Supply Policy

I was wondering if anyone had a formal supply policy they would be willing to share that covers what is chargeable/not chargeable.  I am looking to recommend a policy at my facility that is a little more robust than what we have.  Thank you in advance.  


  • Kelly - Did you make any progress? We are currently working on a supply charge policy and wouldn't sharing what we are doing thus far. Thanks

  • No, I have not started a draft policy yet.  If you are willing to share, that would be fantastic!
  • We have a policy, Determination of Chargeable Supply which is currently under annual review but I can share it if you would like and then again if we make any changes.

  • Dmay2 - Yes. If you can share with me that would be great! Thank you

  • On the subject of chargeable and non-chargeable supplies, I'm also in the process of recommending a supply policy and we are struggling with disposable instrumentation.  These tools are used for biopsies, cutting, forceps and to cauterize to name a few.  Typically used with endoscopic or cardiac procedures.  In the past these items were sterilized and re-used which made them non-chargeable.  Today more and more instrumentation is disposal.  Would these items be integral to the procedure or separately chargeable?
  • Typically, these are reported separately.  While they are "integral" in the sense that you can't perform the procedures without a biopsy needle or forceps, etc., the type and the number that are utilized can vary from patient to patient.  Some facilities include the charge for one in the procedure and then charge separately for any additional items used; others charge for the individual items to ensure they capture the cost for the specific patient due to the difference sizes/types, etc.  
  • edited March 2020
    It needs a bit of updating, but I attached our Supply Charging Policy. 
  • @ecutter Thank you for sharing your policy. We need to set up policies for my organization and your CMS reference was very helpful.

  • What a great policy. So nice of you to share!!!!

    I have a related question. If you charge for an item with status indicator of N, does that reported charge go into the calculation for total charges and then used to determine if the claim is eligible for outlier payment (after the adjustment for CCR)?

  • Yes. Items with status indicator N are packaged and do no receive separate payment, but they are considered in the cost of the services provided to the patient. The only time they won't be included is if there is an MUE or (unresolved) NCCI edit that prevents the line item from processing as an included charge.

  • thanks 😃 - does that include items that have no HCPCS code and are not even on addendum B? Like recovery room services? Do those per minute/per hour costs count towards charges?

  • My pleasure. Yes, all covered services are included in the charges used to calculate the cost and then determine any outlier payment.

  • It has been a little while since this thread has had a response, but I wanted to pose a question. The attached supply policy was great and we are in process as well. I was wondering what thresholds organization use for supply charging. We currently have a $50/cost for supplies, what are others using?

  • Ours is currently $10 but I'd like to raise it because it's been the same for about 15 years. Would love to hear what everyone else is using as a threshold so we can bring that back to our leadership to help make the final call!

  • We are also looking at our threshold, We currently have a threshold of $10.00 Cost per unit. As I'm sure you all know, this can add up quickly.

    How is this impacting future Medicare Reimbursement, if we are not reporting all direct costs related to each procedure?

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