Medicare Rules Contributing to a Fraud Free DME Billing!

Long-standing concerns in DME (Durable Medical Equipment) known for unquestionable billing practices, led the government to take action for tackling fraud in the insurance industry. Medicare, the nation’s largest health insurance program, regulates the billing structure of the maximum number of healthcare providers. Due to its highly fragmented nature, Medicare is prone to widespread fraud thereby rising health care costs, taxes and premiums.

Medicare pays for services given to the severely sick/disabled at home such as wheelchairs, arthritis kits, etc. But many DME companies supply cheap or bad quality equipment at good quality equipment rate to make profits or sometimes bill Medicare for equipment never provided. To crackdown, this fraud, the Centers for Medicare & Medicaid Services (CMS) issued new rules catering toward reducing needless consumption and aberrant billing amongst DME and supply companies.

According to, “Specific durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) that are most commonly and unnecessarily overused will be subject to an updated authorization process that will, for some items, require prior approval before Medicare will pay for them. Not involving any new documentation, this prior authorization will oblige companies to validate relevant coverage, coding, and clinical documentation concerns before a beneficiary receive a product and before a Medicare benefit claim is submitted. Modifying the process in this way will prevent beneficiaries from being forced to pay for items that aren’t covered by Medicare.”

CMS also created a master list containing 135 items that are subjected to prior authorization before the equipment is provided to the beneficiary. It should have an average fee of USD 1000 or greater or a rental fee of USD 100 or greater.  Also, CMS highlighted a 3-year prior authorization demonstration project for power mobility devices (PMD – wheelchairs, scooters, etc.) to reduce expenditures.

Other rules targeted towards curbing DME fraud:

  1. A face-to-face examination is required of the patient by the physician to determine the usage of PMD as a medical necessity.
  2. This prescription must be issued to the DME supplier within 45 days of the examination.
  3. Other medical records (history, physical examination, tests, findings, diagnoses, treatment plans) and PMD prescription must also be furnished. Just a sign of the practitioner does not suffice.
  4. The supplier must submit this documentation to CMS or its agents for validation.
  5. For coverage by Medicare, the medical records must also specify the type and quantity of items claimed, duration of the condition, clinical course, prognosis, nature, and extent of functional limitations, other therapeutic interventions and results, and past experience with related items (
  6. The patient’s record could also be from a hospital, nursing home, health agency, etc.
  7. If there are no authentic documents, and unless an executed ABN has been furnished of possible denial, the supplier is accountable for DME. Hence the supplier should furnish the maximum information available and maintain it for 7 years.

Due to heightened scrutiny of DME suppliers’ claims and new rules, there has been a decline in prices and saved Medicare millions, moreover enhancing a fraud free billing.