Code of Massachusetts Regulations, Title 101 CMR 322.00, Section 322.03 - General Rate Provisions | Code of Massachusetts Regulations

(1) Purchase or Rental of Durable Medical Equipment, Medical and Surgical Supplies. Payment to an eligible provider for the purchase of the above services will be the lowest of:

(a) the eligible provider's usual and customary charge;

(b) the preferred supplier rate published in an administrative bulletin pursuant to 101 CMR 322.01(7) plus an additional percentage handling fee if applicable;

(c) the rebate agreement rate published in an administrative bulletin pursuant to 101 CMR 322.01(7); or

(d) such schedule of allowable fees set forth in 101 CMR 322.06.

(2) Direct Service Component (RE Units). Payment to an eligible DME provider for the initial evaluation of customized seating, positioning, mobility systems, installation of customized movable and fixed patient lift systems, and assembly of the pre-approved levels of time and complexity as defined below:

(a) RE 1-5 - Specialized (1-5 hours).

(b) RE 6-10 - Intermediate - More time and complexity with multiple trials of equipment, custom fabrication of some parts (6-10 hours).

(c) RE 11-15 - More time and complexity with multiple trials of equipment, high level of complexity in custom fabrication of some parts and may involve use of components from one or more manufactures (11-15 hours).

(d) RE 16-23 - Complex - More time and complexity with multiple trials of equipment, very high level of complexity and may involve extensive time for trials of multiple products, extended amount of custom fabrication, or interactions with several professionals-physicians, therapist, teachers. (16-23 hours).

(e) RE units will be billed using the K0739-U5 code and modifier combination.

(3) Rental of Oxygen Delivery Systems.

(a) The monthly rate of reimbursement for comprehensive oxygen services includes, but is not limited to, the following services:

1. the gaseous/liquid oxygen, oxygen generating device and related delivery system container or cylinder, manifold systems whenever high volume oxygen is used, stand, cart, walker/stroller, supply reservoir, contents indicator, regulator with flow gauge, humidification devices, cannulas, masks, and/or special oxygen administration device, tubing and refill adapter;

2. the complete device, cleaned and sterilized when appropriate, in proper working condition, and any maintenance, service and repair of unit as needed including replacement of defective parts. The routine replacement of parts, including disposable parts, occurs as needed or according to manufacturer's specifications;

3. delivery of the gaseous oxygen inclusive of 24-hour service costs;

4. back-up gaseous oxygen and related equipment and supplies; and

5. demonstration and instruction of safe usage of equipment, delivery and set-up.

(b) Payment to an eligible provider for the rental of oxygen generating devices and oxygen delivery systems shall be the lower of:

1. the eligible provider's usual and customary charge; or

2. such schedule of allowable fees set forth in 101 CMR 322.06

(c) Payment to an eligible provider for the rental of oxygen delivery systems provided to publicly aided individuals in a nursing facility shall be the lower of:

1. the eligible provider's usual and customary charge; or

2. 90% of the schedule of allowable fees set for in 101 CMR 322.06.

(4) Purchase and Rental of Respiratory Therapy Devices.

(a) Respiratory Therapy Devices (Purchase).

1. The purchased respiratory therapy device includes, but is not limited to, the following services:

a. the complete device, new at the time of purchase, and in proper working condition;

b. service and repair of the unit as needed including replacement of defective parts. The routine replacement of parts, including disposable parts, occurs as needed or according to manufacturer's specifications; these can be billed for purchased devices unless otherwise specified under warranty;

c. the device and related delivery system accessories including, regulator with flow gauge, humidification and heating units, cannulas, masks, or special administration device, tubing and adapters;

d. delivery of the device inclusive of 24-hour service costs;

e. demonstration and instruction of safe usage of equipment, delivery and set-up.

2. Payment to an eligible provider for the purchase of respiratory therapy devices shall be the lower of:

a. the eligible provider's usual and customary charge; or

b. such schedule of allowable fees set forth in 101 CMR 322.06.

(b) Respiratory Therapy Devices (Rental).

