Billing Medicare for Durable Medical Equipment (DME) is one of the most regulated areas of medical billing. DME providers must adhere to strict Medicare instructions related to criteria, documentation, coding, claim submission, and appeals. Even a small mistake can outcome in claim denials, delayed payments, or lost revenue.
This direction, How to Bill DME Claims to Medicare: A Guide for DME Providers in the USA, explains every step of the Medicare DME billing process in a clear, practical way. It is designed to support DME suppliers across the USA to lower denials, stay compliant, and enhance repayment results. Many providers also rely on professional Medical Billing Services to control this complicated workflow efficiently.
Step 01:
Verify Medicare Eligibility & Enrollment
Before delivering or billing for any equipment, ensure three critical elements: the patient’s Medicare Coverage, the item’s eligibility, and your supplier enrollment status.
Verify Patient Coverage
Medicare Part B covers DMEPOS items such as wheelchairs, oxygen equipment, walkers, and orthotics. Ensure that part B is active on the date of the facility. During this verification, check:
- Whether Medicare is the primary or secondary payer.
- If the patient has Original Medicare or a Medicare Advantage plan.
- Whether coverage applies to the delivery date.
Claims must be submitted differently based on these factors.
Confirm Medical Necessity and Coverage
Medicare only pays for equipment deemed clinically essential and intended for home use. Home includes private residences, assisted living services, and non-Part A nursing services. DME is not separately repaid if the patient is hospitalized or in a Skilled Nursing Services under a Part A stay.
At this phase, ensure:
- A valid Standard Written Order (SWO) is obtained.
- The item complies with applicable LCD or NCD policies.
- You understand whether the item will be purchased or rented.
Validate Supplier Enrollment
Payment is only made to properly enrolled DMEPOS suppliers. You should:
- Be actively enrolled in Medicare.
- Accept the assignment in most conditions.
- Confirms your NPI, PTAN, and practice location are correctly linked.
New suppliers or those making updates must complete the CMS-855S, sustain accreditation, and carry a $50,000 surety bond per location or NPI.
Step 02:
Gather Required Documentation
Documentation is the foundation of Medicare DME billing. Missing or incomplete paperwork is a leading reason for claims denials.
Standard Written Order (SWO)
Medical needs a standard written order (SWO) for each DME item. Certificates of Medical Necessity (CMNs) and DME Information Forms (DIFs) are no longer accepted. The SWO must include:
- Patient name or Medicare Beneficiary Identifiers (MBI).
- Order date.
- Item description.
- Quantity, if applicable.
- Treating provider’s name or NPI.
- Signature and date.
Some items need a Written Order Before Delivery (WOPD).
Medical Records
Medical records should support clinical essential and meet Local Coverage Determination (LCD) or National Coverage Determination (NCD). These records are kept on file and submitted only if requested.
Proof Of Delivery (POD)
Proof of Delivery ensures the patient received the equipment. POD must involve:
- Patient name and address.
- Item description and quantity.
- Delivery date.
- Delivery confirmation (signature or shipping documentation).
Records must be retained for seven years.
Advance Beneficiary Notice (ABN)
If medicare coverage is uncertain, an ABN (CMS-R-131) should be obtained before delivery. This guards both the supplier and the patient and permits proper use of modifiers.
Step 03:
Use Correct HCPCS Codes and Modifiers
HCPCS level II codes identify the equipment, while modifiers explain how the item is provided. Common DME modifiers include:
- NU – new equipment purchases.
- RR – rental.
- KX – Coverage criteria met.
- GA – ABN on file.
- GY – Non-covered Medicare benefits.
Incorrect codes or missing modifiers frequently lead to denials. Experienced medical billing services, such as DocVaz Medical Billing, confirm coding accuracy and policy compliance.
Step 04:
Complete the CMS-1500 or 837P Claim Form
Accuracy is essential when completing the CMS-1500 or electronic 837P claim. Key fields involve:
- Patient MBI and Medicare selection.
- Ordering the provider name and NPI.
- ICD-detection codes.
- Date of services or rental period.
- Place of services (Generally POS12 – Home)
- HCPCS codes with modifiers.
- Units, charges, and diagnosis pointers.
- Prior autorization number, if needed.
- Assignment acceptance.
Even minimal mistakes can cause rejections or delays.
Step 05:
Submit the Claim
Claims must be submitted electronically whenever possible for quick processing and tracking. Medicare needs claims to be filed within one year of the date of services. Medicare Advantage plans have their own submission rules and deadlines, which must be followed carefully.
Step 06:
Acquire Prior Authorization When Needed
Certain DME needs prior authorization or face-to-face documentation. When needed:
- Submit clinical records and SWO to the DME MAC.
- Wait for an affirmative decision.
- Involves the Unique Tracking Number (UTN) on the claim.
Claims submitted without a valid UTN will be denied.
Step 07:
Understand Medicare Repayment
After the part B deductible:
- Medicare pays 80% of the allowed amount.
- The patient pays 20% coinsurance.
Many DME items follow capped rental rules, with ownership transferring to the patient after 13 continuous rental months, except for certain items like oxygen equipment.
Step 08:
Record Claims and Appeals Denials
Medicare DME billing needs active follow-up. Review remittance advice daily and act quickly on denials. The medicare appeals process involves:
- Redetermination (within 120 days).
- Reconsideration (within 180 days).
Strong documentation and timely appeals protect revenue.
