As any business owner or supplier of medical practices will know, it is like a nightmare. As a medical practice or supplier, you are already familiar with this feeling. You submit a claim, wait weeks and then it comes back denied. No payment and no explanation that makes any sense and now you find yourself in the position of having to redo paperwork, while simultaneously losing cash flow.
You’re not alone. Denying claims is one of the most common issues in healthcare billing that can be one of the most frustrating. Particularly for durable medical equipment and supplies. The good news? As long as you know what the insurance companies are looking for, most denials can be prevented.
We’ll explain step-by-step how to bill insurance for medical supplies correctly, why claims are denied in the first place, and how hiring a dedicated DME billing service in Naples can save you time, money, and a lot of headaches.
Why Medical Supply Claims Get Denied So Often
Let’s discuss what is responsible for this issue before we solve it. Insurers do not make arbitrary claims denials, it has a definite, identifiable reason.
Here are some of the typical reasons for medical supply claims being denied:
Here are some of the most common reasons for a rejection:
- Missing or incorrect HCPCS codes Using the wrong HCPCS Level II code (or leaving out a required modifier) is one of the top reasons DME claims bounce back.
- Failure to document Medical Necessary Use of equipment that is not medically necessary is a problem with insurers. The claim is flagged if it does not have a clinical justification.
- Missing prior authorization Many payers, including Medicare and Medicaid, require Prior Authorization (PA) before certain equipment is even dispensed.
- A claim for medical supplies billing that is rejected because there is a missing field on the CMS 1500 form is an automatic rejection.
- If your DMEPOS (Durable Medical Equipment, Prosthetics, Orthotics, and Supplies) accreditation is not up-to-date or is not properly tied to the claim, you can rest assured that it will be denied.
- Mismatched ICD-10 diagnosis codes the diagnosis code has to logically support the equipment being billed. However, if they don’t match, the payor will not approve it.
Sound familiar? If you’ve done two or three of these at least, you will appreciate the time consumed pursuing corrections.
How to Bill Insurance for Medical Supplies the Right Way
Let’s now discuss the actual process, the steps that take a clean claim away from the denial pile.
Step 1: Verify Insurance Coverage Before You Bill
There is a wide range in insurance coverage for medical devices. Before you think about submitting anything, be sure to check first:
- Does the plan cover the specific item?
- There is no deductible or copay.
- Whether Prior Authorization DME insurance rules apply to that item
One of the quickest ways to get into billing a service that wasn’t going to be reimbursed.
Step 2: Verify Coverage Preauthorization Requirements
For many payers, prior authorization for DME is not a nice-to-have, it’s a must-have. This is particularly the case for more expensive items such as power wheelchairs, oxygen equipment, some orthotics etc. Do not give authorization after the equipment has departed – it should be done before it leaves.
Step 3: Use the Correct HCPCS and ICD-10 Codes
This is where many practices go astray. Medical supply HCPCS codes require exact match, and must be reported with an ICD-10 diagnosis code that is well documented to be medically necessary. Codes that are unclear or dated will come across as a red flag to the reviewers.
Step 4: Document Medical Necessity in detail
Physician’s notes, a definite diagnosis, and a physician’s written explanation of the medical necessity for the equipment (not just that this will help) should be included in documentation to the insurance. Payers want specifics.
Step 5: Fill Out the CMS-1500 Form Completely and Accurately
The main instrument of DME claim insurance billing is the claim form CMS-1500. From provider NPI numbers to place-of-service codes, the details of each field are important. One word misspelled can cause the entire claim to be sent back.
Submit and track the claim
After it has been submitted, don’t simply stand idle. Track it. Be aware of the turnaround time for your payer and follow up if it exceeds.
Medicare and Medicaid: Special Rules to Know
Government payers have their quirks, and if you don’t get them just right, you run the risk of denials.
Medicare Part B DME Coverage
The billing of durable medical equipment (DME) items is generally included in the Medicare Part B DME coverage, then the deductible is subtracted and Medicare pays 80% of the allowed charge. The equipment needs to be prescribed by an enrolled Medicare provider and dispensed by an approved supplier.
Medicaid DME Billing Guidelines
This can be one of the most challenging aspects for suppliers who bill Medicaid in multiple states. This is one area where Medicaid DME billing guidelines may differ from state to state. Other states require supplemental documentation or even a new PA process in its entirety.
When a claim is denied what to do next?
Denials do occur with a clean process. Here are the steps you need to take.
Read the Explanation of Benefits Carefully
The Explanation of Benefits (EOB) will inform you why the claim was denied. Don’t skip this step it’s your roadmap for the appeal.
How to Resubmit Denied Medical Claims
Knowing the reason, then make a specific correction. It may be a coding error, missing documentation, or an authorization problem, but re-submitting without fixing the problem just means another denial.
How to Appeal an Insurance Claim Denial for Medical Equipment
If a resubmission isn’t accepted, you have the right to formally appeal. This typically requires a signed request, documentation and, in some instances, a review of the request by the medical director of the peer who is paying for the service.
Avoiding Medical Supply Billing Errors Moving Forward
To keep future claims clean, watch out for:
- Data was billed prior to being authorized.
- Properly using outdated HCPCS codes
- Failure to have completed supplier accreditation records
- Errors in documentation from physician’s notes to claim
Not checking the eligibility before giving out the equipment.
Why Outsourcing to a DME Billing Company in Naples Makes Sense
The truth is that DME billing insurance claims are complex and there are frequent changes in the rules. Juggling all of the codes, forms and payer policies consumes your staff resources by diverting them from patient care.
That is why practices and suppliers in Southwest Florida rely on the medical equipment billing service that is dedicated to their needs in Naples. A specialized DME billing service in Naples is always up to date on the requirements and mandates of each individual payer, and will be able to identify if there are any errors whatsoever that they may want to appeal before the claim is forwarded to the payer for payment.
This is the very issue we solve every day at QHS Health denials and faster reimbursement, and getting the billing burden off your team’s shoulders.
Frequently Asked Questions
- What’s the most common reason DME claims get denied?
The top two are missing or wrong HCPCS codes and lack of medical necessity documentation.
- Are medical supplies always to be authorized prior to use?
It varies depending on the item, and the person paying. PA is almost always necessary for higher-cost equipment but at times is not necessary for basic supplies.
- What is the deadline to appeal an invalidated claim?
This is dependent on the payer, but most have a grace period of 60-180 days after the denial date. Please refer to the EOB for the correct deadline.
- Can Medicaid DME billing rules differ by state?
Yes. Documentation and authorization requirements vary from state to state because Medicaid is state administered.
- Does outsourcing DME billing make sense for a small practice?
Yes, for a majority of the small and mid-size practices, the savings from reduced denials and saved staff time is usually worth the investment in outsourcing.
Looking to Avoid Denied Claims?
Not only are denied claims an inconvenience, they’re lost revenue and lost staff time. If you’re already frustrated with the amount of paperwork you’re chasing down that you know is rejected, it may be time to hire a team that does DME billing insurance claims daily.
Contact us today to get a no-cost audit of your billing process and find out exactly how it can be streamlined before your next claim is denied!
