CMS Pub. 100-02, ch. 15, § 110.2

Under the circumstances specified below, payment may be made for repair, maintenance, and replacement

of medically required DME, including equipment which had been in use before the user enrolled in Part B of

the program. However, do not pay for repair, maintenance, or replacement of equipment in the frequent and

substantial servicing or oxygen equipment payment categories. In addition, payments for repair and

maintenance may not include payment for parts and labor covered under a manufacturer’s or supplier’s

warranty.

A. Repairs

To repair means to fix or mend and to put the equipment back in good condition after damage or wear.

Repairs to equipment which a beneficiary owns are covered when necessary to make the equipment

serviceable. However, do not pay for repair of previously denied equipment or equipment in the frequent

and substantial servicing or oxygen equipment payment categories. If the expense for repairs exceeds the

estimated expense of purchasing or renting another item of equipment for the remaining period of medical

need, no payment can be made for the amount of the excess. (See subsection C where claims for repairs

suggest malicious damage or culpable neglect.)

Since renters of equipment recover from the rental charge the expenses they incur in maintaining in working

order the equipment they rent out, separately itemized charges for repair of rented equipment are not

covered. This includes items in the frequent and substantial servicing, oxygen equipment, capped rental,

and inexpensive or routinely purchased payment categories which are being rented.

A new Certificate of Medical Necessity (CMN) and/or physician’s order is not needed for repairs.

For replacement items, see Subsection C below.

B. Maintenance

Routine periodic servicing, such as testing, cleaning, regulating, and checking of the beneficiary’s

equipment, is not covered. The owner is expected to perform such routine maintenance rather than a retailer

or some other person who charges the beneficiary. Normally, purchasers of DME are given operating

manuals which describe the type of servicing an owner may perform to properly maintain the equipment. It

is reasonable to expect that beneficiaries will perform this maintenance. Thus, hiring a third party to do such

work is for the convenience of the beneficiary and is not covered. However, more extensive maintenance

which, based on the manufacturers’ recommendations, is to be performed by authorized technicians, is

covered as repairs for medically necessary equipment which a beneficiary owns. This might include, for

example, breaking down sealed components and performing tests which require specialized testing

equipment not available to the beneficiary. Do not pay for maintenance of purchased items that require

frequent and substantial servicing or oxygen equipment.

Since renters of equipment recover from the rental charge the expenses they incur in maintaining in working

order the equipment they rent out, separately itemized charges for maintenance of rented equipment are

generally not covered. Payment may not be made for maintenance of rented equipment other than the

maintenance and servicing fee established for capped rental items. For capped rental items which have

reached the 13-month rental cap, contractors pay claims for maintenance and servicing fees after 6 months

have passed from the end of the final paid rental month or from the end of the period the item is no longer

covered under the supplier’s or manufacturer’s warranty, whichever is later. See the Medicare Claims

Processing Manual, Chapter 20, “Durable Medical Equipment, Prosthetics and Orthotics, and Supplies

(DMEPOS),” for additional instruction and an example.

A new CMN and/or physician’s order is not needed for covered maintenance.

In cases where one or more monthly rental payments have been made in accordance with 42 CFR 414.229

for a capped rental DME item, medical necessity for the equipment has been established. In cases where

one or more rental payments have been made for an item classified as capped rental DME, and the supplier

transfers title to the equipment prior to the end of a 13 month period of continuous use per 42 CFR 414.230,

Medicare payment can be made for reasonable and necessary maintenance and servicing of the beneficiary-owned DME. Under the regulations at 42 CFR 414.210(e)(1), reasonable and necessary charges for

maintenance and servicing are those made for parts and labor not otherwise covered under a manufacturer’s

or supplier’s warranty. Charges for routine maintenance and servicing would not be covered. Charges for

maintenance and servicing that exceed the purchase price of the equipment (i.e., the capped rental monthly

fee multiplied by 10) would not be reasonable and necessary and should be denied.

C. Replacement

Replacement refers to the provision of an identical or nearly identical item. Situations involving the

provision of a different item because of a change in medical condition are not addressed in this section.

Equipment which the beneficiary owns or is a capped rental item may be replaced in cases of loss or

irreparable damage. Irreparable damage refers to a specific accident or to a natural disaster (e.g., fire,

flood). A physician’s order and/or new Certificate of Medical Necessity (CMN), when required, is needed

to reaffirm the medical necessity of the item.

Irreparable wear refers to deterioration sustained from day-to-day usage over time and a specific event

cannot be identified. Replacement of equipment due to irreparable wear takes into consideration the

reasonable useful lifetime of the equipment. If the item of equipment has been in continuous use by the

patient on either a rental or purchase basis for the equipment’s useful lifetime, the beneficiary may elect to

obtain a new piece of equipment. Replacement may be reimbursed when a new physician order and/or new

CMN, when required, is needed to reaffirm the medical necessity of the item.

The reasonable useful lifetime of durable medical equipment is determined through program instructions. In

the absence of program instructions, A/B MACS (B) may determine the reasonable useful lifetime of

equipment, but in no case can it be less than 5 years. Computation of the useful lifetime is based on when

the equipment is delivered to the beneficiary, not the age of the equipment. Replacement due to wear is not

covered during the reasonable useful lifetime of the equipment. During the reasonable useful lifetime,

Medicare does cover repair up to the cost of replacement (but not actual replacement) for medically

necessary equipment owned by the beneficiary. (See subsection A.)

Charges for the replacement of oxygen equipment, items that require frequent and substantial servicing or

inexpensive or routinely purchased items which are being rented are not covered.

Cases suggesting malicious damage, culpable neglect, or wrongful disposition of equipment should be

investigated and denied where the DME MACs determines that it is unreasonable to make program payment

under the circumstances. DME MACs refer such cases to the program integrity specialist in the RO.

D. Delivery

Payment for delivery of DME whether rented or purchased is generally included in the fee schedule

allowance for the item. See Pub. 100-04, Medicare Claims Processing Manual, Chapter 20, “Durable

Medical Equipment, Prosthetics and Orthotics, and Supplies (DMEPOS),” for the rules that apply to making

reimbursement for exceptional cases.