Billing No Cost Items Due to Recall, Replacement, or Free Sample

67.2.1 – Billing No Cost Items Due to Recall, Replacement, or Free Sample (Rev. 3181, Issued: 01-30-15, Effective: 07-01-15, Implementation: 07-06-15) Currently, institutional providers that use the Healthcare Common Procedural Coding System (HCPCS) bill device HCPCS codes for no cost or full credit items with token charges in order for claims to pass OPPS claims processing edits that require certain devices to be billed with their associated procedures so that payment can be made. Effective January 1, 2006, modifier –FB is used to indicate that an item used in a procedure was furnished without cost to the provider, and, therefore, it is not being charged to Medicare or the beneficiary. More information on billing HCPCS modifier –FB can be located in Chapter 4, §20.6.9 and 61.3.1 of this manual. Effective April 1, 2006, two new condition codes were created for institutional use: 49 and 50 (Table 1). These new codes are used to identify and track medical devices that are provided by a manufacturer at no cost or with full credit to the hospital due to warranty for a malfunction or recall. Table 1: New Condition Codes and Descriptions Condition Code Description 49 Product Replacement within Product Lifecycle Replacement of a product earlier than the anticipated lifecycle. 50 Product Replacement for Known Recall of a Product Manufacturer or FDA has identified the product for recall and therefore replacement. • Providers must use these condition codes to identify medical devices that are provided by a manufacturer at no cost or with full credit due to warranty or recall. These condition codes will be used to track no cost/full credit devices replaced due to recall or warranty. • Providers must report these condition codes on any inpatient or outpatient institutional claim that includes a no cost/full credit replacement device when conditions of warranty or recall are met. NOTE: OPPS hospitals billing no cost/full credit devices must append modifier –FB to the procedure code for implanting the no cost/full credit device, along with the appropriate condition code if applicable (in Table 1 above), in instances when claims processing edits require that certain devices be billed with their associated procedures. The modifier identifies the procedure code line for the no cost/full credit device, while the condition code explains if the device was provided free of cost due to warranty or recall. Effective January 1, 2014, an additional new condition code was created for institutional use: 53 (Table 2). This new code is used to identify and track medical devices that are provided by a manufacturer at no cost or with full credit to the hospital due a clinical trial or a free sample. Table 2: New Condition Codes and Descriptions Condition Code Description 49 Product Replacement within Product Lifecycle Replacement of a product earlier than the anticipated lifecycle. 50 Product Replacement for Known Recall of a Product Manufacturer or FDA has identified the product for recall and therefore replacement. 53 Initial placement of a medical device provided as part of a clinical trial or free sample Code is for outpatient claims that have received a device credit upon initial medical device placement in a clinical trial or a free sample. • Providers must use these condition codes to identify medical devices that are provided by a manufacturer at no cost or with full credit due to warranty, recall, or free sample. These condition codes will be used to track no cost/full credit devices replaced due to recall, warranty, or free sample. • Providers must report these condition codes on any inpatient or outpatient institutional claim that includes a no cost/full credit replacement device when conditions of warranty, recall, or free sample are met. NOTE: OPPS hospitals billing no cost/full credit devices are no longer required to append modifier –FB to the procedure code for implanting the no cost/full credit device, along with the appropriate condition code if applicable (in Table 2 above), in instances when claims processing edits require that certain devices be billed with their associated procedures.