CurrentEmblemHealthPolicy RPC2O210007

Durable Medical Equipment (DME) Rental vs: Purchase (Commercial and Medicare)

This policy governs EmblemHealth reimbursement rules for renting versus purchasing certain durable medical equipment (DME), prosthetics and orthotics for covered members, including rental caps, purchase criteria, modifiers, place-of-service restrictions, and applicable HCPCS codes. It applies to participating providers, DME suppliers, prosthetic/orthotic vendors and same-specialty physicians reporting the same TIN.

Policy Summary

PayerEmblemHealth

PolicyDurable Medical Equipment (DME) Rental vs: Purchase (Commercial and Medicare)

Policy CodePolicy RPC2O210007

Change TypeNo material change

Effective DateAug 1, 2022

Next Review DateN/A

Key ActionReport applicable rental/purchase modifiers (e.g., RR, NU, NR, UE, BR, KI, KJ, KR) on claims so codes will be considered for reimbursement.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

13 monthscapped rental period (ownership passes to member)

$200inexpensive purchase threshold

POS codes listedhome POS examples

Modifiers requiredrequired modifiers

exception

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oxygen & ventilators

K0740denied repair code

Coverage criteria: rental vs purchase

DME rental vs purchase criteria

Covered when ALL of the following are met:

ALL of the following

Item is a covered benefit under the member's plan and the requirements of this policy are met.
Rental allowed when: DME may be rented when the anticipated medical need is for a limited time, the item requires specialized/high maintenance service, or the item is not routinely purchased (purchase price > $200).
Purchase allowed when
- Inexpensive DME (purchase price <= $200) may be purchased (examples: canes, walkers, crutches, peak flow meters, commode chairs).
- More expensive DME (> $200) may be purchased when long-term use is expected based on the patient's prognosis and a rental trial has documented compliance, tolerance, and clinical benefit (rental trial may be applied toward purchase price).
Monthly rentals are capped (most DME) at 13 months of continuous use; at end of capped rental ownership passes to the member (oxygen equipment and ventilators are exceptions to rental limits).
Total rental reimbursement from a single vendor for a single code is limited to either the purchase price or a maximum number of rental months, whichever is less; rental fees include maintenance, repairs, replacement, supplies and accessories and these are not separately reimbursable.
DME intended for use in the patient's home must be billed with a qualifying home place-of-service code; items dispensed for use in a non-home POS are not reimbursable.
Codes representing rental-eligible or purchase-eligible items must be reported with the appropriate modifier (e.g., RR, NU, NR, UE, BR, KI, KJ, KR) to be considered for reimbursement.

HCPCS eligibility mappings

Lists of HCPCS and device-level codes indicating items that are eligible either for rental or for purchase under Commercial and Medicare plans.

Extensive mapping of HCPCS A-, E-, and K- codes to items eligible for rental or purchase; see tables for specific pairings (examples in policy: A4236 = E0156 and many E- and K- code mappings).

Rental vs Purchase and rental-only items

Items eligible for rental-only or purchase are listed by HCPCS codes; selected items are explicitly rental-only and some have rental period limits.

Certain HCPCS codes are designated eligible for rental-only as enumerated in the tables (examples include A4618 mapped to multiple E-codes; E0935/E0936 listed as rental only).

Specific rental period limit: Continuous Passive Motion devices (E0935/E0936) rental period not to exceed 21 days (3 weeks).

Non-covered DME

Non-covered DME and services

Optional or ancillary DME equipment or features that are primarily for convenience or upgrades beyond medical necessity (e.g., decorative items, customizations, cup holders, extra batteries).

DME that does not provide therapeutic benefit, was not prescribed by a physician, or serves primarily comfort/convenience (e.g., elevators, vehicle lifts, wheelchair lifts for stairs).

Equipment used in a facility expected to provide such items, environmental devices (AC, humidifiers), experimental/investigational or non-FDA approved items, and items prescribed for other-than-intended use.

Electronic devices with multiple uses (laptops, tablets, smartphones) not dedicated to the requested service; installation/support items and monthly internet/data fees; software/apps may be covered only if reviewed and approved by Medical Director.

DME prescribed as part of a home exercise program (e.g., gym memberships, treadmills), recalled items, items abused beyond specifications, and routine maintenance/periodic servicing (except extensive maintenance for medically necessary member-owned equipment per manufacturer's recommendations).

