Capped DME is DME that can be rented but at the tenth month the beneficiary must be given the option to purchase. If the purchase option is used TRICARE will pay rental fees not to exceed a continuous use of 13 months and ownership passes to the beneficiary. If the purchase option is not used, TRICARE will continue to pay rental fees until the 15th month cap is reached and no further payment is made on the equipment.
Items are identified as capped rental if they have a "CR" in the category field on DMEPOS.
Note: Complex/ Rehabilitative power wheelchairs are designated as DME using HCPC codes: (K0835-K0843 and K0848-K0864: group 2 wheelchairs with additional power options and group 3 higher power wheelchairs, options and accessories). The beneficiary must be given the option to purchase up front and then billed with the appropriate modifier.
DME claims submitted for “rental to purchase” items require the appropriate modifier in order to track and calculate the monthly rental rate. Many DME claims have been identified that were processed and paid without the appropriate modifier. Without the necessary modifier to capture the monthly counter for rental to purchase, providers may have received erroneous/over payments on capped DME.
A process change implemented in June 2016 allows better monitoring of DME claims that do not agree with the rental to purchase policy. These claims are now rejecting/denying for missing modifiers or exceeding the capped rental to purchase. Capped DME rental to purchase guidelines are not new. Providers who have been compliant all along should not have been affected by the process change.