DME Billing ServicesMedical EquipmentPhysicians/ DoctorsRevenue Cycle Management (RCM)

Physician Liability for DMEPOS Medical Necessity

The Medicare program only pays for health care services that are medically necessary. In determining what services are medically necessary, Medicare primarily relies on the professional judgment of the beneficiary’s treating physician, since he or she knows the patient’s history and makes critical decisions, such as admitting the patient to the hospital; ordering tests, drugs, and treatments; and determining the length of treatment. In other words, the physician has a key role in determining both the medical need for, and utilization of, many health care services, including those furnished and billed by other providers and suppliers.

Physicians are required to certify to the medical necessity for any service for which they submit bills to the Medicare program. Physicians are involved in attesting to medical necessity when ordering services or supplies that must be billed and provided by an independent supplier or provider. Medicare requires physicians to certify to the medical necessity for many of these items and services through prescriptions, orders, or, in certain specific circumstances, Certificates of Medical Necessity (CMNs). These documentation requirements substantiate that the physician has reviewed the patient’s condition and has determined that services or supplies are medically necessary.

Two areas where the documentation of medical necessity by physician certification plays a key role are (i) home health services and (ii) durable medical equipment (DME). In one of the OIG audits, we have discovered that physicians sometimes fail to discharge their responsibility to assess their patients’ conditions and need for home health care. Similarly, the OIG has found numerous examples of physicians who have ordered DME or signed CMNs for DME without reviewing the medical necessity for the item or even knowing the patient.

Physician Certifies Medical Necessity for DMEPOS

DME is equipment that can withstand repeated use, is primarily used for a medical purpose, and is not generally used in the absence of illness or injury. Examples include hospital beds, wheelchairs, and oxygen delivery systems. Medicare will cover medical supplies that are necessary for the effective use of DME, as well as surgical dressings, catheters, and ostomy bags. However, Medicare will only cover DME and supplies that have been ordered or prescribed by a physician. The order or prescription must be personally signed and dated by the patient’s treating physician.

DME suppliers that submit bills to Medicare are required to maintain the physician’s original written order or prescription in their files. The order or prescription must include:

  • the beneficiary’s name and full address;
  • the physician’s signature;
  • the date the physician signed the prescription or order;
  • a description of the items needed; # the start date of the order (if appropriate); and
  • the diagnosis (if required by Medicare program policies) and a realistic estimate of the total length of time the equipment will be needed (in months or years).

For certain items or supplies, including supplies provided on a periodic basis and drugs, additional information may be required. For supplies provided on a periodic basis, appropriate information on the quantity used, the frequency of change, and the duration of need should be included. If drugs are included in the order, the dosage, frequency of administration, and, if applicable, the duration of infusion and concentration should be included.

Medicare further requires claims for payment for certain kinds of DME to be accompanied by a CMN signed by a treating physician (unless the DME is prescribed as part of a plan of care for home health services). When a CMN is required, the provider or supplier must keep the CMN containing the treating physician’s original signature and date on file.

Generally, a CMN has four sections:

  • Section A contains general information on the patient, supplier, and physician. Section A may be completed by the supplier.
  • Section B contains the medical necessity justification for DME. This cannot be filled out by the supplier. Section B must be completed by the physician, a nonphysician clinician involved in the care of the patient, or a physician employee. If the physician did not personally complete section B, the name of the person who did complete section B and his or her title and employer must be specified.
  • Section C contains a description of the equipment and its cost. Section C is completed by the supplier.
  • Section D is the treating physician’s attestation and signature, which certifies that the physician has reviewed sections A, B, and C of the CMN and that the information in section B is true, accurate, and complete. Section D must be signed by the treating physician. Signature stamps and date stamps are not acceptable.

By signing the CMN, the physician represents that:

  • he or she is the patient’s treating physician and the information regarding the physician’s address and unique physician identification number (UPIN) is correct;
  • the entire CMN, including the sections filled out by the supplier, was completed prior to the physician’s signature; and
  • the information in section B relating to medical necessity is true, accurate, and complete to the best of the physician’s knowledge.

Reference:

Department of Health and Human Services

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