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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Module Two Supplies and Equipment

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Module two supplies and equipment

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

Module two supplies and equipment

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.

Module two supplies and equipment

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]

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