Repair & Replacement criteria and billing

Repair and replacement reimbursement rules and billing guidance

EmblemHealth will consider reimbursement for repair, maintenance, and replacement of medically required DME that the member owns; reimbursement is not considered for equipment previously denied or not covered.

Rental fees for rented DME cover maintenance, repairs, replacement, supplies and accessories; separate reimbursement for these items on rented equipment is not allowed.

Billing rules for repair codes: K0739 may be used for labor associated with repair of member-owned non-oxygen DME (labor per 15 minutes); K0740 is for oxygen repair labor but is non-covered and will be denied; K0462 is considered when loaner or temporary replacement equipment is provided and is only for rented DME when applicable.

Replacement of member-owned or capped rental items due to normal use and wear is considered every five (5) years; replacement also allowed for change in patient condition, loss, or irreparable damage.

Modifier guidance: append RA for replacement due to loss/irreparable damage/theft; append RB when replacement parts are furnished to repair member-owned DME; do not append both RA and RB on same claim line; do not append RA for repairs.

Special power wheelchair interface replacement

Reimbursement will be considered when a member's drive control interface (for example: joystick, head control, sip-and-puff) and controller electronics both must be replaced due to irreparable damage; these interfaces are described by HCPCS codes E2321-E2322, E2325, E2327-E2330, and E2373.

Append Modifier KC to claims when an integrated joystick and controller are being replaced by another drive control interface due to member condition or irreparable damage; do not append Modifier KC at time of initial issue of the wheelchair.

Replacement criteria

Reimbursement consideration when drive control interface and controller electronics must be replaced due to irreparable damage.

Replacement is considered when both the drive control interface and controller electronics are irreparably damaged and unable to be repaired or when repair is not cost effective (irreparable damage).

Append Modifier KC when replacing an integrated joystick and controller with another drive control interface due to member condition or irreparable damage; Modifier KC must not be used at initial wheelchair issue.

HCPCS codes, thresholds, and coding guidance

HCPCS codes eligible for rental or purchaseHCPCS

A4613	Items eligible for Rental or Purchase
A7000-A7026	Series of A7xxx items eligible for Rental or Purchase (examples listed in document)
E0100-E0261	Series of E-codes listed as items eligible for Rental or Purchase (examples listed in document)

Sample HCPCS mappings (partial list)HCPCS

A4236	Mapped to E0156 (example mapping listed in document)
E0156	E-code paired with A4236 as shown in mappings
K0038	K-series code listed in mappings as items eligible for Rental or Purchase

Repair and special power wheelchair interface codesHCPCS

K0462	Temporary replacement for patient-owned equipment being repaired, any type; reimbursable only for rented DME
K0739	Repair or non-routine service for DME other than oxygen requiring the skill of a technician; labor component; per 15 minutes; reimbursable for purchased/member-owned DME
K0740	Repair or non-routine service for oxygen equipment requiring the skill of a technician; labor component; non-covered and will be denied
E2321	Power wheelchair accessory, hand control interface, remote joystick, nonproportional
E2322	Power wheelchair accessory, hand control interface, multiple mechanical switches, nonproportional
E2325	Power wheelchair accessory, sip and puff interface, nonproportional
E2327	Power wheelchair accessory, head control interface, mechanical, proportional
E2328	Power wheelchair accessory, head control or extremity control interface, electronic, proportional
E2329	Power wheelchair accessory, head control interface, contact switch mechanism; nonproportional
E2330	Power wheelchair accessory, head control interface, proximity switch mechanism; nonproportional

Drive control interface HCPCS codesHCPCSCovered

E2321	Power wheelchair accessory, hand control interface, remote joystick, nonproportional, including all related electronics, mechanical stop switch, and fixed mounting hardware.
E2322	Power wheelchair accessory, hand control interface, multiple mechanical switches, nonproportional, including all related electronics, mechanical stop switch, and fixed mounting hardware.
E2325	Power wheelchair accessory, sip and puff interface, nonproportional, including all related electronics, mechanical stop switch, and manual swingaway mounting hardware.
E2327	Power wheelchair accessory, head control interface, mechanical, proportional, including all related electronics, mechanical direction change switch, and fixed mounting hardware.
E2328	Power wheelchair accessory, head control or extremity control interface , electronic, proportional, including all related electronics and fixed mounting hardware.
E2329	Power wheelchair accessory, head control interface, contact switch mechanism; nonproportional, including all related electronics, mechanical stop switch, mechanical direction change switch, head array, and fixed mounting hardware.
E2330	Power wheelchair accessory, head control interface, proximity switch mechanism, nonproportional, including all related electronics, mechanical stop switch, mechanical direction change switch, head array, and fixed mounting hardware.

