Effect of Assignment Upon Rental or Purchase of Durable Medical Equipment on Claims Submitted to Carriers

 Equipment More Expensive Than Standard Item   

An item of durable medical equipment may have certain convenience or luxury features that make it more expensive than a standard item, i.e., one which will adequately meet the medical needs of the patient.  The charge for the more expensive item cannot exceed the fee schedule amount for the item adequate for the patient’s medical needs.  Only if a more expensive item or model with special features is medically necessary for the beneficiary will the Medicare allowed amount be based on the more expensive model.  If the patient purchases or rents an item of durable medical equipment having more expensive features than his/her condition requires, the supplier accepting assignment on such an item cannot charge or collect any amount in excess of the Medicare allowed amount for the appliance adequate for the patient’s needs.  Acceptance of assignment binds the supplier to accept the Medicare allowed amount determined by the carrier, as the full charge for the item.  A supplier who wishes to charge and collect the full price for equipment more expensive than medically required by the patient need not accept assignment.

EXAMPLE:  An enrollee who needs a wheelchair is sold a motorized chair although a manually operated chair would meet his/her medical needs.  The Medicare allowed amount in this case is the Medicare allowed amount for a manually operated chair. Therefore, if the supplier accepts assignment, he/she cannot collect from the enrollee any amount in excess of the difference between the amounts of the SMI benefit paid to the supplier and the Medicare allowed amount for the manually-operated chair.


 Equipment No Longer Medically Necessary  
In assignment cases, the beneficiary is responsible for paying the supplier the unpaid balance of the Medicare allowed amount when payments stop because his/her condition has changed and the equipment is no longer medically necessary.  Similarly, when payments stop because the beneficiary dies, his/her estate is responsible to the supplier for such unpaid balance.

NOTE: Carriers should not get involved in issues relating to ownership or title to property.