Billing Medicare for Certain Replaced Devices

by  Christine Woolstenhulme, QCC, QMCS, CPC, CMRS
June 8th, 2017

When billing for certain replaced devices, Medicare payments should be reduced when a replacement device (cardiac or otherwise) is received by a hospital at a reduced cost (including no cost), or with a credit that is 50 percent or greater than the cost of the device. 

Correct billing in such situations requires providers to use a combination of Condition Codes 49 or 50, along with Value Code “FD.” Condition Codes 49 and 50 identify a replacement device while Value Code “FD,” informs Medicare of the amount of the credit or cost reduction received by the provider for the replaced device. That credit, whether full or partial, is then deducted from the Medicare reimbursement to the provider.

• Hospitals receiving cardiac devices at reduced or no cost should use the proper Condition Codes and Value Code when submitting claims to ensure overpayments are not made by Medicare.

Hospitals should ensure billing staff is aware of rules regarding billing for replacement devices based on guidance found in the “Claims Processing Manual” and 42 CFR 412.89. Current policy, as explained in MLN Matters® article MM8653, as well as in Chapter 4, Section 61.3 of the “Medicare Claims Processing Manual.”

References:

• Medicare Quarterly Provider Compliance Newsletter