New HCPCS Code (K0900) for Custom DME

According to Joint DME MAC A, a new HCPCS code, K0900, has been created for use with custom fabricated durable medical equipment other than wheelchairs. 42 CFR §414.224(a) describes the requirements for custom fabricated, stating in order to be considered a customized DME item, a covered item (including a wheelchair) must be:

  • Uniquely constructed or substantially modified for a specific beneficiary according to a physician’s description and orders.
  • So different from another item used for the same purpose that the two items cannot be grouped together for pricing purposes.

Supplier and manufacturers must remember that the definition of custom fabricated does not include:

  • Items that are measured, assembled, fitted, or adapted in consideration of a patient’s body size, weight, disability, period of need, or intended use (i.e., custom fitted items).
  • Items that have been assembled by a supplier, or ordered from a manufacturer, who makes available customized features, modification or components intended for an individual patient’s use in accordance with instructions from the patient’s physician.
  • These items are not uniquely constructed or substantially modified and can be grouped with other items for pricing purposes. The use of customized options or accessories or custom fitting of certain parts does not result in equipment being considered as customized.

§414.224(b) further provides that the lump-sum payment made for purchase of the customized item is based on the Medicare contractor’s individual consideration and judgment of a reasonable payment amount for each item. The contractor’s individual consideration takes into account:

  • Written documentation on the item’s costs (including design, fabrication, and assembly costs), including at least the costs of labor (to the extent that they are reasonable) of those actually performing the customization;
  • The types of materials (to the extent that they are reasonable) used in custom fabricating or substantially modifying an item.

In order to determine a reimbursement amount, the supplier must provide a detailed description of each phase of the construction process, materials used, the labor skills needed to fabricate or modify the item, etc. (not all-inclusive). When submitting claims for items using K0900 supplier must have in their files:

  • A detailed written order for the item
  • Information from the medical record justifying that the applicable medical necessity requirements from the relevant policy are met
  • Information from the medical record showing the ordering physician’s description of the item to be provided
  • Information from the supplier providing a detailed description of the item provided including a cost breakdown (for time and each material used in fabrication of the item); construction and/or assembly description; and an explanation about why the item should be considered as custom fabricated.

This information must be available upon request. Pricing differentials between the fee for an established HCPCS code and the suppliers cost or desired charge for any item are not a justification for the use of K0900 or any other NOC (not-otherwise-classified) code such as E1399 [DURABLE MEDICAL EQUIPMENT, MISCELLANEOUS]. Correct coding rules require the use of the most specific HCPCS for any item. For questions about correct coding, contact the PDAC Contact Center at (877) 735-1326.

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