Revision 16-2; Effective June 1, 2016
Certain medically necessary DME may be allowable incurred medical expense (IME) deductions. Examples include:
- customized, manual wheelchairs; and
- basic, power wheelchairs.
Certain medically necessary DME expenses are not allowable IME deductions, if they are:
- covered by a third party;
- covered under the Texas Medicaid State Plan;
- included in the nursing facility (NF) vendor payment; or
- included as NF add-on services.
Examples of medically necessary DME included in NF vendor payments are:
- standard wheelchairs;
- air mattresses;
- hospital beds;
- trapeze bars;
- oxygen equipment, such as tanks, concentrators, tubing, masks, valves and regulators; and
- DME that could be used by other residents, such as oversized wheelchairs or beds.
Note: If a recipient wishes to keep DME that is covered by the vendor payment for personal use only, the recipient is responsible for the purchase and it is not an allowable IME. See The Nursing Facility Requirements for Licensure and Medicaid Certification Handbook for additional information.
Direct recipients to their NF representative to request DME items included in the NF vendor payment.
Any repairs to DME for which an IME deduction was allowed are the responsibility of the NF. Refer to the Texas Department of Aging and Disability Services rules at Texas Administrative Code §19.2601(b)(8)(C), Vendor Payment (Items and Services Included).
Use Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME, for a DME IME request.
H-2810 Using the DME Fee Schedule
Revision 16-2; Effective June 1, 2016
Determine the appropriate incurred medical expense (IME) deduction by comparing fees submitted by a durable medical equipment (DME) provider to the fees listed in the DME fee schedule.
The Medicare fee schedule for DME contains Healthcare Common Procedural Coding System (HCPCS) codes used by DME providers to file claims. The Texas-specific amounts allowed for IME claims for each code are available on the HHSC Office of Social Services Intranet. The DME Fee Schedule is updated, as needed.
There are no copyright issues with the DME Fee Schedule posted on the Office of Social Services Intranet. This fee schedule is available to the public on the Centers for Medicare and Medicaid Services website.
The amount allowed for a particular HCPCS code cannot exceed the amount listed on the DME fee schedule. If the DME provider submits a charge with an amount greater than the maximum allowable amount listed for a particular code, allow the amount listed on the DME Fee Schedule for that particular code as an IME deduction. If a DME provider submits a charge less than the amount allowed on the DME Fee Schedule, allow the lesser amount as an IME deduction.
- The DME provider submits a charge for code E2214 with the amount of $35.00. The code E2214, Pneumatic caster tire, reflects a maximum of $32.52. Consider $32.52 as an IME deduction.
- The DME provider submits a charge for code E2603 with the amount of $120.00. The code E2603, Skin protect cushion < 22 inches, reflects a maximum of $126.07. Consider $120.00 as an IME deduction.
Not all codes listed on the DME fee schedule are allowable as IME deductions. IME requests for codes highlighted in gray or codes not listed on the fee schedule should be submitted for review to state office. See Section H-2830, DME Exception Processing/Codes Not on the Fee Schedule.
Contact the DME provider to resolve the discrepancy if the treatment plan received contains:
- a discrepancy in the HCPCS code and description;
- an HCPCS code not listed on the DME Fee Schedule; or
- no HCPCS code listed.
H-2820 DME Procedures
Revision 18-1; Effective March 1, 2018
Use the following procedures to process incurred medical expense (IME) requests for durable medical equipment (DME).
- If the MEPD specialist receives an IME request, send Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME, to the requestor within two working days of receipt of the request.
- Inform the requestor to have Form H1263-A completed and the service or equipment provider submit written, detailed specifications for the requested service or equipment to the recipient's attending practitioner after assessing the recipient's needs. The specifications must include the following:
- a detailed explanation of medical equipment/services recommended;
- an itemized listing of all equipment and accessories and costs;
- the appropriate DME Healthcare Common Procedural Coding System (HCPCS) code for each service or equipment; and
- a clear explanation of why the nursing facility equipment will not meet the recipient's needs.
