Medicare Funding of AAC Technology - Frequently Asked Questions and Answers (FAQs) :: AAC-RERC

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Medicare Funding of AAC Technology - Frequently Asked Questions and Answers (FAQs)

Medicare Funding Pages

General Medicare ~ Eligibility ~ SGDs & Accessories ~ Assessments & Training ~ Payment ~ Processes ~ Repairs & Replacements ~ Miscellaneous

This section explains different aspects of Medicare policies and procedures through a series of questions and answers. The Medicare Frequently Asked Questions and Answers (FAQs) represent the best information we have to date. We will expand the FAQs from time to time as more SLPs, Medicare beneficiaries and suppliers (SGD manufacturers and distributors) share their experiences with Medicare funding for the assessment, purchase, training and repair of Speech Generating Devices (SGDs). This information should not be your sole source of information to ensure you are complying with Medicare requirements. Additional information is available on the AAC-RERC website (www.aac-rerc.com), from the SGD and accessories manufacturers and distributors, and from Lewis Golinker (lgolinker@aol.com), an attorney who works on AAC claims procedures and reimbursement issues. An index of the questions and date the most recent review is posted below so you can recognize when new questions are added or when new or revised information is included.

FAQ Table of Contents

Frequently Asked Questions and Answers

General Medicare

What Is Medicare? 11/20/04

Medicare was created by Congress in 1965 and has become the nation's largest health services funding program. Medicare, sometimes called Title XVIII (for the chapter of the Social Security Act in which the Medicare program is codified), operates as a federal health insurance benefits program for:

1. Persons age 65 and older;
2. Persons receiving Social Security Disability Insurance (SSDI) payments (including many adults with developmental disabilities who receive SSDI on the earnings record of a parent);
3. Persons with end stage renal disease.

Note: Medicare eligibility is not based on an individual's income. Instead, Medicare eligibility is based on age, on disability status, or condition. Medicare eligibility is not limited to older Americans. Younger individuals can be and are eligible for Medicare. Additional information about Medicare eligibility is discussed in Question 3.Medicare is divided into two parts, known as Part A and Part B. Medicare Part B, also known as supplemental medical insurance, covers various outpatient services, including physician services, durable medical equipment, speech-language pathology services, prosthetic and orthotic supplies, and home health services. Medicare Part B will provide funding for an AAC assessment, for the purchase of SGDs, software and accessories; for SGD training; and for SGD repair. Medicare has determined that SGDs are durable medical equipment. Note: To determine whether an individual is enrolled in Medicare Part B, the speech-language pathologist should inquire whether the individual has paid a Part B monthly premium. For some low-income persons, state Medicaid programs will pay an individual's Part B premiums. This usually is done through the Qualified Medicare Beneficiary or QMB program. Individuals with dual eligibility are discussed below in Questions 2 and 3.

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How Is Medicare Different From Medicaid? 11/20/04

Medicare and Medicaid are commonly confused. In a general sense, Medicare and Medicaid are most similar because of the complexity of their benefits programs, which have been described by judges as "unintelligible to the uninitiated." Many SLPs may find they agree with this description, particularly as they make their first inquiries about Medicare coverage of AAC assessment and SGDs. Even so, these programs offer many essential services to individuals with severe communication disabilities, and SLPs are encouraged to proceed despite the initial, inevitable confusion. The characteristics of both programs are summarized in the following table:

Item	Medicare	Medicaid
Enacted by Congress	1965	1965
Alternate Program Name	Title XVIII	Title XIX
Eligibility	Not Income Based: Age (all Persons 65 and older are eligible); younger persons are eligible based on disability or specific condition,	Income based; all ages are eligible
Exclusivity	[Dual Eligibility for both programs is possible]
Premium Required for Enrollment	Yes, for Medicare Part B services, which include durable medical equipment	No for some individuals, others have a "spend-down" requirement each month to be eligible
Administered by	Federal Government with Sub-contractors who make claims decisions for medical services (fiscal intermediaries) and for DME and prosthetic devices (regional carriers). Also uses managed care organizations	State Governments subject to federal regulations and guidelines Also uses managed care organizations
Are AAC Evaluations Covered?	Yes, as an SLP service	Yes, for all children who are eligible nationwide; adult coverage of evaluations depends on whether states cover SLP services for adults (optional benefit)
Are SGDs Covered?	Yes, as durable medical equipment	Yes, as durable medical equipment
Is AAC Training Covered?	Yes, as an SLP service	Yes, for all children who are eligible - nationwide; adult coverage of evaluations depends on whether states cover SLP services for adults (an optional benefit)
Is SGD Repair Covered?	Yes, after expiration of warranty	Yes, after expiration of warranty
What documents are required as part of a claim?	SLP report; doctor's prescription; payment or co-payment from beneficiary; other forms also required	SLP report and doctor's prescription
Claims are submitted by:	Manufacturer/supplier	Manufacturer/supplier
Claims Processing	Claims filed for reimbursement after device is delivered and charges are incurred	Claims filed for "prior approval" before device is delivered and charges are incurred
Payments	Made to beneficiary or to manufacturer/supplier	Made to manufacturer/supplier. Usually payment is full price or a percentage of retail price for every device
Co-Payments by Beneficiaries)	Required	None in most states; if required, must be minimal
Amounts of co-payments	Will be one of these 3 amounts: 20 % of actual charge, when the device's actual charge is the same or less than the fee schedule amount for the device 20 % of the fee schedule amount, when the mfr/supplier will "accept assignment" from Medicare Full actual charge, when the mfr/ supplier refuses to "accept assignment" from Medicare	Not applicable, see above
Administrative Appeals	5-step administrative procedure	1 or 2 step administrative procedure
Judicial Review Available in state court or in federal court	Available in Federal court	Available in state court or in federal court

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Who Is Eligible for Medicare? 11/20/04

Medicare provides coverage to approximately 40 million Americans. It covers all Americans age 65 and older, independent of health, income, or disability status. Medicare also covers three groups of individuals younger than age 65 who have been determined to be disabled under the Social Security Disability Insurance program rules.

1. Individuals who worked and paid the required contributions into the Social Security system while they were working. See Note 1 below.

2. Individuals with disabilities, including the children with disabilities of individuals who paid into the Social Security system, when the family member becomes disabled themselves, retires, or dies.

3. Individuals who have End Stage Renal Disease.

Note 1: Special Status of Persons with ALS Special Status of Persons with ALS . In the period since Medicare began to cover and provide SGDs, two changes have been made to expand eligibility for Medicare for persons diagnosed with ALS. First, the Social Security Administration has announced that individuals who have been diagnosed with ALS will become eligible for Social Security disability benefits immediately after they stop earning "substantial gainful activity," i.e. , stop working. Proof of ALS diagnosis will be sufficient; proof of functional loss will not be required. The practical effect of this change is to make individuals with ALS eligible for SSD benefits sooner. Second, typically, individuals with disabilities become eligible for Medicare benefits 24 months after they begin receiving SSD benefits. However, at the end of 2000, Congress expanded Medicare eligibility by waiving the 24-month wait-period requirement for individuals with ALS.

The practical effect of these two changes is that a person with ALS can become eligible for Medicare immediately after two events occur: 1) ALS diagnosis; and 2) they stop working. By becoming Medicare eligible, these persons with ALS can obtain Medicare reimbursement for SGD assessment, as well as an SGD, as soon as they might be appropriate. Thus, people with ALS will be able to derive the maximum benefit from their SGD and overall, improve the quality of their care.

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Why Does Medicare Call AAC Devices "Speech Generating Devices?" 11/20/04

Medicare administrators proposed to change the name of SGDs to "speech generating devices" or "SGD." The first time this name change appeared was in October 2000, when the DME Regional Carrier (DMERC) Medical Directors distributed the draft "Regional Medical Review Policy" or RMRP. The RMRP, however, was not accompanied by an explanatory text.

In mid-December, comments were submitted to the RMRP. These comments offered 3 alternatives for the DMERC medical directors to consider:

1. Leave the category name as Augmentative and Alternative Communication (AAC) Devices;

2 Shorten the category name to Augmentative Communication Devices, which is the way the acronym AAC typically is stated in conversation (SGDs); or,

3. Change the device category name to a phrase that is recognized by the professional community, such as "voice output communication aids" (VOCA).

