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April 24, 2014

Overview of 2013 Final Rule on DME Written Order and Face-to-Face Encounter Requirements

The 2013 Medicare Physician Fee Schedule (MPFS) final rule, released by the Centers for Medicare & Medicaid Services (CMS) on November 1, 2012, includes, among other policy and payment changes, provisions establishing new durable medical equipment (DME) written order and face-to-face encounter requirements.

Written Order Prior to Delivery and Face-to-Face Encounter Requirements

DME suppliers must obtain detailed written orders from a beneficiary’s treating physician prior to billing for covered DME.  Historically, for most DME, a supplier could deliver DME to a patient based on a verbal order or preliminary written “dispensing order,” although billing was permitted only after receipt of a detailed written order.  However, the Social Security Act authorizes CMS to specify covered DME that requires a supplier to obtain a detailed written order prior to delivering the item.  The Medicare Program Integrity Manual contains the current list of DME that requires a detailed written order prior to delivery.  The list is relatively small and includes pressure-reducing pads, mattress overlays, mattresses and beds; seat lift mechanisms; transcutaneous electrical nerve stimulation (TENS) units; and power-operated vehicles and power wheelchairs, which were seen as posing vulnerabilities to the Medicare program that could be mitigated through requiring a written order prior to delivery.

Under the MPFS final rule, CMS has expanded the list of items that require a detailed written order prior to delivery for new DME orders on or after July 1, 2013.  The list of Specified Covered Items includes common DME, such as glucose monitors, respiratory assist devices, infusion pumps and oxygen and oxygen equipment.  For each item on the list, CMS also will require DME suppliers to obtain documentation from the treating physician that the physician or a physician assistant (PA), nurse practitioner (NP) or clinical nurse specialist (CNS) had a face-to-face encounter with the beneficiary within six months prior to the date the order was written.  This represents a significant change from the proposed rule, which would have required that the face-to-face encounter occur within 90 days prior to or 30 days after the date of the order.  The face-to-face encounter requirement is one of the anti-fraud provisions in the Patient Protection and Affordable Care Act and is consistent with similar face-to-face requirements for the Medicare home health and Medicaid DME benefits.

Specified Covered Items

The list of Specified Covered Items includes DME items that meet at least one of the following criteria:

  • Items that currently require a detailed written order prior to delivery per instructions in the Medicare Program Integrity Manual
  • Items that cost more than $1,000
  • Items that CMS, based on its experience and recommendations from DME Medicare Administrative Contractors, believes are particularly susceptible to fraud, waste and abuse
  • Items CMS believes are vulnerable to fraud, waste and abuse based on reports of the U.S. Department of Health and Human Services Office of Inspector General, U.S. Government Accountability Office or other oversight entities

CMS will annually update the list to add any item of DME (1) described by a health care common procedure coding system code for TENS units, rollabout chairs, oxygen and respiratory equipment, hospital beds and accessories, and traction-cervical but not power mobility devices that are subject to already existing face-to-face requirements; (2) that appears on the Durable Medical Equipment, Prosthetics, Orthotics and Supplies Fee Schedule with a price ceiling at or greater than $1,000; and (3) that CMS adds to the list of Specified Covered Items through the notice and comment rulemaking process in order to reduce the risk of fraud, waste and abuse.  CMS will annually remove any items for which regulations explicitly state that a face-to-face encounter is not necessary.  Updates to the list will appear annually in the Federal Register, and the full updated list will be available on CMS’s website.

Written Order Requirements

CMS will revise 42 C.F.R. 410.38(g) to explicitly require that, as a condition of payment for Specified Covered Items, a written order must include the beneficiary’s name, item of DME ordered, prescribing practitioner national provider identifier, signature of the prescribing practitioner and date of the order.  CMS did not adopt the proposed requirement to include beneficiary diagnosis and necessary proper usage instructions on the written order.  While standards of practice may require that orders contain additional information beyond the five required elements, an order without these minimum elements will be considered incomplete and will not support a claim for payment.

Face-to-Face Encounter and Documentation Requirements

During the face-to-face encounter, the physician, PA, NP or CNS must have evaluated the beneficiary, conducted a needs assessment for the beneficiary or treated the beneficiary for the medical condition that supports the need for each covered item of DME.  A single face-to-face encounter can support the need for multiple covered items of DME as long as it is clearly documented in the beneficiary’s medical record that the beneficiary was evaluated or treated for a condition that supports the need for each covered item of DME during the specified period of time.  A face-to-face encounter may be accomplished via a telehealth encounter if all Medicare telehealth requirements are met.

When the face-to-face encounter is performed by a physician, submission of the part of the medical record that documents the evaluation of the beneficiary, the needs assessment for the beneficiary or the treatment of the beneficiary for the medical condition that supports the need for each covered item of DME is sufficient to document the face-to-face counter has occurred.  When the face-to-face encounter is performed by a PA, NP or CNS, a physician must document the face-to-face encounter was performed by signing or cosigning the portion of the medical record that documents the face-to-face encounter.

Effective July 1, 2013, new code G0454 will be implemented to compensate a physician who documents that a PA, NP or CNS has performed a face-to-face encounter for the list of Specified Covered Items.  Only physicians who do not bill an evaluation and management code for the beneficiary are eligible for the new G-code payment.  If multiple written orders for covered items originate from one beneficiary visit, the physician can receive the G-code payment only once.

DME Supplier Notification of Face-to-Face Encounter

Because the DME supplier submits the claims for the covered DME items, the supplier must have access to the face-to-face encounter documentation.  Although CMS proposed four possible requirements for supplier notification of the face-to-face encounter, CMS ultimately decided not to require a specific method of notification.  CMS will require only that the supplier have all documentation necessary to support the claim, which must be made available to CMS upon request.

© 2014 McDermott Will & Emery

About the Author

Emily J. Cook, McDermott Will Emery Law Firm, Health Care Attorney
Partner

Emily J. Cook is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Los Angeles office.  She focuses her practice on Medicare provider certification, reimbursement and regulatory compliance.

310-284-6113

About the Author

Partner

Joan Polacheck is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office. She represents a broad range of health care industry clients, including hospitals, suppliers, and drug and device companies.

312-984-7556
Associate

Monica A. Wallace is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office.  She focuses her practice on complex regulatory and transactional counseling to health care organizations such as health systems, hospitals, physician groups, integrated delivery systems, durable medical equipment prosthetics and orthotics suppliers, home health agencies, and other health care providers. Monica’s regulatory practice focuses on the Anti-Kickback and Stark laws; Medicare and Medicaid reimbursement and billing; legal...

312-984-7757

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