FAQs Regarding Billing for DME, Orthotics, And Prosthetics

Durable medical equipment is equipment which 1) can withstand repeated use, 2) is primarily and customarily used to serve a medical purpose; 3) generally is not useful to a person in the absence of illness or injury, and 4) is appropriate for use in the home.

It includes items such as hospital beds, wheelchairs, and crutches.

Medical supplies of an expendable nature, such as incontinent pads, catheters, and ace bandages are not considered "durable" within the meaning of the definition.

In order to be covered, the equipment must be necessary and reasonable for the treatment of an illness or injury, or to improve the functioning of a malformed body member. In addition, the equipment must be furnished to a beneficiary for use in the home in order to be covered under the Part B program, whether rented or purchased. For purposes of rental and purchase of DME, a beneficiary's home may be his own dwelling, an apartment, a relative's home, a home for the aged, or some other type of institution. However, inpatient hospitals and skilled nursing facilities do not constitute the patient's home.

A physician’s prescription is required for all DMEPOS and for certain DME the physician must complete a Certificate of Medical Necessity. 

How does Medicare define prosthetics and orthotics, and under what circumstances are they covered?

Medicare defines prosthetic and orthotic devices as “leg, arm, back, and neck braces, and artificial legs, arms, and eyes, including replacements if required because of a change in the beneficiaries

The orthotics benefit regarding braces is limited to leg, arm back and neck braces that are used independently of other medical or non-medical equipment. In order for an orthosis to be covered by Medicare, it must be a rigid or semi-rigid device that is used for the purpose of supporting a weak or deformed body member or restricting or eliminating motion in a diseased or injured part of the body. An orthosis can be either prefabricated or custom fabricated.

Covered orthotics must be reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body member. Payment is prohibited for medical services that are for prevention, palliation, research or experimentation.

Prostheses are covered when furnished incident to physicians' services or on a physician's order. Accessories are also covered when these appliances aide in or are essential to the effective use of the artificial limb.

Congress passed a provision, section 427 of BIPA (Section 1834(h)(1)(F) of the Social Security Act, which provides that no payment shall be made for prosthetics and certain custom fabricated orthotics unless such items are furnished by a "qualified practitioner." The provision defines a "qualified practitioner" to include "a qualified physical therapist or qualified occupational therapist," an ABC certified orthotist/prosthetist, or a BOC certified orthotist/prosthetist. CMS is developing a rule that will further define which items will be covered under this provision and what the terms "qualified physical therapist" and "qualified occupational therapist" mean.

Orthotics claims must have a prescription and/or certificate of medical necessity signed by the physician. Unlike DME, orthotics may be provided in the patient's home and also in other settings, such as outpatient clinics and SNFs.

Are shoe inserts covered?

Typically no. They are covered only in limited circumstances. Therapeutic shoes and inserts and/or modifications to therapeutic shoes are covered in selected patients with diabetes for the prevention or treatment of diabetic foot ulcers. Therapeutic shoes are also covered if they are an integral part of a leg brace.

What Codes are used to bill for orthotics and prosthetics?

CMS established a coding system called the HCFA Common Procedure Coding System (HCPCS) used for billing The L codes are designated for orthotic device. The L codes provide a brief description of the device and describe whether it needs to be molded to a patient model, custom fabricated, custom fitted, or have no fitting specifications. The DME carriers describe custom fitted as when "substantial adjustments are made to a prefabricated item by a specially trained professional to meet the needs and/or unique shape of an individual patient." Custom fabricated means the "brace is made for a specific patient starting with basic materials, including, but not limited to, plastic, metal, leather, or cloth, from his/her individualized measurements and/or pattern." A molded-to-patient model orthosis is a particular type of custom fabricated orthosis in which an impression of the specific body part is made, and the impression is then used to make a positive model. The orthosis is molded on the positive model.

Which codes are used to bill for DME?

