FW: Salvage claim regulations
David Gerecke
Description
Collection
Title:
FW: Salvage claim regulations
Creator:
David Gerecke
Date:
5/15/2013
Text:
Thank you to all who responded, including the recommendation to call the
Repo Man! I called and emailed my Provider Outreach and Education Sr.
Analyst with no response.
I have attached the responses:
Original question:
I am looking for Medicare references describing billing for incomplete
devices, i.e. salvage claim. Patient in question has failed to respond to
attempts to finish a prosthesis and did not sign a delivery receipt. Patient
is in possession of prosthesis.
Thank you,
David M. Gerecke, CPO, FAAOP
San Antonio
1. Salvage Claim: this information can be found in Medicare Manual -
Chapter 5
Artificial Limbs, Braces, and Other Custom-Made Items Ordered but Not
Furnished
If a custom-made item was ordered but not furnished to a beneficiary because
the individual died or because the order was canceled by the beneficiary or
because the beneficiary's condition changed and the item was no longer
reasonable and necessary or appropriate, payment can be made based on your
expenses. In such cases, the expense is considered incurred on either:
The date the beneficiary died;
The date that you learned of the cancellation of the item;
or
The date that you learned that the item was no longer
reasonable and necessary or appropriate for the beneficiary's condition.
If the beneficiary died or the beneficiary's condition changed and the item
was no longer reasonable and necessary or appropriate, payment can be made
on either an assigned or unassigned claim. If the beneficiary, for any other
reason, canceled the order, payment can be made to the supplier only.
DMEPOS Fee Schedule Categories Chapter 5
The allowed amount is based on the services furnished and materials used, up
to the date you learned of the beneficiary's death or of the cancellation of
the order or that the item was no longer reasonable and necessary or
appropriate. The DME MAC determines the services performed and the allowable
amount appropriate in the particular situation, taking into account any
salvage value of the device. Where you breach an agreement to make a
prosthesis, brace, or other custom made device for a Medicare beneficiary,
e.g., an unexcused failure to provide the article within the time specified
in the contract, payment may not be made for any work or material expended
on the item. Whether a particular supplier has lived up to its agreement, of
course, depends on the facts in the individual case.
2. Hi-I found it in the Medicare Benefit Policy Manual. Section 20.3-
Artificial Limbs, Braces and Other Custom Made Items Ordered but not
Furnished.
It will give you the criteria and instructions on submitting your claim.
(it's on page 11 of 285 in case the link below doesn't work).
Hope that helps!
< <URL Redacted>
2c15.pdf>
<URL Redacted>
c15.pdf
3. The only reference that I am aware of regarding salvage billing is
the following statement:
The allowed amount is based on the services furnished and materials used,
up to the date the supplier learned of the beneficiary's death or of the
cancellation of the order or that the item was no longer reasonable and
necessary or appropriate. The Durable Medical Equipment Regional Carrier
(DMERC), carrier or intermediary, as appropriate, determines the services
performed and the allowable amount appropriate in the particular situation.
It takes into account any salvage value of the device to the supplier.
Where a supplier breaches an agreement to make a prosthesis, brace, or other
custom-made device for a Medicare beneficiary, e.g., an unexcused failure to
provide the article within the time specified in the contract, payment may
not be made for any work or material expended on the item. Whether a
particular supplier has lived up to its agreement, of course, depends on the
facts in the individual case.
That's not to say that it is not explained in greater detail somewhere but I
searched the CMS database and again this is all that was found. I do seem
to recall that one of the DME MACs issued a clarification of the salvage
billing via a provider education method some time ago but I could not begin
to tell you which one. I did search a bit for it but was unsuccessful in
locating any reference to this information.
I have never known salvage billing to pertain to an instance where the
patient has actually received the device. It is this type of situation
which has made most providers hesitant to provide walking check-sockets.
Generally salvage billing applies to instances where the patient passes
away, the condition changes prior to fitting, or the patient fails to return
for fitting. In practice, billing salvage involves billing only for the
parts or components which were custom fabricated and unable to be utilized
for another device or returned to the manufacturer for credit.
4. On his last visit did he sign anything to say he was taking the
prosthesis out of the office for 24, or 72 hours for testing? My
interpretation from your notes is that you would rather not see this patinet
again.
Experiences in business are varied, but eventually if you live long enough
you will see everthing.This includes from patients, and the company or
individuals we work with.
If possible and clear this with your company accountant I would add the
hours of the work put into the limb including gross overhead costs, and
parts, with shipping, etc. and see if you can deduct the loss. If you can
consider it cash in hand. As far as the patient side goes I would talk to
your company legal dept. and see if you can send a cert. letter to end any
and all care, or responsibility for the prosthesis or any services provided
to the patient since they have not stayed in contact to enable you to
provide care.