The DMERC Medical Directors ultimately rejected all 3 suggestions and retained SGD at the phrase Medicare will use for "AAC devices."

In the period since the phrase "speech generating device" was introduced, it has become widely accepted by SLPs and most funding programs. Medicaid programs, insurers, Tricare, all have adopted the Medicare nomenclature, and it has come into widespread use among speech language pathologists. Speech generating devices (SGDs) have become an accepted synonym for AAC devices.

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Eligibility

Will Medicare Provide SGDs to Residents of Nursing Homes or other Types of Assisted Living Arrangements? 11/20/04

Medicare regulations state that Durable Medical Equipment will be provided if "the equipment is used in the patient's home or in an institution that is used as a home." In general, this is called a "place of service limitation." Because Medicare classifies SGDs as DME, this limitation applies to SGDs. Settings considered "Home" Medicare considers the settings listed below to be a beneficiary's home, and thus, will provide reimbursement for DME to individuals who reside in:

the beneficiary's home;
a custodial care facility; and
an intermediate care facility for the mentally retarded.

Individuals who live in any of these acceptable "home" settings are able to obtain Medicare reimbursement for SGDs following a complete SLP evaluation and preparation of a complete report, and upon receipt of the physician's prescription for the device. Medicare guidance offers definitions for custodial care facility and intermediate care facility for the mentally retarded. These are: Custodial Care Facility: A facility which provides room, board and other personal assistance services generally on a long-term basis and which does not include a medical component. Intermediate Care Facility/Mentally Retarded: A facility, which primarily provides health-related care and services above the level of custodial care to mentally retarded individuals, but does not provide the level of care or treatment available in a hospital or skilled nursing facility. [NOTE: Individuals eligible for DME must have a definition of mental retardation.]

Settings Not Considered "Home".

The phrase "an institution that is used as a home" is defined by Medicare regulations to exclude a hospital or a skilled nursing facility. Also excluded are hospice residences. Other Medicare guidance defines each of these settings as follows: Skilled Nursing Facility: A facility that primarily provides inpatient skilled nursing care and related services to patients who require medical, nursing, or rehabilitative services, but does not provide the level of care or treatment available in a hospital; Nursing Facility: A facility which primarily provides to residents skilled nursing care and related services for the rehabilitation of injured, disabled or sick persons, or, on a regular basis, health-related care services above the level of custodial care to other than mentally retarded individuals. Hospice: A facility other than a patient's home in which palliative and supportive care for terminally ill patients and their families are provided.

NOTE: This FAQ applies to the availability of Medicare reimbursement for SGDs. An SLP should make an independent inquiry regarding the availability of reimbursement for his or her services to a resident of any of these settings.

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Will Medicare Reimburse for SGDs For Individuals Receiving Hospice Services? 11/20/04

There are two types of hospice care: residential and in-home. A residential hospice offers a setting where the individual receives hospice care but also serves as the person's residence. As an alternative, hospice care also can be provided as a constellation of services provided to an individual who is residing in his or her own home.

In either circumstance, Medicare will NOT provide reimbursement for an SGD. A person receiving in-home or residential hospice services will not be able to get Medicare reimbursement if they purchase their SGD AFTER the hospice services begin.

Hospice services, by their very nature, are chosen by an individual after careful consideration of many factors. It is essential that one factor being considered is ongoing communication. Individuals considering hospice care should proceed first to address their communication needs, and as necessary, delay the onset of hospice services until one day after their SGD arrives. As long as the "date of service" for the SGD is before hospice services began, Medicare reimbursement is available.

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Medicaid Programs Exclude SGD Coverage for Adults? 11/23/04

In the Medicaid program, adults are individuals age 21 or older. In every state, SLPs should presume that adults are covered, and if the state Medicaid program turns down a funding request claiming adult coverage does not exist, advocacy assistance should be sought for the client. All Medicaid programs have legal obligations to cover SGDs for adult beneficiaries.

All Medicaid programs are legally required to cover SGDs needed by adults if:

SGDs are covered for children;
Durable Medical Equipment is covered for adults

Under the Medicaid EPSDT requirement, all states are obligated to cover SGDs for children. And, every state covers DME for adults. Indeed, for any adult whose disabilities are severe enough to qualify the person for nursing facility care, DME is a required service, and therefore DME is absolutely required to be provided, as are SGDs.

As long ago as 1996, Courts struck down SGD adult exclusions in Texas and Florida .. There should be no debate, anywhere, that SGDs are covered for adults.

If any state says it excludes SGDs for either adults or children, SLPs simply shouldn't accept this information. They should perform assessments, seek funding, and if denials are issued, refer the case to Lewis Golinker, 401 East State Street, Suite 300 , Ithaca , New York 14850 ; 607-277-7286.

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Speech Generating Devices and Accessories

What SGDs Are Covered by Medicare? 11/20/04

Medicare originally adopted 4 "codes" for SGDs, with each code representing a group of devices with similar characteristics. Medicare subsequently changed the codes on two occasions. First, it expanded the number of codes from 4 to 6, and most recently, changed the labels of the codes. The most current codes are listed at the end of this FAQ.

Original Medicare Codes Effective January 1, 2001

Code	Description
K0541	Speech generating device, digitized speech, using pre-recorded messages, less than or equal to 8 minutes recording time.
K0542	Speech generating device, digitized speech, using pre-recorded messages, greater than 8 minutes recording time.
K0543	Speech generating device, synthesized speech, requiring message formulation by spelling and access by physical contact with the device.
K0544	Speech generating device, synthesized speech, permitting multiple methods of message formulation and multiple methods of device access.

In 2003, Medicare expanded the number of codes from 4 to 6, by sub-dividing the original K 0542 code.

Code	Description
K 0541	Speech generating device, digitized speech, using pre-recorded messages, less than or equal to 8 minutes recording time.
K 0615	Speech generating device, digitized speech, using pre-recorded messages, with greater than 8 but less than or equal to 20 minutes of recording time
K 0616	Speech generating device, digitized speech, using pre-recorded messages, with greater than 20 but less than 40 minutes of recording time.
K 0617	Speech generating device, digitized speech, using pre-recorded messages, with greater than 40 minutes of recording time
K 0543	Speech generating device, synthesized speech, requiring message formulation by spelling and access by physical contact with the device.
K 0544	Speech generating device, synthesized speech, permitting multiple methods of message formulation and multiple methods of device access

In 2004, Medicare announced its third change to the SGD codes, by changing the code index labels. This change made no substantive changes to the codes or the devices that fit within each one. THE CURRENT 6 MEDICARE SGD "CODES" ARE:

Code	Description
E 2500	Speech generating device, digitized speech, using pre-recorded messages, less than or equal to 8 minutes recording time.
E 2502	Speech generating device, digitized speech, using pre-recorded messages, with greater than 8 but less than or equal to 20 minutes of recording time
E 2504	Speech generating device, digitized speech, using pre-recorded messages, with greater than 20 but less than 40 minutes of recording time.
E 2506	Speech generating device, digitized speech, using pre-recorded messages, with greater than 40 minutes of recording time
E 2508	Speech generating device, synthesized speech, requiring message formulation by spelling and access by physical contact with the device.
E 2510	Speech generating device, synthesized speech, permitting multiple methods of message formulation and multiple methods of device access

Please Note: Laptop computers, desktop computers, PDAs [personal digital assistants] or other devices that are not dedicated SGDs are NOT covered because they do not meet the definition of durable medical equipment. See FAQ # 6

For information about the coverage of eyegaze systems, see FAQ #30

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Why Aren't All SGDs Covered? 11/20/04

Medicare will cover all dedicated devices and computer-based and PDA-based devices "that have been modified to run only AAC software. " Medicare's coverage guidance on SGDs: the Regional Medical Review Policy (RMRP) and the National Coverage Decision on SGDs (# 60-23), state that "multi-functional" SGDs are not covered because Medicare believes they do not satisfy the Medicare definition of "durable medical equipment."