- The recipient's attending practitioner, physician assistant or advance practice nurse employed by the attending practitioner, must sign and date the form that lists the medical procedure and the itemized list of equipment and accessories that includes the explanation of why the nursing facility equipment is not adequate for the recipient.
- The requestor submits to the MEPD specialist:
- completed Form H1263-A;
- a provider service statement reflecting service or equipment provided along with the appropriate HCPCS code(s); and
- a statement from the provider showing the equipment is delivered and the date of delivery.
The MEPD specialist must document on the form the date the form was received by the agency.
If the request does not contain a detailed explanation or identification of the equipment needed, return the request to the provider. Explain to the provider that more information is needed regarding the need to identify the equipment or an explanation for the need of the equipment.
- Once the completed Form H1263-A, written/detailed specifications and itemized list are received, the MEPD specialist determines the correct amount of the recipient's co-payment adjustment by comparing the fees submitted by the provider to the appropriate HCPCS codes and charges on the Medicare DME Fee Schedule. This is in accordance with Section B-8200, Redetermination Cycles, for treatment of a change. Within this same time frame, the MEPD specialist ensures entry into the appropriate automated system and notifies the recipient of the co-payment adjustment, using Form H4808, Notice of Change in Applied Income/Notice of Denial of Medical Assistance, or Form H1259, Correction of Applied Income, in accordance with established agency notification requirements.
- Complete the same type of form that was sent to notify the recipient of the IME adjustment and mail it to the provider with only the following information:
- the particular claim that is approved;
- total amount approved;
- recipient's co-payment is adjusted (not the actual co-pay amount); and
- the beginning month of the co-payment or adjustment.
To safeguard confidentiality, do not send a notice to a provider that includes specific information about the recipient's finances, sources of income or the amount of co-payment. Do not use auto-populated forms or a copy of the same notice that was sent to the recipient. If a provider inquires about a recipient's finances, refer the provider to the recipient or the recipient's authorized representative. Do not refer the provider to nursing facility staff.
Reminder: To safeguard confidentiality, do not provide the co-payment amount to any provider (either verbally or in writing) without written authorization from the recipient.
H-2830 DME Exception Processing/Codes Not on the Fee Schedule
Revision 17-3; Effective September 1, 2017
The Medicare fee schedule does not contain all of the Healthcare Common Procedural Coding System (HCPCS) codes used by durable medical equipment (DME) providers. Medicare considers these codes as miscellaneous codes or codes not otherwise specified or classified. Based on the DME exception processing information from the Centers for Medicare & Medicaid Services, certain miscellaneous codes may be allowable incurred medical expense (IME) deductions even though the HCPCS codes are not identified on the Medicare fee schedule.
Based on the DME exception process, determine the amount of the IME deduction for allowable miscellaneous codes and allowable codes not listed on the fee schedule using the following steps.
- Request the wholesale pricing in writing from the DME provider for each HCPCS miscellaneous code on the invoice.
- Multiply the wholesale price by 40 percent to obtain the markup amount.
- Add the wholesale price and the markup amount for the total fee.
- Allow up to the total amount as an IME deduction.
Example: K0108 wholesale price is $350. $350 x 40 percent = $140. $140 is the markup amount. $350 + $140 = $490 total amount. $490 is the allowable IME.
If a DME provider does not provide the wholesale pricing for a particular HCPCS miscellaneous code, do not allow that code as an IME deduction. Do not deny the entire IME request. Use Form H1052-IME, Notice of Delay in Decision for Incurred Medical Expenses, to notify the provider of a delay in processing the IME and include the additional information needed to process the request. If the wholesale price is not provided, process the IME request for the remaining codes. If the wholesale price is provided after the remaining IME has been approved, process the change and allow the code as an IME deduction.
H-2840 DME Modifier Code for Rental Items
Revision 10-3; Effective September 1, 2010
Because of Medicare regulations regarding durable medical equipment (DME), an individual owns the DME after a set number of payments. This is common for wheelchairs.
