DME Billing Services

3 Tips to Analyze Payer Reimbursement for DME

Some things in life are very easy and straightforward. Unfortunately, purchasing things such as splints, prosthetics, and durable medical equipment (DME) – and determining which orthotics are covered by insurance – isn’t so cut and dried. In fact, a lot can go wrong when it comes to orthotics and prosthetics billing. So, to make sure your patients get with they need – and you get paid what you deserve – stick to the following guidelines.

The information below refers to how Medicare reimburses for prosthetics and orthotics and does not necessarily reflect how commercial payers reimburse for these interventions. At the same time, many commercial insurance payers align themselves with Medicare policies, so this should serve as a good general guide.

For prosthetics, Medicare reimbursement includes evaluation, fitting, parts and labor, repairs due to normal wear or tear within the first 90 days of the delivery date, and adjustments made during the fitting and within the first 90 days of the delivery date (not including adjustments brought on by changes in the remaining limb or a patient’s level of function).

For orthotics, Medicare reimbursement includes evaluation, measurement and/or fitting, fabrication and customization, materials, cost of labor, and delivery.

HCPCS Code and Modifier Combinations

Knowing which modifier to use with a given HCPCS code can be tricky. Many HCPCS codes require a modifier to let us know if the item is being rented (RR), purchased new (NU), or purchased used (UE). If you submit a claim without an RR, NU, or UE modifier for an HCPCS code that requires one of these modifiers, your claim will be rejected. To help you, we’ve put together a few tips to help you make sure you have the modifiers you need on your claim.

The DME MAC Jurisdiction C Supplier Manual, Appendix A contains a list of HCPCS codes with their Payment Category. If the code falls into one of the following categories, then it will require an RR, NU, or UE modifier:

  • Inexpensive or Routinely Purchased (IRP) Item
  • Capped Rental Item
  • Items Requiring Frequent and Substantial Servicing
  • Oxygen Equipment (not contents)

An easy way to determine if an RR, NU, or UE modifier is required is by looking up the HCPCS code on the CMS DMEPOS Fee Schedule. If the fee schedule shows a modifier next to the HCPCS code, then that modifier is required for claim submission. When there are multiple modifier possibilities (such as RR, NU, or UE), then the HCPCS code will be listed multiple times with a different modifier next to each code. Note that there are exceptions to this rule.

For instance, certain capped rental items that can be purchased in the first month do not have an NU or UE value on the fee schedule. Also, note that inclusion or exclusion of a fee schedule amount for an item or service does not imply any health insurance coverage.

Proving Medical Necessity

A Certificate of Medical Necessity (CMN) or a DME Information Form (DIF) is a form required to help document the medical necessity and other coverage criteria for selected DMEPOS items. CMNs contain Sections A through D. Sections A and C are completed by the supplier and Sections B and D are completed by the physician. A DIF is completed and signed by the supplier. It does not require a narrative description of equipment and cost or a physician’s signature.

The following forms below have been approved by the Office of Management and Budget (OMB):

  • CMN CMS-484 – Oxygen
  • CMN CMS-846 – Pneumatic Compression Devices
  • CMN CMS-847 – Osteogenesis Stimulators
  • CMN CMS-848 – Transcutaneous Electrical Nerve Stimulators
  • CMN CMS-849 – Seat Lift Mechanisms
  • CMN CMS-854 – Section C Continuation Form
  • DME Information Form CMS-10125 – External Infusion Pumps
  • DME Information Form CMS-10126 – Enteral & Parenteral Nutrition

Billing for TENS Units

Billing for TENS units is a little trickier than billing for other pieces of DME. In fact, it can even be difficult to receive reimbursement for TENS units, as nearly half of all claims for TENS units are denied. Reasons for those denials: Incorrect billing procedure and the claim failed to prove medical necessity.

To start, you must obtain a written order prior to delivery (WOPD) before you can even hand over the unit and provide the DMERC with a CMN. Furthermore, as far as Medicare is concerned, there are only two reasons why a patient would need to purchase a TENS unit: acute post-op pain and chronic pain. So, make sure your CMN justifies one of these conditions in order to receive payment.

Additional Tip:

As long as the provider is DME certified, the provider will bill the patient for a “rental” payment of 10% of the purchase price – less coinsurance and/or any deductible is allowed – for the first two months of use. This is essentially a trial period, which gives the attending physician a chance to determine whether the patient needs to actually purchase the unit.

If the physician deems it medically appropriate, then the full amount for the unit will be due (the carrier will not adjust this amount for the two monthly payments). You can then bill your DMERC for the two-month rental period as well as the actual purchase.


Medical Billers and Coders

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