Dig into DME Coding

By Cheryl Bennett, RN, BS, CPC

As a coder, durable medical equipment (DME) may scare you as its coding intricacies are deeply rooted in Healthcare Common Procedure Coding System (HCPCS) Level II codes and Medicare’s policies. Never fear, we’ll show you how to fine-tune your DME coding skills by digging into the DME dirt and exposing how to properly assign HCPCS Level II codes for billing. We’ll start by getting our hands dirty and scooping away the top layer of DME by defining it. We’ll dig deeper to find Medicare’s policies on DME and discover the physician’s role in getting reimbursed. Lastly, we’ll unearth how to use LCD to support medical necessity.

Certified Inpatient Coder CIC

According to the Center for Medicaid and Medicare Services (CMS) 42 CFR, 414.202, DME is defined as equipment which: “(a) can withstand repeated use; (b) is primarily and customarily used to serve a medical purpose; (c) generally is not useful to a person in the absence of an illness or injury; and (d) is appropriate for use in the home. For items to be considered DME, all requirements of the definition must be met.”

Another commonly used acronym is DMEPOS or durable medical equipment, prosthetics, orthotics and supplies. The majority of the time you hear DMEPOS referred to only as DME, as DME can include any prosthetics, orthotics and supplies.

DMEPOS are classified as HCPCS Level II codes. The codes start with a letter and are followed by numbers; for example, E1390 Oxygen concentrator, single delivery port, capable of delivering 85 percent or greater oxygen concentration at the prescribed flow rate. When using HCPCS Level II codes for DME claims, you should always check if they are covered by Medicare.

Medicare’s Policies for DME Codes

Any time you use a HCPCS Level II code that ends in 99, such as, E1399 Durable medical equipment, miscellaneous, provide supporting documentation to bill that code. Once Medicare receives a miscellaneous code, the claim is suspended and medical records are requested. The records are checked for several possible issues. The miscellaneous code is reviewed to see if another code is more appropriate to bill. Most DME items have a code appointed. If the piece of equipment does not have a code assigned, then the manufacturer’s invoice is reviewed for an allowable. As always, the medical necessity is verified before payment is made.

If you have any questions regarding a code for a particular item you can check with Statistical Analysis Durable Medical Equipment Regional Carrier (SADMERC). SADMERC offers guidance to manufacturers and suppliers on proper usage of HCPCS codes in regards to DMEPOS services identified for Medicare billing. You can search for codes and prices at the URL.

A Medicare provider places the DMEPOS claim into the Medicare system. A durable medical equipment Medicare administrative contractor (DMEMAC), depending on where the beneficiary lives, processes the claim.

There are four DMEMACs shown on the map above:

1. NHIC, Inc., jurisdiction A

2. National Government Services (NGS), jurisdiction B

3. Cigna Government Services, jurisdiction C

4. Noridian Administrative Services, jurisdiction D

You can find which jurisdiction you belong to by going to the CMS website.

Decision Making Process

The service provider will receive a decision. The decision is one of three: fully favorable, partially favorable, or unfavorable. If the Medicare provider wishes to appeal the decision, they may submit information to the redetermination level. The DMEMAC completes the first level of appeal. If the decision remains the same, the next level of appeal is the reconsideration (or second level). The provider has 120 days from the date of notification to submit the reconsideration. The Medicare provider submits additional information (if available) to a qualified independent contractor (QIC) for review. The QIC completes the reconsideration, including review of the documentation submitted on first review and the new information submitted on second review. The QIC renders a decision within 60 days of receipt and if the decision continues to be upheld, the Medicare provider has 180 days from the decision’s notification date to submit an appeal to the administrative law judge (ALJ). The ALJ has 60 days to complete their decision. The provider cannot submit any new or additional information to the ALJ.

The decision tree for the appeal process can be found on the CMS website.

Physician’s Role for DME Supplies

If you work in a physician’s office you may wonder how this impacts you. A physician order is required for a beneficiary’s DME supplies. According to Medicare, a physician’s order, certificate of medical necessity (CMN), or attestation from a physician, alone, does not show medical necessity. Refer to CMS Publication 100-08, Medicare Program Integrity Manual, Chapter 5, Section 5.7 for additional information. The service provider contacts your office to request medical records to support medical necessity. The medical records consist of office notes, X-rays, laboratory results, hospital notes (including emergency room visits), outpatient services, inpatient stays, and therapy services. When gathering information in the physician’s office for a provider, review the section and submit any other documentation requested.

The provider is notified when a claim is denied or upheld at the redetermination level. The notification includes submission instructions for the next level of appeal. During the review at the reconsideration level, the providers don’t always submit additional information. Without additional information to support medical necessity, the reconsideration level must uphold the denial. Documentation is a very important part of a beneficiaries chart. In other words, “If you don’t document it, it wasn’t done.”

Use LCDs to Support Medical Necessity

If your physician orders a wheelchair for the beneficiary, you need to support it as a medical necessity. Each DMEMAC has policies to address necessary equipment usage. The policies are called local coverage determinations (LCDs). Each LCD has a name and number assigned by the DMEMAC. One criteria for a manual wheelchair, according to the LCD for Manual Wheelchair Bases (L11443) from CIGNA Government, is:

”The patient has a mobility limitation that significantly impairs his/her ability to participate in one or more mobility-related activities of daily living (MRADLs) such as toileting, feeding, dressing, grooming and bathing in customary locations in the home.”

Note: This information is only part of the medical necessity requirements for a manual wheelchair within this LCD.

Each LCD has a policy article attached to the end of the LCD. The policy article is a part of the LCD, and includes additional information. Each LCD has a section titled “Documentation Requirements.” This section is very important, not only to the provider of services, but also to the person ordering the service.

Code the Scenario

What codes do you use when billing a wheelchair? A few years ago, providers only had the code E1399 to bill wheelchair components or add-ons. At a closer look, the codes reveal there is one more appropriate to bill. The code E1220 Wheelchair; specially sized or constructed, (indicate brand name, model number, if any) and justification is used for customized wheelchairs. This type of wheelchair is for a patient with special needs who cannot fit into a standard wheelchair. Most Medicare providers bill wheelchairs using K codes. The wheelchair K codes range from K0001 to K0899, from a standard wheelchair to power wheelchairs. Refer your HCPCS Level II book for a description of each code.

As Medicare contractors are not permitted to instruct providers on which codes to use to bill. DMEPOS providers are strongly recommended to have a certified professional coder available for coding questions.

Assigning the correct DME codes can seem like a muddy area for coders, however, with a little spring cleaning you can avoid claim denials and receive proper reimbursement.


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