A, E, and L codes are the most common codes used to reflect physical therapy practice. The A codes are used for medical supplies, E codes are used for durable medical equipment (canes, walkers), and L codes describe orthotic and prosthetic devices. The APTA and St. Anthony's Publishing offer the Coding and Payment Guide for the Physical Therapist which includes common physical therapy ICD-9-CM, CPT, and HCPCS Level II codes. To order, contact St. Anthony's Publishing at 1-800-632-0123. Complete CPT and HCPCS handbooks are available through the American Medical Association at 1-800-621-8335 or on-line at www.amapress.com

How do I get a DMEPOS supplier number?

You must fill out and submit form 855S from the Centers for Medicare and Medicaid Services. To be assigned a supplier number, you must fill out a CMS-855S form with the appropriate supporting documents to Palmetto GBA. Palmetto GBA is the National Supplier Clearinghouse for the Medicare program and processes all applications to become suppliers. The Clearinghouse can be contacted at (866) 238-9652 or on the Web by clicking here. The application form can be retrieved from either the Forms or Supplier Enrollment folders. An application should be processed within sixty days. (In late 2003, CMS suspended assignment of new supplier provider numbers for an indefinite period of time due to fraudulent and abusive practices in the area of DME billing) The initial enrollment lasts for three years at which point you would have to re-enroll. In addition, all suppliers will receive a site visit from a Medicare Inspector prior to receiving a supplier number. At the time of re-enrolling another CMS 855-S will be filled out and another site visit will be performed.

In addition, the following 21 standards that must be met in order for a DMEPOS supplier number to be issued. These 21 standards are separate and distinct from any other Medicare guidelines or conditions of participation that must be met in the treatment setting.

1. A supplier must be in compliance with all applicable Federal and State licensure and regulatory requirements.

2.  A supplier must provide complete and accurate information on the DMEPOS supplier application. Any changes to this information must be reported to the National Supplier Clearinghouse within 30 days.

3.  An authorized individual (one whose signature is binding) must sign the application for billing privileges.

4.  A supplier must fill orders from its own inventory, or must contract with other companies for the purchase of items necessary to fill the order. A supplier may not contract with any entity that is currently excluded from the Medicare program, any State health care programs, or from any other Federal procurement or non-procurement programs.

5.  A supplier must advise beneficiaries that they may rent or purchase inexpensive or routinely purchased durable medical equipment, and of the purchase option for capped rental equipment.

6.  A supplier must notify beneficiaries of warranty coverage and honor all warranties under applicable State law, and repair or replace free of charge Medicare covered items that are under warranty.

7.  A supplier must maintain a physical facility on an appropriate site.

8.  A supplier must permit CMS (formerly HCFA), or its agents to conduct on-site inspections to ascertain the supplier's compliance with these standards. The supplier location must be accessible to beneficiaries during reasonable business hours, and must maintain a visible sign and posted hours of operation.

9.  A supplier must maintain a primary business telephone listed under the name of the business in a local directory or a toll free number available through directory assistance. The exclusive use of a beeper, answering machine or cell phone is prohibited.

10.  A supplier must have comprehensive liability insurance in the amount of at least $300,000 that covers both the supplier's place of business and all customers and employees of the supplier. If the supplier manufactures its own items, this insurance must also cover product liability and completed operations.

11.  A supplier must agree not to initiate telephone contact with beneficiaries, with a few exceptions allowed. This standard prohibits suppliers from calling beneficiaries in order to solicit new business.

12.  A supplier is responsible for delivery and must instruct beneficiaries on use of Medicare covered items, and maintain proof of delivery.

13.  A supplier must answer questions and respond to complaints of beneficiaries, and maintain documentation of such contacts.

14.  A supplier must maintain and replace at no charge or repair directly, or through a service contract with another company, Medicare-covered items it has rented to beneficiaries.

15.  A supplier must accept returns of substandard (less than full quality for the particular item) or unsuitable items (inappropriate for the beneficiary at the time it was fitted and rented or sold) from beneficiaries.

16.  A supplier must disclose these supplier standards to each beneficiary to whom it supplies a Medicare-covered item.

17.  A supplier must disclose to the government any person having ownership, financial, or control interest in the supplier.

