Produced by - Mead Johnson Nutrition

SECTION VI – BILLING ENTERALS TO MANAGED CAREORGANIZATIONS AND PRIVATE PAYERS FOR HOMECAREBilling enteral products to private indemnity andmanaged care payers uses many of the same principles asMedicare billing. However, these payers tend to be less strictabout the use of enteral products. In addition, the pricingmethodologies can differ significantly from Medicare.ENTERAL BILLING STRUCTURESMedicare uses a fee-for-service billing structure forpayment. In other words, there is a specific code for aproduct (e.g., a feeding tube) and a concurrentreimbursement amount or Medicare allowable rate.Private and managed care payers may accept thefollowing billing structures:Fee-for-ServiceSimilar to Medicare, in these billing structures, theprovider delineates a list of product codes as well asservice codes, then develops a price list that is eithernegotiated on a case by case basis with the payer orincorporated into a contract. Typical products and servicesincluded in this billing methodology are:❏ Specific enteral products❏ Enteral pumps❏ Enteral supplies❏ IV poles❏ Delivery and management servicesSometimes providers establish a fee-for-service rateon a product basis that includes delivery and managementservices, while other providers incorporate their servicechanges into their product fees in the same manner as withMedicare billing. When this methodology is used, theprovider typically uses the Medicare HCPCS codes.Per Diem RatesA per diem rate is a daily rate for products and services.This is a common methodology for billing enteral productsthat are delivered in a patient’s home. Because there are nospecific codes for per diem billing, the provider mustprovide a narrative explanation for the per diem rate.Example:Enteral products and services, 500 mL per day,pump, pole, supplies, inventory management, delivery- $35 per dayProviders use a number of different methods tocalculate per diem rates and these include:Method 1- Cost EstimatesEnteral Products Calories per day = $____________+ Supplies Cost per day = $____________+ Pump Cost per day = $____________+ Pole Cost per day = $____________+ Nursing or other service Cost per day = $____________+ Overhead Cost per day = $____________Total$______________May, 200271