Medicare and Medicaid DME Billing: Key Regulations to Know

Accurate Medicare and Medicaid Durable Medical Equipment (DME) billing plays an essential role for providers who need to get paid and for patients who receive services. In fact, proper reimbursement of supplied DME helps providers secure financial stability so they can provide essential care to patients.

Further, the strict set of billing rules created by Medicare and Medicaid require absolute compliance to prevent penalties while maintaining program integrity. Therefore, the understanding of such essential regulations remains crucial for healthcare providers and patients as it establishes an efficient DME billing practice.

This blog will explore the key regulations regarding the Medicare and Medicaid DME Billing that every provider needs to know.

Medicare DME Billing

• Coverage

The Durable Medical Equipment (DME) comes under the medical coverage of Medicare Part B. This includes essential equipment like wheelchairs, oxygen equipment, hospital beds, and other devices required for patient safety, mobility, and health. Coverage is typically restricted to items that are deemed essential for a beneficiary’s medical treatment and care.

• Documentation

The medical necessity of DME items needs proper documentation which providers must provide during Medicare billing. A written document from treating physicians or healthcare providers with patient diagnosis information and accurate required DME specifications must be provided. In fact, the documentation should contain complete information regarding the equipment benefits for health improvement, patient health information, and documentation of clinical necessity. A clear demonstration that the DME item is integral to the patient's care plan is necessary to justify the claim.

• Prior Authorization

Before providing power wheelchairs or other selected high-cost DME equipment, the provider must obtain pre-authorization from Medicare. This step ensures that the requested DME is medically necessary and meets Medicare's guidelines. The Centers for Medicare & Medicaid Services mandate the healthcare providers to obtain prior authorization before delivering the equipment. If the prior authorization request is denied, providers must refrain from issuing the DME and follow the appeals process if necessary.

• Repairs

The Medicare program provides coverage of repairs for beneficiary-owned DME when both the original purchase was deemed medically necessary, and the repair is also considered reasonable and necessary. But Medicare does not pay for repairing medical equipment that has become unusable for patient treatment or when the tool was never justified for medical purposes. Therefore, the provider must check that repairs pertain to the DME status while abiding by Medicare's essential maintenance requirements.

• National Coverage Determinations (NCDs)

National Coverage Determinations (NCDs) specify whether a particular DME item or service is covered under Medicare. These determinations are created by CMS and are legally binding across all Medicare administrative contractors (MACs). NCDs can help clarify coverage criteria for specific items and services, allowing providers to understand what is covered under Medicare’s benefits.

• Local Coverage Determinations (LCDs)

In addition to NCDs, Local Coverage Determinations (LCDs) address specific issues related to DME coverage at a regional level. LCDs are developed by MACs and provide guidance for coverage decisions based on regional policies, local medical practices, and the interpretation of Medicare's overall coverage rules. Providers need to get familiar with both NCDs and LCDs so that they can bill properly and avoid improper claim denials.

Medicaid DME Billing

• State-Specific Coverage

Unlike Medicare, Medicaid coverage for DME is not uniform across the United States and varies by state. Each state has its own Medicaid program, and benefits can vary considerably from state to state. Some states offer comprehensive coverage for a wide range of DME items, while others may have more restrictive policies. Providers must understand the specific Medicaid policies in the state where they are practicing to ensure that the DME they provide is covered.

• Mandatory vs. Optional Benefits

Medicaid benefits can be divided into two main categories, i.e., mandatory and optional benefits. Mandatory services are those that every state must provide under federal law, including some aspects of DME. However, many types of DME fall under optional benefits, meaning that states have the discretion to choose whether to include them in their Medicaid programs. States may also set additional requirements or limitations on the type of DME that is covered.

• Coordination of Benefits

Medicaid is generally regarded as the last resort payer. This means that providers must first bill any private insurance or other healthcare programs before submitting a claim to Medicaid. If a beneficiary has secondary insurance coverage, the primary payer will be responsible for paying first, with Medicaid covering any remaining costs up to its limits. Providers must understand the sequence of billing to avoid delays or payment issues.

• State-Specific Rules

As Medicaid programs are administered at the state level, each state’s Medicaid agency establishes specific rules and procedures for DME billing. These rules can include how claims are submitted, documentation requirements, and billing deadlines. Providers must familiarize themselves with the unique rules of the state where they are submitting claims to ensure that all procedural requirements are met.

• Early and Periodic Screening, Diagnostic, and Treatment Services (EPSDT)

The EPSDT program provides enhanced benefits for children under the age of 21, ensuring that they receive early and comprehensive healthcare services. Under EPSDT, states are required to offer services needed to correct or improve defects and physical and mental illnesses, including DME. This program often covers a broader range of DME items compared to regular Medicaid coverage, especially when it comes to children’s needs. Providers should take advantage of EPSDT guidelines when billing for pediatric DME needs, as it can provide access to more extensive coverage.

Conclusion

Understanding and adhering to Medicare and Medicaid DME billing regulations is vital to ensure accurate reimbursement, maintain compliance, and provide quality care. In fact, providers can deal with the complexities of billing with confidence by staying informed about the latest guidelines, understanding coding requirements, and implementing best practices. It is also important to utilize technology and streamline processes to minimize errors and reduce audit risks. Moreover, outsourcing DME billing and coding to experts like 24/7 Medical Billing Services can further optimize the DME billing process, offering customized solutions, ongoing support, and compliance auditing.

FAQs

Q1.What is the difference between Medicare and Medicaid in DME billing?

Medicare is for individuals aged 65 or older or those with certain disabilities, whereas Medicaid is a need-based program for low-income individuals and families.

Q2. Who is eligible for Medicare?

Medicare is available to individuals aged 65 or older, or younger individuals with disabilities or conditions like end-stage renal disease.

Q3. Who is eligible for Medicaid?

Medicaid eligibility is based on income, household size, and sometimes other factors like age or health conditions, with criteria varying by state.

Q4. How does Medicaid eligibility differ across states?

Medicaid eligibility and benefits can differ significantly between states based on local income limits, family size, and specific health conditions.

Q5. What is a copay in DME billing?

A copay is a fixed amount a patient pays for services like DME, separate from their insurance premium.

Q6. What does 100% coinsurance mean in DME billing?

100% coinsurance means the patient is responsible for all costs of healthcare services after meeting the deductible, until the out-of-pocket maximum is reached.