Rules for DME Rental Coverage

June 17, 2016

Rules for DME Rental Coverage

Durable medical equipment that are used on a continuous basis, though for short periods of time, by a beneficiary are eligible for reimbursement where rental works out more economical than purchase. This is usually determined by the durable medical equipment billing services providers in consultation with the payors. Also known a capped rental items, these are reimbursed with no questions asked when they are rented as that is more beneficial for the members. The term capped rental payment will include any additional costs incurred by the user for effective use of the equipment. This includes apart from the equipment, all accessories, delivery at user’s place of choice, supplies, labor costs, shipping & handling charges, costs incurred in setting up the equipment, educating the patient, maintenance, follow up visits, and replacement of parts for the DME item that is being rented.

Whenever a particular DME item is eligible for coverage, it comes under the beneficiary’s provision for benefits. The durable medical equipment billing requirements are as under:

  • In order for the DME item to be eligible for coverage, the durable medical equipment billing companies need to make sure there is a prescription to rent the particular item.
  • There are certain items that need to be rented only, and should never be purchased, certain other items need to be rented even before being converted to a purchase as per the norms of the payor.
  • DME billing companies need to ensure that the bill is typed on the CMS-1500 claim form (of version 08/05)
  • The maintenance and repair modifier codes should be billed after the procedure code.
  • All claims for repairs need to be submitted along with a complete description of services provided.
  • If no suitable Healthcare Common Procedure System (HCPCS) code is found, E1399 or some other miscellaneous HCPCS codes may be used.
  • Each claim along with miscellaneous codes or custom items like specialty wheelchairs or foot orthotics should have special documentation.
  • Medical billing companies should ensure that complete description of the item is always submitted with the claim.
  • The factory invoice for the DME item needs to be attached along with the initial claim, though catalogs or price listings should not be submitted.
  • The medical necessity for the DME item should be certified by a physician in the prescribed medical necessity form.
  • Whatever additional documentation is provided it should be sent via mail, and cannot be transmitted online along with submitted claims.

General reimbursement guidelines Services need to be authorized in advance, and those that are not will be subject to medical review, for which the submitted files should include:

  • The plan of treatment adopted by the physician, with an approximate time frame for which the DME item is going to be used.
  • Prediction of the outcomes (benefits) from using the DME item needs to be provided by the prescribing physician.
  • Whether the physician will be involved in supervising the usage of the prescribed DME item.
  • The medical necessity of the patient to be determined from a detailed description of the member’s clinical and functional status.
  • DME item needs to be prescribed first in order to be rented and come under coverage.
  • Coverage will commence only after the DME item is delivered, setup and made available for use to the member at his or her place of choice.
  • The reimbursement should include all other charges incurred for fittings, shipping & handling, labor, adjustments etc.

The condition is that eligibility for reimbursement for DME items depends on the DME item supplier meeting the eligibility and credentialing norms as defined by the payor.


Category : Best Billing and Coding Practices