TITLE 8 SOCIAL SERVICES
CHAPTER 324 ADJUNCT
SERVICES
PART 5 DURABLE MEDICAL EQUIPMENT AND MEDICAL SUPPLIES
8.324.5.1 ISSUING AGENCY: New Mexico Human Services Department.
[2/1/95; 8.324.5.1 NMAC - Rn, 8 NMAC 4.MAD.000.1, 7/1/04]
8.324.5.2 SCOPE: The rule applies to the general public.
[2/1/95; 8.324.5.2 NMAC - Rn, 8 NMAC 4.MAD.000.2, 7/1/04]
8.324.5.3 STATUTORY AUTHORITY: The New Mexico medicaid program is administered pursuant to regulations promulgated by the federal department of health and human services under Title XIX of the Social Security Act, as amended and by the state human services department pursuant to state statute. See Sections 27-2-12 et seq. NMSA 1978 (Repl. Pamp. 1991).
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8.324.5.4 DURATION: Permanent
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8.324.5.5 EFFECTIVE DATE: February 1, 1995, unless a later date is cited at the end of a section.
[2/1/95; 8.324.5.5 NMAC - Rn, 8 NMAC 4.MAD.000.5, 7/1/04; A, 11/1/05]
8.324.5.6 OBJECTIVE: The objective of these regulations is to provide policies for the service portion of the New Mexico medicaid program. These policies describe eligible providers, covered services, noncovered services, utilization review, and provider reimbursement.
[2/1/95; 8.324.5.6 NMAC - Rn, 8 NMAC 4.MAD.000.6, 7/1/04]
8.324.5.7 DEFINITIONS: [RESERVED]
8.324.5.8 MISSION STATEMENT: The mission of the New Mexico medical assistance division (MAD) is to maximize the health status of medicaid-eligible individuals by furnishing payment for quality health services at levels comparable to private health plans.
[2/1/95; 8.324.5.8 NMAC - Rn, 8 NMAC 4.MAD.002, 7/1/04]
8.324.5.9 DURABLE MEDICAL EQUIPMENT AND MEDICAL SUPPLIES: The New Mexico medicaid program (medicaid) pays for medically necessary services furnished to eligible recipients, including durable medical equipment and medical supplies, as specified at 42 CFR Section 440.70 (c). This part describes eligible providers, covered services, services restrictions, noncovered services, and general reimbursement methodology.
[2/1/95; 8.324.5.9 NMAC - Rn, 8 NMAC 4.MAD.754, 7/1/04]
8.324.5.10 Eligible Providers: Upon approval of medical assistance program provider participation agreements by the medical assistance division (MAD), all suppliers of medical supplies and/or durable medical equipment that are licensed to do business may become medicaid providers. Once enrolled, providers receive a packet of information, including medicaid program policies, billing instructions, utilization review instructions and other pertinent material from MAD. Providers are responsible for ensuring that they have received these materials and for updating them as they receive new materials from MAD.
[2/1/95; 8.324.5.10 NMAC - Rn, 8 NMAC 4.MAD.754.1 & A, 7/1/04]
8.324.5.11 Provider Responsibilities: Providers who furnish services to medicaid
recipients must comply with all specified medicaid participation
requirements. See 8.302.1 NMAC, General
Provider Policies. Providers must
verify that individuals are eligible for medicaid at the time services are
furnished and determine if medicaid recipients have other health
insurance. Providers must maintain
records that are sufficient to fully disclose the extent and nature of the
services provided to recipients. See
8.302.1 NMAC, General Provider Policies.
Providers must notify recipients of covered and non-covered services by
medicaid prior to providing services.
See 8.301.3 NMAC, General Noncovered Services and 8.302.1 NMAC, General
Provider Policies.
