A Simplified Explanation on How to Bill DME Items

Durable Medical Equipment (DME) billing is a complex and lengthy process requiring in-depth knowledge of the various types of HCPCS Level II codes. Understanding the billing steps will help you set up an effective billing process to ensure clean claims submission and receive maximum reimbursement. 

This article will explain how to bill DME items, HCPCS codes and modifiers (and their abbreviations), and how a four-step billing and coding process works. 

HCPCS Codes and Modifier(s)

During the DME billing process, billers and coders will use HCPCS Level II codes and modifiers to indicate and describe DME items when billing insurance companies. 

HCPCS Level II Codes

These codes will begin with a letter, and letters and numbers follow. In total, the code is five digits long. For example, the HCPCS code for a CPAP machine is E0601.

HCPCS codes correspond to a specific product/s that serves a medical purpose. For more information about how HCPCS codes are assigned, consult the Pricing, Data Analysis and Coding Contractor – PDAC (dmepdac.com).


Unlike the HCPCS code, which explains what item a patient needs, the modifiers provide more detailed information about how the product will be used and for how long.

The modifiers will say if the item is:

  • New, used or rented 
  • Inexpensive or routinely purchased 
  • Requires frequent and substantial servicing 
  • A capped rental 
  • Will need to indicate the rental period 
  • Maintenance and serving fee 
  • A replacement or repair 
  • For the right or left part of the body

Additionally, the modifier will indicate if specific medical records are on file to support the patient’s medical necessity for an item. 

Here is a list of commonly used modifier abbreviations. 

  • RR – Rental 
  • NU – Purchase of new equipment 
  • UE – Purchase of used equipment
  • KH – Initial claim, first-month rental 
  • KI – Second and third capped rental months 
  • KJ – Fourth to 13th capped rental months 
  • MS – Maintenance and servicing 
  • RA – Replacement item due to loss, damage, or theft (for first-month rentals)
  • RB – Replacement of a part of an item for a repair 
  • KX – Documentation to support medical necessity  
  • RT – Right 
  • LT – Left 

HCPCS Code and Modifiers Example 

An example of an HCPCS and modifier for a capped rental of a CPAP machine for the first month and medical documentation is on file would look like: E0601, RR, KH, KX

4 Step Example of the Billing and Coding Process

Here is a simplified overview of a four-step process for DME billers and coders during the billing process.  

Step 1 – Medical Documentation 

The patient’s doctor finds a medical reason the patient needs DME. The reasons are included in the patient’s file and included for billing and claims submission. 

Step 2 – DME Supplier 

Once the doctor prescribes the specific DME items needed, the patent goes to a DME supplier to fulfill their prescription.  

Once there, the Intake specialist will need to:

  • Locate the DME prescription.
  • Obtain the patent’s insurance and billing information.
  • Determine if pre-authorization is required before filling the order.
  • Wait for the insurance carrier to review the paperwork and approve the order.
  • After approval and completing any additional paperwork, the supplier will contact the patient for delivery.

Step 3 – Billing the Claim 

The final step is billing the claim and assigning the necessary HCPCS codes and modifier(s). To ensure a “clean claim submission,” every single DME item must be coded. Once coded and prepared on a claim form or in electronic format, the claim is sent to the payer. In some cases, additional documentation may be required to accompany the claim in order to process for payment.

Step 4 – Claim Follow Up 

The DME biller can follow up on the submitted claims as needed to ensure timely payments. 

Learn if DME Billing Outsourcing is Right for You 

Creating and maintaining an efficient billing process from intake to claims submission will positively ripple effect throughout the company. Learn how Medbill can help with your DME billing needs and increase your collection rate. Contact us!