One of the most confusing things to medical billing personnel is rental modifiers. Most billers don't even know what a modifier is unless they have at least had some experience with rental billing. Hopefully, after reading this installment, you'll have a decent idea of what modifiers are, how they work and what you have to be aware of when doing your medical billing duties.
Rental items are a strange breed in the world of medical billing. Unlike a purchase item that is sold and then that's the end of it, a rental item is kind of like the gift that keeps on giving. It is a medical billing agencies main source of income, especially if they do a lot of oxygen billing which requires patients to have an oxygen concentrator for many months if not years.
Because of this, insurance carriers need to know, every step along the way, just how long a piece of equipment has been rented. Why? Well, this has to do with certain regulations. See, once an item has been rented so many months, usually 12, it then goes on what is called maintenance billing. Maintenance billing is usually cheaper than regular billing because by the time the 12 months have passed, the supplier of the equipment has already gotten their due profit from the item and because of this, the insurance company begins to pay less starting with month 13. What does all this have to do with modifiers?
From months one through 12, the modifier for the particular rental item will be one set of letters, usually beginning with the letter K. When month number 12 hits, the item is then transferred to a different status called maintenance. While this is happening, the modifier that is stored with the item is changed from a K modifier to something else, again, depending on the item. When the insurance company sees this modifier come over on month 13, they know the item is on maintenance and now pay a different allowable for it. Usually, when this happens, the item also stops billing monthly. Depending on what it is, it may bill every six months or even every year.
The thing that most medical billing personnel don't understand is how this process happens. How does the software know when to change the modifier from a K to a maintenance modifier? It does this by looking at the number of rebill pages that are in the system. Each time the system bills a rental item, because it is not a one shot deal, it creates another billing page, called a rebill page. So if the system has billed 11 months and that's the key, it knows when it is billing month 12 and at that time it changes the modifier AFTER it sends the month 12 bill. That is the key, to do it after and NOT before. Otherwise, the item goes on maintenance too soon.
It's a tricky process but it all happens behind the scenes. So if your DME software is functioning properly, you shouldn't run into any problems with your rental modifiers.