[2/1/95; 8.324.5.11 NMAC - Rn, 8 NMAC 4.MAD.754.2 & A, 7/1/04]
8.324.5.12 Covered Durable Medical Equipment and Medical Supplies:
A. Medicaid covers durable medical equipment (DME) that meet the definition of DME, the medical necessity criteria and the prior authorization requirements. Medicaid covers repairs, maintenance, delivery of durable medical equipment and disposable and non-reusable items essential for use of the equipment, subject to the limitations specified in this section. All items purchased or rented must be ordered by providers who are currently enrolled in medicaid.
(1) “Durable medical equipment” is defined as equipment that can withstand repeated use, is primarily and customarily used to serve a medical purpose, is not useful to individuals in the absence of an illness or injury and is appropriate for use at home.
(2) Equipment used in a recipient’s residence must be used exclusively by the recipient for whom it was approved.
(3) To meet the medical necessity criterion, durable medical equipment must be necessary for the treatment of an illness or injury or to improve the functioning of a body part.
(4) Replacement of equipment is limited to one item every three years for adults, unless there are changes in medical necessity or are otherwise indicated in policy.
B. Medicaid covers medical supplies that are necessary for an ongoing course of treatment within the limits specified in this section. As distinguished from DME, medical supplies are disposable and non-reusable items. Medicaid also covers oxygen, nutritional products and shipping charges as specified in this section. Medicaid coverage for DME and medical supplies may be limited for recipients in institutional settings when the institutions are expected to provide the necessary items. Institutional settings are hospitals, nursing facilities, intermediate care facilities for the mentally retarded and rehabilitation facilities.
C. Covered services for non-institutionalized recipients: Medicaid covers certain medical supplies, nutritional products and durable medical equipment provided to eligible non-institutionalized recipients without prior authorization. Medicaid covers the following for non-institutionalized recipients:
(1) needles, syringes and intravenous (IV) equipment including pumps for administration of drugs, hyper alimentation or enteral feedings;
(2) diabetic supplies, chemical reagents, including blood, urine and stool testing reagents;
(3) gauze, bandages, dressings, pads, and tape;
(4) catheters, colostomy, ileostomy and urostomy supplies and urinary drainage supplies;
(5) parenteral nutritional support products prescribed by a physician on the basis of a specific medical indication for a recipient who has a defined and specific pathophysiologic process for which nutritional support is considered specifically therapeutic and for which regular food, blenderized food, or commercially available retail consumer nutritional supplements would not meet medical needs;
(6) apnea monitors: prior authorization is required if the
monitor is needed for six (6) months or longer; and
(7) disposable sterile gloves are limited to 200 per month; disposable non-sterile gloves are limited to 200 per month.
D. Covered services for institutionalized and non-institutionalized recipients: Medicaid covers the following items without prior authorization for both institutionalized and non-institutionalized recipients:
(1) trusses and anatomical supports that do not need to be made to measure;
(2) family planning devices;
(3) repairs to DME; medicaid covers repair and replacement parts if recipients own the equipment for which the repair is necessary and the equipment being repaired is a covered medicaid benefit; some replacement items used in repairs may require prior authorization; repairs to augmentative and alternative communication devices require prior authorization; see Subsection C of 8.324.5.14 NMAC;
(4) monthly rental includes monthly service and repairs;
(5) replacement batteries and battery packs for augmentative and alternative communication devices owned by the recipient.
E. Covered oxygen and oxygen administration equipment:
(1) Medicaid covers the following oxygen and oxygen administration systems, within the specified limitations:
(a) oxygen contents, including oxygen gas and liquid oxygen;
(b) oxygen administration equipment purchase, with prior authorization: oxygen administration equipment may be supplied on a rental basis for one (1) month without prior authorization; rental beyond the initial month requires prior authorization.
(c) oxygen concentrators, liquid oxygen systems and compressed gaseous oxygen tank systems; medicaid approves the most economical oxygen delivery system possible for a specific recipient when considering types of oxygen concentrators;
(d) cylinder carts, humidifiers, regulators and flow meters;
(e) purchase of cannulae or masks; and
(f) oxygen tents and croup or pediatric tents.
