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Upgrading Equipment

Upgrading Equipment

Upgrading equipment
Medicare pays for equipment that is:

  • Prescribed by your physician
  • Approved by Medicare
  • Medically necessary

This coverage generally includes standard quality items with basic functions. Items and features that are considered a luxury are never covered. However, you have the option of upgrading your equipment to a device of your choosing. This is done through a process called Advanced Beneficiary Notice.

An Advanced Beneficiary Notice ( ABN) is a form that your provider of service can use when an item is unlikely to be covered by Medicare. By signing in ABN you are agreeing to pay for the portion that is uncovered. This process is routinely used when a person chooses to purchase a more expensive item and pays the difference that the insurance does not cover.

Under the Medicare competitive bidding program you may still use the ABN process. However, because the new reimbursement rates are significantly lower the difference between the reimbursed amount and the cost of the item you choose may be greater. Be sure to discuss costs at a time with your provider.

You should remember that Medicare will cover 80% of approved charges. If you have a supplemental insurance the remaining 20% may be covered. If you do not have a supplemental insurance you are responsible for this 20% in addition to the agreed-upon difference as explained in the ABN.

The five-year rule
Medicare considers most purchased items to have useful life of five years. In the event that you require replacement item within the five-year period you may be asked to sign an ABN. Therefore you may be responsible for the entire cost of the device has replacements within the five-year period are generally not covered.

Exceptions to this rule apply when replacing the devices necessitated by changing your medical condition, the device is stolen, or the devices damaged beyond repair and out of warranty. These are special situations which require extra documentation. If any of these situations apply to you be sure to discuss them with your provider.

Competitive bidding exception
Some items are considered rentals by Medicare. When Medicare rents an item it does so for 13 months (36 months for oxygen). After the item reaches the last month of payment ownership of the product is transferred to the patient. However, even though payments are no longer being made Medicare consider the useful life of this item to be five years. Therefore the item would generally not be replaced ( prior to the 60th month).

Under the Medicare competitive bidding program there are some exceptions to this rule. If an item has reached its final month of billing and services being provided by company was not contracted with Medicare for that item the patient may change to a contracted provider. In this event a new rental period begins and the patient will receive new equipment.


Information for patients who use have Medicare and use home medical equipment.

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Info for hospitals about Medicare's Competitive Bidding Program for home medical equipment.

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Information for prescribers about the new Medicare Competitive Bidding program.

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