TN 3 (11-22)

HI 00610.210 Necessary and reasonable

Although an item may be classified as DME, it may not be covered in every instance. For coverage in a particular case the equipment must be necessary and reasonable for treatment of an illness or injury, or to improve the functioning of a malformed body member. These considerations prevent payment for equipment which cannot be reasonably expected to perform a therapeutic function and permits only partial payment when the type of equipment furnished substantially exceeds that required for the treatment of the illness or injury involved.

A. Necessity for the equipment

Equipment is necessary when it can be expected to make a meaningful contribution to the treatment of the patient's illness or injury or to the improvement of a malformed body member. In most cases the physician's prescription for the equipment and other medical information available to the carrier is sufficient to establish that the equipment serves this purpose.

B. Reasonableness of the equipment

Even though an item of DME may serve a useful medical purpose, the carrier also considers whether it would be reasonable for the program to pay for the item. The following considerations enter into the determination of reasonableness:

  1. 1. 

    Would the expense of the item to the program be clearly disproportionate to the therapeutic benefits which could ordinarily be derived from use of the equipment?

  2. 2. 

    Is the item substantially more costly than a medically appropriate and realistically feasible alternative pattern of care?

  3. 3. 

    Does the item serve essentially the same purpose as equipment already available to the beneficiary?

Claims for billed items of equipment found to be out of line with tests of reasonableness are denied in full except in the following case: When it is determined that there exists a medically appropriate and realistically feasible alternative pattern of care for which payment could be made, payment is based on the reasonable charge for this alternative.

C. Payment consistent with what is necessary and reasonable

When a claim is filed for equipment containing features of an aesthetic nature or of a medical nature which are not required by the patient's condition or when there exists a reasonably feasible and medically appropriate alternative pattern of care which is less costly than the equipment furnished, the amount payable is based on the reasonable charge for the equipment or alternative treatment which meets the patient's medical needs.

The acceptance of an assignment binds the supplier-assignee to accept the reasonable charge for the medically required equipment or service as the full charge and the supplier-assignee cannot charge the beneficiary the differential attributable to the equipment actually furnished.

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HI 00610.210 - Necessary and reasonable - 11/28/2022
Batch run: 11/28/2022