(2) Medicaid does not cover oxygen tank rental (demurrage) charges as separate charges when renting gaseous tank oxygen systems. If medicaid pays rental charges for systems, tank rental is included in the rental payments.
(3) Nursing homes are administratively
responsible for overseeing oxygen supplied to their residents. Nursing homes are encouraged to enter into
agreements with oxygen suppliers to provide a well-managed process for
provision of oxygen.
F. Augmentative and alternative communication devices: Medicaid covers medically necessary electronic or manual augmentative communication devices for medicaid recipients. Medical necessity is determined by the medical assistance division or its designee(s). Communication devices whose purpose is also educational and/or vocational are covered only when it has been determined the device meets medical criteria.
(1) A recipient must have the cognitive ability to use the augmentative communication device and meet one of the following criteria:
(a) the recipient cannot functionally communicate verbally or through gestures due to various medical conditions in which speech is not expected to be restored; or
(b) the recipient cannot verbally or through gestures participate in his/her own health care decisions (i.e., making decisions regarding medical care or indicating medical needs or communicate informed consent on medical decisions).
(2) All of the following criteria must be met before an augmentative communication device can be considered for authorization. The communication device must be:
(a) a reasonable and necessary part of the recipient’s treatment plan;
(b) consistent with the symptoms, diagnosis or medical condition of the illness or injury under treatment;
(c) not furnished for the convenience of the recipient, the family, the attending practitioner or other practitioner or supplier;
(d) necessary and consistent with generally accepted professional medical standards of care (i.e., not experimental or investigational);
(e) established as safe and effective for the recipient’s treatment protocol; and
(f) furnished at the most appropriate level suitable for use in the recipient’s home environment.
G. Rental of durable medical equipment: Medicaid covers the rental of durable medical equipment. All rental payments must be applied toward purchase of the equipment. When the rental charges equal the amount allowed by medicaid for purchase, the equipment becomes the property of the recipient for whom it was approved.
(1) Medicaid does not cover routine maintenance and repairs for rental equipment.
(2) Low cost items, defined as those items for which the medicaid allowed payment is less than one hundred and fifty ($150) dollars, may only be purchased. Purchased DME becomes the property of the medicaid recipient for whom it was approved.
(3) Oxygen concentrators, ventilators, stationary and portable liquid oxygen systems are not subject to the mandatory provisions of applying the rental payments toward purchase. See Subsection E of 8.324.5.12 NMAC, covered oxygen and oxygen administration equipment.
H. Delivery of equipment and shipping charges: Medicaid covers the delivery of DME only when the equipment is initially purchased or rented and the round trip delivery is over seventy-five (75) miles. Providers may bill delivery charges as separate additional charges only when the providers customarily charge a separate amount for delivery to non-medicaid patients. Medicaid does not pay delivery charges for equipment purchased by medicare, for which medicaid is responsible only for the coinsurance and deductible. Medicaid covers shipping charges for DME and medical supplies when it is cost effective or practical to ship items rather than have recipients travel to pick up items. Shipping charges are defined as the actual cost of shipping items from providers to recipients by a means other than that of provider delivery. Medicaid does not pay shipping charges for items purchased by medicare for which medicaid is only responsible for the coinsurance and deductible.
I. Rental and purchase of used
equipment: Medicaid covers the rental
and purchase of used equipment. The
equipment must be identified and billed as used equipment. The equipment must have a statement of
condition or warranty, and a stated policy covering liability.
J. Wheelchairs and seating systems for institutionalized recipients:
(1) Medicaid covers customized wheelchairs and seating systems made for specific recipients, including recipients who are institutionalized. Written prior authorization is required. MAD or its designee cannot give verbal authorizations for customized wheelchairs/seating systems. A customized wheelchair and seating system is defined as one that has been uniquely constructed or substantially modified for a specific recipient and is so different from another item used for the same purpose that the two items cannot be grouped together for pricing purposes. There must be a customization of the frame for the wheelchair base or seating system to be considered customized.