Two of the four criteria in Medicare's definition of durable medical equipment state that an item be "primarily and customarily used to serve a medical purpose;" and "generally not useful to an individual in the absence of illness or injury." Medicare views multi-functional, computer-based and PDA-based SGDs as not meeting these criteria. This conclusion is obvious if these devices are viewed as computers and PDAs, as opposed to communication aids. In addition, Medicare has long-standing guidance that excludes equipment that for some individuals and in some circumstances can be of medical benefit, but which also has other, non-medical uses and benefits.

Although it is possible to argue with Medicare's conclusions and policy regarding multi-functional devices, leading AAC professionals and the SGD manufacturers concluded it would be easier and faster, and thereby in the best interests of Medicare beneficiaries with current AAC needs to modify existing devices to meet Medicare's concerns.

When modified computer-based and PDA-based devices are being considered, SLPs and beneficiaries should contact the manufacturers regarding these additional features, such as e-mail and text-processing, to see what options exist to make them available. Several SGD manufacturers now offer modified computer-based and PDA-based devices for Medicare beneficiaries.

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How Much Will Medicare Pay for SGDs? 1/30/10

Medicare regulations state that Medicare will pay 80% of the lesser of the following:

The actual charge for the SGD; or
The fee schedule established for the SGD.

Medicare has created six "codes" or categories of SGDs, and has created a fee schedule for each code. The formula for calculating the reasonable charge is exceedingly complex, and cannot easily be re-stated here. The fee schedules for SGDs with the following characteristics are as follows:

Device Code	Code Description	2010 Medicare Fee Schedule
E 2500	Speech generating device, digitized speech, using pre-recorded messages, less than or equal to 8 minutes recording time.	$ 410.61
E 2502	Speech generating device, digitized speech, using pre-recorded messages, with greater than 8 but less than or equal to 20 minutes of recording time	$ 1,255.59
E 2504	Speech generating device, digitized speech, using pre-recorded messages, with greater than 20 but less than 40 minutes of recording time.	$ 1,656.29
E 2506	Speech generating device, digitized speech, using pre-recorded messages, with greater than 40 minutes of recording time	$ 2,428.61
E 2508	Speech generating device, synthesized speech, requiring message formulation by spelling and access by physical contact with the device.	$ 3,755.44
E 2510	Speech generating device, synthesized speech, permitting multiple methods of message formulation and multiple methods of device access	$ 7,106.66

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How Much Must A Medicare Beneficiary Pay for a SGD? 11/20/04

Medicare requires beneficiaries to pay one of the following amounts for an SGD:

a) 20 % of the actual charge for the device, if the actual charge is less than the applicable fee schedule amount for the device;

b) 20 % of the fee schedule for the device, if the manufacturer/supplier is willing to "accept assignment" for the device;

c) the full catalogue or retail price for the device, if the manufacturer/supplier refuses to "accept assignment;" or

d) nothing, if the manufacturer/supplier agrees to accept assignment, and the special circumstances for waiver of the beneficiary's co-payment exist. (This is discussed in FAQ 12).

For devices that fall within the circumstances described in sub-paragraphs (a), (b) and (d), Medicare will make its payment directly to the manufacturer/supplier. For devices that fall within the circumstances described in sub-paragraph (c), Medicare will make its payment directly to the beneficiary. For devices that fall within the circumstances described in sub-paragraph (b), the beneficiary's co-payment amount will be 0.2 x the applicable fee schedule for each code, as stated in answer to FAQ # 11:

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Are Eyegaze Systems Covered? 11/20/04

Medicare recently provided reimbursement for an Eyegaze Communication System from LC Technologies. This system, used by individuals with extreme physical limitations, was coded as an SGD accessory, code E 2599 (formerly K 0547).

The supplier submitted a reimbursement request to Medicare for $ 14,350.00. This sum was itemized to reveal that it included the Eyegaze Communication System, minus the charge for the system's computer. Also deleted from the funding request and identified as non-covered were the itemized charges for the telephone interface, environmental controls, an option to run a second PC, and a flat screen monitor.

Medicare approved the funding request, setting a reasonable charge for the system at $11,191.72, and paying the recipient 80% of that amount, or $ 8,953.38.

Individuals who seek Medicare reimbursement for this system can obtain a copy of the favorable Medicare Summary Notice on this request from Lewis Golinker (lgolinker@aol.com).

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Speech Amplifiers Covered by Medicare? 11/20/04

Yes, Medicare covers Speech Amplifiers, but NOT as SGDs. Voice amplifiers are used by people who are unable to produce speech with enough volume to meet their daily communication needs. Individuals with ALS and other impairments may need voice amplification to effectively engage in face to face communication as well as telephone communication.

Medicare covers voice amplifiers under a different benefit category than SGDs. SGDs are classified as DME by Medicare; amplifiers are classified as prosthetic devices.

Amplifiers are covered by Medicare pursuant to a joint policy statement of the four DMERCs. They wrote:

The Health Care Financing Administration (HCFA) [now the Centers for Medicare and Medicaid Services, CMS] has determined that voice amplifiers used for beneficiaries with impaired function of their larynx (which is still present) are eligible for coverage by Medicare. This decision is retroactive, and therefore applies to any dates of service on which these items were/are provided.

When billing for these items use HCPCS code L 8499 (unlisted procedure for miscellaneous prosthetic services); include the name, model number and manufacturer of the device as well as documentation explaining the medical necessity for the item.

Because a voice amplifier is not the same as a voice prosthesis, do not use the HCPCS codes that describe an artificial larynx (L 8500), or tracheostomy speaking valve (L 8501).

The 4 DMERC policy statements are posted at the CMS web page.

Subsequently, in 2002, a distinct HCPCS code was added for voice amplifiers. At present, claims for voice amplifiers should use code L 8510, instead of L 8499. The L prefix for this code designates it as a prosthetic device.

SLPs and physicians also take careful note of the last paragraph of the Medicare guidance quoted above. It warns SLPs and physicians to use the proper vocabulary when requesting a voice amplifier. To Medicare, a voice amplifier is not an artificial larynx, which Medicare calls an electronic speech aid. These devices are very specifically described in Medicare national coverage decision 65-5 to have physical characteristics not unlike those of a voice amplifier, but these devices are intended for individuals who have had a laryngectomy or whose larynx is permanently inoperative. A voice amplifier, by contrast, is described as equipment for a person with an intact larynx with impaired function.

In addition, because voice amplifiers do not generate speech, SLPs should not call voice amplifiers "AAC devices," or "speech generating devices."

Medicare's coverage of voice amplifiers is valuable not only for Medicare recipients, but also for individuals with insurance or health plans, when their policies or plans cover prosthetic devices or durable medical equipment. (In most circumstances, items that meet a definition of prosthetic devices also will satisfy criteria as items of DME.)

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Is SGD Software Covered? What is the Claims Procedure and How Is It Reimbursed? 11/20/04

Medicare agreed to cover SGD software when it adopted the new SGD coverage criteria in January 2001. Medicare recognized that some individuals already have computers that they can adapt for SGD use. Thus, for these individuals, covering software alone will be a cost-effective way to provide an appropriate communication solution. SGD software is covered as code E 2511 (formerly K 0545).

The procedure for acquiring SGD software is the same as for acquiring an SGD device. The SLP report and physician's prescription must specify that SGD software is recommended and prescribed, respectively. Additional paperwork is required to support a claim, see FAQ 18; the manufacturer/supplier is responsible for assembling and reviewing the paperwork for accuracy and completeness, see FAQ 19; and the same review process as for SGDs is used by the DMERCs for software claims, see FAQ 20.

One difference between the way SGDs are covered by Medicare and software, is that the former is subject to a "fee schedule," while software is not. Instead, software is reimbursed according to a process known as "individual consideration." This process means that DMERC staff review each claim and apply payment rules to arrive at a reimbursable amount, of which they then pay 80%.

