Payment for Additional Expenses for Deluxe Features

The payment amount for a given service or item, whether rented or purchased, must be consistent with what is reasonable and medically necessary to serve the intended purpose (See the Medicare Benefit Policy Manual, Chapter 15). Additional expenses for "deluxe" features, or items that are rented or purchased for aesthetic reasons or added convenience, do not meet the reasonableness test. Thus, where a service or item is medically necessary and covered under the Medicare program, and the patient wishes to obtain such deluxe features, the payment is based upon the payment amount for the kind of service or item  normally used to meet the intended purpose (i.e., the standard item.) Usually this is the least costly item. Carriers may, of course, determine that the payment amount for a more expensive service or item is reasonable when the additional expense is for an added feature that is medically necessary in a given case. For example, a more expensive item may be medically necessary where a patient in a weakened condition needs a power-operated wheelchair or a power-operated vehicle that may be appropriately used as a wheelchair since the patient is not strong enough to operate a manual wheelchair.

Finally the provider may not charge the beneficiary for features not medically required by his/her condition and which cannot be considered in determining the provider's allowable costs unless the beneficiary or her/his representative has specifically requested the excessive or deluxe items or services with knowledge of the amount s/he is to be charged. An Advance Beneficiary Notification (ABN) is required as documentation that the beneficiary has made such an informed request. See Chapter 30 for ABN requirements.

The acceptance of an assignment binds the supplier-assignee to accept the allowed charge for the medically required equipment or service as the full charge and he cannot charge the beneficiary the differential attributable to the equipment actually furnished.

Only if a more expensive item or model with special features is medically necessary for the beneficiary will the allowed charge 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 condition requires, the supplier accepting assignment on such an item cannot charge or collect any amount in excess of the allowed charge for the appliance adequate for the patient's needs. Acceptance of assignment binds the supplier to accept the allowed charge determined by the contractor, 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. In assignment cases, the beneficiary is responsible for paying the supplier the unpaid balance of the allowed charge when payments stop because his 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.