(2) Repairs to a wheelchair owned by a recipient residing in an institution may be covered.
(3) Customized or motorized wheelchairs required by an institutional recipient to pursue educational or employment activity outside the institution may be covered, and will be reviewed on a case-by-case basis.
[2/1/95; 3/1/99; 8.324.5.12 NMAC - Rn, 8 NMAC 4.MAD.754.3 & A, 7/1/04; A, 12/1/04; A, 11/1/05]
8.324.5.13 Prior AUTHORIZATION and Utilization Review: All medicaid services are subject to utilization review for medical necessity and program compliance. Reviews may be performed before services are furnished, after services are furnished and before payment is made, or after payment is made. See 8.302.5 NMAC, Prior Authorization and Utilization Review. Once enrolled, providers receive instructions and documentation forms necessary for prior authorization and claims processing.
A. Services for non-institutionalized recipients that require prior authorization: Medicaid covers certain medical supplies, nutritional products and durable medical equipment provided to eligible recipients with prior authorization. Written requests for items not included in the categories listed above or for a quantity greater than that covered by medicaid may be submitted by the recipient’s physician, with a prior authorization request, to MAD for consideration of medical necessity. Please refer to criteria in 8.301.3 NMAC, General Noncovered Services [MAD-602.6] for durable medical equipment or medical supplies that are not covered. Medicaid covers the following benefits with prior authorization for non-institutionalized recipients:
(1) enteral nutritional
supplements and products provided to recipients who must be tube fed oral
nutritional supplements when administered enterally are included;
(2) oral nutritional support products prescribed by a physician:
(a) on the basis of a specific medical indication for a recipient who has a defined need for which nutritional support is considered therapeutic, and for which regular food, blenderized food, or commercially available retail consumer nutritional supplements would not meet the medical needs;
(b) when medically necessary due to inborn errors of metabolism; or
(c) medically necessary to correct or ameliorate physical illnesses or conditions in children under the age of twenty-one.
(3) either disposable diapers or underpads prescribed for recipients age three and older who suffer from neurological or neuromuscular disorders or who have other diseases associated with incontinence limited to 200 diapers per month or 150 underpads per month;
(4) supports and positioning devices that are part of a DME system, such as seating inserts or lateral supports for specialized wheelchairs;
(5) protective devices, such as helmets and pads;
(6) bathtub rails and other rails for use in the bathroom;
(7) electronic monitoring devices, such as electronic sphygmomanometers, oxygen saturation, fetal or blood glucose monitors and pacemaker monitors;
(8) passive motion exercise equipment;
(9) decubitus care equipment;
(10) equipment to apply heat or cold;
(11) hospital beds and full length side rails;
(12) compressor air power sources for equipment that is not self-contained or cylinder driven;
(13) home suction pumps and lymph edema pumps;
(14) hydraulic patient lifts;
(15) ultraviolet cabinets;
(16) traction equipment;
(17) prone standers and walkers;
(18) trapeze bars or other patient helpers that are attached to bed or freestanding;
(19) home hemodialysis and/or peritoneal dialysis systems, replacement supplies and/or accessories;
(20) wheelchairs and functional attachments to wheelchairs: wheelchairs are authorized every five (5) years; for recipients under twenty-one (21) years of age, wheelchairs can be authorized every (3) years; earlier authorization is possible when dictated by medical necessity;
(21) wheelchair trays;
(22) whirlpool baths designed for home use;
(23) intermittent or continuous positive pressure breathing equipment; and
(24) manual or electronic augmentative and alternative communication devices;
(25) augmentative and alternative communication devices are authorized every five (5) years for adults and every three (3) years for recipients under twenty-one (21) years of age, unless earlier authorization is dictated by medical necessity.
