DME vs. HME: Coding, Billing, and Compliance Explained

Definitions

• DME, durable medical equipment. A Medicare and payer category: equipment that withstands repeated use, serves a medical purpose, is not useful to someone who is not sick or injured, and is appropriate for use in the home. It is defined by the item and the coverage policy, not by who supplies it or where.

• HME, home medical equipment. An industry term for the business of providing equipment, supplies and related services to patients where they live. HME providers deliver, set up, train, service, pick up and resupply. Most of what they bill is DME, but the term describes the service model.

• DMEPOS. The full Medicare category: durable medical equipment, prosthetics, orthotics and supplies. Accreditation, supplier standards and the competitive bidding program all use this term.

Where they overlap

Almost entirely. An HME provider bills DME HCPCS codes to the same DME MACs, Medicaid programs and commercial plans as any other supplier, under the same supplier standards and accreditation requirements. A pharmacy, an orthotics shop and a home oxygen company can all be DMEPOS suppliers. The codes, modifiers, documentation rules and claim formats are shared.

The difference shows up in the mix. A DME supplier that sells or ships items may bill mostly purchases with the NU modifier and single dates of service. An HME provider bills rentals, resupply, oxygen contents, repairs and service calls, month after month, for patients it has physically visited.

What changes in coding

• Rental modifiers. HME billing leans on RR with KH, KI and KJ for capped rentals, and on the oxygen-specific rules for 36-month payment and the five-year reasonable useful lifetime. Purchase-heavy DME billing uses NU and UE far more.

• Oxygen and respiratory. Oxygen has its own coding for stationary and portable systems, contents, and the flow-rate and qualifying-test requirements behind them. CPAP and bilevel devices carry compliance and re-evaluation requirements within the first 90 days.

• Repairs, service and replacement. HME providers bill labor and parts for equipment the patient owns, and replacement after the reasonable useful lifetime, each with its own documentation.

• Resupply frequency. Supplies tied to equipment in the home are limited to payer-specific quantities per period, and each shipment needs a documented patient contact.

What changes in billing operations

• Delivery is a clinical event. Setup in the home, patient training and equipment serial numbers are part of the record. Proof of delivery is captured in the field, and the date of service on the claim must match it.

• The account never closes. A rental patient bills every month. A resupply patient ships on a schedule for years. Documentation that expires, coverage that changes and patients who move all have to be tracked continuously, not once.

• Inventory is in the field. Equipment on rent is an asset the provider still owns. Tracking where each serialized unit is, when it comes back and when it is cleaned and redeployed is part of billing correctly.

• Patient contact is a billing requirement. Resupply confirmation and compliance follow-up are not customer service extras. They are the documentation the payer will ask for.

What changes in compliance

Both DME and HME suppliers must meet the Medicare DMEPOS supplier standards, hold accreditation from an approved organization, and carry a surety bond. HME adds the standards that come with service in the home: equipment maintenance and cleaning logs, delivery and setup documentation, patient training records, complaint and incident logs, infection control, emergency preparedness, and for oxygen, hazardous materials handling and home safety assessments.

Audits follow the money. Because HME revenue is rental and resupply, auditors look at continued medical need, compliance documentation for CPAP, resupply contact logs and reasonable useful lifetime. A rental billed one month past the stop date, across a whole patient base, is the kind of finding that becomes a large recoupment.

What this means for software

A system built around single-sale DME will handle HME poorly. It needs a rental engine that knows the month, the modifier and the stop rule; a resupply scheduler that contacts the patient and logs it; mobile delivery that captures proof of delivery and serial numbers in the home; serialized inventory that follows equipment out and back; and accreditation logs that live where the billing does.

BFLOW® has been built for both since 2012, so a provider that sells walkers, rents oxygen and ships CPAP supplies works from one patient record and one worklist. Our HME billing software page covers the home medical equipment side in depth, and our DME software overview covers the platform as a whole.

Frequently asked questions