the agency changed the protocol for maintenance and service rendered after July 1, 2010. Here are highlights of the change:

• The payment amount is fixed at $66.
• Not only must the supplier physically visit the home of the beneficiary (no change from 2009), the visit must take place during the first month of the six-month period.
• A supplier is not required to visit. However, should he choose not to, he is required to ensure that the equipment is still in working order, that the beneficiary has not requested the equipment be checked, and that he does not bill for maintenance and service.
• The applicable date of service must be at least six months after the 36-month rental cap for oxygen equipment or the end of the warranty period for maintenance and service, whichever is later. Further, before a supplier can bill for maintenance and service, the supplier must verify and document in the records that the oxygen equipment is no longer covered under a warranty.
• The rule applies to the following oxygen concentrator and oxygen transfilling equipment HCPCS codes: E1390: Oxygen concentrator E1391: Oxygen concentrator, dual delivery port E1392: Portable oxygen concentrator, rental E0433: Portable liquid oxygen system, rental K0738: Portable gaseous oxygen system
• The rule does not apply to beneficiary-owned oxygen equipment or to the following liquid and gaseous oxygen equipment HCPCS codes: E0424, E0431, E0434 or E0439.
• When billing for maintenance of a portable oxygen concentrator, suppliers must use code E1390 MS, not E1392 MS. This has caused some confusion because, during the rental period, suppliers bill for both E1390 and E1392 for the POC. CMS will only make one maintenance and service payment, regardless of the combination of equipment provided to the patient.

The second-most burdensome issue for suppliers will be trying to hit that limited 30-day window to actually connect with the patient to perform the work. One solution is to notify patients well in advance about the restrictive time frame. CMS has communicated that in unavoidable circumstances, such as the hospitalization of a patient, an exception can be made. This should be documented in the patient record as well as noted in the narrative field. The next maintenance and service visit, then, cannot occur for another six months, resulting in a “moving anniversary date.”

However, the biggest problem suppliers will face is determining if the oxygen equipment patients have in their possession is still under warranty. Many companies do not track this within the billing area of their operating systems, but instead in their technical or warehouse records, and the data may or may not be computerized.

HME suppliers should question manufactures about equipment-failure rates in year four and five of use. Most of us know (or think we do) which manufacturers have higher failure rates, so choose manufacturers with proven rates of less than 2.5 percent. But always double check that against your own data. By doing this, going with a threeyear warranty instead of five may yield a better ROI.

These issues will have to be addressed if your organization is going to continue to make service calls, and most will as it provides an opportunity to ensure the company’s assets are still where they are reported to be. Also, it provides an opportunity to bring in some revenue after the cap kicks in. For example, an HME company with 150 oxygen patients that collects the fee for the about 14 percent of patients who make it to months 36-60 would gain approximately $4,000 in additional top-line revenue.

In this industry, it is critical to try to recoup our costs of doing business. Every time CMS changes a policy, it warrants an evaluation of your company’s processes, too.

Portions of this article are based on the CMS publication “MLN Matters: Number MM6990.” For more details, check with your local Medicare Administrative Contractor.

This article originally appeared in the Respiratory & Sleep Management September 2010 issue of HME Business.