B. Services for institutionalized and non-institutionalized recipients that require prior authorization: Medicaid covers the following items with prior authorization for both institutionalized and non-institutionalized recipients:
(1) trusses and anatomical supports that require fitting or adjusting by trained individuals, including JOBST hose;
(2) custom-fitted compression stockings;
(3) artificial larynx prosthesis;
(4) repairs to, and replacement parts for, augmentative and alternative communication devices owned by the recipient.
C. Additional review: Services for which prior authorization was obtained remain subject to review at any point in the payment process.
D. Eligibility determination: Prior authorization does not guarantee that individuals are eligible for medicaid. Providers must verify that individuals are eligible for medicaid at the time services are furnished and determine if medicaid recipients have other health insurance.
E. Reconsideration: Providers who disagree with prior authorization request denials or other review decisions can request a re-review and a reconsideration. See 8.350.2 NMAC, Reconsideration of Utilization Review Decisions [MAD-953].
F. Reasons for prior authorization denial: Requests for prior authorization are denied for any of the following reasons:
(1) prescribing providers have not examined recipients within two (2) months or have insufficient knowledge of the recipient’s condition to enable them to prescribe or recertify the need for DME;
(2) prescriptions do not document recent physician involvement in the estimate of duration of need or the recipient’s condition; or
(3) requests are not signed by attending physicians: signature stamps or signatures by employees are not acceptable.
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8.324.5.14 Service Limitations and Coverage Restrictions:
A. Non-covered multiple services: Medicaid does not cover multiple
services. Recipients are limited to one
wheelchair, one hospital bed, one oxygen delivery system or one of any
particular type of equipment. A back-up
ventilator is covered.
B. Special requirements for purchase of wheelchairs: Before billing for a customized wheelchair, providers who deliver the wheelchair and seating system to a recipient must make a final evaluation to ensure that the wheelchair and seating system meets the medical, social and environmental needs of the recipient for whom it was authorized.
(1) Providers assume responsibility for correcting defects or deficiencies in wheelchair and seating systems, that make them unsatisfactory for use by recipients.
(2) Providers are responsible for consulting physical therapists, occupational therapists, special education instructors, teachers, parents or guardians, as necessary, to ensure that the wheelchair meets the recipient’s needs.
(3) Evaluations by a physical therapist and/or occupational therapist are required when ordering customized wheelchairs and seating systems. These therapists should be familiar with the brands and categories of wheelchairs and appropriate seating systems and work with the recipient and those consultants listed in Paragraph (2) of Subsection B of 8.324.5.14 NMAC to assure that the selected system matches physical seating needs. The physical and/or occupational therapist may not be a wheelchair vendor or under the employment of a wheelchair vendor or wheelchair manufacturer.
(4) Medicaid does not pay for special modifications or replacement of customized wheelchairs after the wheelchairs are furnished to recipients.
(5) When the equipment is delivered to the recipient and the recipient accepts the order, the provider will submit the claim for reimbursement.
C. Special requirements for purchase of augmentative and alternative communication devices:
(1) The purchase of augmentative communication devices requires prior authorization. In addition to being prescribed by a physician, the communication device must also be recommended by a speech-language pathologist, who has completed a systematic and comprehensive evaluation. The speech pathologist may not be a vendor of augmentative communication systems nor have a financial relationship with a vendor.
(2) A trial rental period of up to 60 days is required for all electronic devices to ensure that the chosen device is the most appropriate device to meet the recipient’s medical needs. At the end of the trial rental period, if purchase of the device is recommended, documentation of the recipient’s ability to use the communication device must be provided showing that the recipient’s ability to use the device is improving and that the recipient is motivated to continue to use this device.
(3) Medicaid does not pay for supplies for augmentative and alternative communication devices, such as, but not limited to, paper, printer ribbons and computer discs.
(4) Prior authorization is required for equipment repairs.
[2/1/95; 3/1/99; 8.324.5.14 NMAC - Rn, 8 NMAC 4.MAD.754.5 & A, 7/1/04]
8.324.5.15 Noncovered Services: Medicaid does not cover certain durable medical equipment and medical supplies. See 8.301.3 NMAC, General Noncovered Services [MAD-602], for an overview of the criteria used to assess whether equipment and supplies are not covered.
