Health Information Management

Do not separately bill 'soft goods' through a home medical supplier

APCs Insider, March 23, 2007

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QUESTION: In an OPPS hospital, is it acceptable to allow a home medical supplier to both provide orthopedic "soft goods" items (e.g., slings and braces) and separately bill these items under their durable medical equipment (DME) license? The home medical supplier provides these items to patients who are still in the hospital outpatient department following outpatient surgery. Or are these items packaged into the APC payment?

My other questions include:

a) How should we bill for items placed following completion of surgery, but while the patient is still in the operating suite?

b) Would it make a difference if the hospital owned the medical supplier?

c) If we can separately supply and bill these items, what kind of notification/patient choice documentation do we need?

d) Are there any compliance concerns if the patient purchases the item prior to arriving for surgery and brings it with them?

ANSWER: Your question encompasses a large number of items defined simply as "soft goods". Assuming these "soft goods" are not customized for the patient and the hospital routinely provides these items, a home medical supplier should not separately bill them. The hospital should bill for them on the UB-04, and the reimbursement is either bundled into the APC payment for Medicare beneficiaries, or paid under a fee schedule.

For those items paid under a fee schedule (i.e, non-implantable orthotics and prosthetics or take home surgical dressing schedules) you must assign an appropriate L code and bill them using an appropriate revenue code.

Following are additional answers to your questions:

a) The patient's location in the hospital when he or she receives the "soft good(s)" is not relevant when determining who should bill for the item(s). In some cases, staff must fit patients with custom DME devices while the patient is still in the hospital (and in some instances, still in surgery). The DME or home health company will fit a patient with a device which he or she will primarily use after discharge. This process ensures the item is properly fit to the patient.

b) The DME billing rules apply to all DME and home medical providers, regardless of ownership.

c) The Hospital Billing Manual provides six different categories of payment classes for DME, and in reality there are thousands of items which fall into these categories. It is simply not possible to provide a single determination and billing guidance which would cover all potential items. Please provide specific examples of items for which you desire additional guidance.

d)  Provided the hospital has not required the patient to purchase the item from a particular vendor, a compliance concern should not exist. Together, the patient and his or her physician must select a DME item and agree upon its use.



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