On the Medicare Fee Schedule, some DMEs are considered capped rental items. In these situations, the first Modifier column (column labeled Mod) will reflect only RR for rented. The DME supplier must transfer ownership of the capped rental equipment to the individual after the 13th continuous month of rental. An individual in an institution makes a one-time purchase instead of renting the DME. Calculate the incurred medical expense (IME) deduction by multiplying the monthly rental amount on the Medicare Fee Schedule by 13. This is the total allowable amount of IME deduction for this item.
Example: An individual purchased a heavy-duty wheelchair with modifications specific for his use. The code submitted with Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME, is K0006. The monthly rental amount for this code is 125.41. The total IME deduction for this DME is $1,630.33 ($125.41 x 13).
To safeguard beneficiary access to quality equipment throughout the duration of the rental period, Medicare requires that the DME supplier may not provide different equipment from that which was initially furnished to the individual at any time during the 13-month rental for capped rental DME unless one of the following exceptions applies:
- the equipment is lost, stolen or irreparably damaged;
- the equipment is being repaired while loaner equipment is in use;
- there is a change in the beneficiary's medical condition such that the equipment initially furnished is no longer appropriate or medically necessary; or
- the DME carrier determines that a change in equipment is warranted.
Based on this, an individual is limited to only one IME deduction for each identified DME during the capped rental period. If an exception is met and a need is identified for a change, request the DME provider to submit a copy of the exception request/approval.
Revision 18-3; Effective September 1, 2018
Customized Power Wheelchairs
A customized power wheelchair (CPWC) is a covered service in a nursing facility (NF). Direct individuals to request CPWCs through a recipient's managed care organization.
Customized Manual Wheelchairs (CMWCs)
CMWCs may be considered for an incurred medical expense (IME) deduction for an NF recipient with:
- A completed, signed, and dated Form H1263-A, Certification of Medical Necessity – Durable Medical Equipment or Other IME
- Written and detailed specifications and an itemized list of the requested durable medical equipment (DME) and all accessories
- Clear, written explanation, signed by the physician, of why the NF equipment will not meet the recipient's needs
Before allowing an IME deduction, if the recipient has a positive preadmission screening and resident review (PASRR) evaluation, verify what type of positive PASRR the person has.
A NF recipient with a positive PASRR evaluation for an intellectual disability (ID) or a developmental disability (DD) is eligible to receive DME through NF specialized services. Do not consider an IME deduction for a CMCW. Direct these individuals to the NF to request a CMWC as a NF specialized service.
A NF recipient with a positive PASRR evaluation for Mental Illness (MI) is not eligible to receive DME through NF specialized services. Requests for CMWCs can be considered for an IME deduction.
Basic Power Wheelchairs
Basic power wheelchairs that are not customized can be considered for an IME deduction if the following verification is received:
- a completed, signed, and dated Form H1263-A; and
- a clear, written explanation, signed by the physician, of why the NF equipment will not meet the recipient's needs.
Basic power wheelchairs include the wheelchair, necessary batteries and may include the following basic components. Do not allow separate charges for the items listed below:
- lap belt or safety belt;
- battery charger;
- batteries (initial);
- complete set of tires and casters, any type;
- leg rests;
- foot rests or foot platform;
- arm rests;
- any weight-specific components (braces, bars, upholstery, brackets, motors, gears, etc.), as required by a person’s weight capacity; and
- controller and input device.
H-2860 Reserved for Future Use
Revision 20-2; Effective June 1, 2020
H-2870 When the Co-Payment Adjustment is Not Used to Pay DME Provider
Revision 10-3; Effective September 1, 2010
Payment for services in accordance with the agreed plan is a matter between the recipient and the durable medical equipment (DME) provider. The recipient or the recipient's payee is expected to actually pay the DME provider in a timely manner using the income from the co-payment adjustment. If the MEPD specialist is notified the recipient has not appropriately used the income from the co-payment adjustment to pay the DME bill, the MEPD specialist consults with legal counsel as to the appropriate action to take.