Answer Your DME Questions

By Susan M. Edwards, CPC, CEDC
Correct coding and billing for durable medical equipment (DME) raises many questions, such as:

  • What constitutes DME?
  • Besides the order and physician signature, what other information do I need to submit a claim?
  • Are there modifiers?

To shed some light on ambiguous areas, we’ll answer these questions and more.
What Is DME?
Per Centers for Medicare & Medicaid Services (CMS) guidelines, DME is “medically necessary durable medical equipment, prosthetics, orthotics, and disposable medical supplies (DMEPOS), which includes oxygen and related supplies, parenteral and enteral nutrition, and medical foods.”
DME is also medical equipment that:

  • Can withstand repeated use
  • Is primarily and customarily used to serve a medical purpose
  • Is generally not useful to a person in the absence of illness or injury
  • Is appropriate for use in the home
  • May include a rigid or semi-rigid device
  • May be designed to support weak or deformed body part by eliminating motion
  • May be used to immobilize a part to decrease pain and inflammation
  • May be rented or purchased

What Do I Submit with Claims?
Providers must submit DME claims in accordance with Healthcare Common Procedural Coding System (HCPCS) Level II coding guidelines and national and local coverage determinations (NCDs and LCDs). Providers may only bill for the actual number of medical necessary units dispensed or delivered to a patient, regardless of the number of units allowed by policy and/or prior authorization.
Orders are required for any DME equipment to be covered under Medicare. To bill Medicare for DME, the ordering physician must be a Medicare enrolled physician.
Requirements on the orders include:

  • Dispensing order
  • Description of item
  • Name of beneficiary
  • Name of ordering physician and signature
  • Date of order
  • Diagnosis
  • Quantity delivered
  • Item brand name and serial number (if not custom)

Documentation should include detailed descriptions of the item, as well as any accessories and upgrades that will be used. Written orders for custom fabrications must specifically state “custom fabrication,” or the brand name being used. Custom fabrication involves more than trimming, bending, or making other modifications to a substantially prefabricated item. Prefabricated items are factory processed without a patient in mind, but may be altered to fit the patient.
Products and services must be medically necessary, safe, and appropriate for the course and severity of the condition using the least costly and equally effective alternative to meet the recipient’s needs. For all DME items, refer to your state’s Medicare policy.
To support medical necessity, include chart notes, surgery notes, and all supporting documentation for the product. You will need to verify that:

  • The patient is eligible and meets the coverage criteria.
  • Ask the patient about the items being dispensed. For example, “Have you had a wheelchair before?” or, “Do you receive any diabetic supplies from anyone else right now?”
  • There is a supporting diagnosis.
  • The beneficiary has signed and dated the forms.
  • The physician has signed and dated the forms.
  • The physician has provided his or her National Provider Identifier (NPI) number.

Note that some DME services or items will require prior authorization. It is critical to submit complete and accurate clinical documentation on prior authorization requests.
When a claim is received, Medicare will determine if the ordering/referring provider is required for the billed service. If the provider is not on the claim, Medicare will not pay. If the ordering/referring provider is on the claim, Medicare will verify that the ordering/referring provider is in Medicare Provider Enrollment, Chain, and Ownership System (PECOS) and eligible to order and refer.
DME Modifiers
Modifiers are frequently used on DME claims. The most common include (Note: These are not the full descriptions.):
RT/LT – Right/left
NU – New equipment
GY – Non-covered item
KX – Required for knee and ankle-foot orthoses
RR – Rental
UE – Purchase of used equipment
CG – May or may not have a specific LCD in place
GA – Does not meet medical necessity and ABN signed
GZ – Does not meet medical necessity and ABN not signed
GY – Item statutorily not covered
RA – Replacement of DME, orthotic, or prosthetic item
EY – No physician order
Use a Form to Be Sure You’ve Got All Relevant Information
Perhaps the best way to ensure you’ve documented all the necessary information is to use a specialized DME intake form. You can find a sample DME Intake Form at Noridian Administrative Services (NAS):
Any person in the office can use the form to ensure all the right questions are asked.
Lastly, remember to always check your DME Medicare administrative contractor (MAC) websites often for LCD revisions. Educating your physicians of documentation requirements and coverage guidelines will help you as the coder/biller make submitting claims for DME an easier process.
Ask the Patient to Sign an ABN if Coverage Is in Doubt
When ordering DME, determine whether you should ask the patient to sign an Advanced Beneficiary Notice (ABN). The ABN is a standard form to inform a patient that Medicare may deny coverage for a recommended or desired item or service. It explains why Medicare may deny the item or service, provides a cost estimate for the item or service, and notifies the patient of his or her responsibility to pay for the non-covered item or service if he or she chooses to receive it. In many cases, a provider cannot seek payment from the patient for unpaid Medicare services if he or she did not properly issue an ABN.
The ABN must be verbally reviewed with the beneficiary or his or her representative and any questions raised during that review must be answered before the patient signs and dates the ABN. CMS requires the provider present the ABN “far enough in advance that the beneficiary or representative has time to consider the options and make an informed choice.” A copy of the completed, signed form must be given to the beneficiary or representative, and the provider must retain the original notice on file for seven years.
When filing your claim, apply modifier GA Waiver of liability statement issued as required by payer policy, individual case on file when the provider believes the service is not covered and the office has a signed ABN on file.
Modifier GY Item or service statutorily excluded, does not meet the definition of any Medicare benefit or for non-Medicare insurers, is not a contract benefit applies when Medicare excludes the item or service from coverage. When you report modifier GY, Medicare will generate a denial notice that the beneficiary may use to seek payment from secondary insurance, for instance.
If the provider fails to issue an ABN for a potentially uncovered service, append modifier GZ Item or service expected to be denied as not reasonable and necessary to the claim. This indicates the provider cannot hold the patient financially responsible if Medicare denies the service, but will reduce the risk of fraud or abuse allegations for claims deemed “not medically necessary.”
The ABN CMS-R-131 form and instructions may be downloaded from the CMS website:

Medical coding books

Susan Edwards, CPC, CEDC, is a coding specialist at Copley Hospital in Morrisville, Vt. She is the president of the Newport, Vt. chapter, and she teaches Medical Terminology at the local adult learning center. Ms. Edwards is Northeast region one representative for AAPCCA, and secretary on the Board of Directors. She is also on the AAPC Ethics Committee.
Latest posts by admin aapc (see all)

2 Responses to “Answer Your DME Questions”

  1. Debbie says:

    What codes do I use to bill a reclining wheelchair?

  2. Mary says:

    Is the date of service for DME, the date of the order or the date the item is dispensed to the patient?