Billing Procedures Related to Downcoding under the Competitive

40.12 - Billing Procedures Related to Downcoding under the Competitive Bidding Program (Rev. 1532, Issued: 06-11-08, Effective: 07-01-08, Implementation: 07-07-08) The following downcoding guidelines describe situations where Medicare reduces the level of payment for the prescribed item based on a medical necessity partial denial of coverage for the additional, not medically necessary, expenses associated with the prescribed item. For beneficiaries who reside in a CBA and for whom Medicare determines that the prescribed item should be downcoded to an item that is reasonable and necessary under Medicare’s coverage requirements, the subsequent scenarios and chart detail the type of supplier that can furnish the item and the payment for the item. • Downcodes from a non-bid item to a bid item In this situation, Medicare payment will be made to any Medicare enrolled supplier on an assigned or unassigned basis. Medicare payment will be equal to 80 percent of the single payment amount for the medically necessary bid item. • Downcodes from a bid item to a non-bid item Medicare payment in this downcoding scenario will be made to a contract supplier on an assignment-related basis. Medicare payment will be equal to 80 percent of the lower of the actual charge or the fee schedule amount for the medically necessary non-bid item. • Downcodes from a bid item in one product category (category “U”) to a bid item in another product category (category “S”) In this case, Medicare payment will be made to a contract supplier for the product category “U” on an assignment-related basis. Medicare payment would be equal to 80 percent of the single payment amount for the medically necessary bid item in product category “S”. Downcoding Scenarios for Beneficiaries Residing in a CBA From a Higher Level of Service Item To a Medically Necessary Item Must be Furnished by Assignment Mandatory (Y/N) Medicare Payment Based Upon Non-Bid Item Bid Item Any Medicare Enrolled Supplier N Single Payment Amount for the Medically Necessary Item Bid Item Non-Bid Item Contract Supplier Y Lower of the Actual Charge or Fee Schedule Amount for the Medically Necessary Item Bid Item in Product Category “U” Bid Item in Product Category “S” Contract Supplier for Category “U” Y Single Payment Amount for Category “S” for the Medically Necessary Item The following scenarios and chart describe situations where the prescribed item for a beneficiary that does not reside in a CBA, but travels to a CBA is downcoded to an item that is reasonable and necessary under Medicare’s coverage requirements. • Downcodes from a non-bid item to a bid item In this situation, Medicare payment will be made to any Medicare enrolled supplier on an assigned or unassigned basis. Medicare payment will be equal to 80 percent of the lower of the actual charge or the fee schedule amount for the medically necessary bid item. • Downcodes from a bid item to a non-bid item Medicare payment in this downcoding scenario will only be made to a contract supplier on an assignment-related basis. Medicare payment will be equal to 80 percent of the lower of the actual charge or the fee schedule amount for the medically necessary non-bid item. • Downcodes from a bid item in one product category (category “U”) to a bid item in another product category (category “S”) In this case, Medicare payment will only be made to a contract supplier for the product category “U” on an assignment-related basis. Medicare payment will be equal to 80 percent of the lower of the actual charge or the fee schedule amount for the medically necessary bid item in product category “S”. Downcoding Scenarios for Beneficiaries Who Do Not Reside In a CBA, But Travel to a CBA From a Higher Level of Service Item To a Medically Necessary Item Must be Furnished by Assignment Mandatory (Y/N) Medicare Payment Based Upon Non-Bid Item Bid Item Any Medicare Enrolled Supplier N Lower of the Actual Charge or Fee Schedule Amount for the Medically Necessary Item Bid Item Non-Bid Item Contract Supplier Y Lower of the Actual Charge or Fee Schedule Amount for the Medically Necessary Item Bid Item in Product Category “U” Bid Item in Product Category “S” Contract Supplier for Category “U” Y Lower of the Actual Charge or Fee Schedule Amount for the Medically Necessary Item