1. The monthly rental of respiratory therapy devices includes, but is not limited to:

a. the complete device, cleaned and sterilized when appropriate, in proper working condition, and any maintenance, service and repair of unit as needed including replacement of defective parts. The routine replacement of parts, including disposable parts, occurs as needed or according to manufacturer's specifications;

b. the device and related delivery system accessories including, regulator with flow gauge, humidification and heating units, filters, cannulas, masks, and special administration device, tubing and adapters;

c. delivery of the device inclusive of 24-hour service costs;

d. monthly cleaning and check of unit;

e. back-up respiratory therapy equipment; and

f. demonstration and instruction of safe usage of equipment, delivery, and set-up.

2. Payment to an eligible provider for the rental of the above services shall be the lower of:

a. the eligible provider's usual and customary rental fees and terms; or

b. the fees set forth in 101 CMR 322.06.

3. Payment to an eligible provider for the rental of respiratory therapy devices provided to publicly-aided individuals in a nursing facility shall be the lower of:

a. the eligible provider's usual and customary rental fees and terms; or

b. 90% of the schedule of allowable fees set forth in101 CMR 322.06.

(5) General Rate Provisions for the Purchase of Home Infusion Therapy Services.

(a) Payment to an eligible provider for home infusion therapy services shall be the lower of

1. the eligible provider's usual and customary charge; or

2. such schedule of allowable fees set forth in 101 CMR 322.06.

(b) For services designated I.C., the adjusted acquisition costs to the eligible provider for items consumed per day plus a 20% markup plus $8.00 for professional service.

(c) Included in the per diem fees are all necessary supplies, equipment and administrative services. Payment for Pharmacy items and services shall be determined under the provisions of 101 CMR 331.00: Prescribed Drugs. Payment for nursing services shall be determined according to purchaser specifications under the provisions of 101 CMR 350.00: Home Health Services. Parenteral and enteral nutrition formula shall be billed separately.

(6) Option to Purchase. Governmental units may reserve the right to purchase, at their option, durable medical equipment and respiratory therapy equipment that is being supplied on a monthly rental basis to publicly-aided individuals.

(a) If covered, items can be purchased new or used; however, total payments cannot exceed the fee for purchase as new.

(b) If covered, items can be purchased at 100% of the fee.

(c) If covered, items that are usually purchased and fall into the inexpensive and frequently purchased item category can be rented for 10% of the purchase price, not to exceed ten months of rental and the fee for purchase as new.

(d) If covered, used equipment can be rented at 10% of 75% of the fee for purchase as new.

(e) If covered, used equipment can be purchased at 75% of the fee for purchase as new.

(f) Capped rental items that are purchased prior to the end of the 13-month capped rental period are purchased at an amount not to exceed 13 months of rental.

(7) Condition of Rental Equipment upon Delivery. All equipment that is rented on a monthly basis must be clean and in proper working condition when delivered. Respiratory therapy equipment provided on a rental basis must be in proper working condition and be free from contaminating agents. Tubing and masks shall be new or unused, in proper working condition and free from contaminating agents.

(8) Condition of Purchased Equipment upon Delivery. All equipment that is purchased must be new and unused, clean, in proper working condition, free from defects, and meet all implied and expressed warranties. In the case of rental items purchased under 101 CMR 322.03(6), Option to Purchase, the equipment shall be in proper working condition and be free from contaminating agents. Tubing and masks shall be new or unused, in proper working condition and free from contaminating agents. (See101 CMR 322.03(7): Condition of Rental Equipment Upon Delivery.)

(9) Rental Services. Unless otherwise authorized under 101 CMR 322.00, rental rates include the cost of servicing, repairs and maintenance including replacements of defective parts and disposable items.

(10) Delivery, Installation and Patient Instructional Time. Unless otherwise authorized under 101 CMR 322.00, the maximum allowable fee for purchase or rental of durable medical equipment shall include the following where required and appropriate:

(a) cost of the provider's delivery to the inside of the recipient's residence and, when appropriate, to the room in which the equipment will be used; including allowance of the delivery via UPS or a similar delivery service with a copy of the proof of delivery slip signed by the recipient or recipient's caregiver, or noted by the company driver when a signature is unobtainable, and/or a copy of the delivery service company log (route) sheet.

(b) installation and set up of the equipment

(c) instruction of the recipient in the safe usage of the equipment.

(11) Terms and Warranties. Other terms and warranties included under 101 CMR 322.00 's rate provisions notwithstanding, all terms, express and implied warranties, warranties of repair and service, or any other warranties, which are extended to a specific recipient or customarily extended to any payor shall apply to purchases, or rentals made under authority of 101 CMR 322.00.

