American College of Physicians: Internal Medicine — Doctors for Adults ®


Consult billing, DME fraud and the year 2000 issues

From the March 1999 ACP-ASIM Observer, copyright 1999 by the American College of Physicians-American Society of Internal Medicine.

By Brett Baker

Q: If I furnish a consultation and then I assume all or part of the patient's care, can I still bill the initial visit using the consultation codes?

A: Yes. According to the general guidelines of the consultation section of the evaluation and management (E/M) service codes found in "Current Procedural Terminology (CPT) 1999," a physician consultant may initiate diagnostic and/or therapeutic services." Even though the physician initiates treatment during the initial service done at the request of another physician, the initial visit is still considered a consultation. Do not use the consultation codes, however, when reporting visits that occur after the completion of the initial consultation when you have assumed all or a portion of the patient's care.

Keep in mind that you cannot bill a consultation when another physician transfers the care of the patient to you. For more information about billing for consults, see "How to bill for consults, analyze use of E/M codes " on page 5 of the February 1999 ACP-ASIM Observer.

Q: I heard that the HHS Office of Inspector General (OIG) issued a "fraud alert" regarding physician certification of home health services and durable medical equipment (DME). What are its implications for physicians?

A: The OIG issued a "fraud alert" to heighten physician awareness of potentially fraudulent actions by home health providers and DME suppliers. The alert also provides information about physicians' roles in properly certifying home health services and DME items and supplies.

While the OIG fraud alert states that physician fraud in this area is infrequent, it contends that physician laxity in the certification process contributes to fraudulent and abusive practices by unscrupulous home health providers and DME suppliers.

Medicare relies on physicians' professional judgment to determine whether or not services and supplies furnished and billed for by home health providers and DME suppliers are medically necessary. The OIG is concerned that physicians sometimes fail to adequately assess their patients' needs for home health care and that they sometimes prescribe or sign off on DME without properly reviewing the medical necessity of the item or supply.

It is important to be aware of your role in certifying home health services and DME items and supplies so that your patients get the medical care they need. Properly certifying these services and supplies will prevent you from inadvertently perpetuating fraudulent or abusive activities by unscrupulous home health providers and DME suppliers. Although you are not personally liable for erroneous claims due to mistakes or negligence, knowing the rules and properly fulfilling your role protects you from scrutiny. Knowingly signing a false certification, however, can lead to serious penalties.

Medicare's policies for physician certification of home health services and DME supplies and items are listed below:

Physician certification for home health services

Medicare will pay a Medicare-certified home health agency for home health care services provided under a physician's plan of care to a patient confined to the home. As a condition for payment, Medicare requires a patient's treating physician to certify initially and re-certify at least every two months that:

  • The patient is confined to the home.
  • The individual needs intermittent skilled nursing care, speech or physical therapy, or speech-language pathology services.
  • A plan of care has been established and periodically reviewed by the physician.
  • The services are furnished while the patient is under the care of the physician.

The physician must give a verbal or written order before the home health agency provides the services. The home health agency must obtain physician certification of the services at the time it establishes a plan of treatment or as soon as possible thereafter. The physician certification must be signed and dated before the home health agency submits the claim to Medicare.

ACP-ASIM's "Requirements for Certifying a Medicare Beneficiary for Home Health," developed by the Center for a Competitive Advantage, provides more information on physician certification of home health services. The publication is available at ACP-ASIM's Web site ( and through the College's Customer Service at 800-523-1546, ext. 2600, or 215-351-2600 (9 a.m. to 5 p.m., EST).

Physician orders and certification of medical necessity for DME

Medicare covers DME items and supplies such as wheelchairs, oxygen delivery systems and catheters that a physician has ordered or prescribed. A patient's treating physician must personally sign and date each order or prescription.

DME suppliers that submit bills to Medicare are required to maintain the physician's original written order or prescription. The order or prescription must include:

  • the beneficiary's name and full address;
  • the physician's signature;
  • the date the physician signed the order or prescription;
  • a description of the item(s) needed;
  • the start date of the order (if appropriate);
  • the patient's diagnosis (if required by a Medicare payment policy); and
  • an estimate of the total length of time in months or years that the item(s) will be needed.

In addition, Medicare requires that claims for certain large-ticket DME items be accompanied by a certificate of medical necessity (CMN) signed by the patient's treating physician. A DME supplier must keep the CMN containing the treating physician's original signature on file for these items.

A CMN form has four sections

  • Section A contains beneficiary information. It may be filled out by the DME supplier.
  • Section B contains the medical necessity justification for the DME item. It can be completed by the treating physician, a nonphysician clinician involved in the patient's care or a physician employee. It cannot be completed by the DME supplier.
  • Section C contains information about the item and its costs. It must be completed by the DME supplier.
  • Section D is the treating physician's attestation and signature, which certifies that the physician has reviewed Sections A, B, and C of the CMN and that the information contained in Section B is accurate. Section D must be signed by the treating physician.

A physician's signature on a CMN represents that he is the patient's treating physician; the sections filled out by the supplier were completed prior to the physician's signature; and the information contained in Section B is accurate to the best of the physician's knowledge.

The ACP-ASIM Center for a Competitive Advantage publication, " What Internists Need to Know About Ordering Durable Medical Equipment Under Medicare," provides more information on the physician's role in ordering DME items and supplies for patients. It is available on ACP-ASIM's Web site ( or through the College's Customer Service at 800-523-1546, ext. 2600, or 215-351-2600 (9 a.m. to 5 p.m., EST).

Contact your Medicare carrier if you have questions concerning your responsibilities in certifying home health services and DME items and supplies.

You can view all OIG fraud alerts on the Internet at

Q: I realize that my billing system needs to be able to handle eight-digit dates before Jan. 1, 2000. When must the claims I submit to Medicare be in a format that is year 2000 compliant?

A: Medicare carriers will reject claims that are not Y2K compliant for physician services beginning April 5, 1999. These claims will be returned to physicians as "unprocessable." See "Government to doctors: time to get office systems Y2K compliant".

You should contact your local Medicare carrier to request an "exception" if your billing system is still incapable of handling eight-digit dates in the required claim form fields. You can view Medicare's year 2000 specifications for electronic claims at: Year 2000 compliant specifications for paper claims are located at:

Carriers will only grant exceptions to providers for only certain reasons. HCFA cites the scenario in which a physician is in the process of completing year 2000 product testing of his billing system as a valid reason for an exception. Your carrier will consult with HCFA to decide whether or not to approve your exception request.

Carriers will use the following remittance advice messages to notify a physician when a claim is not year 2000 compliant and is returned as unprocessable:

  • "Claim lacks information which is needed for adjudication."
  • "Did not enter full eight-digit date (MM/DD/CCYY)."
  • "Your claim contains incomplete and/or invalid information, and no appeal rights are afforded because the claim is unprocessable."

Having the capability to submit year 2000 compliant claims is only one piece of the year 2000 puzzle. For more information on the Y2K issue, see "Will the Y2K bug force you to replace your computer? ".

Brett Baker is a third-party payment specialist in the College's Washington Office. If you have questions on third-party payment or coding issues, call him at 202-261-4533, send a fax to 202-835-0441 or send an e-mail to

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