18.  A supplier must not convey or reassign a supplier number; i.e., the supplier may not sell or allow another entity to use its Medicare billing number.

19.  A supplier must have a complaint resolution protocol established to address beneficiary complaints that relate to these standards. A record of these complaints must be maintained at the physical facility.

20.  Complaint records must include: the name, address, telephone number and health insurance claim number of the beneficiary, a summary of the complaint, and any actions taken to resolve it.

21.  A supplier must agree to furnish CMS (formerly HCFA) any information required by the Medicare statute and implementing regulations. 

In order to bill for DME or prosthetics/orthotics services, do I have to obtain a provider number? 

The answer to this question depends on which setting you are describing. 

Physical therapists in private practice: Even if you have previously enrolled in the Medicare program as provider of physical therapy services, a DMEPOS (durable medical equipment, prosthetics, orthotics, and supplies) supplier number is necessary to provide items such as splints, orthotics, and walkers. A physical therapist in private practice is considered by Medicare to be a "supplier." However, he/she is not considered a supplier for the purposes of DMEPOS unless he/she has been assigned a DME-supplier number. To be assigned a supplier number, you must fill out a CMS-855S form with the appropriate supporting documents to Palmetto GBA. Palmetto GBA is the National Supplier Clearinghouse for the Medicare program and processes all applications to become suppliers. The Clearinghouse can be contacted at (866) 238-9652 or on the web at www.palmettogba.com/NationalSupplierClearinghouse the application form can be retrieved from either the Forms or Supplier Enrollment folders. An application should be processed within sixty days. The initial enrollment lasts for three years at which point you would have to re-enroll. In addition, all suppliers will receive a site visit from a Medicare Inspector prior to receiving a supplier number. At the time of re-enrolling another CMS 855-S will be filled out and another site visit will be performed. All claims for DMEPOS should be submitted to the DMERC for the appropriate region.

Rehab Agencies: Claims should be submitted to the FI for prosthetic/orthotic devices and supplies.

CORFs: Claims should be submitted to the FI for prosthetic/orthotic devices and supplies.

Hospitals:

Outpatient hospitals: All DME should be billed on Form HCFA-1500 to the DMERC. A supplier number is required from the National Supplier Clearinghouse as described earlier in this document.

The local fiscal intermediary should be billed for prosthetic and orthotic devices on Form HCFA-1450 and NO supplier number is required. In other words, you may use your provider number and submit claims for reimbursement to your intermediary.

Inpatient Hospitals: DMEPOS furnished to an inpatient for use only outside the hospital are not, in general, covered under the Part A Prospective Payment System as inpatient hospital services. DME will be covered by Medicare for outpatient use only, not for use during the hospital stay. Claims for DME should be submitted to the DMERC. Medicare Part B will cover the reasonable cost basis for durable medical equipment, which it rents or sells to a beneficiary for use in his home if the following three requirements are met:

The equipment meets the definition of durable medical equipment and 

The equipment is necessary and reasonable for the treatment of the patient's illness or injury or to improve the functioning of his malformed body member and 

The equipment is used in the patient's home 

Generally, inpatient hospital payments under Part A include payment for P & O. Payment by the fiscal intermediary is included in the payment to a hospital (and therefore may not be billed separately) if:

1.       The prosthesis is provided to a patient during an inpatient hospital stay prior to the day of discharge; and

2.       The patient uses the prosthesis for medically necessary inpatient treatment or rehabilitation.   

Payment for a prosthesis delivered to a patient in a hospital is eligible for coverage if:

            1) The prosthesis is medically necessary for a patient after discharge from a hospital; and
            2) The prosthesis is provided to the patient within two days prior to discharge to home; and
            3) The prosthesis is not needed for inpatient treatment or rehabilitation, but is left in the room for the patient to take home.

Bill your intermediary for prosthetic and orthotic devices under revenue code 274 along with the appropriate HCPCS code representing the device. When billing for maintenance and servicing of these items, use revenue code 274 along with one or more of the following HCPCS codes: L4205, L4210, L7500, L7510, or L7520.