In the abstract, individual consideration seems in conflict with the principles underlying "accepting assignment," see FAQ 11. Assignment is accepted because the fee schedules provide suppliers with a credible basis to predict the amount of reimbursement they will receive for each item. Because no fee schedule exists for individual consideration items, such as SGD software, manufacturers/suppliers must rely on their experience over multiple claims to develop that expectation. While at first, that suggests assignment won't be accepted, the SGD software manufacturers/suppliers now have more than 3 years of experience with Medicare claims, and they should have sufficient knowledge to determine whether the Medicare reimbursement they receive is sufficient to accept assignment for SGD software.

If assignment is taken, the manufacturer/supplier will tell the individual the co-payment amount that is due. That amount will represent the full payment by the individual. Medicare will pay the balance due to the manufacturer/supplier directly. Or, if assignment is not taken, the individual will be responsible for full payment, and will be reimbursed by Medicare for 80 % of the amount Medicare determines is the "reasonable charge."

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What SGD Accessories are Covered? What is the Claims Procedure and How are they Reimbursed? 11/20/04

Medicare agreed to cover SGD mounting items, and SGD accessories (e.g., access items, such as switches; keyguards, etc; batteries), when it adopted the new SGD coverage criteria in January 2001. SGD mounts are assigned a distinct code: E 2512 (formerly K 0546); SGD accessories have been assigned code E 2599 (formerly K 0547).

The procedure for acquiring SGD mounts and accessories is the same as for acquiring an SGD device and software. The SLP report and physician's prescription must specify that SGD software is recommended and prescribed, respectively. Additional paperwork is required to support a claim, see FAQ 18; the manufacturer/supplier is responsible for assembling and reviewing the paperwork for accuracy and completeness, see FAQ 19; and the same review process as for SGDs is used by the DMERCs for mount and accessories claims, see FAQ 20.

One difference between the way SGDs are covered by Medicare and mounts and accessories, is that the former is subject to a "fee schedule," while the latter two types of items, like SGD software, is not. Instead, software, mounts and accessories are all reimbursed according to a process known as "individual consideration." This process means that DMERC staff review each claim and apply payment rules to arrive at a reimbursable amount, of which they then pay 80%. For mounts and accessories, individual consideration was selected as the payment methodology because of the enormous range of prices for the items that comprise each code. Setting a single fee schedule for all the items in each of these codes would have been inequitable to the most costly items, making it difficult for manufacturers/suppliers to accept assignment.

In the abstract, individual consideration seems in conflict with the principles underlying "accepting assignment," see FAQ 11. Assignment is accepted because the fee schedules provide suppliers with a credible basis to predict the amount of reimbursement they will receive for each item. Because no fee schedule exists for individual consideration items, such as SGD software, mounts and accessories, manufacturers/suppliers must rely on their experience over multiple claims to develop that expectation. While at first, that suggests assignment won't be accepted, the SGD software manufacturers/suppliers now have more than 3 years of experience with Medicare claims, and they should have sufficient knowledge to determine whether the Medicare reimbursement they receive is sufficient to accept assignment for these items.

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Assessments and Training

Are AAC Assessments and Training -- SLP Services -- Covered? 11/20/04

Yes. AAC Assessments and Training Services are covered by Medicare as SLP services if the SLP works in a facility that is a Qualified Provider. Otherwise, SLP services are not covered. Typically, the setting the SLP works in determines whether or not he/she is "Medicare Qualified" to be reimbursed for SLP Assessments and Training, including SGD-related services. SLPs know whether (or not) they can bill Medicare for SLP services. Individual SLPs may be paid directly by Medicare only if they establish a rehabilitation agency. Practitioners billing through physicians' offices or medical clinics must be employees, not contractors.

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How Much Will Medicare Pay SLPs for AAC Assessments and Training? 11/23/04

If an SLP works in a Medicare Qualified setting and thus is a "Qualified Provider," Medicare will pay for an SGD Evaluation and for SGD Training. There are 3 CPT codes that address these activities:

SLP Activity	CPT Code	Medicare Reimbursement Rate, 2004 [NOTE: These rates may vary slightly from state to state]
Evaluation for prescription for speech-generating device, face-to-face with the patient; evaluation, first hour	92607	$ 122.09
SLP Evaluation for Speech Generating Device (additional 30 min periods; use 92608 in conjunction with 92607)	92608	$ 26.88
Therapeutic services for the use of SGD, including programming and modification	92609	$ 61.23

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Payment

What Does "Accept Assignment" Mean? 11/20/04

Medicare is a cost reimbursement program, like many insurance policies. This means that the beneficiary must incur a charge -- usually associated with having an examination or procedure performed, or purchasing an item of equipment -- before a claim can be submitted. After the charge is incurred, the claims procedure begins.

In Medicare, a claims procedure has evolved that is called "accepting assignment." Medicare has set a fee schedule for many covered procedures and devices, thus suppliers (manufacturers and their representatives) can develop a reasonable expectation of the amount they will be reimbursed. To make the service delivery and billing processes easier for their patients and customers, many manufacturers have agreed to follow a practice that is the equivalent to "billing Medicare first." Suppliers know Medicare will pay only 80% of the fee schedule or actual cost of the device, so the supplier charges 20% of this amount as a co-payment to be paid by the beneficiary at the time the device is delivered. When the co-payment and the other claims paperwork are received, the supplier submits the claim to Medicare and receives the balance from Medicare as reimbursement.

Note : When a supplier accepts assignment, Medicare pays the supplier; if not, Medicare pays the beneficiary. The amount paid by Medicare, however, remains the same. The relationship between the fee schedule amount and the actual charge will lead SGD suppliers to decide whether (or not) to "accept assignment." If the actual charge is below the fee schedule amount, suppliers will undoubtedly accept assignment. This makes their devices easier for beneficiaries to acquire, i.e., they need to pay only 20 % of the price to the supplier. By contrast, for devices that have selling prices (actual charges) above the fee schedule amount, the greater the difference, the greater the likelihood the supplier will not accept assignment. Suppliers' decisions whether to accept assignment are important from a business perspective. If a supplier agrees to accept assignment, it will receive from Medicare 80% of the fee schedule amount, or, 80% of the actual charge for the device, whichever is less. In addition, the supplier will receive 20 % as a co-payment from the beneficiary. When a supplier agrees to accept assignment, there can be no "balance billing" to the beneficiary. Thus, for a device with a selling price higher than the fee schedule amount, the supplier who accepts assignment will be agreeing to accept a reduced total payment for the device. When a supplier does not agree to accept assignment, the supplier can charge (and receive from) the beneficiary the full price of the device. The beneficiary will then be reimbursed 80% of the fee schedule amount.

Accepting assignment is a very common billing/claims procedure among Medicare DME suppliers. As the cost of a device increases, the supplier's willingness to accept assignment can make the difference between whether or not the device will be available to the beneficiary. Because many SGDs cost thousands of dollars, beneficiaries and their families often find it very difficult to pay the full price of a device, even though they must first do so in order to seek and receive Medicare reimbursement. In short, when a family cannot afford the SGD, the potential Medicare reimbursement rates become meaningless. Most significantly, these beneficiaries will be unable to get or derive any benefit from the SGD that is prescribed by the SLP and physician. From the supplier's perspective, when a device costs more than the fee schedule allows for a device category, when they "accept assignment", they are accepting a mandatory discount. However, if they do not accept assignment, they are most likely forgoing any sale at all so everyone loses. However, SLPs need to contact the suppliers to learn whether assignment will be taken for the device they are recommending.

