New Ostomy Product Codes Effective April 2002
by Bob Baumel, Stillwater-Ponca City (OK) UOA
Be Sure your Supplier Knows!
In a change achieved largely via the efforts of UOA's Government
Affairs Committee, the US Government's
Centers for Medicare & Medicaid
Services (CMS, formerly HCFA) have adopted
new ostomy product
classifications, to take effect April 1, 2002, with the potential to
significantly improve reimbursement for all ostomates whose supplies are
covered by either Medicare or non-Medicare insurance in the US.
In a previous
change--also achieved largely by efforts of UOA, which took effect in
October 2000, the "usual maximum quantity of supplies" eligible for
Medicare reimbursement were doubled in a number of product categories.
However, the monetary reimbursements per item were not changed on that
occasion. These reimbursement rates have remained static for 10 years or
more, although product prices have steadily increased. Consequently, the
reimbursements are now woefully inadequate, often below dealer's wholesale
cost, with the result that fewer and fewer dealers accept Medicare
assignment on ostomy supplies.
The April 2002 changes are intended to actually increase reimbursement
rates, although the amounts of monetary increases aren't known yet as I
write this article. They accomplish this by assigning new product codes to
account for technological advances in ostomy supplies. Then, the more
advanced (& more expensive) products which most of us are using
nowadays will be reimbursed at a higher rate than the older, less advanced
Since these Government-assigned product codes are used by all
public and private insurance in the US, not just by Medicare, the newly
approved changes have the potential to improve your reimbursement whether
or not you're on Medicare. In any case, your supplier needs to know about
these changes if your ostomy supply purchases are covered by any sort of
The newly introduced product codes are of several kinds. In some cases,
an existing category has been split into two categories to account for
technological (and price) variations. In other cases, "add-on" codes have
been introduced to account for additional features that a product may
To illustrate the first kind of change, code A4370 for stoma paste has
been replaced by two codes: K0561 for non-pectin based paste and K0562 for
pectin-based paste. The concept is that one of these versions (the
pectin-based paste) represents the more modern product and will be
reimbursed at a higher rate.
To illustrate the 2nd kind of change, I personally use 1-piece pouches
with non-convex extended wear barrier, whose code (A4388) hasn't changed.
However, the product I use would now be eligible for three "add-on" codes:
K0575 for rustle-free material, K0576 for a comfort panel, and K0577 for
odor-barrier material. Each add-on code may presumably increase the
As you can see, the new regulations are pretty complicated, but it's
very important for dealers to be aware of them. To aid dealers in this
task, UOA has established a direct line of
communication to ostomy product suppliers, in the form of an e-mail
listserv, with frequent communications from UOA's Government Affairs
chair, Linda Aukett. Dealers may learn about this list at the UOA website,
or can subscribe automatically by sending an e-mail to
with the word "subscribe" as the Subject. Ask your ostomy supply
dealer to subscribe!