CMS Pub. 100-04, ch. 20, § 120.1

Instead of using ABNs and charging beneficiaries for upgraded items, suppliers in certain

circumstances may decide to furnish beneficiaries with upgraded equipment but charge

the Medicare program and the beneficiary the same price they would charge for a non-upgraded item. The reason for this may be that a supplier prefers to carry only higher

level models of medical equipment in order to reduce the costs of maintaining an

inventory that includes a wide variety of different models and products. Also, a supplier

may be able to reduce its costs for replacement parts and repairs if it includes in its

inventory only certain product lines. The supplier may also be accommodating a

physician order for an upgrade.

Policy

Suppliers are permitted to furnish upgraded DMEPOS items and to charge the same price

to Medicare and the beneficiary that they would charge for a non-upgraded item. This

policy allows suppliers to furnish to beneficiaries, at no extra costs to the Medicare

program or the beneficiary, a DMEPOS item that exceeds what the non-upgraded item

that Medicare considers to be medically necessary. Therefore, even though the

beneficiary received an upgraded DMEPOS item, Medicare’s payment and the

beneficiary’s coinsurance would be based on the Medicare allowed amount for a non-upgraded item that does not include features that exceed the beneficiary’s medical needs.

Billing Instructions

When a supplier decides to furnish an upgraded DMEPOS item but to charge Medicare

and the beneficiary for the non-upgraded item, the supplier must bill for the non-upgraded item rather than the item the supplier actually furnished. The claim must

include only the charge and HCPCS code for the non-upgraded item. The HCPCS code

for the non-upgraded item must be accompanied by the following modifier:

Modifier Detailed Text

GL Medically Unnecessary Upgrade Provided Instead of Non-upgraded Item,

No Charge, No ABN

Suppliers must show the upgrade using the ASC X12 837 professional claim format, or in

Item 19 of a paper Form CMS-1500 claim, or as an attachment. The supplier must

specify the make and model of the item actually furnished, that is, the upgraded item, and

describe why this item is an upgrade

DME MACs are to pay based on Medicare’s payment amount for the non-upgraded item

if it meets Medicare’s coverage and payment requirements. A certificate of medical

necessity, if applicable, must be completed for the HCPCS code that identifies the non-upgraded item but not for the upgraded item.

MSN Message:

For items accompanied with a GL modifier, use:

MSN Detailed Text

8.51: You are not liable for any additional charge as a result of receiving an

upgraded item.