Skilled nursing facilities:  Most prosthetics and orthotic devices are generally included in the Part A PPS rate; a separate claim for the O & P service would not be sent to the FI.  Payment for prosthesis is included in the payment to a SNF if:

                        1) The prosthesis is provided to a patient during Medicare Part A covered SNF stay prior to the day of discharge; and  

                      2) The patient uses the prosthesis for medically necessary inpatient treatment or rehabilitation.

Separate payment, not included in the PPS, can be made for certain customized prosthetic devices for patients in a Part A SNF stay.  These items may be billed by the SNF to the intermediary.  In addition,  Part B payment for any necessary P & O can be made for SNF patients that have exhausted their Part A benefit.  Payment for a prosthesis delivered to a patient in a SNF is eligible for coverage if:

1) The prosthesis is medically necessary for a patient after discharge from a hospital or Part A covered SNF stay; and
2) The prosthesis is provided to the patient within two days prior to discharge to home; and
3) The prosthesis is not needed for inpatient treatment or rehabilitation, but is left in the room for the patient to take home.

The SNF should bill the intermediary for prosthetic/orthotic devices on Form HCFA-1450 or the electronic equivalent under revenue code 274, along with the appropriate HCPCS code. When billing for maintenance and servicing of these items, use revenue code 274 along with the appropriate HCPCS code. Report under Item 52 "Units of Service" on Form HCFA-1450 the number of items billed to the intermediary for orthotics and prosthetics. There may be prosthetic and orthotic devices, or surgical dressings for which you bill that are not included in the fee schedule. When fee schedule amounts are not available for a particular item, your intermediary, DMERC, or local carrier will establish a fee.

DME is not covered for residents of a SNF. A SNF may qualify as a supplier of outpatient DME by receiving a DMEPOS supplier number from the National Supplier Clearinghouse. The supplier must bill the DME on Form HCFA - l500. If these services are billed separately by an outside supplier, payment will be made directly to the supplier.

Home Health Agency: HHAs bill their Regional Home Health Intermediary (RHHI) for DME on Form HCFA-1450 or if they meet the requirements of a SME supplier, they may bill the DMERC. Prosthetics and orthotics is not a defined service under the home health benefit. Therefore, claims for P & O should be submitted by the HHA to the DMERC. The HHA would require a supplier number when billing the DMERC.

Where do I submit claims for DMEPOS?

The Centers for Medicare & Medicaid Services (CMS) depends on four healthcare carriers to administer the reimbursement of DMEPOS. These four carriers (HealthNow New York, Administar, Palmetto GBA, and Cigna Healthcare) are known as durable medical equipment regional carriers (DMERC) and each represents a specific geographic region of the country.

DMERC A (Healthnow New York, Inc.  www.nycpic.com):  CT, DE, ME, MA, NY, NH, NJ, PA, RI, VT

DMERC B (Administar Federal, Inc  www.astar-federal.com):  DC, IL, IN, MD, MI, MN, OH, VA, WV, WI

DMERC C (Palmetto Government Benefits Administrator  www.palmettogba.com):  AL, AR,CO, FL, GA, KY, LA, MS, NM, NC, OK, SC, TN, TX, Puerto Rico, Virgin Islands

DMERC D (Cigna  www.cignamedicare.com):  AK, AZ, CA, HI, ID, IA, KS, MO, MT, NE, NV, ND, OR, SD, UT, WA, WY, Guam/American, Marianna Islands, Samoa

The fiscal intermediary may be billed for prosthetics and orthotics in the scenarios described earlier in the document.

How are the services reimbursed?

DMERCs establish base fee schedules for all DME, prosthetic/orthotic devices, and supplies except implanted DME and implanted prosthetic devices.

What items are included in the reimbursement for the orthotic under the L codes? 