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What If A Beneficiary Cannot Afford the Co-Payment? Can A Co-Payment Be Waived? Must it be Paid in a Lump Sum? 11/20/04

Medicare requires durable medical equipment suppliers to collect the 20 % co-payment -- of either the actual charge for the device, or of the fee schedule amount -- from beneficiaries. However, as the cost of items increases, beneficiaries' ability to afford the co-payment amount can become a significant challenge. Medicare guidance acknowledges this potential difficulty, and has created an exception to this rule. A beneficiary may ask the SGD manufacturer/supplier to waive the co-payment, because to pay it will create a special financial hardship. When such a request is received, the manufacturer/supplier should then determine, for this particular individual, whether collection of the co-payment should be waived. This exception must be based on a determination made by the manufacturer/supplier, and it must be made on a case-by-case basis. The beneficiary cannot self-certify that he/she is indigent, and manufacturers/suppliers cannot routinely waive the co-payment amount for all beneficiaries or any specific classes of beneficiaries. No definition or specific criteria have been found regarding what constitutes "special financial hardship," or to otherwise guide manufacturers/suppliers in this determination, but it is clear that Medicare expects it to be used rarely. Medicare guidance states clearly that the routine waiver of the co-payment amount is impermissible. Because SLPs will be discussing SGD cost issues with most beneficiaries and their families as part of the device recommendation process, the SLP should be prepared to discuss the potential for a co-payment waiver. If the family believes they must pursue such a waiver, the SLP should provide information for the family to contact the manufacturer/supplier directly. Just as each manufacturer will be required to determine, on a case-by-case basis whether to waive the co-payment due to beneficiary indigence, each manufacturer also will have to determine whether it is willing to allow the family to divide the co-payment amount into multiple payments.

NOTE: The expectation that the beneficiary contribute a 20 percent co-payment does not mean that the beneficiary has only one option: to write a check for that sum from a personal account. To the contrary, many families have supplemental sources of insurance coverage that will pay for DME co-payments. This insurance may be provided through a spouse or other family member, or, it may be a special "Medi-Gap" insurance policy specially created to cover costs that Medicare will not pay for.

In addition, certain not-for-profit organizations, most notably, the Muscular Dystrophy Association (MDA) has targeted funding -- up to $ 2,000 per person -- to help defray costs related to SGD access and use, which may be applied to co-pay obligations. Other foundations or charitable sources also may be considered.

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What If A Beneficiary Cannot Afford the Purchase Price of a Device When the Supplier Will Not Accept Assignment? 11/20/04

Medicare coverage does not exist for all SGDs, at present, and for some devices that are covered, the manufacturer/supplier may conclude that the applicable fee schedule amount is too Medicare coverage does not exist for all SGDs, at present, and for some devices that are covered, the manufacturer/supplier may conclude that the applicable fee schedule amount is too low. In both of these circumstances, the manufacturer/supplier will not accept assignment for that particular device. As a result of that decision, the beneficiary will be required to pay the full catalogue or retail price for the device. Following the purchase of the device, a claim for Medicare reimbursement can then be made. However, both purchase of the device and the filing of the Medicare claim can occur only if the beneficiary can afford the initial purchase price of the device. If not, the beneficiary will not be able to obtain the device; there is no Medicare claim; there is no Medicare reimbursement; and the beneficiary will have no tangible benefits in functional communication ability. If the SLP proposes to recommend a device for which the manufacturer/supplier will not accept assignment, SLPs must: a) discuss with the beneficiary whether there are other possible sources to help pay for the device; or b) consider an alternative device and present it to the beneficiary to see it is affordable. In addition, SLPs should make it clear to the manufacturers/suppliers of these devices that their refusal to accept assignment is limiting beneficiaries' access to the most appropriate SGDs that will meet their needs.

Refusing to accept assignment defeats the potential benefits of the Medicare January 1, 2001 policy change to cover SGDs.

NOTE: Regardless whether the device is covered, if the device is purchased, the manufacturer/supplier is required to submit a Medicare claim. For devices that are covered, reimbursement (80% of the applicable fee schedule) will be paid directly to the beneficiary. For devices that are not covered, reimbursement still may be possible if appeals are followed to an administrative law judge hearing.

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Will Medicare provide reimbursement for the rental of a SGD? 1/30/10

Medicare will provide reimbursement for the rental of SGDs. Device rentals will be subject to the same documentation requirements as device purchases, meaning the SLP evaluation and report and physician's prescription must be completed.

Medicare will provide reimbursement for rental equipment based on the code in which the device "fits." Medicare's fee schedule for rental represents the full amount of Medicare reimbursement, either to the beneficiary if assignment is not accepted, or to the supplier/manufacturer, if assignment is taken. If assignment is taken, the beneficiary or supplemental insurance will have to meet the 20 % co-payment amount.

Device Code	Code Description	2010 Medicare Rental Fee Schedule
E 2500	Speech generating device, digitized speech, using pre-recorded messages, less than or equal to 8 minutes recording time.	$ 41.07
E 2502	Speech generating device, digitized speech, using pre-recorded messages, with greater than 8 but less than or equal to 20 minutes of recording time	$ 125.57
E 2504	Speech generating device, digitized speech, using pre-recorded messages, with greater than 20 but less than 40 minutes of recording time.	$ 165.65
E 2506	Speech generating device, digitized speech, using pre-recorded messages, with greater than 40 minutes of recording time	$ 242.85
E 2508	Speech generating device, synthesized speech, requiring message formulation by spelling and access by physical contact with the device.	$ 375.55
E 2510	Speech generating device, synthesized speech, permitting multiple methods of message formulation and multiple methods of device access	$ 710.66

NOTE: This Medicare fee schedule will remain current for the foreseeable future. A freeze on Medicare payment rates for items of DME was included in the Medicare Modernization Act, which was enacted in late 2003.

For information on the fee schedule for purchase of an SGD, see FAQ #9

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SGD Vendors Re-Possess SGDs if Third Party Funding Sources Refuse to Pay? 11/23/04

SLPs have raised 2 related questions: Is a client is ever at risk of being asked to return an SGD if expected third party funding sources do not pay? And, what is the appropriate advice an SLP can give a client or a supplier if either asks about device return or repossession.

These questions arise infrequently, but they are serious, emotion-laden issues. These questions arise at all because almost all SGDs are purchased with money provided by third party benefits programs, such as Medicare, Medicaid, insurance or Tricare. These questions arise infrequently because in the vast majority of cases, these funding sources have clearly identifiable obligations and they honor those obligations. Device delivery to the client and payment to the supplier both flow as expected.

But exceptions do occur. There are times when device delivery proceeds, but funding does not follow. It is in this circumstance these questions are raised.

If device return or repossession ever is raised by a supplier, both the client and the SLP can speak with a common voice: the answer should be a clear, simple "no." Once the device is received, the box is opened, and the device put to use, the device stays where it is until it is no longer needed. This should be the end of the discussion regarding the device.

The basis for this recommendation is that SGD need is a professional judgment made by the SLP. The ASHA code of ethics is clear that this must be a decision made independent of funding availability. In all circumstances in which this question will arise, the SLP has made a recommendation that the client's daily communication needs require an SGD. Thus, unless the client's medical condition changes, i.e., his or her daily communication needs change and the client no longer needs the SGD, the SLP should offer no opinion -- ethically, can offer no opinion -- other than that the client continues to need the device and there is no basis for its removal.

Stated more simply: for the SLP, device access is a function of client need. By contrast, funding issues are about money. Funding issues should not be about the device.

Offering a firm, non-conditional opinion does not leave an SGD supplier without options.

If a SGD or accessories supplier is worried about non-payment, it can ask the client to pay first or to sign a "waiver." Pay first may not be practical due to the cost of the device. But that is a dilemma the supplier -- not the SLP or the client -- has to face. If the supplier provides the device in advance of payment, that is a choice it makes, a risk it takes. For Medicare, no supplier accepted assignment (provided a device in advance of payment) before 2001. Suppliers made clients pay before shipping and submitting claims to Medicare, which had to be appealed before funding was obtained and clients were reimbursed. That is why there were only 21 Medicare funded SGDs from 1993-2001, but more than 4,000 Medicare funded SGDs from 2001-2004.

"Waivers" also protect suppliers. Waivers are used for Medicare recipients when the supplier has reason to believe a specific item might not be approved. Carrying cases are an example of such an item. When a waiver is signed, the client promises to pay if the funding source does not.

Pre-payment, obviously, and waivers, are about money. A waiver does not obligate the client to return the device, just to pay for it if the funding source does not.

