CMS Pub. 100-04, ch. 36, § 20.5.4.1

Medicare beneficiaries who maintain a permanent residence in a CBA in which CMS has

implemented a competitive bidding program for mail order diabetic supplies may purchase their

diabetic testing supplies from:

• A mail order contract supplier for the CBA in which the beneficiary resides; or

• Any enrolled Medicare supplier if the diabetic testing supplies are furnished at a

storefront and are not subject to a competitive bidding program established for non-mail

order diabetic supplies.

Mail order contract suppliers will be reimbursed at the single payment amount for mail order

diabetic supplies for the CBA in which the beneficiary maintains a permanent residence. In

situations where a competitive bidding program has not been established for non-mail order

diabetic supplies, noncontract suppliers that do not furnish items through mail order will be

reimbursed at the fee schedule amount for the state in which the beneficiary maintains a

permanent residence. Medicare payment will not be made to noncontract suppliers that furnish

mail order diabetic testing supplies to Medicare beneficiaries residing in a CBA.

Mail order diabetic suppliers must use the HCPCS modifier KL on each claim to indicate that the

item was furnished on a mail order basis. The modifier must be used for both competitive

bidding and non-competitive bidding mail order diabetic supplies. Suppliers that furnish mail

order diabetic items that fail to use the HCPCS modifier KL on the claim may be subject to

penalties under of the False Claims Act.