Inexpensive DME purchase threshold

Inexpensive DME purchase threshold$200 (purchase price at or below $200 may be purchased rather than rented)

Examples of inexpensive itemsCanes, walkers, crutches, peak flow meters, commode chairs (illustrative examples listed)

Routinely purchased classificationItems classified as 'Other Routinely Purchased DME' may be purchased or rented; purchase threshold guidance still applies

Capped rental duration

Capped rental duration13 months of continuous use (at end of 13-month rental ownership passes to the member)

Electric wheelchair note

Provider billing, documentation, and place-of-service requirements

Billing Rule

Modifiers and claim reporting

Report applicable rental/purchase modifiers on claims for DME items to be considered for reimbursement. Examples include RR (rental), NU (new equipment), NR (new when rented), UE (used), BR, KI, KJ, KR, and others as applicable. Ensure the correct modifier that reflects rental vs purchase status is appended to the HCPCS code when billing.

Applicable modifiers: RR, NU, NR, UE, BR, KI, KJ, KR, KC (see replacement guideline)

Billing Rule

Place of Service billing requirement

DME intended for use in the member's home must be billed with a qualifying home Place of Service (POS) code. Report the POS code where the device is intended to be used. DME dispensed for use in a POS other than the patient’s home is not reimbursable. Verify that the item is suitable for home use before billing a home POS.

Qualifying home POS codes include 12 (Home), 13 (Assisted Living Facility), 14 (Group Home), 16 (Temporary Lodging) and other CMS-defined home POS codes as appropriate.

Definitions and terms

Durable Medical Equipment (DME) definition

DME definition (short)Durable Medical Equipment (DME): equipment for home use that provides therapeutic benefit, is reusable, ordered by a physician, can withstand repeated use, and is not generally useful in the absence of illness or injury

Typical examplesCrutches, walkers, ventilators, oxygen equipment, monitors, pressure mattresses, nebulizers, prosthetics, CPAP

Primary characteristicsPrimarily and customarily used to serve a medical purpose; appropriate for use in the home

Same Specialty Physician

Same Specialty Physician definitionPhysicians and/or other health care professionals of the same group and same specialty reporting the same Federal Tax Identification Number (TIN)

Applies to

Policy Summary

PayerEmblemHealth

PolicyDurable Medical Equipment (DME) Rental vs: Purchase (Commercial and Medicare)

Policy CodePolicy RPC2O210007

Change TypeNo material change

Effective DateAug 1, 2022

Next Review DateN/A

Key ActionReport applicable rental/purchase modifiers (e.g., RR, NU, NR, UE, BR, KI, KJ, KR) on claims so codes will be considered for reimbursement.

SourceLink

On This Page

For electric wheelchairs, members must be offered a purchase option at initial provision (special rule referenced)

Exception (documented elsewhere)Oxygen equipment and ventilators are not subject to rental limits

Replacement interval

Replacement interval for member-owned DMEEvery 5 years for normal use and wear (replacement considered every five (5) years)

Other replacement triggersAlso considered for change in patient condition, loss, or irreparable damage

Modifier guidance for replacementAppend Modifier RA for replacement due to loss/irreparable damage/theft; do not append RB for repairs; do not append RA and RB together

Billing Rule

DME Rental vs. Purchase — note applicability for Commercial and Medicare

For Commercial and Medicare claims, certain DME items may be billed either as rental or purchase. Codes that are eligible for rental or purchase must be reported with the appropriate modifier (e.g., RR, NU, NR, UE) to indicate the chosen method. Rental fees cover maintenance, repairs, replacement, supplies and accessories; total reimbursement from a single vendor is limited to either the purchase price or a maximum number of rental months, whichever is less (rental limits exclude oxygen equipment and ventilators).

