Billing and Collections Q&A

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By Lisa Lake-Salmon

Denials are difficult to identify and time-consuming to appeal. Count on "Got FAQs?" to help you sort through the complexities associated with O&P billing. This month's column addresses your questions about using NOC codes, Medicare billing for consumables, and POS codes.

Q: The practice I work at provides a lot of new, high-tech devices that do not have L-Codes. Should I use existing codes that descriptively fit but are not accurate for the specific device, or should I use Not Otherwise Classified (NOC) codes for everything?

A: I recommend that you verify the Healthcare Common Procedure Coding System (HCPCS) code before using an NOC code. The Pricing, Data Analysis, and Coding (PDAC) contractor provides coding verification. The web-based application, called the Durable Medical Equipment Coding System (DMECS), is designed to help people search for HCPCS code information, modifier descriptions, fee-schedule information, and codes for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). The application can be found at www.dmepdac.com/dmecsapp/do/search. You may also call the PDAC contact center at 877.735.1326. When you call, make sure to have the product information available. When submitting an NOC (MISC) code, you are required to include the manufacturer's name or product name, model number, suggested retail price or manufacturer's invoice price, and a full description of the item.

Q: Can we bill Medicare in advance for a consumable, such as a component that will need to be replaced in the future but is not provided at the time of device delivery to avoid having to submit another bill and get another prescription?

A: Proof of delivery (POD) is one of the supplier standards, as noted in Title 42 of the Code of Federal Regulations (CFR) §424.57(12), and is required for every item provided to verify that the beneficiary received all items for which you have billed. POD assists in determining correct coding and billing. The Durable Medical Equipment Medicare Administrative Contractor (DME MAC) must be able to determine from delivery documentation that you have properly coded the item(s) and that the item(s) delivered is the same item(s) submitted for Medicare reimbursement. All services that do not have appropriate POD will be denied, and overpayments will be requested. If you consistently do not provide documentation to support your services, you may be referred to the Office of Inspector General (OIG) for investigation and/or imposition of sanctions.

All items billed to Medicare require a prescription. An order for each new or full replacement item billed must be signed and dated by the treating physician and kept on file by the supplier.

Q: I received a denial from Medicare with reason code CO-58: Payment adjusted because treatment was deemed by the payer to have been rendered in an inappropriate or invalid place of service (POS). The beneficiary received the equipment in our office, and I billed with POS 11.

A: POS 11 (Office) is not valid for services provided for DMEPOS items. For claims submitted to the DME MAC, the POS is where the beneficiary will primarily use the DMEPOS item. The following is a list of valid POS codes for DMEPOS items.

  • 04 Homeless Shelter
  • 09 Prison or Correctional Facility
  • 12 Home
  • 13 Assisted Living Facility
  • 14 Group Home
  • 16 Temporary Lodging
  • 33 Custodial Care Facility
  • 54 Intermediate Care Facility/Mentally Retarded
  • 55 Psychiatric Residential Treatment Center

Coverage consideration for DMEPOS items in a Skilled Nursing Facility (31), unless the beneficiary is in a covered Part A stay, or a Nursing Facility (32) are also considered for certain types of equipment.

Lisa Lake-Salmon is the president of Acc-Q-Data, which provides billing, collections, and practice management software. She has been serving the O&P profession for more than a decade. We invite readers to write in and ask any questions they may have regarding billing, collections, or related subjects. While every attempt has been made to ensure accuracy, The O&P EDGE is not responsible for errors. For more information, contact or visit www.acc-q-data.com