Billing for Capped Rental DME Items

50.9 - Billing for Capped Rental DME Items (Rev. 1544, Issued: 06-26-08, Effective: 07-01-08, Implementation: 07-07-08) Noncontract suppliers of capped rental DME equipment may elect to become “grandfathered suppliers” and continue furnishing equipment to their existing beneficiaries after the start of the DMEPOS Competitive Bidding Program, if the beneficiary agrees to the arrangement. This grandfathering process only applies to suppliers that began furnishing the capped rental DME item to beneficiaries in a CBA prior to the implementation of the competitive bidding program for that area and choose to continue to furnish the grandfathered item to these same beneficiaries in the CBA after the start of the DMEPOS Competitive Bidding Program. See §20.6 for additional information on payments to noncontract suppliers. If a noncontract supplier does not want to continue furnishing capped rental DME to its existing customers/beneficiaries after the start of the DMEPOS Competitive Bidding Program, the beneficiary must use a contract supplier to obtain the item. Ordinarily, the title to the capped rental DME item would transfer to the beneficiary after rental payments have been made for 13 months of continuous use. However, for beneficiaries that switch from a noncontract supplier to a contract supplier, the 13 month capped rental period starts over again. In this case, Medicare allows for a minimum of 13 months of rental payments to be made to a contract supplier because their current supplier chose not to become a grandfathered supplier. Therefore, under DMEPOS Competitive Bidding Program, when a beneficiary switches from a noncontract supplier to a contract supplier, up to 25 continuous payments could be made for the capped rental DME item. The beneficiary is liable for co-payments for all paid capped rental DME equipment claims.