(12) Repairs, Maintenance Service, Replacement Parts, and Professional Services. All rates for repair and maintenance services to purchased equipment that require repair, replacement parts and/or the use of technical components (services) can be found within 101 CMR 322.06.

(13) Modifiers. The following list of letter modifiers must be added, where appropriate, to HCPCS procedure codes to determine the percent fee to be paid on claims. Refer to purchasers' manuals for specific coding instructions.

(a) Capped rental coding modifiers are as follows:

1. KH-Initial claim, either rent (first month) or purchase

2. KI-Second or third month rental

3. KJ-Rental months four to 13

(b) Additional modifiers are as follows:

1. A1-Dressing for one wound

2. A2 -Dressing for two wounds

3. A3-Dressing for three wounds

4. A4-Dressing for four wounds

5. A5-Dressing for five wounds

6. A6-Dressing for six wounds

7. A7-Dressing for seven wounds

8. A8-Dressing for eight wounds

9. A9-Dressing for nine or more wounds

10. AU-Item furnished in conjunction with a urological, ostomy, or tracheostomy supply

11. AV-Items furnished in conjunction with prosthetic/orthotic

12. AW-Item furnished in conjunction with a surgical dressing

13. AX-Item furnished in conjunction with dialysis services

14. AY-Item or service furnished to an ESRD patient that is not for the treatment of ESRD

15. BA-Item furnished in conjunction with parenteral enteral nutrition (PEN) services

16. BO-Orally administered nutrition, not by feeding tube

17. CS-Item or service related, in whole or in part, to an illness, injury, or condition that was caused by or exacerbated by the effects, direct or indirect, of the 2010 oil spill in the Gulf of Mexico including, but not limited to, subsequent clean-up activities

18. GA-Waiver of liability statement issued as required by payer policy, individual case

19. GS-Dosage of epo or darbepoietin alfa has been reduced 25% of preceding month's dosage

20. GU-Waiver of liability statement issued as required by payer policy, routine notice

21. GX-Notice of liability issued, voluntary under payer policy

22. JB-Subcutaneous administration

23. KC-Replacement of special power wheelchair interface (applicable to codes E2320-E2330)

24. KF-item designated by FDA as class III device

25. KK- DMEPOS item subject to DMEPOS competitive bidding program number 2

26. KL-DMEPOS item delivered via mail

27. KO-Single drug unit dose formulation

28. KP-First drug of a multiple unit dose formulation

29. KQ-Second or subsequent drug of a multiple drug unit dose formulation

30. KR-Rental item for a partial month

31. KS-Glucose monitor supply for diabetic beneficiary not treated with insulin

32. KX-Specific required documentation on file (member treated with insulin)

33. KU-DMEPOS item subject to DMEPOS competitive bidding program number 3

34. LL-Lease/rental with option to purchase

35. LT-Left side (used to identify procedures performed on the left side of the body)

36. MS- Six-month maintenance and servicing fee for reasonable and necessary parts and labor which are not covered under any manufacturer or supplier warranty

37. NU-New equipment

38. QF-Prescribed amount of oxygen exceeds 4 liters per minute (LPM) and portable oxygen is prescribed

39. QG-Prescribed amount of oxygen is greater than 4 liters per minute (LPM)

40. RA-Replacement of a DME item (for use only with K0108 for direct service component for customization purposes, MassHealth only)

41. RB-Replacement of a part of a DME furnished as part of a repair

42. RR-Rental of durable medical equipment and oxygen/respiratory therapy equipment

43. RT-Right side (used to identify procedures performed on the right side of the body)

44. SC-Medically necessary service or supply

45. SD-Services provided by registered nurse with specialized, highly technical home infusion training

46. TW when used in conjunction with code A4210: Back-up equipment; when used with codes for alternative and augmentative communication devices: MassHealth only--non-dedicated alternative and augmentative communication devices

47. U1-Medicaid level of care 1 (used only for nonstandard power wheelchair trays and patient lift systems)

48. U2-Medicaid level of care 2 (first six months of rental, volume/pressure ventilator)

49. U3-Medicaid level of care 3 (used only for supplies for maintenance of insulin infusion catheter for MassHealth)

50. U4-Medicaid level of care 3 (used only for supplies for maintenance of insulin infusion catheter for MassHealth)

51. U5-direct service components for customized mobility services requiring ATP RE-1 through RE-23, for installation of patient lift systems RE-1 through RE-23, and setup of safety beds RE-1 through RE-5.

