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Durable Medical Equipment (DME) Program Changes

November 26, 2012

TO:  DME Providers, Prosthetics & Orthotics (P&O) Providers, Pharmacies, Physicians, Physician Assistants, Nurse Practitioners, and Nursing Homes

The Alabama Medicaid Agency’s Durable Medical Equipment Program will make changes to:

  • Reimbursement for CPAP
  • Humidifier Reimbursement
  • External Breast Prostheses Prior Authorization
  • Home Medical Equipment (HME) License        
  •  Wheelchairs Coverage Limit Change 

Detailed information about each change is below. Also below is a reminder regarding the procedure for manually priced DME items’ Prior Authorization (PA) Requests.

CPAP Reimbursement

Effective January 1, 2013, the CPAP (E0601) will be a capped rental to purchase item. The equipment can be rented for up to three months.  After three months, if the recipient continues to meet criteria and must continue on the CPAP, the CPAP machine will transition to a purchase, with the total rental payments during the first three months and a subsequent one month payment equaling the purchase rate.  No additional payment will be made by Alabama Medicaid on the CPAP machine and the machine will be considered to be owned by the recipient.

The monthly payment will include delivery, in-service for the caregiver, maintenance, repair and supplies.  Alabama Medicaid will not reimburse separately for procedure codes A7030, A7034, A7037 and A7038 during the CPAP’s four month capped rental period. Recertification is required after the initial three months.  If the CPAP is determined not be medically necessary (i.e., the criteria are no longer met), the device will be returned to the supplier. NOTE: Do not use the RR modifier for initial PAs submitted on or after 1/1/13.

If a recipient already has CPAP and/or humidifier devices via continuous rental on January 1, 2013:

For recipients with nine or more months of continuous rental for the devices (CPAP and/or humidifier), provider should submit a claim for needed supplies only. The device(s) is considered to have been purchased and Alabama Medicaid will no longer pay for continuous rental of the device. The device is considered to be owned by the recipient. Existing prior authorizations (PAs) will no longer be valid. Requests for Medicaid’s authorization of a replacement CPAP device will be accepted for review every eight years. A request for replacement of the device submitted within less than eight years which is due to a natural disaster, or an occurrence beyond the recipient’s control, and not the result of misuse, neglect or malicious acts by the user may be considered for approval and payment. 

For recipients with four to eight months of continuous rental, the current PA will be capped and the provider will be paid the remaining amount equal to a cumulative total of $800.42. If the cumulative amount has been reached, no additional claims will be paid. For these PAs, the provider will continue to include the RR modifier.

For recipients with three months rental, and the device continues to meet criteria on or after 1/1/13, the 4th month will cap the rental. If criteria are not met, then the device will be returned to the supplier.

Humidifier Reimbursement

Effective January 1, 2013, Alabama Medicaid will no longer reimburse procedure codes E0561 or E0562 separately when E0601 is requested at the same time.  Procedure codes E0561 and E0562 can only be billed separately if requested for BiPAP (E0470, E0471, or E0472) only.


Therefore, providers are to ensure that recipients, who have current prior authorizations (PAs) for both devices, have both the CPAP and humidifier prior to January 1, 2013.  These items will be considered as purchased and owned by the recipient.  Therefore, after January 1, 2013, Alabama Medicaid will only reimburse the provider for needed supplies for these recipients.

External Breast Prostheses Prior Authorization

Effective January 1, 2013, prior authorization (PA) will no longer be required for external breast prostheses covered by Alabama Medicaid’s Durable Medical Equipment Program. This change applies to procedure codes L8000, L8015, L8020, L8030, L8035 and L8039 submitted with one of the following breast cancer diagnosis codes: 174.0 through 174.9, 198.81 and 233.0. 


Home Medical Equipment (HME) License

Effective January 1, 2013, applicable DME providers will need to provide verification of Home Medical Equipment (HME) license during the annual on-site provider re-enrollment visits.  (All other required licenses/certifications continue to apply; See Chapter 14 of the Provider Manual for provider enrollment requirements listing.) The chart below is provided to assist you with determining the required licenses/certification you must have.  If you have any additional questions regarding HME licenses, please contact the Alabama Board of Home Medical Equipment Services Providers. 

Type of Operation

License/Certification Required

Prosthetic, Orthotic & Pedorthic (POP) Services Only (custom fabricated devices only) 

Alabama Board of  Prosthetists and  Orthotists Accredited Facility Certification

POP and Mastectomy  in the same facility (custom fabricated devices only)

Alabama Board of  Prosthetists and  Orthotists Accredited Facility Certification


Alabama Board of  Prosthetists and  Orthotists Accredited Facility Certification and Alabama Board of Home Medical Equipment (HME) license

HME (DME) and Mastectomy

Alabama Board of  Prosthetists and  Orthotists Accredited Facility Certification and Alabama Board of Home Medical Equipment (HME) license

Mastectomy Only (Boutique)

Alabama Board of  Prosthetists and Orthotists Accredited Facility Certification and Alabama Board of Home Medical Equipment (HME) license


Alabama Board of Home Medical Equipment (HME)

Wheelchairs Coverage Limit Change

Effective January 1, 2013, all wheelchairs will be limited to one per recipient every seven years based on medical necessity. It was previously limited to one per recipient every five years.

PA Requests for manually priced DME items

When submitting PA requests for manually priced items, providers should only submit MSRPs (Manufacturer’s Suggested Retail Price), procedure codes and item prices.  All price calculations will be completed by Alabama Medicaid’s PA contractor.



REMINDER:  Beginning January 1, 2013, if a Medicaid service requires an ordering, prescribing, or referring provider  and the ordering, prescribing, referring provider does not have a current enrollment record with Alabama Medicaid, the claim will be denied.  See the July and October 2012 Provider Insider articles for more details.