BOC-CDME cheat sheet

Medicare DME reimbursement requires five elements: the patient has a medical need, the equipment meets the definition of DME, the supplier holds a valid supplier number, the equipment is used in the patient's home, and a physician's order and medical record support the need.

A detailed written order must include the patient's name, the item ordered, the date of the order, the ordering physician's signature, and the physician's NPI; it must be received before billing.

Proof of delivery must show the patient's name, the item delivered, the delivery date, and the recipient's signature; for items shipped, a delivery service's tracking record may serve as proof.

The CMN (Certificate of Medical Necessity) is required for certain items such as oxygen, CPAP, and hospital beds; the physician must sign and date it, and the supplier must retain it.

The fee schedule amount for DME is based on the lower of the supplier's charge or the Medicare fee schedule; for capped rental items, the supplier is paid over a 13-month period, after which the patient may own the equipment.

A rental item becomes a purchase option after 13 months of continuous use; the supplier must transfer ownership to the patient if the patient elects to purchase.

Documentation of medical necessity must include the patient's diagnosis, the reason the equipment is needed, and the expected duration of use; this information must be in the physician's records, not just on the order.

For competitive bidding areas, the supplier must be a contract supplier to receive Medicare payment for the bid items; non-contract suppliers may still furnish other items.

The advance beneficiary notice (ABN) must be given when the supplier believes Medicare will deny payment; the patient must sign it before receiving the item, and the supplier must retain the signed copy.

DME is defined as equipment that can withstand repeated use, is primarily and customarily used for a medical purpose, is not useful in the absence of illness or injury, and is not worn in or on the body (e.g., wheelchairs, hospital beds, oxygen concentrators).

Prosthetics and orthotics are not DME; they are separately classified and billed under different codes and rules.

Capped rental items include hospital beds, wheelchairs, and oxygen equipment; these are rented for up to 13 months, after which ownership may transfer.

Oxygen equipment includes concentrators, liquid systems, and cylinders; Medicare requires a qualifying blood gas test (PaO2 ≤ 55 mmHg or oxygen saturation ≤ 88%) and a physician's order.

CPAP devices require a diagnosis of obstructive sleep apnea confirmed by a sleep test and a physician's order; the supplier must provide education and follow-up.

Negative pressure wound therapy (NPWT) is a modality that uses a vacuum pump and dressing to promote wound healing; it is billed as a capped rental item.

Enteral nutrition is a prosthetic device, not DME, and is billed under parenteral/enteral nutrition codes; it requires a physician's order and documentation of the patient's nutritional need.

Wheelchair seating and positioning items are often classified as complex rehabilitation technology (CRT) and require specialized evaluations and documentation.

Infusion pumps are DME when used outside the home; for home use, they may be billed as DME if they meet the definition.

A DME supplier must obtain a supplier number from Medicare, a state license if required, and accreditation from a CMS-approved accrediting organization (e.g., Joint Commission, ACHC) within 18 months of enrollment.

Surety bond requirement: suppliers must post a $50,000 surety bond for each location, or $100,000 for multiple locations, to protect against fraud.

Inventory management should use a perpetual inventory system to track serialized equipment and ensure accurate billing and asset control.

The billing process includes claim creation, electronic submission (e.g., via a clearinghouse), and follow-up on denials; timely filing limits (e.g., 12 months from date of service for Medicare) must be observed.

Key performance indicators include days in accounts receivable, denial rate, and inventory turnover; these should be monitored monthly.

Staff training on HIPAA, fraud and abuse, and billing compliance must be documented and conducted at least annually.

A compliance program should include written policies, a compliance officer, training, and a mechanism for reporting violations anonymously.

Cost reporting: suppliers must submit an annual cost report to Medicare; failure to do so can result in revocation of billing privileges.

The Anti-Kickback Statute prohibits offering or receiving anything of value to induce referrals for items or services covered by federal healthcare programs; safe harbors exist for certain arrangements.

The Stark Law prohibits physician self-referral for designated health services, including DME, unless an exception applies; it is a strict liability statute.

HIPAA Privacy Rule requires safeguards for protected health information (PHI); suppliers must have a Notice of Privacy Practices and train staff.

The False Claims Act imposes liability for knowingly submitting false claims; whistleblowers may receive a share of recoveries.

Medicare enrollment requires revalidation every five years; suppliers must report changes in ownership or location within 30 days.

The supplier must maintain records for at least 7 years (or longer if state law requires) and make them available to Medicare on request.

Ethical standards include avoiding conflicts of interest, providing accurate information to patients, and not misrepresenting equipment capabilities.

The Office of Inspector General (OIG) publishes a work plan and compliance guidance for DME suppliers; suppliers should monitor it for risk areas.

Patient education must include proper use, maintenance, and safety precautions for the equipment; documentation of education is required.

A patient intake process should verify insurance eligibility, obtain prior authorization if required, and schedule delivery.

Customer service standards include responding to patient inquiries within 24 hours and resolving complaints promptly.

Delivery and setup should include a demonstration of the equipment and a check for patient comfort and understanding.

Follow-up calls after delivery can identify issues and improve patient satisfaction; they should be documented.

Cultural competence and language access are important; provide materials in the patient's preferred language when possible.

Patient rights include the right to be informed of costs, to refuse treatment, and to privacy; these should be explained at intake.

Complaint resolution should follow a formal process with tracking and trending to identify systemic issues.