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Artificial Limbs, Braces, and Other Custom-Made Items and Incurred Expenses

Based on CMS guidelines, a supplier may bill for expenses incurred for custom-made items that have been canceled or not picked up by the patient. The CMS IOM Publication 100-02, Medicare Benefit Policy Manual, Chapter 15, Section 20.3 states the following:

"If a custom-made item was ordered but not furnished to a beneficiary because the individual died or because the order was canceled by the beneficiary or because the beneficiary's condition changed and the item was no longer reasonable and necessary or appropriate, payment can be made based on the suppliers' expenses."

Date of Service: "In such cases, the expense is considered incurred on the date the beneficiary died or the date the supplier learned of the cancellation or that the item was no longer reasonable and necessary or appropriate for the beneficiary's condition."

Assigned or Non-Assigned: "If the beneficiary died or the beneficiary's condition changed and the item was no longer reasonable and necessary or appropriate, payment can be made on either an assigned or non-assigned basis. If the beneficiary, for any other reason, canceled the order, payment can be made to the supplier only."

Allowable Amounts Charged: "The allowed amount is based on the services furnished and materials used, up to the date the supplier learned of the beneficiary's death or of the cancellation of the order or that the item was no longer reasonable and necessary or appropriate. The A/B MAC (B) or (HHH), or DME MAC as appropriate, determines the services performed and the allowable amount appropriate in the particular situation. It takes into account any salvage value of the device to the supplier."

"Where a supplier breaches an agreement to make a prosthesis, brace, or other custom-made device for a Medicare beneficiary, e.g., an unexcused failure to provide the article within the time specified in the contract, payment may not be made for any work or material expended on the item. Whether a particular supplier has lived up to its agreement, of course, depends on the facts in the individual case."

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