What if the funding source does not pay, and a client signed a waiver, but really can't afford to just write a check for the value of the device? If this is the circumstance presented to an SLP, the first question should be how does this affect me? This is clearly a money issue between the client and the supplier. An SLP has no foundation ever to say to a client "box up and return the device." SLPs must hold paramount the interests of their clients. Boxing up and returning a device NEVER will be in a client's best interests unless the client no longer needs the device. Absent proof of lack of need, device return only is in the interest of the supplier, and that is not an interest the SLP has any duty to advance or protect.

Instead, the issue should remain about money. The supplier and client can negotiate some repayment plan. It can be set at whatever amount the client can afford. If it is $ 100 per month, or $ 10 per month; or for a period of 6 months, or 6 years, so be it.

Or, the supplier may just have to write off the financial loss. But the device never should be seen as negotiable. Not by the client, and most definitely not by the SLP community.

Is this "unfair" to the suppliers? People's opinions may differ here. One view is why does an SLP care whether it is unfair or not? Another view is that suppliers have many ways to protect themselves from this so-called "unfairness," and if they want to take a funding risk, that is a choice they made upon deliberation. It is not the SLP's role to reduce or eliminate suppliers' financial risks.

Product suppliers of all types take financial risks regarding non-payment all the time. Credit cards may be over their credit limit; or they may be fraudulent. Checks can bounce. Clients on payment plans may not make their payments. In general, if any of these circumstances arise, it is in only the rarest instances that objects are boxed up and returned to satisfy those debts.

Even rarer still are laws that allow involuntary repossession. That is the stuff of bad movies and TV. Because of the characteristics of SGD users, it is unlikely any SGD supplier even would contemplate trying to just take an SGD from someone's hands or remove it from a wheelchair.

Instead, when debts are owed, actions to recover debts are pursued in court. A person with a severe speech impairment can be sued for debt repayment just as anyone else. The electric company; doctor; SGD provider; and all other creditors have a right to demand payment for services provided.

Or, like these other services providers, debts that are more work to collect than they are worth are written off. These are the choices all services providers, including SGD suppliers have available. They can:

Demand pre-payment before delivery;
Appeal the funding source denial or underpayment;
Negotiate with the client for payment;
File and action to recover the debt;
Write off the debt.

Suppliers are dependent on the SLP community for recommendations of their products, and clients are dependent on their SLPs for all sorts of information. The SLP community must make clear to the suppliers that they never will support funding of a device on one day, and on the next turn around and support device return by a client because of some flaw in the funding process. The SLP community also must educate clients, just as they write in their funding justifications, that these devices are essential, and that the clients can't meet daily communication needs without them. They must be viewed as being as important to communication as a pacemaker is to circulation.

A client should never be reinforced in a belief that "well, we got by without it, and I guess we'll have to do so again." Or, "the company wants the device back; we should voluntarily do so -- we can't really afford it."

Nothing in the guidance provided here supports the conclusion that SGD suppliers are expected to provide equipment for free. Nothing stated here supports the conclusion that those who have the obligation or ability to pay should be excused from paying. Instead, the point stated here is solely about keeping a money issue a money issue. If after device delivery, a funding program says no; or if a client can't afford to pay in full, the resulting issue should remain focused exclusively on money. And, that issue should be worked out, or not, between the supplier or client and the funding source, or the supplier and the client. But this dispute never should be transformed into a question whether the client keeps the device or returns it. And, SLPs should be clear and firm in their position that they will never agree to act as agents for device suppliers supporting device return for financial reasons, and instead will affirmatively educate their clients that device return should not be considered an option.

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Processes

What is the SLP's Role in Medicare Funding of SGDs? 11/20/04

The SLP is the key person in the Medicare claims process related to SGDs. Medicare guidance related to SGDs is unique among all items and medical services Medicare covers in that it designates a non-physician, the SLP, as the primary determiner of a beneficiary's medical The SLP is the key person in the Medicare claims process related to SGDs. Medicare guidance related to SGDs is unique among all items and medical services Medicare covers in that it designates a non-physician, the SLP, as the primary determiner of a beneficiary's medical need. For everything else Medicare covers, the beneficiary's doctor holds responsibility. The assignment of this role to the SLP is based on the enormously positive impression made upon Medicare and DMERC staff by the SLPs who prepared the Formal Request and who thereafter responded patiently to questions raised about AAC intervention. The credibility they established in this process is priceless, and every SLP must approach each Medicare evaluation recognizing the importance of maintaining and reinforcing that trust. There are 4 specific steps the SLP must complete as part of the Medicare claims process:

Complete an assessment for an SGD pursuant to the DMERC RMRP outline. A protocol has been developed to help SLPs conduct a complete assessment and prepare a complete application report consistent with Medicare's requirements. It is posted at www.aac-rerc.com.

As part of the evaluation process, the SLP will determine the most appropriate device that will meet the beneficiary's daily communication needs, as well as determine the beneficiary's need for AAC software, and/or accessories.

The SLP also must determine whether the beneficiary can obtain the most appropriate device, which requires consideration of the following points:
- Does Medicare cover the device or is it currently excluded from coverage?
- If covered, will the manufacturer/supplier accept assignment for the device?
- If not covered, or no assignment will be taken, can be beneficiary afford the full purchase price of the device (if not, the SLP will need to consider an alternative device.)
Complete a written report and supporting information pursuant to the DMERC RMRP outline. The protocol posted at www.aac-rerc.com is intended to help ensure this report is complete. As part of the report, the SLP should address AAC accessories that are needed in addition to the need for the device.
Forward the report to the beneficiary's treating doctor along with a request for a prescription containing the information stated in response to FAQ 16.
Inform the beneficiary and his/her family of the information that must be assembled to support a claim, including the assessment report, prescription, and co-payment or full payment amount. The SLP also should contact the manufacturer/supplier and then instruct the family of the procedure for filing the claim, including the address and phone number of the manufacturer/supplier who will process it. If the SLP believes the beneficiary and/or the family will be unable to process the claim, this role may be assumed by the SLP and/or the manufacturer's funding support staff.

NOTE: Medicare coverage of SLP services extends to reimbursement for the SGD evaluation. However, not all SLPs will qualify as Medicare SLP services providers. An evaluation and report recommending an SGD, AAC software and/or accessories can support a Medicare claim for these items of equipment even if the SLP is not a Medicare provider him/her-self. In this circumstance, the device can be reimbursed but the SLP will not be reimbursed for his/her evaluation. The SLP's duty in making an SGD recommendation is to identify the most appropriate device that meets the individual's daily communication needs, which may or may not be the most technically advanced device. The goal should be to recommend the best match between the client's communication needs and an appropriate SGD, which may include consideration of the coverage status of the device in some cases.

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What is the Physician's Role in Medicare Funding of SGDs? 11/20/04

The physician is a necessary part of the Medicare claims process. No Medicare payment will be made for an SGD, AAC software, or accessory without a physician's prescription. Medicare has not required that any particular physician prepare the prescription. Thus, Medicare beneficiaries with multiple physicians can have any one of them sign the prescription. The key will be the existence of a physician-patient relationship, but not particular training or expertise on the part of the doctor. It is expected that the doctor will base the prescription on the SLP report. Thus, the SLP report that is prepared following the evaluation should be submitted to the doctor for review. It is recommended that the doctor be asked to prepare the prescription with the following information included:

The physical and communication diagnosis;
That the doctor referred the pt for SLP evaluation (if that occurred)
That the doctor reviewed the SLP report;
That the doctor concurs in the recommendation of the SLP and prescribes EACH ITEM: device, switches, if any, software, if any and so on, that is recommended; and
That each of these items is reasonable and necessary for the treatment of the patient's expressive communication diagnosis (dysarthria, apraxia, aphasia, aphonia), and is necessary to achieve the functional communication goals stated for the patient in the SLP's treatment plan.

