Specialties
DME Billing Services
DME billing is a supplier business, not a physician office. The supplier never examines the patient, yet it carries the risk for every claim: it must hold a supplier number and accreditation, collect a valid order and the prescriber's records, prove delivery, bill rentals month by month, and refill supplies only when the patient asks. Claims go to a DME MAC, not the local A/B contractor.
- Orders and medical records collected before delivery, not after a denial
- Rental months billed with the correct KH, KI and KJ modifiers
- Proof of delivery and refill requests filed for every claim
Why a DME claim depends on someone else's documentation
Medicare pays a DME supplier only when the prescriber's medical record supports the item. The supplier needs a standard written order with the required elements and, for items on CMS's required lists, a documented face-to-face encounter and an order received before delivery. When the medical record does not describe why the patient needs the item, the supplier's claim fails, and statements the supplier prepares cannot fix it.
Before any claim, the supplier itself must qualify. Medicare DMEPOS suppliers enroll separately, meet the supplier standards in federal regulations, hold accreditation from a CMS-approved accrediting organization and, for most suppliers, a surety bond. Losing any of these stops payment for everything.
Payment rules then depend on the item: some are purchased, many are rented, and capped rental items pay monthly for a limited number of months before ownership transfers to the patient. Fee schedule amounts are updated every year, and the competitive bidding program is between rounds, so we track the current status rather than quote it.
Official sources: CMS: DMEPOS fee schedule (external site), CMS: DMEPOS Competitive Bidding Program updates (external site), eCFR: 42 CFR 410.38 (orders and face-to-face encounters) (external site), eCFR: 42 CFR 424.57 (DMEPOS supplier standards) (external site), eCFR: 42 CFR 414.229 (capped rental) (external site), eCFR: 42 CFR 414.234 (prior authorization) (external site), CMS Medicare Coverage Database: article A55426 (standard DME documentation) (external site), CMS Program Integrity Manual, chapter 5 (refills, CMNs) (external site), CMS Claims Processing Manual, chapter 20 (DMEPOS) (external site)
Resupply rules and audit exposure
Ongoing supplies, such as CPAP supplies, diabetic testing supplies and ostomy products, cannot be shipped on a schedule alone. Medicare requires the supplier to contact the beneficiary before dispensing a refill, inside the window before the current supply runs out, document the beneficiary's request and what remains, never ship automatically, and deliver no earlier than the rules allow.
Audit requests usually arrive months after delivery, when the missing piece, an unsigned order, a note that does not support the item or a missing delivery receipt, can no longer be fixed. Every claim should be audit-ready on the day it is billed: the order, the prescriber's records, proof of delivery and refill requests all on file.
DME denials that start before delivery
Order missing a required element
The written order lacks an element such as the item description, quantity, prescriber or date.
Medical record does not support the item
The prescriber's note does not show the condition and need described in the coverage policy.
No proof of delivery
Missing signed delivery receipt, or for shipped items, no tracking record tied to the claim.
Refill shipped without a request
Supplies sent automatically, or delivered too early, without a documented refill request from the beneficiary.
Rental month sequence broken
KH, KI or KJ out of order, or a rental billed after the patient changed suppliers or entered a facility.
Supplier standards lapsed
An accreditation, license or bond lapse that suspends billing privileges.
How we run a DME supplier's billing
Step 1: Intake the order
Every order is checked for required elements, face-to-face and prior-delivery requirements, and the item's coverage policy.
Step 2: Request the records
The prescriber's notes are requested and reviewed against the policy before the item ships.
Step 3: Authorize where required
Items on the prior authorization list are approved before delivery is scheduled.
Step 4: Prove delivery
Delivery receipts or shipping records are matched to each claim before it is sent.
Step 5: Manage rentals and refills
Rental months and refill requests are tracked per patient, with refills contacted inside the allowed window only.
DMEPOS modifiers and payment categories
The modifiers that tell the DME MAC what is being billed and why.
| Modifier or category | Meaning | Billing notes |
|---|---|---|
| NU, UE, RR | New equipment purchase, used equipment purchase, and rental. | Every DME line identifies whether it is a purchase or a rental. |
| KH, KI, KJ | Capped rental: initial claim (first month), second and third months, and months four to fifteen. | The month count follows the item, so a missed or duplicated month throws off the rest of the rental. |
| KX | Requirements in the medical policy have been met. | Added only when the documentation on file meets every coverage criterion in the LCD. |
| GA, GZ, GY | ABN on file, no ABN, and item statutorily excluded. | Used when coverage criteria are not met or the item is never covered. |
| RT, LT | Right and left side. | Required for many orthotics and prosthetics, and for items supplied in pairs. |
| Required prior authorization | Items CMS lists as requiring prior authorization before delivery, such as certain power mobility devices. | Delivering before approval generally means the claim cannot be paid. |
Official sources: CMS: DMEPOS fee schedule (external site), CMS Claims Processing Manual, chapter 1 (external site), CMS: DMEPOS prior authorization (external site), CMS: HCPCS quarterly file (external site), CMS: DMEPOS competitive bidding (external site), eCFR: 42 CFR 424.58 (external site)
What the file for each DME claim should contain
Documents the DME MAC can request on any claim.
Standard written order
With every required element and the prescriber's signature.
Prescriber's medical records
Notes that show the condition and need the coverage policy requires, including the face-to-face encounter when required.
Proof of delivery
Signed delivery receipt or shipping and tracking records.
Refill documentation
For supplies, the beneficiary's refill request and remaining quantity.
Prior authorization and ABN
Approval for items that require it, and an ABN where coverage criteria may not be met.
Frequently asked questions
Who processes Medicare claims for DME suppliers?
DME Medicare Administrative Contractors, which are separate from the A/B contractors that process physician claims. The DME MAC is determined by where the beneficiary permanently lives. Some DMEPOS, such as items billed by hospitals and skilled nursing facilities, goes to the A/B MAC instead.
What is a capped rental item?
An item Medicare pays for on a monthly rental basis for a limited number of months, after which the patient owns it. Each month is billed with the modifier for its place in the rental sequence.
Can we ship refills automatically each month?
Not for Medicare. The beneficiary or caregiver must request the refill, the supplier contacts them shortly before the supply runs out, and delivery happens only inside the allowed window.
Do we still need certificates of medical necessity?
Suppliers no longer submit CMNs or DME information forms to Medicare, and claims sent with them attached are rejected. Some other payers still use their own forms.
Does competitive bidding affect our payment?
It can, for items and areas included in the program's current round. The items, areas and contract periods change by round, so we check the current program status rather than rely on past rules.
Official source: CMS: DMEPOS Competitive Bidding Program updates (external site)
Related services and specialties
Related services
Prior Authorization
Authorization requirements checked, requests submitted with clinical support, and approvals matched to claims before the service date.
Learn more about Prior AuthorizationInsurance Eligibility Verification
Coverage, benefits, coordination of benefits and patient cost share confirmed before the visit, so claims start with the right payer.
Learn more about Insurance Eligibility Verification
Specialties
Podiatry Billing
Routine foot care exceptions, class findings and Q modifiers, nail and callus debridement, foot surgery globals and the diabetic shoe program.
Learn more about Podiatry BillingOrthopedic Billing
Surgical global periods, laterality and bilateral rules, fracture care, injections and bracing, plus work-injury claims routed to the right payer.
Learn more about Orthopedic Billing
Make every DME claim audit-ready
A free audit checks orders, delivery records, rental sequences and refill documentation on a sample of your DME claims.