Do the revised payment rules for capped rental items preclude suppliers from complying with supplier standard 5?

On April 28, 2006, the Centers for Medicare & Medicaid Services (CMS) issued Change Request (CR) 5010. This CR discusses the revised payment rules for capped rental items. Section 5101(a) of the Deficit Reduction Act (DRA) of 2005 mandated changes in how CMS pays for certain items of durable medical equipment (DME).

Section 5101(a) of the DRA of 2005 refers to capped rental items in which the first rental month occurred on or after January 1, 2006. For these items, CMS has limited the rental payments to a total of 13 months of continuous use. After CMS has paid for 13 months of continuous use, the supplier shall transfer the title of the equipment to the beneficiary.

Supplier standard 5 requires suppliers to, "advise beneficiaries that they may either rent or purchase inexpensive or routinely purchased durable medical equipment, and of the purchase option for capped rental durable medical equipment, as defined in Sec. 414.220(a) of this subchapter."

Although CR 5010 limits the number of continuous months of rental for capped rental items and eliminates the tenth month rental option, suppliers must still comply with this standard. Suppliers are required to notify the beneficiary of the rental option and must explain the beneficiary will assume ownership after the 13 month of continuous use. The beneficiary must also be made aware once they assume ownership of the item, they are responsible for locating a supplier to perform service and/or repair the item. The supplier who services or repairs the item may bill Medicare for the parts and labor.

Further, there are inexpensive and routinely purchased items that do not fall into the capped rental category. Beneficiaries may rent these items, and it is the responsibility of the supplier to notify the beneficiary these items may be rented. 

Additionally, effective for items furnished on or after January 1, 2011, the section regarding the lump sum purchase payment for standard power wheelchairs (classified under the HCPCS codes for Group 1 power wheelchairs or Group 2 power wheelchairs without additional power options) was eliminated. Suppliers must furnish these items on a monthly rental basis like other capped rental DME other than power wheelchairs. Since the statute prohibits payment on a purchase basis for standard power wheelchairs, these items must be rented only and supplier standard 5 is not applicable. 

As further clarification, complex rehabilitative power wheelchairs and parenteral/enteral pumps can be either rented or purchased. Therefore, supplier standard 5 still applies.

The supplier must provide upon request it has provided beneficiaries with this information. Suppliers may decide how they want to retain this information.

Last Updated: 09/26/2022