Orthopedic Durable Medical Equipment

Orthopedic Durable Medical Equipment Purchasing

We encourage all of our clients to make sure their coding is done off of a dictated surgical report by a certified coder who understands orthopedics. We have found that relying on what the doctor has recorded often does not fully account for everything he or she did in the operation room. By looking at the dictator reports we have been able to enhance what we’re capable of billing on behalf of our clients.

Durable Medical Equipment (DME) is always a challenge. Based off of our experiences, if you effectively manage DME it will be profitable and add to the profitability of the practice.

I have always recommended clients track the DME revenue and compare it to the direct expense paid to the vendor for the supplies.

When we got involved about four or five years ago helping clients with their inventory and group purchasing, one of our directors started to look at how much DME we ordered and actually compared that with what we billed for. What we’ve realized on average is we were missing approximately one fourth, 25 to 30% of what we were purchasing.

We looked further and realized most offices do not do a good job of managing their inventory and controlling the dispensing of DME. For a large client, we worked with the administration and helped them set up a DME store where the dispensing of the inventory was centralized and controlled. In the first year of operations, the profitability for DME increased over $300,000 from the previous year. The second year in operation as a result of increased volume, it was just under $400,000 and it has continued at that pace the prior two years.

It’s an area that we encourage you to look into.

On the billing side for DME , if you are not producing and having an ABN available for the patients when they walk in the door, and having them sign that as part of the registration packet, you essentially are going to give that product away for free. If it is not signed and you go ahead and dispense a DME product to that patient, and the insurance denies for whatever the reason, you cannot go back and bill that patient for that item nor can you go back retroactively and get an ABN signed by the patient.

  • If you’re not doing it today, you should make sure that an ABN is part of your overall registration packet so that patients are signing that and you’ve got it in hand.
  • Another item that you need to make sure that you have is a CMN or a certified of medical necessity.
  • You need to have a CMN, which is typically designated on the outbound side on the claim with the modifier of a KX or a CG. You cannot just put that modifier on and not have the CMN. If you’re ever audited and been asked for the certificate of medical necessity and don’t have it, then you have a whole new set of problems.

An LMN or letter of medical necessity is simply is a letter coming from the doctor indicating that DME is needed in support of the overall health for the patient. LMNs are at times necessary and needed as supplemental documentation from the insurance companies.

ABN, absolutely necessary, CMN, certificate of medical need, is needed for largely the higher dollar DME.