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CMS article explains device credit policy

Device Regulation Alert: Safety, Compliance and Reimbursement News, December 17, 2007

CMS issued a December Medlearn Matters article regarding Medicare reimbursement for recalled or replaced devices for which providers receive partial credit. In prior issues we explained CMS's concerns about costs associated with recalled and replacement devices. The December article explains hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System payment for partial device credits.

The article describes how partial credits should be reported to Medicare and how they will be reimbursed under these payment systems. If a hospital or ASC receives a 50% or more partial credit for a replacement device, it must report that credit and it will be paid 50% of the new device's estimated cost. The article links to a table of applicable Ambulatory Payment Classifications to which the policy applies.

In January 2007, Medicare began adjusting OPPS payment when hospitals were given a full credit or weren't charged for a replacement device. Now, effective January 1, 2008, both OPPS and ASC payment will be subject to a partial credit policy.

Hospitals and ASCs must report partial credit for devices using modifier -FC with the procedure code for the procedure in which the device is used if the device is on the policy list. That list is the same list of devices to which the full credit policy applies. The article also provides hypothetical examples of how the policy will be applied.

Click here to read the article.

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