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Durable Medical Equipment (DME) Billing – A Detailed View

by | Feb 18, 2015 | Articles, Resources | 0 comments

Durable Medical Equipment BillingDurable Medical Equipment (DME) billing is quite different from other types of medical billing and coding procedures. It requires an in-depth, specialized knowledge of all HCPCS Level II codes. All DME is classified under HCPCS Level II. The complex nature of reimbursement is another challenge. Since more expensive equipment may be rented rather than purchased, DME billers and coders must be aware of exactly how to code claims and when to send them for getting the right reimbursement amounts. This means, the code should specify the equipment was rented instead of purchased and each day of the rental period should be listed separately on the claim so that the insurance company will pay a small amount for each of those days.

DME billing specialists typically focus on larger durable medical equipments such as:

  • Bathroom Equipment
  • Canes, Crutches, and Walkers
  • Communication and Speech Generating Devices
  • Decubitus Care Equipment (for treatment of wounds)
  • Hospital beds and accessories
  • Infusion Equipment and Supplies
  • Other Miscellaneous Equipment (such as breast pumps)
  • Oxygen and Respiratory Equipment
  • Patient Lifts and Standing Frames
  • Pneumatic Compressors and Appliances
  • Traction and trapeze Equipment
  • Wheelchairs, Modifications and Accessories

DME billing codes also include smaller sterile equipment (tweezers, urine catheterization bags) and small accessory parts.

DME Billing and Coding Process

The process involves three major steps such as:

  • The doctor finds some sort of durable medical equipment medically necessary for the patient’s care. The documentation that explains the reasons of medical necessity should be prepared for claim submission.
  • Once the doctor prescribes a piece of durable medical equipment, the patient will go to a DME supplier to get the supplies. The coder must locate the provider’s prescription as well as obtain the patient’s insurance and billing information. Depending on the patient’s insurance, a pre-authorization may be required. This is where the insurance carrier reviews the diagnosis and treatment, agrees with the findings and approves the use of the DME supplies. The DME supplier would distribute the appropriate equipment after finishing the necessary paperwork.
  • The final step is assigning the correct codes and billing the claim to the patient’s insurance company. This step involves identifying the correct HCPCS Level II codes. Make sure that each and every accessory and piece of the equipment is coded for. The DME biller should send the claim with any necessary authorization paperwork to ensure that the insurance company will pay for the claim.

After this process, DME coders and billers can follow up on the claim just like any other medical claim.

Proposed Prior Authorization for Medicare Coverage

The proposed rule for Medicare program released by the CMS in May 2014 states that a prior authorization process would be established for certain durable medical equipment that are frequently subjected to unnecessary utilization. The term ‘unnecessary utilization’ is defined as the furnishing of items that do not comply with one or more of Medicare’s coverage, coding and payment rules, as applicable. A prior authorization process would help to make sure that items frequently subject to unnecessary utilization are furnished in compliance with applicable Medicare rules before they are delivered. This would curb unnecessary utilization while ensuring beneficiaries’ access to medically necessary items. CMS considers this as an effective way to reduce or prevent improper payments for unnecessary DME items.

According to the proposed rule, prior authorization would be required for items included in the Master List. Since 2007, there have been several reports published by the HHS OIG identifying DME items that meet the payment threshold and are frequently subject to questionable utilization. Some of the DME items included in the proposed Master List based on these reports are as follows.

  • E0193: Powered air flotation bed (low air loss therapy)
  • E0260: Hosp bed semi-electr w/matt
  • E0277: Powered pres-redu air mattrs
  • E0371: Non-powered advanced pressure reducing overlay for mattress, standard mattress length and width
  • E0372: Powered air overlay for mattress, standard mattress length and width
  • E0373: Nonpowered advanced pressure reducing mattress
  • E0470: Respiratory assist device, bi-level pressure capability, without backup rate feature, used with noninvasive interface, e.g., nasal or facial mask (intermittent assist device with continuous positive airway pressure device).
  • E0601: Continuous Airway Pressure (CPAP) Device
  • E2402: Negative pressure wound therapy electrical pump, stationary or portable
  • K0004: High strength, lightweight wheelchair
  • K0813: Power wheelchair, group 1 standard, portable, sling/solid seat and back, patient weight capacity up to and including 300 pounds
  • K0814: Power wheelchair, group 1 standard, portable, captains chair, patient weight capacity up to and including 300 pounds

Inappropriate payment for DME items may result not only from unnecessary utilization, but also from no documentation, insufficient documentation, incorrect coding, duplicate payment or non-covered/unallowable service. Due to the complex nature of the durable medical equipment billing and coding process, it is advisable to obtain the services of a reliable professional medical billing company in this regard. Established healthcare services outsourcing companies experienced in the DME billing process can ensure timely filing of accurate DME claims and the right payment.