52. U6-used when requesting premium incontinent products

53. UA-Medicaid level of care 10 (used for adults for safety beds and customized tracheostomy supplies)

54. UB-Medicaid level of care 11 (repair, RTS providers only)

55. UC-Medicaid level of care 12 (used for pediatric specialized equipment only)

56. UD-Medicaid level of care 13 (bariatric equipment)

57. UE-Used durable medical equipment.

(14) Shop Repair of Purchased Equipment and Rental Equipment.

(a) Whenever a repair service for purchased equipment that is unusable or requires removing the equipment from the residential setting to the shop, the eligible provider must supply a substitute unit in proper working condition and comparable in all respects to the unit to be serviced. The provision of the substitute equipment will be on a rental basis: the rental rate will be established utilizing the one-month KJ fee on file for the primary HCPCS code being repaired on a one-time per repair basis.

(b) No payment for rental of substitute equipment shall exceed the one month rental fee, per repair.

(c) Whenever a repair service for rental equipment requires the removal of the equipment from the residential setting, the eligible provider must supply a substitute unit in proper working condition and comparable in all aspects to unit to be repaired. No extra rental charge will be allowed for this substituted equipment.

(15) Recall Provisions. Whenever purchased or rental equipment is subject to recall, the provider will fully address the recall as specified in the manufacturer's recall instructions. For recalls of potentially dangerous or defective DME that predictably could cause serious health problems or death, the DME provider shall provide the member with a copy of the Recall Notice and fully address the Recall as specified in the Recall instructions no later than five business days from the date the DME provider receives the Recall Notice. Any costs not covered by the manufacturer or other third party for activity associated with amelioration, repair or replacement of recalled equipment is included in the general rate provisions for each category of equipment in 101 CMR 322.03.

(16) General Rate Provisions for Pricing of New Codes

As described in 101 CMR 322.01(6), EOHHS may publish new procedure codes in the form of an Administrative Bulletin and set fees as follows:

(a) when Medicare fees are available, except as otherwise specified in 101 CMR 322.03(16)

1. 100% of Medicare for

a. specialized wheeled mobility equipment and accessories

b. first six months' rental for volume ventilators

c. certain diabetic equipment and supplies

d. certain patient lifts and accessories

e. elevating leg rests

2. 85% of Medicare for all other items, including speech generating devices and certain oxygen equipment and supplies

(b) when Medicare fees are not available and for certain durable medical equipment or medical supplies, apply individual consideration at adjusted acquisition cost plus the standard markup as defined in 101 CMR 322.02. MassHealth may specify a fixed rate determined by using a comparison of industry rates including Medicare crossover payments, other state Medicaid payment rates and Medicaid third-party liability/private insurance rates.

(17) AAC Methodology and Documentation.

(a) The eligible provider must accurately indicate the amount of any discounts set forth at 101 CMR 322.02 and the order in which any discounts were applied. The provider must maintain documentation evidencing the amount and application of discounts.

(b) Current Catalogue Price. The AAC to the eligible provider shall not exceed the manufacturer's current catalogue price. Eligible providers must maintain documentation of the current catalogue price or submit documentation of the current catalogue price with a claim or invoice for any item priced using the AAC methodology.

(c) Documentation of the Purchase Price and Timely Payment Discount for Items Not Subject to Prior Authorization (PA). For items not subject to PA and purchased in advance of filing a claim, the AAC must be evidenced by the purchase price to the provider from the manufacturer for the equipment listed on a copy of a current receipted invoice from the manufacturer. The invoice and supporting documentation submitted with claims to the applicable governmental unit must indicate:

1. the date of the timely payment; and

2. the amount and percentage of the timely payment discount.

Providers must maintain documentation evidencing the percentage of the AAC that the provider's supplier allows as a timely payment discount, and how the supplier defines "timely payment" for any such discount.

