Workers’ compensation is a system established to help provide fair reparation and payment to employees who have sustained work-related injuries. The variety of injuries meant to be covered under this system is broad, although not without some limitations. In addition, the treatments covered by the workers’ compensation system range from physical therapy to acupuncture to prescription medication. The type of treatment that is covered will depend heavily on what is prescribed by the employee’s treatment physician. In some cases, a physician may determine an employee’s injury requires medical equipment to treat.
There are important differences between medical equipment and medical supplies. The workers’ compensation system has borrowed the definition of “durable medical equipment” from the Medicare system. Durable medical equipment means medical equipment that is reusable, and necessary for treatment of the employee in his or her home. Note that this means certain items such as latex gloves or hypodermic needles would not qualify as DME, as they are not reusable. Moreover, an electric scooter that the employee never uses in the home, but rather simply uses to get around the local grocery store also probably would not qualify. Note that not all Medicare rules have been adopted by California in this area.
Under the workers’ compensation system, a physician may bill for and be reimbursed for dispensing medically necessary durable medical equipment. The rate to be billed and reimbursed is capped at a particular rate established by California Labor Code 5307.1. However, there is an exception for this if the DME device is a “dangerous device.” A “dangerous device” is defined by California statute, and typically will be a piece of equipment that can only be dispensed with a prescription from a physician licensed in that particular field. For dangerous devices, there is a different fee schedule or formula established by statute.
Employers should be wary, as unscrupulous individuals have exploited the provisions for DME billing. For example, in 2014, several men were charged with many felony counts of conspiracy and submitting fraudulent claims after renting out DME in the workers’ compensation system, double billing and billing far above the actual value. The men faced over fifty years in prison.
Durable medical equipment is covered under workers’ compensation, but you should consult an attorney to make sure you understand the obligations of your business. Call us today at (714) 516-8188 if you have questions regarding Durable Medical Equipment.