Review code-specific guidance to determine whether an item is eligible for rental, purchase, or both and append the corresponding modifier.

Documentation Required

Documentation requirement

Document the prescribed DME item in the medical record, including a clear description of the item and whether it is rented or owned. If the item is repaired, maintained, or replaced, the documentation must state this and include the medical necessity rationale for the repair, maintenance, or replacement.

Include item identification and description, rental vs. owned status, and specific notes if repaired/maintained/replaced with supporting medical necessity.
Maintain documentation supporting the choice of rental versus purchase and any service or replacement performed.

Billing Rule

Replacement billing guideline

When replacing an integrated drive control interface (for example joystick, head control, sip-and-puff) and controller electronics due to irreparable damage or the member’s condition, append Modifier KC to the replacement claim. Modifier KC should not be appended at the time of initial issue of the wheelchair; use KC only for replacements of integrated joystick/controller assemblies that meet irreparable-damage criteria.

Applicable HCPCS examples: E2321, E2322, E2325, E2327–E2330, E2373 — append Modifier KC when replacement is due to irreparable damage.
Do not append Modifier KC on initial wheelchair issuance.

Includes DME, prosthetic and orthotic vendors renting or selling DME, prosthetics, or orthotics under this policy

Policy relevanceDefines which providers are considered 'same specialty' for application of the policy

DME Rental vs. Purchase

Rental vs. Purchase mapping (concept)The policy maps HCPCS/device codes to indicate whether items are eligible for rental, purchase, or either; specific code pairings are listed in the HCPCS tables

Applicable programsDurable Medical Equipment (DME) Rental vs. Purchase guidance applies to both Commercial and Medicare contexts as noted

Purchase considerationsPurchase may be appropriate when long-term use expected or price ≤ $200; rental trials may apply toward purchase price

Durable Medical Equipment (DME)

Detailed DME definitionMedical equipment which can withstand repeated use, is not disposable, serves a medical purpose, generally not useful in the absence of illness or injury, and is appropriate for home use

Ordering requirementDME must be ordered or prescribed by a physician to meet policy criteria

Reusability and durabilityEquipment must be reusable and able to withstand repeated use to qualify as DME

Orthotic

Orthotic definitionAn external appliance (e.g., brace or splint) that prevents or assists movement of the spine or limbs; supports weak or deformed body parts or restricts/eliminates motion in injured areas

PurposeUsed to support, restrict, or assist movement for medical benefit

Relation to DMEClassified separately from prosthetics but falls under policy provisions for DME/prosthetic/orthotic vendors

Prosthetic

Prosthetic definitionA device that replaces all or part of an external body organ or replaces function of a permanently inoperative or malfunctioning external body organ

FunctionRestores form and/or function of a missing or nonfunctional body part

Policy scopeProsthetics are included in the policy provisions for purchase vs. rental where applicable

Irreparable Damage

Irreparable Damage definitionIrreparable damage refers to a specific accident or natural disaster and means the item is not repairable or not cost-effective to repair

ExamplesFlood, fire, or other events that render equipment non-repairable or economically impractical to repair

Implication for replacementReplacements for irreparably damaged items may be considered for reimbursement under replacement rules

Repair

Repair definitionReplacement of parts or components that make up the base item to make equipment functional and operational

Member-owned vs rentedReimbursement for repair is considered for member-owned DME (not including oxygen) and may use codes such as K0739 for member-owned DME labor

Warranty exclusionRepairs covered under a manufacturer's or supplier's warranty are not reimbursable

Replacement

Replacement definitionFurnishing new separately payable accessories not part of the initial base item but part of the repair or replacement

Timing for replacementReplacement of member-owned or capped rental items due to normal wear is considered every 5 years; also for change in patient condition, loss, or irreparable damage

Modifier instructionUse RA for replacement due to loss/irreparable damage/theft; do not append RB for repairs; do not append RA and RB on same claim line

Drive control interface

Drive control interface examplesJoystick, head control, sip-and-puff (examples described for interfaces requiring replacement)

HCPCS codes referencedDrive control interfaces described by HCPCS codes E2321-E2322, E2325, E2327-E2330, or E2373

Replacement conditionReimbursement considered when both the interface and controller electronics must be replaced due to irreparable damage; append Modifier KC when replacing integrated joystick/controller (not at initial issue)