The Medicare payment for the L codes includes all of the following:

      Evaluation of the patient (with regard to the device/need for the device)

      Measurement and/or fitting, casting if applicable (fabrication and customization)      Materials used to create device

      Fitting of the device

      Cost of base component parts and labor contained in HCPCS base codes

      Delivery

The CPT codes specific to orthotics and prosthetics are the following:

Physical therapists, physicians and other practitioners may currently bill their services under Medicare using CPT codes, and they may also bill HCPCs level II codes, such as the L codes. If the service performed by the PT is described by the L code, the PT should not bill for that service using both the L code and the CPT code. The use of both codes for the same service would be considered duplicate billing. The “L” codes do not include all of the services within the physical therapists scope of practice as recognized by Medicare. There are circumstances in which he physical therapist, physician or other practitioner provides distinct and separate services to a patient; some of which may or may not be described or reimbursed under the L codes. In such cases, the provider should utilize the CPT code for reimbursement of those services that are not described by or reimbursed under the L code. 

What items are included in the reimbursement for the prostheses? 

Evaluation, fitting of the prosthesis, cost of base component parts and labor contained in HCPCS base codes, repairs due to normal wear or tear within 90 days of delivery, adjustments of the prosthesis or the prosthetic component made when fitting the prosthesis or component and for 90 days from the date of delivery when the adjustments are not necessitated by changes in the residual limb or the patient’s functional abilities. 

When do I need to obtain a certificate of medical necessity?

Certificates of medical necessity (CMN) are required for particular items determined by the DMERC.  A comprehensive list of items requiring a CMN can be obtained from each DMERC, but typically the following items are included:  hospital beds, support surfaces, motorized wheelchairs, manual wheelchairs, CPAP devices, Lymphedema pumps, Osteogenesis stimulators, TENS units, seat lift mechanisms, and power operated vehicles. 

How should a TENS unit be billed?

For TENS, a payment of 10 percent of the purchase price, i.e., 10 percent of the purchase fee schedule amount for the item less coinsurance and any applicable deductible is allowed for the first 2 months of usage for a 2 month trial period prior to purchase. This permits an attending physician time to determine whether the purchase of a TENS is medically appropriate. If so, the full purchase price is paid without an adjustment for the two monthly rental payments. Bill your DMERC for TENS for the 2 month rental period and for the actual purchase. The HCPCS codes for TENS are E0720 and E0730. The HCPCS codes for TENS supplies are A4557, A4595, and E0731. 

How many different categories of durable medical equipment exist?

DMEPOS is classified into six different categories which determine if rental or purchase is more appropriate

1.  Inexpensive or Other Routinely Purchased- under $150 (Rental or Purchase)

            Commonly utilized by physical therapists 

            EX.  Canes, walkers, crutches, commode chairs

2.  Items Requiring Frequent and Substantial Servicing (Rental only)

            EX.  Ventilators, aspirators, CPM machines 

3.  Genl Prosthetic and Orthotic Devices & Supplies, Misc Supplies & Other Items (Purchase only)

            EX.  Lumbar-sacral orthosis, prostheses

4.  Capped Rental Items (Rental or Purchase)

          Items more than $150 and not placed in another category

EX.  Hospital beds, wheelchairs, alternating pressure pads

Electric wheelchairs (rent or purchase)-  Special rules apply

5.  Oxygen (rental only) and Oxygen Equipment

6.  Customized Equipment (incl. Customized Prosthetic and Orthotic devices- Purchase only)

EX.  Custom fabricated devices, modification of an item with a HCPCS code beyond the terminology of the code accurately describing it

          Individually considered one time purchases

Paid out in a lump-sum amount 

Do I have to inform Medicare of the patient’s choice to rent or purchase DME?

You must report one of the following HCPCS modifiers to notify your carrier of the beneficiary's decision resulting from the rent/purchase options for DME. Notify your carrier of the beneficiary's decision on the first claim for an electric wheelchair using modifiers BR or BP. During the 11th or 12th month for all capped rental items, use any of the modifiers listed above depending on when services were received. 

            o    BR - The beneficiary has been informed of the purchase and rental options and has elected to rent the item; 

            o    BP - The beneficiary has been informed of the purchase and rental options and has elected to purchase the item; or 

            o    BU - The beneficiary has been informed of the purchase and rental options and after 30 days has not informed the supplier of his/her decision.