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8.324.5.16 Reimbursement: Durable medical equipment or medical supply providers must submit claims for reimbursement on the HCFA-1500 claim form or its successor. See 8.302.2 NMAC, Billing for Medicaid Services. Once enrolled, providers receive instructions on documentation, billing and claims processing.
A. Reimbursement for purchase or rental of DME and for nutritional products is made at the lesser of the provider’s billed charges, the medicare fee schedule, or the MAD maximum allowed amount.
(1) The provider’s billed charge must be the lesser of the usual and customary charge for the item or service, or the actual acquisition cost plus a percentage as described below:
(a) for items for which the provider’s actual acquisition cost, reflecting all discounts and rebates, is less than one thousand dollars ($1,000), the provider must bill the actual acquisition cost plus twenty-five percent (25%).
(b) for items for which the provider’s actual acquisition cost, reflecting all discounts and rebates, is one thousand dollars ($1,000) or greater, the provider must bill the actual acquisition cost plus fifteen percent (15%).
(2) “Usual and customary charge” refers to the amount that the individual provider charges the general public in the majority of cases for a specific item or service.
(3) Medicare fees are implemented when MAD is advised by medicare of changes in the fee schedule. MAD implements medicare fees retroactively.
(4) If there is not a medicare fee schedule for the item, the MAD maximum allowed amount is the provider’s actual acquisition cost plus the applicable percentage as described in Paragraph (1) of Subsection A of 8.324.5.16 NMAC.
(5) All rental payments must be applied towards purchase, with the exception of ventilators, oxygen concentrators and liquid oxygen units. Providers must keep a running total of rental charges identifying the total of all rental charges for each piece of equipment.
(6) “Set-up fees” are considered to be included in the payment for the equipment or supplies and are not reimbursed as separate charges.
B. Reimbursement for medical supplies and home infusion drugs: Reimbursement to providers is made at the lesser of the following:
(1) The provider’s billed charge;
(a) the provider’s billed charge is their usual and customary charge for services.
(b) “usual and customary charge” refers to the amount which the individual provider charges the general public in the majority of cases for a specific service or item, or
(2) The maximum established by MAD, which is the department’s estimated acquisition cost of the item plus twenty-five percent (25%). The department’s estimated acquisition cost will be calculated using the average wholesale price less 10.5 percent (10.5%).
(3) Home infusion drugs are reimbursed at the lesser of the provider’s billed charge or the MAD fee schedule.
(a) Home infusion providers will be reimbursed a dispensing fee for each package or intravenous admisture prepared and dispensed to the recipient.
(b) Reimbursement will be made
at the lesser of the provider’s usual and customary charge or the MAD fee
schedule.
C. Reimbursement for delivery and shipping charges: Delivery charges are reimbursed at the MAD maximum amount per mile. Shipping charges are reimbursed at actual cost if the method used is the least expensive method of shipping. Medicaid does not pay for charges for shipping items from suppliers to the providers.
[2/1/95; 12/30/95; 3/1/01; 8.324.5.16 NMAC - Rn, 8 NMAC 4.MAD.754.7 & A, 7/1/04]
HISTORY OF 8.324.5 NMAC:
Pre-NMAC History: The material in this part was derived from that previously filed with the State Records Center:
ISD 310.0800, Medical Supplies, filed 2/29/80.
MAD Rule 310.08, Medical Supplies, filed 12/1/87.
MAD Rule 310.08, Medical Supplies, filed 5/31/88.
MAD Rule 310.08, Medical Supplies, filed 4/3/92.
MAD Rule 310.08, Durable Medical Equipment and Medical Supplies, filed 4/21/92.
History of Repealed Material:
MAD Rule 310.08, Durable Medical Equipment and Medical Supplies, filed 4/21/92 Repealed effective 2/1/95.