I have been on your end and I don't think you will if you can, get any
better deal.
5. There is a section in the manual. Chapter 5 and 20 are the ones
most pertaining to O&P. I believe the search term will be refusal of
delivery.
There is definitely a process. Must prove notification (certified letter or
documentation of conversation). You can only bill for the customized parts
of the appliance, not OTS components. So, you can bill for the socket, but
not the foot, pylon, adapters, knee. Do a google search with those terms.
6. That's a tough situation. All I know about salvage claims is what
the Supplier Manual, Chapter 5, says, which is the following:
Artificial Limbs, Braces, and Other Custom-Made Items Ordered but Not
Furnished If a custom-made item was ordered but not furnished to a
beneficiary because the individual died or because the order was canceled by
the beneficiary or because the beneficiary's condition changed and the item
was no longer reasonable and necessary or appropriate, payment can be made
based on your expenses. In such cases, the expense is considered incurred on
either:
. The date the beneficiary died;
. The date that you learned of the cancellation of the item; or . The date
that you learned that the item was no longer reasonable and necessary or
appropriate for the beneficiary's condition.
If the beneficiary died or the beneficiary's condition changed and the item
was no longer reasonable and necessary or appropriate, payment can be made
on either an assigned or unassigned claim. If the beneficiary, for any other
reason, canceled the order, payment can be made to the supplier only.
The allowed amount is based on the services furnished and materials used, up
to the date you learned of the beneficiary's death or of the cancellation of
the order or that the item was no longer reasonable and necessary or
appropriate. The DME MAC determines the services performed and the allowable
amount appropriate in the particular situation, taking into account any
salvage value of the device. Where you breach an agreement to make a
prosthesis, brace, or other custom made device for a Medicare beneficiary,
e.g., an unexcused failure to provide the article within the time specified
in the contract, payment may not be made for any work or material expended
on the item. Whether a particular supplier has lived up to its agreement, of
course, depends on the facts in the individual case.
I attached the file, but here is the link to that :
< <URL Redacted>>
http://www.cgsmedicare.com/jc/pubs/supman/index.html
7. David, After 45 days, you can bill for everything provided, not as
a salvage but for the full amount. Whatever they have in their possession
is billable, is my understanding. Let me know if anyone disagrees.
8. Send the patient a letter notifying him/her of your intentions to
bill. Make sure you have documented at least 3 attempts to contact the
patient. Use the last attempt as the DOS to bill Medicare.
Repo Man! I called and emailed my Provider Outreach and Education Sr.
Analyst with no response.
I have attached the responses:
Original question:
I am looking for Medicare references describing billing for incomplete
devices, i.e. salvage claim. Patient in question has failed to respond to
attempts to finish a prosthesis and did not sign a delivery receipt. Patient
is in possession of prosthesis.
Thank you,
David M. Gerecke, CPO, FAAOP
San Antonio
1. Salvage Claim: this information can be found in Medicare Manual -
Chapter 5
Artificial Limbs, Braces, and Other Custom-Made Items Ordered but Not
Furnished
If a custom-made item was ordered but not furnished to a beneficiary because
the individual died or because the order was canceled by the beneficiary or
because the beneficiary's condition changed and the item was no longer
reasonable and necessary or appropriate, payment can be made based on your
expenses. In such cases, the expense is considered incurred on either:
The date the beneficiary died;
The date that you learned of the cancellation of the item;
or
The date that you learned that the item was no longer
reasonable and necessary or appropriate for the beneficiary's condition.
If the beneficiary died or the beneficiary's condition changed and the item
was no longer reasonable and necessary or appropriate, payment can be made
on either an assigned or unassigned claim. If the beneficiary, for any other
reason, canceled the order, payment can be made to the supplier only.
DMEPOS Fee Schedule Categories Chapter 5
The allowed amount is based on the services furnished and materials used, up
to the date you learned of the beneficiary's death or of the cancellation of
the order or that the item was no longer reasonable and necessary or
appropriate. The DME MAC determines the services performed and the allowable
amount appropriate in the particular situation, taking into account any
salvage value of the device. Where you breach an agreement to make a
prosthesis, brace, or other custom made device for a Medicare beneficiary,
e.g., an unexcused failure to provide the article within the time specified
in the contract, payment may not be made for any work or material expended
on the item. Whether a particular supplier has lived up to its agreement, of
course, depends on the facts in the individual case.
2. Hi-I found it in the Medicare Benefit Policy Manual. Section 20.3-
Artificial Limbs, Braces and Other Custom Made Items Ordered but not
Furnished.
It will give you the criteria and instructions on submitting your claim.
(it's on page 11 of 285 in case the link below doesn't work).
Hope that helps!
