Some supplies used in patient treatment can be billed to Medicare or the patient's insurance.
Medicare: In order to bill Medicare for covered supplies in an outpatient setting, the therapist or practice must be a Medicare DMEPOS provider. Supply codes are located in the HCPCS II code list and begin with the letter A. Supplies or exercise equipment (e.g. theraputty) not covered under Medicare Part B, can be billed to the patient directly as long as an Advanced Beneficiary Notice (ABN) is signed and in the patient's chart. The fee for these non-covered supplies can include the cost of shipping and handling and any applicable sales tax.
Private payers: Private insurance companies may use the HCPCS II codes or may be billed using the general supply code: 99070. This is an open code, meaning any amount can be billed using this code as it does not have a set fee.
There is little uniformity among payers and plans as to which codes they will pay and they usually assume the price has been "marked up," so if they pay, they will reduce the payment by a set percentage. For example, one carrier will automatically pay 66% of any approved supply billed with that code. Therapists must take this into consideration when determining the billed fee for the supply in order to be reimbursed their cost plus any applicable shipping and taxes.
Some companies require proof of cost and may request the original shipping invoice from the vendor. It is also a good idea to photograph the item and keep it along with the item number and vendor information in the patient's chart.