Recent CMS Guidance on Billing of Devices and Supplies

on Tuesday, 24 March 2009. All News Items

March 13, 2009 CMS released Transmittal 1702 (CR 6416) concerning the April 2009 Update of the Hospital Outpatient Prospective Payment (OPPS).  This transmittal included the following information on the billing of supplies and devices.

If a hospital uses a kit that contains a device whose payment is packaged into the payment for the surgical procedure (device HCPCS code has status indicator of “N”), the hospital can consider the cost of the entire kit in their line-item charge amount for the device HCPCS code.  Alternatively, if the hospital only reports the charge of the device itself in the device HCPCS line-item, the charges for other items included in the kit should be reported on a separate line on the claim.  CMS continues to encourage hospitals to report charges for all packaged items and services that are provided (unless instructed otherwise by CPT or CMS) so that CMS can consider complete costs when establishing annual payment rates.

If a kit contains a device that qualifies for transitional pass-through payment (device HCPCS code has status indicator of “H”), only the charge for the pass-through payment device may be reported on the line-item with the device HCPCS.  The charges for other items included in the kit should be reported on a separate line on the claim and not associated with a HCPCS code that receives pass-through payment.  Note: At this time, there are no pass-through payment devices for 2009.

Per CMS, charges for medical and surgical supplies used in providing hospital outpatient services should be included on claims with the associated procedures so their costs can be incorporated into rate setting for the separately billable procedures. However these supplies (other than Orthotics and Prosthetics) should not be billed with a HCPCS code if they are provided incident to a physician’s service unless they have a status indicator of “H” or “N.”  They should be billed without a HCPCS code as a line item for supplies. (Examples: infusion pump used in the IV administration of a drug should not be billed with HCPCS E0781; a catheter used for temporary bladder catheterization during a surgical procedure should not be billed with HCPCS code A4338).

If a hospital provides and bills for a prosthetic or orthotic device whose HCPCS code description includes the fitting and adjustment of the device, a separate visit or procedure  HCPCS code for the fitting or adjustment of the device should not be billed. (Example: a hospital provides a knee immobilizer described by HCPCS code L1830 (KO, immobilizer, canvas longitudinal, prefabricated, includes fitting and adjustment). The hospital should bill for the item with the HCPCS code L1830 and should not bill a separate visit or procedure HCPCS code to describe the fitting and adjustment of the item.)

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