the focus of significant Medicare fraud and abuse enforcement activity.

Investigations by the Office of Inspector General (OIG) and the Department of Justice (DOJ) led to a number of civil and criminal enforcement actions, including prison terms for several incontinence product providers and millions of dollars in fines and recoupments.

In addition, both the Health Care Financing Administration (HCFA, now the Centers for Medicare & Medicaid Services) and the Durable Medical Equipment Regional Carriers (DMERCs) issued new payment policies for incontinence supplies. By 1997, the OIG was reporting that as a result of these efforts, “abusive billings for incontinence supplies have all but disappeared.”

Today the government directs most of its fraud enforcement activities related to incontinence supplies at nursing home operators rather than at HME providers. However, because of the history of abusive practices in billing for these supplies, HME providers should observe the rules relating to coverage and billing of incontinence supplies scrupulously to avoid potential liability.

There are a couple of basic rules that apply to Medicare coverage of all incontinence supplies. First, the patient must have a “permanent impairment of urination.” To meet this criterion, the medical record must document that the attending physician considers the condition to be of “long and indefinite duration,” ordinarily at least 3 months.

Although Medicare does not require the condition to be permanent in the strict sense of the word, Medicare will not cover incontinence supplies for conditions that are clearly temporary. The signed and dated physician’s order in the provider’s file must include a statement indicating whether the patient has permanent or temporary urinary incontinence or retention, or another indication for use of a catheter or urinary collection device.

Second, because Medicare covers incontinence supplies under the prosthetic device benefit, only items that are prosthetic devices or that are required for the effective use of a prosthetic device are covered. If the relevant coverage criteria are met, Medicare will pay for external urinary collection devices and for catheters, catheter trays, catheter bags, and irrigation supplies, as well as miscellaneous supplies, such as tape, leg straps, and extension tubing. However, Medicare will not cover diapers, skin care products, or other items not directly related to a catheter or other device.

If the physician’s order indicates permanent urinary incontinence or urinary retention, and if the item is a catheter, an external urinary collection device, or a supply product used with one of these items, then the provider should add the KX modifier to the code for each urological supply on each claim submitted. If these requirements are not met, the provider should not use the KX modifier, but he or she may submit additional documentation to justify coverage.

Avoid Providing Too Much
In addition to the basic threshold requirements, DMERC medical policies include quantity limits for each item. Where use exceeds the usual quantity limits, the provider must furnish additional documentation with each claim that certifies the need for more than the usual amount of the item.

• For patients with indwelling catheters, Medicare will pay for only one catheter and one catheter tray per month unless the medical record contains documentation of the medical necessity of more frequent catheter changes.

• For ambulatory or wheelchair-bound patients, one latex leg bag or two vinyl leg bags are covered per month.

• For patients who are confined to bed, the usual limits are two bedside bags per month or one bedside bottle every 3 months.

• Medicare covers supplies for intermittent catheterization in cases where the basic coverage criteria are met and the patient or caregiver can perform the procedure. However, coverage is limited to one replacement catheter per week unless the medical record documents the necessity of more frequent replacement or the patient meets the criteria for coverage of intermittent catheterization using sterile technique.

Sterile technique criteria are quite limited. Except for patients with specific conditions listed in the coverage policy, sterile intermittent catheterization is covered only if the patient resides in a nursing facility, has a suppressed immune system, or has had urinary tract infections twice within the previous 12 months while on a program of clean intermittent catheterization.

Documentation supporting the need for sterile technique must be included with the initial claim for supplies for sterile intermittent catheterization. For patients who meet the coverage criteria for intermittent catheterization using sterile technique, Medicare will pay for one catheter or catheter kit for each episode of sterile catheterization.

Incontinence and PPS
In connection with the frequency limits, providers must also take into account DMERC rules regarding bundling of incontinence supplies under the Prospective Payment System (PPS). The DMERC medical policies include lists of codes that PPS requires providers to bundle for billing purposes. For example, the medical policy states that two bedside drainage bags (A4357) per month are covered. However, if a catheter kit is provided at the same time as the drainage bag, the bundling rules require the provider to bill using a code for a kit with drainage bag (A4314, A4315, or A4316) rather than billing the kit and bag separately. In a month in which one of these codes is billed, the DMERC will ordinarily reimburse the provider only for one separately billed drainage bag.

Providers should be familiar with the list of bundled codes, because billing separately for items that are required to be bundled can result in overpayments and, if done frequently, to possible false claims liability.

Also use caution when billing supplies for intermittent irrigation of an indwelling catheter. DMERC medical policies cover these supplies only when they are used on an as-needed basis because of an acute obstruction of the catheter. Routine intermittent irrigation and continuous irrigation as a primary preventive measure are considered medically unnecessary and will be denied. Supplies for continuous irrigation are covered only if there is a history of obstruction and the catheter cannot be kept open with intermittent irrigation. The medical record must contain documentation of the necessity for either intermittent or continuous irrigation.

Medicare also covers male external catheters when used as an alternative to indwelling catheters by patients who have permanent urinary incontinence. Coverage is limited to 35 per month unless the medical record documents the necessity of greater use. Female external urinary collection devices are also covered under the same conditions, with coverage ordinarily limited to one metal cup per week or one pouch per day.

Finally, when it comes to incontinence supplies, providers should bear in mind that Medicare fraud and abuse rules apply even when submitting claims for low-cost items. For example, a provider may not offer free wipes, lotion, or other skin-care products with the purchase of covered catheter supplies. Such an offer would violate the Medicare anti-inducement statute, which prohibits giving anything of value to a beneficiary to induce the beneficiary to order a Medicare-covered item from a particular provider. Plus, the OIG could find that such an offer would also violate the Medicare antikickback statute. The OIG has on several occasions criticized the practice of giving a noncovered item free with the purchase of a covered item because it believes that this practice shifts costs of noncovered items from the beneficiary to the Medicare program. Prudent HME providers will ensure that they observe these rules as well as the specific rules governing bills for incontinence products when submitting claims to the Medicare program.

Jeffrey S. Baird, JD, is chairman of the Health Care Group of Brown & Fortunato, PC, an Amarillo, Tex, law firm. Contact him at (806) 345-6320 or jbaird@bf-law.com.