DME billing is a specialized branch of medical billing that necessitates scrutiny of documentation, codes, and modifiers. Traditional medical billing is more straightforward compared to DME billing, which comprises extra levels of compliance, including equipment status verification, rental terms, physician orders, and medical necessity. Consequently, mastering these elements is important to provide correct claim submissions and timely reimbursements for DME providers. 

As the healthcare industry evolves with stricter regulations, payer-specific rules, and growing audit scrutiny, it is more important than ever to understand what sets DME billing apart. This blog will highlight all the essential components related to documentation and modifiers in DME billing.

DME Billing Starts with Documentation

Outsource DME billing and coding services providers can streamline claim submissions and ensure compliance, but documentation remains the backbone of this process. The key documentation components every offshore billing team must master 

include:

• CMN and DIF – Discontinued

Until December 31, 2022, Certificates of Medical Necessity (CMNs) and DME Information Forms (DIFs) were required for documenting medical necessity for particular items. These forms were used to collect specific coverage criteria and physician verification.

However, CMS has officially discontinued the use of all CMNs and DIFs as of January 1, 2023. All claims submitted with these forms after this date will be rejected, even if electronically attached. The forms discontinued include:

• CMNs: CMS-484 (Oxygen), CMS-846 (Pneumatic Compression), CMS-847 (Osteogenesis Stimulators), CMS-848 (TENS), CMS-849 (Seat Lift), CMS-854 (Continuation)
• DIFs: CMS-10125 (External Infusion Pumps), CMS-10126 (Enteral and Parenteral Nutrition)

Now, medical necessity information is expected to be documented directly in the patient’s medical records or captured within the electronic claim data elements.

Detailed Written Order (DWO)

A DWO is a formal document from the patient’s prescribing physician that authorizes the durable medical equipment being ordered. It must clearly describe all billable items, including accessories or related supplies. There are two common ways a DWO is generated:

The supplier may prefill the form with selected items and send it to the physician for review. The physician must then initial and date any changes.

The form may be sent blank, and the physician selects and writes in the required items.

In both cases, the DWO must include the patient’s full name, a detailed description of all the items being prescribed, the order date, and the physician’s signature along with the date. These elements are essential to validate the authenticity and completeness of the order before submitting any claims to Medicare.

• Proof of Delivery

A POD is a required document that confirms the beneficiary received the item. This can include shipping documents, delivery slips, or service logs. Offshore billing and coding services providers in India must ensure the supplier retains POD in the patient’s file before submitting claims. Medicare auditors often request POD during reviews, whereby missing or incomplete POD can result in claim denials or repayment demands.

• Medical Records Supporting Necessity

Medical records that justify the medical necessity of a DME item are crucial. These include physician progress notes, diagnostic results, treatment history, and any relevant clinical documentation. These records should support:

• Why is the item medically necessary
• The item fits the patient’s current health condition
• The prescribing physician is actively involved in the patient’s treatment

Offshore outsourcing medical billing and coding services providers in India must coordinate with providers to ensure all necessary clinical documentation is collected and stored correctly.

Essential Modifier Management

The correct use of modifiers ensures proper reimbursement, avoids claim denials, and supports Medicare compliance. The following are the most relevant modifiers used in DME billing:

• Equipment Status and Ownership

These modifiers are commonly used to describe the status of the DME item, whether it is rented, purchased new, or used.

• RR – Rental: Indicates that the equipment is being rented. Must be used each month for ongoing rentals.
• NU – New Equipment: Used when the equipment is being purchased in new condition.
• UE – Used Equipment: Indicates the equipment was previously used and is now being purchased.

Always verify the provider’s intent, whether the equipment is for rent or sale, and document the condition (new or used) clearly in both the patient’s record and claim.

• Capped Rental Periods

These modifiers apply to capped rental items that Medicare will rent for up to 13 months, after which ownership may transfer to the patient.

• KH – First Rental Month: Indicates the first month of capped rental.
• KI – Second and Third Rental Months: Used for months two and three of capped rental.
• KJ – Fourth to Thirteenth Rental Months: Used from the fourth through the thirteenth month.

It is important to track rental timelines in your billing software. Also, assign the correct modifier based on the rental period, and ensure accurate sequence to avoid billing errors or denials.

• Documentation Requirement

Use the KX modifier only when documentation (such as clinical notes, detailed written orders, etc.) is complete and available for review.

• KX – Documentation on File: Signals that all necessary documentation supporting medical necessity is on file.
• Complex Power Wheelchairs

These modifiers apply to providers using complex rehabilitative power wheelchairs.

• BP – Elected to Purchase: Indicates that the patient has chosen to purchase the equipment.
• BR – Elected to Rent: Indicates that the patient has chosen to rent the equipment.

You should confirm the patient’s choice (purchase vs. rental) and document it in writing. Also, use the appropriate modifier based on the agreement and retain supporting records.

• Maintenance and Replacement

Though there are no universal letter modifiers for DME maintenance, proper coding and documentation must be used when billing for:

• Routine servicing
• Repair due to wear and tear
• Replacement due to damage or medical necessity

It is essential to include explanation and justification in the documentation. Use correct HCPCS repair codes with modifiers when required, and ensure all service records are retained.

• Other Modifiers (if applicable in DME scenarios)

Though not exclusive to DME, these modifiers are from the 59 modifier family used when procedures/services must be reported separately due to:

• XE – Separate Encounter
• XP – Different Practitioner
• XS – Separate Structure/Organ
• XU – Unusual Non-Overlapping Service

Use these modifiers only when justified, and ensure documentation supports the need to report a service as distinct or separate from another on the same claim.

Conclusion

Staying compliant and accurate is non-negotiable for offshore billing teams handling DME claims. A valid physician order must support every claim, and only handwritten or electronically signed documents are acceptable. It is critical to have a fully completed, signed, and dated DWO on file before submitting any claim to Medicare.

If an item was dispensed based on a verbal order, both the verbal and written orders must be retained to meet compliance requirements. Moreover, incomplete or missing documentation will result in automatic denial, with no option to appeal for items requiring statutory orders like diabetic shoes. Additionally, CMNs and DIFs should never be submitted for services provided on or after January 1, 2023.

Confused amidst numerous complexities? Offshore medical billing and coding Company in India is your solution. Info hub Consultancy Services has a team of experienced DME billing professionals to help you with end-to-end compliance support to streamline your revenue cycle.

FAQs

1. Can DME billing include home health services?
DME billing is separate and only covers medically necessary equipment and supplies.

2. How often should modifiers in DME billing be updated?
Modifiers should be reviewed quarterly to stay current with Medicare updates.

3. Are prior authorizations required for all DME items?
No, but many payers require them for high-cost or capped rental items.

4. How long should DME billing records be retained?
Typically, at least 7 years, or longer, depending on state and payer requirements.

5. What is the role of HCPCS Level II codes in DME billing?
They identify DME items and supplies not covered under CPT coding.

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