Modifier KH Reporting Changes Oct. 1

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  • May 24, 2018
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Modifier KH Reporting Changes Oct. 1

Beginning Oct. 1, modifier KH needn’t be appended to purchased capped rental durable medical equipment (DME) or parental/enteral items or services.

Simplifying KH

According to Transmittal 4052CP from the Centers for Medicare & Medicaid Services (CMS), Medicare Aministrative Contractors (MACs) won’t require KH DMEPOS item, initial claim, purchase or first month rental, as before.
Capped rental items, such as wheelchairs, are initially covered by Medicare as rentals rather than for purchases of the high-cost items. Medicare pays rental in monthly installments. Providers support prescription of these DME items using the following documentation criteria, according to CGS Medicare:
A new prescription (order) is required:

  • For all claims for purchases or initial rentals
  • If there is a change in the order for the accessory, supply, drug, etc.
  • On a regular basis (even if there is no change in the order) only if it is so specified in the documentation section of a particular medical policy
  • When an item is replaced
  • When there is a change in the supplier

Most equipment and supplies may be delivered upon receipt of a dispensing order. A dispensing order may be verbal or written. The dispensing order must contain:

  • Description of the item
  • Beneficiary’s name
  • Prescribing physician’s name
  • Date of the order
  • Prescribing physician’s signature (if a written order) or supplier signature (if verbal order)

A DWO is required before billing. Someone other than the physician may complete the DWO of the item unless statute, manual instructions, the contractor’s LCD or policy articles specify otherwise. However, the prescribing physician must review the content and sign and date the document. It must contain:

  • Beneficiary’s name
  • Prescribing physician’s name
  • Date of the order
  • Detailed description of the item(s) (see below for specific requirements for selected items)
  • Prescribing physician’s signature
  • Signature date, if applicable (see below)

For items provided on a periodic basis, including drugs, the written order must include:

  • Item(s) to be dispensed
  • Dosage or concentration, if applicable
  • Route of Administration, if applicable
  • Frequency of use
  • Duration of infusion, if applicable
  • Quantity to be dispensed
  • Number of refills

For the “Date of the order” described above, use the dispensing order date i.e., the date the supplier was contacted by the prescribing physician (for verbal orders) or the date entered by the prescribing physician (for written dispensing orders).
Additional order date instructions:

  • If the prescriber creates the DWO, only a single date – the “order date” – is required. This order date may be the date that the prescriber signs the document.
  • If someone other than the prescriber (e.g., DME supplier) creates the DWO then the prescription must be reviewed and, “…personally signed and dated…” by the prescriber. In this scenario, two dates are required: an “order date” and a prescriber-entered “signature date”.

In some cases, the prescribing physician may specify a future start date for therapy that is different from the date of the order. This start date does not impact the date of the order, DOS) entered on the claim, Medicare-required forms (e.g., CMN, DIF) or refill/delivery timelines. As long as the supplier has a properly completed dispensing order with a correctly determined prescription date, an item may be shipped or delivered on or after the date of the dispensing order (except for items that require written orders prior to delivery).
Frequency of use information on orders must contain detailed instructions for use and specific amounts to be dispensed. Reimbursement shall be based on the specific utilization amount only. Orders that only state “PRN” or “as needed” utilization estimates for replacement frequency, use, or consumption are not sufficient to justify payment.
The detailed description in the written order may be either a narrative description or a brand name/model number.


Brad Ericson
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Brad Ericson, MPC, CPC, COSC, is a seasoned healthcare writer and editor. He directed publishing at AAPC for nearly 12 years and worked at Ingenix for 13 years and Aetna Health Plans prior to that. He has been writing and publishing about healthcare since 1979. He received his Bachelor's in Journalism from Idaho State University and his Master's of Professional Communication degree from Westminster College of Salt Lake City.

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