Preventing Delays When Billing for Supplies

Saturday, May 24, 2003 | 0

As a Workers' Compensation Auditor and Bill Review Specialist I see numerous claim payments being held up on claims where supplies and materials are billed and the invoice is not attached to show the actual cost of the supplies and/or materials. This may result in a significant delay in getting paid or reimbursed by the carrier.

According to the California Official Medical Fee Schedule, the provider must identify the supplies and/or materials provided. Documentation of the actual cost may be required.

Most carriers are requiring that an invoice be provided for supplies and/or materials that are allowed as a separate reimbursement. Include the invoice, even if you purchase in bulk, so you can be reimbursed properly and in a timely manner!

The following supplies and/or materials that are allowed as a separate reimbursement include:

cast and strapping materials;
sterile trays for laceration repair and more complex surgeries;
applied dressings beyond simple wound occlusion;
taping supplies for sprains;
iontophoresis electrodes;
reusable patient specific electrodes;
canes;
braces;
slings;
ace wraps;
TENS electrodes;
crutches;
splints;
back supports;
and dressings.

The formula for establishing fair and reasonable fees and charges for separately reimbursable supplies and materials are:

A) Supplies and materials other than dispensed durable medical equipment are reimbursed at the cost (purchase price plus sales tax) plus 20% of the cost up to a maximum of cost plus $15.00.

B) Dispensed durable medical equipment* is reimbursed at the cost (purchase price plus sales tax plus shipping and handling) plus 50% of the cost up to a maximum of cost plus $25.00.

Patient instruction booklets, pamphlets, videos or tapes are separately reimbursable using code 99071. Most carriers also require documentation and invoices for these items.

*Don't forget that the total rental cost of durable medical equipment cannot exceed the purchase price.

Article by Mary Saxon. Mary has over 15 years of workers' compensation experience, from claims to marketing to audits and bill review. She is presently employed with USA Managed Care Organization. Mary's e-mail address is mary3438@yahoo.com.

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workcompcentral user, York McGavin, provided the following additional information by way of correspondence to Ms. Saxon which the editors felt was important information:

Dear Ms. Saxon,

I like your article regarding the necessity for attaching the providers invoice when billing for dispensed DME or supplies and materials.

Although you are absolutely correct in regards to the formulas found in the general instructions of the OMFS on page 4, there are exceptions.

Effective July 12, 2002, the OMFS was amended, and there is now a page '4A' to the general instructions. On page 4A, the Administrative Director (AD) informed the regulated public that, "The following formulas only apply to health care providers such as physicians, physical therapists, Physician Assistants, and Nurse Practitioners, dispensing items from their office or outpatient surgery facility." (bolding added.)

In the "Final Statement of Reasons" published by the AD, on page 11, it states that, "...the reimbursement formulas were only intended to apply to medical providers and not wholesale or retail vendors or suppliers. Portions of the regulated community expressed confusion on this point. Clarification was therefore needed." (bolding added.)

You will note that in the Final Statement of Reasons, the AD chose the word "were" rather than "are" which gives this amendment retroactive applicability to non-physician providers.

In order to be more precise, you might wish to clarify for the readers of your article that the formulas for reimbursement for medically necessary DME or supplies and materials found in the OMFS only apply to "physicians, physical therapists, Physician Assistants, and Nurse Practitioners, dispensing items from their office or outpatient surgery facility."

In order to verify the veracity of my assertions, please click on the URL below to view and download the update pages for your copy of the OMFS, as well as the Final Statement of Reasons. I have chosen to print the OMFS update pages on yellow paper for clarity.

http://www.dir.ca.gov/dwc/dwcpropregs/omfsregs.html

Once at the DWC's website, you can click on "Final Statement of Reasons" as well as the "Insert pages for the OMFS as adopted." I suggest that if you download the Insert pages, you should reformat each page in MS Word due to the fact the margins in the DWC document generally will not print out in full without the reformat.

As a non-physician provider of DME as well as supplies and materials, in the past, I always used to attach a copy of my invoice and the prescription from the prescribing physician to the HCFA 1500 bill sent the payer. This is because I always thought the OMFS applied to all providers, regardless of whether they are physician or non-physician. However, since the changes of July 12, 2002, I have chosen not to attach invoices.

If a payer is relying on an outdated OMFS to deny reimbursement, I simply file a green lien (DWC Form 6) and seek the statutory increase and interest pursuant to LC 4603.2(b). On an admitted injury claim, the payer is exposed to a LC 5814 sanction (10% increase on an award) if the bill is not paid timely.

As a suggestion, you might wish to amend your article to state "physician provider" rather than simply "provider."

Should you wish to discuss this issue further, please email me your direct telephone number and I will call you as soon as possible.

York McGavin
ymcgavin@socal.rr.com