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What is the Manufacturer/supplier role in Medicare Funding of SGDs? 11/20/04

The SGD manufacturer/supplier plays a critical role in the Medicare claims process. There are 6 specific steps that the manufacturer/supplier must do as part of the Medicare claims process:

Determine which devices within product line will be subject to Medicare "assignment;"
Collect beneficiary information; confirm Medicare eligibility and current residence of beneficiary (beneficiary must live at home or in an assisted living facility, but not a nursing facility or hospital) see FAQ 28
Collect SLP report and physician's prescription;
Confirm that all data required by RMRP for SGDs has been included in the report and transfer of the report to the physician pre-dates the prescription;
For devices subject to Medicare assignment: collect co-payment from beneficiary; information about 3d party funding of co-payment; or financial information from beneficiary seeking waiver of co-payment (determine whether waiver is appropriate)
For devices not subject to Medicare assignment: collect payment in full from beneficiary or information about any 3d party funding of device;
Ship device to beneficiary;
Submit claim for reimbursement to Medicare.

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What Paperwork/Reporting Is Required to Submit a Claim? 11/20/04

Each of the SGD manufacturers has its own documentation requirements for submitting a Medicare claim. In general, though, all require the following information:

General information about the beneficiary; proof of Medicare coverage, e.g., photocopy of Medicare card; information about any available 3d party funding for co-payment or for items Medicare may not cover;
Signed Medicare release of information form;
SLP Report dated prior to physician prescription and conforming to all elements of the Medicare RMRP on SGDs (original signatures are likely to be required)
Physician's prescription (original signatures are likely to be required)
Co-payment amount, or information about how co-payment will be paid by 3d party, or data supporting decision to waive co-payment for this beneficiary

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Where Does the Paperwork Go? 11/20/04

Typically, Medicare paperwork to support an SGD claim will be retained by the manufacturer/supplier. Only a cover sheet, known as a HCFA 1500 form is transmitted to the DMERCs, and this will be sent electronically. When the manufacturers/suppliers rely on this method of claims processing, they are asserting to Medicare that they have reviewed the paperwork and that the paperwork is in compliance with Medicare's coverage guidelines. Medicare does not conduct "prior authorization," of SGD claims; instead, it reviews claim documentation, through periodic post-payment audits. Manufacturers/suppliers are required to maintain the Medicare claims paperwork and to present them for review upon a Medicare auditor's request. If the audit reveals flaws in the documentation, Medicare may ask the manufacturer/supplier to re-pay Medicare for the improper payments. For this reason, manufacturers/suppliers have a strong incentive to insist that documentation in support of Medicare claims is complete.

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How Are Decisions Made after the Supplier Files a Claim? 11/20/04

SGD claims information is submitted to one of the 4 Medicare DMERCs, based on where the beneficiary lives. At the DMERC, staff review the documentation submitted, which for an SGD is likely to be just a HCFA 1500 form. The form will be reviewed to check that it contains the required information to support a claim, and if so, the claim will be processed for payment. No substantive review of the underlying documentation will be conducted. Alternately, if some required documentation is missing, or if something is included that raises a question, the DMERC staff may seek more information, or may deny the claim, in full or in part, forcing the manufacturer/supplier to submit more information or to file an appeal of the claims denial.

In almost all cases, the interaction between the manufacturer/supplier and the DMERC will occur beyond the involvement of the beneficiary. Before the claim is submitted, the beneficiary will have received his or her device. The claims process will parallel the beneficiary's learning to use the device and reap its benefits. Only if a beneficiary signs a "waiver" will the s/he be at risk of being asked to pay the balance of the cost of a device, if Medicare refuses to pay. In general, waiver requests should be rare for SGDs, SGD software, mounts and accessories.

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When Will the SGD be Shipped to the Beneficiary? 11/20/04

The device (and/or software and accessories) will be shipped to the beneficiary when: a) payment is provided; or b) when all paperwork related to filing a Medicare claim has been received. The first alternative will likely occur for devices and other items that will not have assignment taken. In this circumstance, full payment of the catalogue or retail price is required. Thus, once payment is received, the manufacturer/supplier will have gotten all that it is entitled to, and it will then deliver the product. However, the manufacturer/supplier still is obligated to submit the Medicare claim, but it will be up to the beneficiary and his/her family to ensure all the necessary paperwork is submitted, and that the manufacturer/supplier then forwards it to Medicare. The second alternative will be followed for devices that will have assignment taken. For these devices, the manufacturer/supplier is unlikely to ship the device before all the necessary claims paperwork is submitted. The manufacturer/supplier will wait because it will be demanding from the beneficiary only 20% of either the actual charge for the device or of the applicable fee schedule, and will be relying on Medicare to provide reimbursement of the remaining 80%. Because the manufacturer/supplier is dependent on the approval of that claim to receive the bulk of its payment for the device, it has a much greater interest in ensuring that the documentation supporting the claim is complete.

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Will SGDs be Shipped for Medicare Beneficiaries? 11/20/04

See FAQ 28

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What General Rules Should a New SLP Follow When Performing His or Her First Medicare SGD Assessment? 11/22/04

SLPs who conduct assessments for Medicare recipients must follow the Medicare RMRP. Assessments for all other funding programs also should follow the RMRP, or the specific assessment criteria established by the funding program, where applicable.

For Medicare recipients, there are no shortcuts in the assessment process, and there are no alternatives to conducting a complete assessment and preparing a complete report. Medicare has no length requirement or preference for how long SGD reports should be. Instead, Medicare demands that the reports be complete. A complete report is one that addresses all the topics identified in the RMRP.

A complete report is a non-waivable, non-negotiable obligation on the part of the SLP.

SLPs who fail to conform their assessments and reports for Medicare recipients to the requirements of the Medicare RMRP should expect to be told by an SGD supplier to edit, add to, or rewrite their report. And to keep editing, adding to, or rewriting it until it addresses all the content areas of the RMRP.

SLPs who fail to conform their assessments and reports for Medicare recipients to the requirements of the Medicare RMRP are doing a disservice to their clients. If the SLP report is insufficient, the supplier may refuse to accept assignment for the requested device, and thereby force the client to prepay for the equipment. Because the family may not be able to afford the device, this may make it impossible for the client to get the device. In this circumstance, one must question why the assessment was conducted in the first place.

SLPs who fail to conform their assessments and reports for Medicare recipients to the requirements of the Medicare RMRP are doing a disservice to the SGD suppliers. If an incomplete report is used to support a Medicare claim, the supplier is at risk of being asked to repay Medicare in the event that claim is audited in a post-payment review.

That SLPs may not receive generous reimbursement for their assessment is no defense and no excuse for not meeting the Medicare RMRP's content requirements for their reports. The duty to prepare a proper and complete report exists independent of SLP reimbursement. It flows from the SLP's duty to hold paramount the interests of the client. No SLP is forced to conduct the assessment. If the task is undertaken, it must be done right, which means the report must be complete, as the RMRP outlines.

The Medicare RMRP, as well as an instruction protocol to guide SLPs through its required contents, is posted at http://www.aac-rerc.com/

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Repairs and Replacements

Are SGD and Accessories Repairs Covered? 11/20/04

Medicare will cover SGD and accessory repairs -- both parts and labor -- for devices and accessories, which are beyond their warranty periods. During the warranty period, it is expected the supplier will be responsible for repairs. Beyond that time, Medicare will cover SGD and accessory repairs as they do any other item of durable medical equipment. Individuals who require repairs on their SGDs or accessories, whether within or beyond the warranty period, should contact the supplier of the item in need of repair to inquire about the applicable repair procedure. Medicare also will repair SGDs that were not purchased by Medicare, as long as the device is otherwise covered.

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What if my device cannot be repaired? 11/20/04

Medicare assumes that durable medical equipment will have a useful life of 5 years. This means that Medicare will not replace items of durable medical equipment within a five-year span, except when a substitution request is based on change of beneficiary condition. The impacts of this practice are significant:

a) Medicare apparently will not provide reimbursement for the replacement of a non-repairable device if it is within its 5 year expected life span.

b) It is unlikely a manufacturer/supplier will accept assignment for a replacement device within the five-year period. For this reason a family will be required to purchase a replacement device.

c) If the family cannot afford a replacement device, they may ask the SLP for help. This may include identifying another device that is affordable, even if it is not able to meet all the person's needs; or, to identify sources of low interest loans, or device loans, used devices, or charitable sources. The goal, of course, is to ensure the beneficiary is not without functional communication for the duration of the 5-year period.

d) To prevent this situation from occurring, beneficiaries should be told of this risk during the discussions about device selection, and encouraged to purchase supplemental insurance that will cover replacement if the device becomes non-repairable and Medicare refuses to replace the device.

