CMS Pub. 100-04, ch. 20, § 40.1

A/B MACs (HHH), and DME MACs pay for reasonable and necessary maintenance and

servicing of purchased equipment in the following classes:

• inexpensive or frequently purchased,

• customized items, other prosthetic and orthotic devices, and

• capped rental items purchased in accordance with §30.5.2 and §30.5.3, or in

situations where rental claims have been paid but title to the equipment is

transferred to the beneficiary during a period of continuous use of less than 13

months.

Do not pay for maintenance and servicing of purchased items that require frequent and

substantial servicing, or purchased oxygen equipment. (Maintenance and servicing may

be paid for purchased items in these two classes if they were purchased prior to June 1,

1989). Reasonable and necessary charges include only those made for parts and labor

that are not otherwise covered under a manufacturer's or supplier's warranty. A/B MACs

(A), (B), (HHH), and DME MACs pay on a lump-sum, as needed basis based on their

individual consideration for each item. Payment may not be made for maintenance and

servicing of rented equipment other than maintenance and servicing for PEN pumps

(under the conditions of §40.3), the maintenance and servicing fee established for capped

rental items in §40.2, or the maintenance and servicing fee established for certain oxygen

equipment in 42 CFR 414.210(e)(2).

Servicing of equipment that a beneficiary is purchasing or already owns is covered when

necessary to make the equipment serviceable. The service charge may include the use of

"loaner" equipment where this is required. If the expense for servicing 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. A/B

MACs (HHH), and DME MACs investigate and deny cases suggesting malicious

damage, culpable neglect or wrongful disposition of equipment as discussed in Pub.100-

02, Medicare Benefit Policy Manual, chapter 15 where they determine that it is

unreasonable to make program payment under the circumstances. Such cases are referred

to the program integrity specialist in the RO.