Strategies for Revenue Cycle Management
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Strategies for Revenue Cycle Management. Focusing on the Charge Description Master. Module Two Supplies and Equipment. What is the CDM?. The CDM is a list of supplies and services with corresponding charges for each of those items.

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Strategies for Revenue Cycle Management

Focusing on the Charge Description Master

Module Two

Supplies and Equipment

What is the cdm
What is the CDM?

  • The CDM is a list of supplies and services with corresponding charges for each of those items.

  • Items are grouped together by the departments and nursing units of the healthcare facility.

Specific issues
Specific Issues

  • Routine Supplies

    • Not separately billable

  • Ancillary Medical Supplies

    • Separately billable

  • Equipment

  • Durable Medical Equipment

  • Prosthetics/Orthotics

Routine supplies
Routine Supplies

  • Not specifically ordered by a physician AND are normally expected to be available.

  • Allowed as “covered” services

    • Cost can be reported in the hospital cost report

    • Usually are NOT separately billed on the UB

Not Separately Billable Supplies

  • Charges are usually included in the room cost or the procedure cost.

  • No specific hospital regulations regarding separate billing

    • Medicare Fraud and Abuse look to Skilled Nursing Facility regulations

    • Also refer to

Not separately billable supplies
Not Separately Billable Supplies

  • Items furnished routinely and relatively uniformly to all patients.

    • Patient gowns

    • Paper tissues

    • Water pitchers

    • Basins

    • Bed pans

    • Deodorants

    • Mouthwashes

Not separately billable supplies1
Not Separately Billable Supplies

  • Items stocked at nursing stations or on the floor in gross supply and distributed in small quantities

    • Alcohol

    • Applicators

    • Cotton Balls

    • Band-Aids

    • Aspirin (non-legend drugs)

    • Suppositories

Supplies in the or
Supplies in the OR

  • Do not bill for drapes, gowns, linens etc.

  • Do not bill for instruments used such as scopes or lasers.

  • Do not bill for reusable trays.

  • Do not bill for oxygen or pulse oximetry.

Separately billable supplies
Separately Billable Supplies

  • Services are considered as ancillary AND therefore, are separately billable.

  • Following conditions must be met

    • Directly identifiable to a specific patient

    • Furnished at the direction of a physician because of specific medical needs

    • Not reusable or representing a cost for preparation

    • Not routinely furnished to all patients within a setting

    • Not a reusable item

    • Meet a specific medical need

    • Charged to Medicare and non-Medicare patients similarly

    • Commonly charged as ancillary by providers within the State

Separately billable supplies1
Separately Billable Supplies

  • Disposable and separately billable items should always be charged.

  • Do not use estimates

  • Ancillary charges should be directly identifiable to a specific patient.


  • Reusable equipment is considered as capital cost.

  • Equipment charge should be included in facility or room charge of the department.

  • Equipment should not be separately charged to the patient.


  • Equipment commonly available to patients in a particular setting is routine and not separately billable.

  • Supplies routinely used with the equipment is also not separately billable, unless considered a disposable supply item that meets ancillary criteria.


  • Examples of not separately billable equipment

    • Cardiac monitors

    • OR lights

    • Traction devices

    • Specialty beds

    • Suction devices

Durable medical equipment
Durable Medical Equipment

  • Hospital must have a DME supplier number

  • Generally reusable and suited for home use

  • Medicare will pay separately.

  • Examples: Wheelchairs, crutches, braces

Prosthetics orthotics
Prosthetics / Orthotics

  • Prosthetics / Orthotics are billed on the UB-92 to the Fiscal Intermediary

  • Use revenue code 274

  • Use appropriate HCPCS code for the device

  • Paid under the fee schedule on bill types 12X (inpatient) or 13X (outpatient)

Prosthetics orthotics1
Prosthetics / Orthotics

  • Certain HCPCS codes are considered supplies and should be billed under the 272 revenue code.

    • A4310-A4330, A4338-A4359, A5102-A5114

  • A5119-A5131 will not be paid unless submitted with ostomy related procedures

Prosthetics orthotics2
Prosthetics / Orthotics

  • Generic names cause difficulty in assigning HCPCS codes for billing

    • Identify item on shelf

    • Locate vendor and item number

    • Look in vendor catalog

    • Most vendors now publish the HCPCS for each item in their catalog


  • If an item is routinely used for all patients in a certain setting, the item should not be separately billed, but included in the facility/room or procedure charge.

  • If the item is a bulk supply item that is used in small quantities, such as cotton balls, do not separately bill.


  • Department managers should identify all supplies used in their respective areas / procedures.

    • Determine which are routine and which are ancillary

    • Determine how these are treated in the CDM

    • Verify detail bills to the medical record to insure all charges are accurately reported.

Strategies for Revenue Cycle Management

Focusing on the Charge Description Master

Module Two: Supplies and Equipment

If you have any questions or concerns regarding this course, please contact Mary Askew

at [email protected]