< <URL Redacted>
2c15.pdf>
<URL Redacted>
c15.pdf
3. The only reference that I am aware of regarding salvage billing is
the following statement:
The allowed amount is based on the services furnished and materials used,
up to the date the supplier learned of the beneficiary's death or of the
cancellation of the order or that the item was no longer reasonable and
necessary or appropriate. The Durable Medical Equipment Regional Carrier
(DMERC), carrier or intermediary, as appropriate, determines the services
performed and the allowable amount appropriate in the particular situation.
It takes into account any salvage value of the device to the supplier.
Where a supplier breaches an agreement to make a prosthesis, brace, or other
custom-made device for a Medicare beneficiary, e.g., an unexcused failure to
provide the article within the time specified in the contract, payment may
not be made for any work or material expended on the item. Whether a
particular supplier has lived up to its agreement, of course, depends on the
facts in the individual case.
That's not to say that it is not explained in greater detail somewhere but I
searched the CMS database and again this is all that was found. I do seem
to recall that one of the DME MACs issued a clarification of the salvage
billing via a provider education method some time ago but I could not begin
to tell you which one. I did search a bit for it but was unsuccessful in
locating any reference to this information.
I have never known salvage billing to pertain to an instance where the
patient has actually received the device. It is this type of situation
which has made most providers hesitant to provide walking check-sockets.
Generally salvage billing applies to instances where the patient passes
away, the condition changes prior to fitting, or the patient fails to return
for fitting. In practice, billing salvage involves billing only for the
parts or components which were custom fabricated and unable to be utilized
for another device or returned to the manufacturer for credit.
4. On his last visit did he sign anything to say he was taking the
prosthesis out of the office for 24, or 72 hours for testing? My
interpretation from your notes is that you would rather not see this patinet
again.
Experiences in business are varied, but eventually if you live long enough
you will see everthing.This includes from patients, and the company or
individuals we work with.
If possible and clear this with your company accountant I would add the
hours of the work put into the limb including gross overhead costs, and
parts, with shipping, etc. and see if you can deduct the loss. If you can
consider it cash in hand. As far as the patient side goes I would talk to
your company legal dept. and see if you can send a cert. letter to end any
and all care, or responsibility for the prosthesis or any services provided
to the patient since they have not stayed in contact to enable you to
provide care.
I have been on your end and I don't think you will if you can, get any
better deal.
5. There is a section in the manual. Chapter 5 and 20 are the ones
most pertaining to O&P. I believe the search term will be refusal of
delivery.
There is definitely a process. Must prove notification (certified letter or
documentation of conversation). You can only bill for the customized parts
of the appliance, not OTS components. So, you can bill for the socket, but
not the foot, pylon, adapters, knee. Do a google search with those terms.
6. That's a tough situation. All I know about salvage claims is what
the Supplier Manual, Chapter 5, says, which is the following:
Artificial Limbs, Braces, and Other Custom-Made Items Ordered but Not
Furnished If a custom-made item was ordered but not furnished to a
beneficiary because the individual died or because the order was canceled by
the beneficiary or because the beneficiary's condition changed and the item
was no longer reasonable and necessary or appropriate, payment can be made
based on your expenses. In such cases, the expense is considered incurred on
either:
. The date the beneficiary died;
. The date that you learned of the cancellation of the item; or . The date
that you learned that the item was no longer reasonable and necessary or
appropriate for the beneficiary's condition.
If the beneficiary died or the beneficiary's condition changed and the item
was no longer reasonable and necessary or appropriate, payment can be made
on either an assigned or unassigned claim. If the beneficiary, for any other
reason, canceled the order, payment can be made to the supplier only.
The allowed amount is based on the services furnished and materials used, up
to the date you learned of the beneficiary's death or of the cancellation of
the order or that the item was no longer reasonable and necessary or
appropriate. The DME MAC determines the services performed and the allowable
amount appropriate in the particular situation, taking into account any
salvage value of the device. Where you breach an agreement to make a
prosthesis, brace, or other custom made device for a Medicare beneficiary,
e.g., an unexcused failure to provide the article within the time specified
in the contract, payment may not be made for any work or material expended
on the item. Whether a particular supplier has lived up to its agreement, of
course, depends on the facts in the individual case.
I attached the file, but here is the link to that :
< <URL Redacted>>
http://www.cgsmedicare.com/jc/pubs/supman/index.html
7. David, After 45 days, you can bill for everything provided, not as
a salvage but for the full amount. Whatever they have in their possession
is billable, is my understanding. Let me know if anyone disagrees.
8. Send the patient a letter notifying him/her of your intentions to
bill. Make sure you have documented at least 3 attempts to contact the
patient. Use the last attempt as the DOS to bill Medicare.
Citation
David Gerecke, “FW: Salvage claim regulations,” Digital Resource Foundation for Orthotics and Prosthetics, accessed November 2, 2024, https://library.drfop.org/items/show/235116.
