Consolidated coverage and payment criteria for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS). Includes definitions, payment classes, billing responsibilities, documentation requirements, and special rules for oxygen, PEN/TPN, home dialysis, used equipment, delivery/service charges, upgrades, and capped rentals.
DME definition and general coverage: DME is covered under Part B when it meets the statutory definition: can withstand repeated use; primarily and customarily used to serve a medical purpose; not generally useful in absence of illness/injury; appropriate for use in the home. All elements must be met before coverage.
Coverage table and contractor actions: Reimbursement for rental or purchase is allowed only when conditions in the DME Coverage Table are met; A/B MACs and DME MACs perform the review actions specified (see local MAC instructions). A supplier must maintain and provide, upon request, the physician's detailed written order or CMN when required.
Payment classes and fee schedule: DMEPOS are assigned to payment classes (inexpensive/routinely purchased; items requiring frequent/substantial servicing; certain customized items; other P&O devices; capped rental items; oxygen and oxygen equipment). Payment is made on the DMEPOS fee schedule (oxygen on its fee schedule). Fee schedule applies according to bill type and provider (see Application of DMEPOS Fee Schedule).
Used equipment and purchase after rental: Used equipment is treated as routinely purchased DME; when a beneficiary rents new equipment then purchases it, the purchase allowed amount is the purchase fee schedule less prior rental payments or the actual charge, whichever is lower, but not to exceed actual charge. UE modifier rules apply (see 30.1.1.2).
Rental vs purchase reporting and modifiers: Claims must indicate rented vs purchased and whether equipment is new or used. If an assigned claim fails to indicate new/used, MAC assumes used. Use HCPCS modifiers (e.g., -NU, -UE, -RR, -BR, -BP, -NR, KH/KI/KJ historical) to indicate status.
Power-operated vehicles/wheelchairs: Payment is the lesser of actual charge or fee schedule amount (including medically necessary accessories). CMN required for initial POV claims; MACs must not broadly require additional documentation beyond CMN except for audits/investigations.
Delivery and service charges: Separate delivery/service charges are normally included in the fee schedule and are not payable separately except in rare/unusual documented circumstances (e.g., delivery outside supplier's normal area, extraordinary expenses). When allowed, MACs base amount on relevant local circumstances and actual expenses; suppliers must fully document unusual circumstances.
Repair parts and RB modifier: Repair parts billed with RB modifier are paid as lump sum purchase. For competitive bidding items, payment follows single payment amounts or contractor discretion per regulation.
Deluxe features and ABN/beneficiary charges: Deluxe or aesthetic features not medically necessary are not payable. If beneficiary requests upgrades, supplier may collect excess charges only with a valid ABN. When upgrades are furnished, suppliers must bill two line items (upgraded item with GA and non-upgraded item with GK) or use GL when charging Medicare for the non-upgraded item while furnishing an upgraded item with no charge to beneficiary.
CMN and documentation requirements: As of 01-01-2023, CMNs and DIFs are not required to be submitted with claims for dates of service on/after that date; however CMN content and physician attestation elements remain authoritative for items that require certification and MACs may request supporting documentation in reviews. CMN elements and completion rules remain in effect where CMNs are required.
PEN (Parenteral and Enteral Nutrition) documentation and coverage: Initial PEN claims must be supported by a properly completed PEN CMN with medical and prescription information entered by the attending/ordering physician (or employee authorized and reviewed/signed by physician). Initial certification is valid for six months; recertification schedule is case-by-case. DME MACs will deny initial assigned claims without appropriate documentation or with deficiencies (e.g., missing/inappropriate diagnosis, duration <90 days, supplies provided before onset date, stamped signatures).
PEN pump payment limits and supplies: Rental of parenteral/enteral pumps limited to 15 months during a period of medical need; once limit reached, no additional rental payments unless prescription changes between parenteral/enteral. DME MACs do not start a new 15-month period when supplier changes; new supplier entitled to remaining balance. PEN supply kits are all-inclusive for monthly administration; payment tied to method of administration documented on CMN; inappropriate kit billed without documentation may be denied or paid at gravity-fed allowance when pump documentation absent.
