Payment for Replacement of Equipment (Rev. 1, 10-01-03)

by  Jared Staheli
June 17th, 2015

Replacement of equipment which the beneficiary owns or is purchasing or is a capped rental item is covered in cases of loss, or irreparable damage or wear, and when required because of a change in the patient's condition subject to the following provisions. Expenses for replacement required because of loss or irreparable damage may be reimbursed without a physician's order when, in the contractor's judgment, the equipment as originally ordered, considering the age of the order, still fills the patient's medical needs. However, claims involving replacement equipment necessitated because of wear or a change in the patient's condition must be supported by a current physician's order. (See the Medicare Benefit Policy Manual, Chapter 16, for payment for equipment replaced under a warranty.)

Contractors investigate and deny cases suggesting malicious damage, culpable neglect or wrongful disposition of equipment as discussed in BPM Chapter 15, where it is determined that it is unreasonable to make program payment under the circumstances. They refer such cases to the program integrity specialist in the RO.

Contractors do not pay for replacement of rented equipment except capped rental items. (See §50.1) However, they pay for replacement of purchased equipment in the following classes: inexpensive or routinely purchased, customized items, capped rental (where the beneficiary has elected to purchase the item), and other prosthetic and orthotic devices. They do not pay for purchase or replacement of items that require frequent and substantial servicing or oxygen equipment.

References:

• Pub 100-04 Medicare Claims Processing Manual