Payment for Repair and Replacement of Beneficiary-Owned Equipment

40.8 - Payment for Repair and Replacement of Beneficiary-Owned Equipment (Rev. 3593, Issued: 08-17-16, Effective: 10-01-16, Implementation: 10-03-16) Beneficiaries who maintain a permanent residence in a CBA may go to any Medicare-enrolled supplier (contract or noncontract supplier) for the maintenance or repair of beneficiary-owned equipment, including parts that need to be replaced in order to make the equipment serviceable. Labor to repair equipment is not subject to competitive bidding and, therefore, will be paid in accordance with Medicare’s general payment rules. Payment for replacement parts that are part of the competitive bidding program for the area in which the beneficiary resides is based on the single payment amount for that replacement part in the CBA in which the beneficiary lives. Payment is not made for parts and labor covered under a manufacturer’s or supplier’s warranty. Beneficiaries must obtain replacements of beneficiary-owned competitively bid items that are part of the competitive bidding program for the areas in which the beneficiary resides from a contract supplier unless the item is a replacement part or accessory that is replaced as part of the service of repairing beneficiary-owned base equipment (e.g., wheelchair, walker, hospital bed, continuous positive pressure airway device, oxygen concentrator, etc.). All base equipment that is replaced in its entirety because of a change in the beneficiary’s medical condition or because the base equipment the beneficiary was using was either lost, stolen, irreparably damaged, or used beyond the equipment’s reasonable useful lifetime (see section 110.2.C of chapter 15 of the Benefit Policy Manual) must be obtained from a contract supplier in order to receive Medicare payment. The contract supplier is not required to replace an entire competitively bid item with the same make and model as the previous item unless a physician or treating practitioner prescribes that make and model. (See section 30.4 of this chapter.). If beneficiary-owned oxygen equipment or capped rental DME that is a competitively bid item for the CBA in which the beneficiary maintains a permanent residence has to be replaced prior to end of its reasonable useful lifetime, then the replacement item must be furnished by the supplier (contract or noncontract supplier) that transferred ownership of the item to the beneficiary. Payment for replacement of items that are part of the competitive bidding program for the area in which the beneficiary resides is based on the single payment amount for that item. For additional information regarding payment of a part of a DMEPOS Item, please see Pub.100- 04 chapter 20, section 50.5.