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What documentation is required to support a Medicare SGD device repair request? 11/20/04

Before submitting a funding request to Medicare for an SGD repair, the following documents must be obtained and/or completed, and then submitted to the repair source (typically the device supplier):

A release of information form, which can be obtained from the device manufacturer, must be completed
A physician's prescription, on letterhead, that states: "Repair of ____________ [name of client's SGD] is medically necessary. ______________ [name of patient (Medicare beneficiary)] requires this device because ___ [s/he] is unable to meet daily communication needs due to severe ____________________ [communication diagnosis], secondary to ________________________ [primary physical or neurological diagnosis]."
A letter of medical necessity, written by the SLP or by the physician, reporting the following information:
- Patient/Client name
- Primary [physical condition] Diagnosis
- Communication Diagnosis [such as dysarthria, apraxia, aphasia, aphonia]
- Statement that: "the client is unable to meet daily communication needs using natural communication techniques and requires use of an SGD (or SGD) to meet those needs"
- Statement that: "the client's/patient's device continues to be appropriate and necessary for _____[his/her] use.
- If this letter is written by SLP, a statement that this letter has been forwarded to the client's doctor.

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When Will Medicare Approve an SGD Replacement? 7/13/06

Medicare uses the term "replacement" as a term of art. It is important that SLPs understand how Medicare uses the term. To Medicare, "replacement" means "the provision of an identical or nearly identical item." This is narrower or more specialized than a conversational use of the term, which would include any substitute of a new item for an existing one, whether the new one is of the same or different model type.

For this reason, a client whose medical condition changes and therefore requires a different SGD, is not seeking a "replacement." And, for this reason, whatever Medicare guidance applies to replacement devices, does not apply to a person in this circumstance. Medicare guidance states this clearly: "Situations involving the provision of a different item because of a change in medical condition are not addressed by this section."

Medicare will consider the "replacement" of an existing item of DME when it has been lost or experienced irreparable damage. "Irreparable damage" also is a specialized term. To Medicare, "irreparable damage" refers to a specific accident or to a natural disaster (e.g., fire, flood, etc.)." To seek replacement (of the same model) an SLP confirmation that the item remains appropriate and physician"s prescription will be needed.

Note, there is no time limit associated with replacement necessitated by irreparable damage.

Medicare also describes a different circumstance that necessitates replacement: irreparable wear. This is defined as "deterioration sustained by day-to-day usage over time and a specific event cannot be identified." For devices sought to be replaced for this cause, Medicare will take into account an expected useful life of the product. Medicare states "if the item has been in continuous use by the patient" for the equipment's useful lifetime, the beneficiary may elect to obtain a new piece of equipment.

Medicare guidance also states that the reasonable useful lifetime of DME is to be set by program instructions. To date, none has been written for SGDs. For this reason, the DMERCs are instructed to make this determination themselves, "but in no case can it be less than 5 years."

This guidance is important regarding the so-called "5 year rule." Medicare appears to have a "5-year rule" for replacement of equipment that simply wears out and becomes irreparable due to daily wear and tear. By contrast, when a specific event can be identified as the cause of the irreparable damage to the device, e.g., it is dropped, the 5 year rule does not apply. A device whose status as irreparable can be traced to a specific event, can be replaced whenever it is determined to be irreparable.

Note, however: replacement, to Medicare means replacement of the same model. To the extent a model has gone out of production, replacement will be with the device that succeeds the earlier model, e.g., an MT 4 for a Dynamyte 3100.

Note as well that a client will not be seeking "replacement" and the preceding does not apply when the recipient's medical condition changes and s/he is unable to continue to use an existing SGD. Most often, SGD users in this situation will not need a new SGD, but instead, an accessory such as a switch or scan module. These can be requested whenever their need arises.

In short, the rules are that if an SGD still works, you can replace it:

whenever it no longer meets your needs, because your needs have changed. Note: if your needs change, e.g., a progressive impairment progresses and you can't use the existing stuff, you can change it at any time. But, the expectation is that you need something in a new code. If you need an accessory, no problem -- change of condition is enough. No time issues there. But if you need a whole new box, then you have to show change of condition, and a change of code to get around any question of timing.
whenever it no longer works, if the reason it does not work can be attributable to a specific cause
after 5 years if it does not work due to ordinary wear and tear.

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Miscellaneous

How Many People Have Benefitted From the Medicare Policy Change for SGD? 03/26/2012

Medicare's policy change for Speech Generating Devices (SGDs) has had a profound positive impact on Medicare beneficiaries, and on persons who receive health benefits from other funding programs.

Table 1 reports the number of SGDs Medicare has approved and purchased in the 10 year period from 2001-2010. The totals are reported by year as well as by “code,” or device types.

Table 1: 2001-2010 Medicare SGD Purchases

Year								Total/yr	Cumulative Total	Yr #
	SGD Codes
	K0541	K0542				K0543	K0544
2001	66	93				119	476	754	754	1
2002	37	116				218	893	1264	2,018	2
			K0615	K0616	K0617
2003*/	37	77	21	13	13	330	1128	1619	3,637	3
	E2500		E2502	E2504	E2506	E2508	E2510
2004**/	34		30	18	21	155	952	1210	4,847	4
2005	25		36	26	54	213	1547	1901	6,748	5
2006	16		34	22	79	197	1614	1962	8,710	6
2007	16		23	29	76	168	2041	2353	11,063	7
2008	18		33	33	75	130	2112	2401	13,464	8
2009	15		24	11	53	84	2349	2536	16,000	9
2010	9		11	2	47	61	2524	2654	18,654	10

Total by code	273	286	212	154	418	1675	15636	18654

*/ In 2003, Medicare revised the SGD codes for digitized speech output devices. It split one of the digitized device codes into 3. Because the split occurred after the year began, data were reported both for the original code, K 0542, and the 3 replacement codes, K 0615; 0616; and 0617.

**/ In 2004, Medicare renumbered the SGD codes, replacing the “K” codes with “E” codes.

As reported in Table 1, more than 18,000 Medicare recipients have received SGDs in the period since 2001, i.e., in the period since the Medicare National Coverage Decision for SGDs and Regional Medical Review Policy (Local Coverage Decision) for SGDs went into effect. This compares with the 20 Medicare recipients who were able to win Medicare SGD appeals in the 8 years between 1993-2000.

In addition to this impact on Medicare beneficiaries' access to SGDs, the Medicare policy change has had a direct positive impact on insurance funding for SGDs, making acceptance of coverage and subsequent approvals far more likely. Dozens of insurers have adopted their own SGD coverage guidance based on the Medicare Regional Medical Review Policy (RMRP). The RMRP is the source of the Medicare SGD assessment and report requirement. It is of nationwide applicability, and it is the document for which the "protocol" was developed.

In addition, in late 2001, Congress directed the Tricare program, which provides health benefits to active duty military service members and their families, and military retirees and their dependents, to cover SGDs for all Tricare recipients. In 2005, the Department of Defense adopted coverage rules for SGDs that are a copy of the Medicare RMRP.

A number of Medicaid programs also have adopted the reporting requirement of the RMRP for their own SLP reports, which will lead to greater standardization of the SLP task in SGD assessment and reporting across funding programs. Medicaid programs also benefit financially from these Medicare SGD purchases: approximately half of all the Medicare SGD purchases were for persons who are dually eligible for both Medicare and Medicaid. Prior to 2001, Medicare did not contribute anything to the cost of those SGDs, forcing Medicaid to pay for them in full. Since 2001, however, Medicare has paid close to 80 % of the cost of these SGDs, providing an enormous savings to Medicaid programs. In total, Medicaid programs have saved many millions of dollars as a direct result of Medicare’s SGD purchases.

Medicaid programs have saved additional sums for Medicaid recipients who have dual eligibility with insurance, which also is far more likely to approve SGDs. The insurance payment for these devices provides a further reduction in Medicaid program’s SGD outlays.

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