3. Documentation of Amount and Percentage of Timely Payment Discount for Items Subject to PA. For items subject to PA and not purchased in advance of filing a claim, the eligible provider must include the following with the PA request:

a. a copy of the quote from the manufacturer;

b. supporting documentation of cost and discounts; and

c. documentation of the amount and percentage of the timely payment discount. The claim must reflect the actual purchase price to the provider from the manufacturer if less than the quote submitted for prior authorization. Manufacturers enrolled as DME providers must submit documentation that demonstrates the retail/catalogue/list price along with all discounts that would be passed on to a provider.

d. Providers are required to submit invoices on initial claims but are not required to submit invoices on subsequent claims during a PA period if the price established on the PA has not changed.

(18) The Methodology for Pricing Capped Rentals. Purchase rates for items, including power wheelchairs, otherwise designated in 101 CMR 322.06 with the capped rental modifiers KH, KI, KJ are indicated with the modifiers NU and UE. The NU rates are established as a percentage of Medicare's rates, pursuant to 101 CMR 322.01(5) and 101 CMR 322.03(16). The purchase of capped rental items, including power wheelchairs, otherwise designated with the modifiers KH, KI, KJ for capped rental, will be no more than the sum of the capped rental methodology applied for 13 months. See 101 CMR 322.03(14).

(a) The methodology for capped rental payment of items other than power wheelchairs designated with the modifiers KH, KI, and KJ is as follows:

1. for months one through three of rental (KH, KI), 10% of the new purchase fee;

2. for months four through 13 of rental (KJ), payment at 75% of the amount for months one through three;

3. no further monthly payments after the 13th month.

(b) The methodology for payment of power wheelchairs designated with the modifiers KH, KI, KJ is as follows:

1. for the first three months of rental (KH, KI), 15% of the new purchase fee;

2. for months four through 13 (KJ), payment at 40% of the amount for months one through three;

3. no further monthly payments after the 13th month

(19) Except where otherwise stipulated in 101 CMR 322.03, payment to an eligible provider for individual consideration will be the lower of:

(a) the eligible provider's usual and customary charge; or

(b) the following rate, as applicable

1. for purchases of supplies and disposable items, the adjusted acquisition cost to the eligible provider plus the applicable standard markup of 20% or 25%, as defined in 101 CMR 322.02;

2. for purchases of enteral and parenteral solutions, the adjusted acquisition cost to the eligible provider plus the applicable standard markup of 25% or 30%, as defined in 101 CMR 322.02;

3. for purchases of wheeled mobility system equipment and related accessories, and for certain patient lift systems, the adjusted acquisition cost to the eligible provider plus the applicable standard markup of 35% or 40%, as defined in 101 CMR 322.02;

4. for purchases of other new equipment or customized tracheostomy supplies or certain diabetic equipment and supplies, the adjusted acquisition cost to the eligible provider plus the applicable standard markup of 30% or 35%, as defined in 101 CMR 322.02;

5. for rental items, one-tenth of the fee paid for the item if purchased new;

6. for capped rental items, refer to the methodology within the definition of "capped rental" in 101 CMR 322.02;

7. for used items, 75% of the fee paid for the item if purchased new.

8. for covered drugs, the adjusted acquisition cost, as defined in 101 CMR 322.02;

9. for home infusion therapy, the adjusted acquisition cost to the eligible provider for items consumed per day plus a 20% markup plus $8.00 for professional services, as indicated in 101 CMR 322.03(5)(b).

(20) Methodology for Certain Durable Medical Equipment or Medical Supplies Purchased at Pharmacies. Payments to pharmacies billing through the pharmacy online processing system for designated durable medical equipment or medical supplies will be the lower of wholesale acquisition cost and usual and customary charge, as defined in 101 CMR 331.00: Prescribed Drugs (with any references to "prescription drugs" changed, for purposes of 101 CMR 322.03(20), to "durable medical equipment" or "medical supplies", as applicable). EOHHS will designate durable medical equipment or medical supplies subject to this pricing methodology in an administrative bulletin or other appropriate written issuance.

Code of Massachusetts Regulations101 CMR - EXECUTIVE OFFICE FOR HEALTH AND HUMAN SERVICESTitle 101 CMR 322.00 - Rates for Durable Medical Equipment, Oxygen and Respiratory Therapy EquipmentSection 322.03 - General Rate Provisions

Code of Massachusetts Regulations
101 CMR - EXECUTIVE OFFICE FOR HEALTH AND HUMAN SERVICES
Title 101 CMR 322.00 - Rates for Durable Medical Equipment, Oxygen and Respiratory Therapy Equipment
Section 322.03 - General Rate Provisions