Oxygen coverage and NCD changes: For services on/after 09-27-2021, home oxygen claims must meet NCD 240.2 criteria; the CED NCD for cluster headache was removed effective 09-27-2021 and MACs adjudicate such claims under 1862(a)(1)(A) when no NCD applies. All initial certifications with >4 LPM require MAC review before payment.
Oxygen fee adjustments and contents fees: Monthly stationary oxygen fee is reduced by 50% if prescribed <1 LPM. Volume adjustment (+50%) applies when stationary >4 LPM. Portable add-on applies if portable oxygen is prescribed; if both apply use the higher add-on; QF modifier effective 04-01-2017 must be used when both stationary and portable codes billed. Contents-only fee payable when beneficiary owns stationary gaseous or liquid system (not for owned concentrators); portable contents fee payable in certain ownership/rental combinations.
Pre-discharge delivery for fitting/training: Pre-discharge delivery of DME/P&O (not supplies) is appropriate when all conditions are met: item medically necessary for home use, physician order with initial date no later than discharge, delivery solely for fitting/training, delivery within two days of discharge, supplier ensures item goes home with beneficiary or delivers to home on discharge date, no intent to shift facility responsibility, no claims prior to discharge date, no separate charges for redelivery, and discharge to a qualified place of service.
Method II home dialysis elimination: Method II was eliminated for dates of service on/after 01-01-2011; home dialysis claims must be billed by ESRD facilities and paid under ESRD PPS for those dates. For pre-2011 DOS, Form CMS-382 selection rules applied.
Frequency and sequencing of claims: Suppliers bill monthly for DME/oxygen unless another policy allows different frequency. Claims for continuous services should be sequential; when break in service occurs (e.g., inpatient stay) resume sequential billing and adjust anniversary date for capped rentals when discharge changes 'from' date.
Appeals of duplicate claims: DME MACs only afford appeal rights for initial determinations; duplicate claim denials have limited appeal rights only to the issue of duplication. Specific MSN and remittance messages must be used for duplicate denials.
Fee schedule application and patient liability: Allowable amount is lower of fee schedule or billed charge. For non-nominal providers, payment = (lower of billed charge or fee schedule - unmet Part B deductible) * 80%. Patient liability rules and bill types determine fee schedule application.
Maintenance & servicing and installation: Maintenance and servicing included in rental payments; for purchased equipment reasonable servicing is payable. Use modifiers (-MS for capped rental servicing, -RP for replacement/repair) or revenue codes as specified. Installment purchases report total price on first bill; monthly amounts equal rental fee until purchase price or actual charge reached.
Supplies and drugs billing: Supplies necessary for effective use of DME and associated drugs are billed to DME MAC (HHAs use revenue code 0294). NDCs and HCPCS rules apply; MACs must accept NDCs in specified formats and return claims with invalid NDC as unprocessable.
Lymphedema compression treatment: Effective 01-01-2024 CAA 2023 establishes benefit for standard/custom compression garments and items; frequency and quantity limits apply (e.g., up to 3 daytime garments and 2 nighttime per body area with replacement rules and RA modifier for replacements); payment made as lump sum at national Medicare allowed payment amount, beneficiary pays 20% coinsurance after deductible when applicable.
Home infusion and HIT transitional payments: Temporary transitional categories and payment rules apply to home infusion drugs and associated professional G-codes; claims must include associated J-code on same or recent claim or professional claim will recycle/deny per CWF rules.
Billing for P&O and customized items: Providers bill appropriate MACs per setting; specialty licensing/certification codes are required when state law applies. Customized items without specific HCPCS use E1399 and are billed to DME MAC.
Special collection limits and PRA: DME MACs must adhere to PRA limits on collection of information; except during audits/investigations they must not require additional documentation beyond CMN for POV claims, nor require make/model or functional ability documentation on all claims beyond CMN/Section C capture.
Operational notes: MACs provide local instructions and bulletins; suppliers must retain documentation and support claims; claims with CMNs for pre-2023 dates follow prior rules; suppliers must ensure proper modifiers, ABNs, and documentation to avoid denials.