Date: November 15, 2018
To: Enrolled Durable Medical Equipment and Supplies Providers
Re: Pricing Process for Loaner Items Effective December 1, 2018
This notice identifies to durable medical equipment (DME) providers a revised process for pricing of loaner items. This change applies only to patients covered under fee-for-service Medicaid. It does not apply to patients covered under HealthChoice Illinois managed care plans.
Due to an internal audit finding, the Department is required to take action to ensure proper reimbursement for DME loaner items. Current DME Handbook policy allows providers to submit a claim for a loaner item with no prior approval. The reimbursement is based on the lesser of the provider’s charges or the established rate for a one-month rental of the same item.
In order to achieve better oversight of loaner coding, charges, and reimbursement, effective December 1, 2018, providers must submit an HFS 1409 Prior Approval Form for pricing purposes for the loaner item. The prior approval system is being used solely for the purpose of ensuring the item is priced consistent with the Department’s loaner pricing policy.
HFS 1409 Prior Approval Request Completion Requirements
All loaner items should be requested using HCPCS code K0462 - Temporary Replacement for Patient Owned Equipment Being Repaired, Any Type. The Pur/Rent field must contain an “R”. The Begin Date and End Date period on the request should cover only one month.
Department staff will not review the loaner item for medical necessity. Reimbursement policy regarding the approved amount will remain the same, and will not exceed the Department’s established rate for a one-month rental of the item. The approved reimbursement will be identified in the Department’s prior approval system.
Providers are reminded that per 89 Ill. Adm. Code Section 140.475(d), payment will be made for loaner items issued pending repair or replacement of prosthetic devices, orthotic devices and medical equipment owned by participants if it is the usual practice of the supplier to provide and charge for such items. The Department will not approve reimbursement for loaner equipment during a rental phase, nor during the time an item is under warranty.
837P Electronic Claim Submission Requirements
Providers must submit charges for the loaner item under the approved procedure code K0462 for the item furnished with modifier “RR”.
HFS 2210 Paper Claim Submission Requirements
Providers must submit charges for the loaner item under the approved procedure code K0462 for the item furnished with a Pur/Rent code of “2”. Pur/Rent Code “5” will not be accepted after November 30, 2018.
Questions regarding this notice may be directed to the Bureau of Professional and Ancillary Services at 877-782-5565.
Teresa T. Hursey