Observation Deck

Billing Non-Assigned

More providers are electing to be non-participating. What are the details?

• By Jeffrey S. Baird
• Dec 01, 2016

Up to now, DME suppliers have shouldered the burden of increasingly harsh Medicare policies. The suppliers have shielded their patients from the pain being inflicted by competitive bidding, plummeting reimbursement, and out-of-control audits. Financially, it is difficult for DME suppliers to continue to do this. Out of necessity, suppliers are having to shift the burden, of complying with the increasingly harsh Medicare policies, to their patients. This is unpleasant … but it is the “new normal.”

What we are now witnessing are DME suppliers are electing to be nonparticipating and “billing non-assigned.” If a non-participating supplier provides a product on a non-assigned basis, this means that the supplier is not agreeing to accept the Medicare allowable as payment in full, can collect directly from the patient, and can charge more than the Medicare allowable in such cases. The supplier must file the claim with Medicare on behalf of the patient and any Medicare reimbursement will go directly to the patient.

The bottom line is that the non-participating supplier (that is not a competitive bid contract supplier taking care of competitive bid patients) can collect up-front from the patient (i.e., bill non-assigned). But as is often the case, the “devil is in the details.” So let’s talk about some of the “details.”

Recoupment Risk to DME Supplier. Assume that the supplier provides the item non-assigned and submits a claim to Medicare on behalf of the patient. Assume that Medicare reimburses the patient but subsequently audits the claim. Assume that following the audit, Medicare demands recoupment of the claim. Is the supplier at risk of being required to repay the patient? Unfortunately, there is little published guidance from Medicare on the risk of liability for non-assigned claims. The DME supplier’s intake process should be the same for assigned and non-assigned items.

If the patient does not meet medical necessity criteria and the supplier chooses to provide and bill non-assigned, an Advance Beneficiary Notice should be issued. Assuming the ABN is valid, the supplier should not have recoupment exposure. If the patient did meet medical necessity criteria and the supplier chooses to file a non-assigned claim, then the supplier may be liable if the claim is audited and a recoupment action ensues. The supplier should not routinely obtain an ABN for all non-assigned claims. An ABN should be issued only when the supplier reasonably believes that the claim will be denied. In the instance that a non-assigned claim is reviewed and payment denied, the supplier will likely be required to refund the amount collected back to the Medicare beneficiary.

Retail Supplier With No PTAN. Items that require a prescription prior to dispensing should be labeled as such. Any item labeled as a prescription device or supply requires a prescription prior to dispensing, regardless of whether it is being sold by a Medicare supplier or “retail” company (e.g., online company) with no PTAN. State licensing requirements govern who can/cannot sell prescription items. The seller of a prescription-only item should retain the prescription in its records. If the supplier is not a Medicare supplier, it does not need to meet Medicare requirements; however, Medicare requirements are different than state licensure requirements.

Electronic Signatures for Monthly Rental. Medicare should accept an electronic signature that meets the requirements of the Uniform Electronic Transactions Act (“UETA”). In the past, there were instances when CMS took the approach that electronic signatures are not sufficient for certain documents and attempted to require blue ink documents. Notwithstanding what has happened in the past, as long as the UETA is followed, CMS should be required to accept electronic documentation. However, there is some risk that CMS may still question the use of an electronic signature.

Collecting Rent on Non-Assigned Basis. A non-participating supplier can choose to not accept assignment for a Medicare rental item, and can collect its usual rental charge up front from the patient and submit a claim to Medicare on a non-assigned basis. This results in Medicare paying 80% of the Medicare allowable to the patient. The supplier needs to follow Medicare requirements when filing non-assigned claims.

Obligation to Service Oxygen Patient During 60 Months. The DME supplier can choose not to service oxygen for Medicare beneficiaries after the initial five years. However, suppliers are obligated to provide oxygen equipment once they submit the first rental claim through the five year mark, unless the patient chooses to change suppliers. A DME supplier cannot force patients to go to another supplier mid-rental.

PTAN Required to Bill Commercial Insurers? Suppliers that do not bill the Medicare program will lose their supplier number after 12 months of no billing. Commercial insurers determine what their criteria are for a DME supplier to be able to participate with that insurance. Many commercial insurers require suppliers to have a PTAN. The DME supplier needs to review the commercial insurer’s DME supplier requirements. Most state Medicaid programs require that DME suppliers be enrolled with Medicare.

Paying Cash for Capped Rental Item. A DME supplier can only use an ABN and sell a capped rental item on a non-assigned basis if the patient chooses option 2 on the ABN to NOT have the claim submitted to Medicare. A claim with a capped rental HCPCS code and the NU modifier will reject and never be processed by Medicare. If a patient chooses to have the claim filed with Medicare, then the supplier cannot sell the capped rental item and must follow Medicare rules.

Billing Commercial Insurance Patients Non-Assigned. ABNs do not apply to commercial payers. The DME supplier needs to review its contract (with the commercial insurer) to determine if the supplier can provide products to the commercial insurer’s covered lives on a non-assigned basis. As a general rule, a supplier cannot provide products to commercial insurance covered lives on a non-assigned basis.

Signed Authorization for Submission of Claim. The DME supplier must have a signed authorization for submission of a claim. There is no “set” form for this authorization; it can be language included as part of the delivery ticket … or for monthly rentals on a non-assigned basis, a separate form can be signed. The supplier can use language from the 1500 form on a document created by supplier as follows: “I authorize the release of any medical or other information necessary to process this claim. I also request payment of government benefits to me.”

Commercial Insurer Prohibition Against Billing Non-Assigned. The DME supplier will not be discriminating against a Medicare patient so long as the supplier only makes a particular product available to patients for whom the supplier is paid a threshold price, whether that payment amount is collected from the patient on a non-assigned claim, or from the payer (with the patient co-pay) for assigned claims. In the circumstance that a commercial payer requires that the DME supplier accept assignment, the supplier can decline to make a particular product available unless the reimbursement meets the threshold amount established for that item (unless the insurance contract requires otherwise).

This article originally appeared in the December 2016 issue of HME Business.