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Published 11/1/2017
Sarah Wiskerchen, MBA, CPC

Dispensing DME in Orthopaedics for Medicare

Answers to key coding questions
Orthopaedic practices often provide patients with supplies, such as casts and canes, integral to patients' treatment plans.

This article covers the essentials of coding and claims submission. Understanding the definitions and rules for DME can help practices make more effective decisions on which supplies to offer patients as well as help them ensure that items are both accurately reported and appropriately paid.

The article also focuses on Medicare policy, which applies nationally.

Q. What exactly is DME?

DME—or durable medical equipment—is often used to refer to a range of supplies and assistive devices that are dispensed in a healthcare setting. However, not all of these items are classified as DME within the coding system used for billing.

According to the Centers for Medicare & Medicaid Services (CMS), DME is "medically necessary durable medical equipment, prosthetics, orthotics, and disposable medical supplies (DMEPOS), which includes oxygen and related supplies, parenteral and enteral nutrition, and medical foods." DME is primarily used to serve a medical purpose, generally is not useful to a person in the absence of illness or injury, and is appropriate for use in a patient's home. In some cases, DME items are rented, but in orthopaedics they are usually purchased.

Q. What supply items might be used in an orthopaedic office? How does a coder know which codes to use?

The American Medical Association's published current procedure terminology (CPT) codes are used for professional coding. These codes are also known as Level I of the Healthcare Common Procedure Coding System (HCPCS). DME items are categorized as Level II HCPCS codes and are identifiable by their alpha-numeric structure. Just like CPT codes, Level II HCPCS codes are updated annually, published in book form, and available in various commercial coding software products.

The Level II HCPCS codes most commonly used in orthopaedics fall within multiple categories, including drugs, cast supplies, orthotics, and DME.

Under HCPCS II terminology, the DME category begins with orthopaedic-applicable items such as canes, crutches, and walkers, but also includes products and devices used in other clinical specialties, such as continuous positive airway pressure (CPAP) devices, pacemakers, and electrical stimulators, such as bone healing osteogenesis stimulators and transcutaneous electrical joint stimulation units used in pain management.

HCPCS DME item codes usually begin with the letter E, although some begin with the letter K.

Orthopaedic "braces" are under the HCPCS heading Orthotics, and codes begin with the letter L. These items are classified as prefabricated, custom-fitted and custom-fabricated; numerous codes are available.
According to the Medicare Claims Processing Manual, "a brace includes rigid or semi-rigid devices that are 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."

As such, supplies that are made from materials without rigid plastic or metal are not considered orthotics, and are not covered by Medicare.

Q. Why are claims for supply items dispensed in the office denied when they're submitted to Medicare Part B?

The Medicare Part B Administrative Carriers (MACs) adjudicate claims for professional services and a limited set of orthopaedic supplies. Orthotic supplies and true DME claims for Medicare beneficiaries must be submitted to a separate DME MAC. Depending on location, a group's or provider's DME MAC may be different than its Part B MAC. Physicians, physician assistants, nurse practitioners, occupational and physical therapists, orthotists and prosthetists must formally enroll with the assigned DME MAC for their location(s).

Q. Which supply items need to be reported to the DME MAC instead of Part B?

Each year CMS publishes a "Jurisdiction List" that outlines which HCPCS codes can be reported to the Part B MAC (such as injectable drugs and plaster or fiberglass cast materials), and which must be reported to the DME MAC (such as orthotics, crutches, canes, walkers, or therapeutic shoes). The Jurisdiction List can be downloaded from the DME MAC's website.

Q. Does the practice have to go through a competitive bidding process to bill Medicare for orthotics and DME?

No. A key exception to the competitive bidding program allows physicians and specific treating practitioners who are enrolled as DME MAC suppliers to dispense certain competitively bid items to their own patients without being part of the competitive bidding program.

Q. If the practice is exempt from the bidding program, is it still subject to the DMEPOS supplier accreditation requirement?

No, the accreditation requirement affects only those DMEPOS suppliers that are not exempt from the bidding process.

Q. Where can the HCPCS code for a supply item purchased by the practice for patient dispensing be found?

Noridian Healthcare Solutions LLC is the pricing, data analysis, and coding (PDAC) contractor for the DMEPOS program. They also provide coding guidance for manufacturers and suppliers on the proper use of the HCPCS system and manage the fee schedule data files.

Start by visiting www.dmepdac.com and entering the name of a manufacturer, model number, or product name. This should enable a practice to determine whether an HCPCS code has been correlated with the product. For example, a search for "air walker" will yield numerous results for items assigned HCPCS codes L4360 or L4361, varying by manufacturer and model number. Once the HCPCS code is known, the user can search for the state-specific allowable rate.

Q. Should a splint application code or an orthotic management code be used when an L-code item is dispensed?

The orthotic HCPCS codes that begin with the letter L have been valued to include evaluation and fitting, so it would not be appropriate to report a separate splint application code from the 20000 series of CPT.

CPT code 97760 is used to report orthotic training and management when performed under a therapy plan of care and billed by a physical or occupational therapist. Because the L code already includes the evaluation and fitting of the orthotic, 97760 would only be reportable for the training time that is required for custom-fabricated or custom-fitted items when the training is performed by a therapist; this could include wearing instructions, precautions, and orthosis care.

Q. Should patients sign an Advance Beneficiary Notice (ABN) when they receive an orthotic or DME item from the practice?

An ABN form should be used in the following situations:

  • There is concern that a service or supply may not be medically necessary.
  • The service or supply is being ordered at a frequency that is not covered by Medicare.
  • The service or supply is considered experimental or investigational.

If these factors are not present, it would not be appropriate to execute an ABN. An ABN should not be executed for items that are statutorily excluded from Medicare coverage.

Sarah Wiskerchen, MBA, CPC, is a senior consultant with KarenZupko & Associates, Inc. Information in this article has been reviewed by the members of the AAOS Coding, Coverage, and Reimbursement Committee.

Editor's Note: In this first of two articles, the author answers key questions asked by physicians, managers, and billing staff about durable medical equipment (DME) in a physician practice setting. The conclusion will be published in the December issue.


  1. Medicare Claims Processing Manual Chapter 20 - Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c20.pdf
  2. Medicare Learning Network The Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program, April 2016 https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/DME_Physicians_Other_Pract_Factsheet_ICN900926.pdf
  3. MLN Fact Sheet DMEPOS Accreditation, June 2017 https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/downloads/DMEPOS_Basics_FactSheet_ICN905710.pdf