DME HCPCS Codes, Modifiers and Billing Mistakes

0:00Introduction

In the name of Allah, the Most Gracious, the Most Merciful. Assalamu alaikum wa rahmatullahi wa barakatuhu. Welcome, everyone. We are continuing the course that we have been running. And today our topic is DME products in HCPCS codes. And this is a very, very important chapter. In this course, in this session, we will learn many new things. And in fact, every single thing is very important, because if any one thing is taken out from the middle, or you don't have its full and actual deep knowledge, then understand that the chain will break in the middle in healthcare and in revenue cycle management.

And besides that, if you talk about the healthcare industry in the United States, it is like a chain. If you are not a jack of everything, it won't work. Being an expert in one thing is necessary, but being a jack of everything is also very necessary, so that you know everything. I mean, your basics should be strong. Like last time, Ansar is with us again. So Ansar, assalamu alaikum, how are you, how are things? Wa alaikum assalam. Alhamdulillah, how are you? I'm fine too. So Ansar, shall we start then? Yes, yes, okay, okay, let's start.

1:30What HCPCS codes are and why they exist

Okay, so first let's talk about HCPCS codes. Its full form is Healthcare Common Procedure Coding System. Okay, basically these codes came after the CPT codes. Earlier there were no HCPCS codes, there were only CPT codes. But then when Medicare felt that when patients have to be given tangible services outside the doctor's office, and we don't have codes for them, so then they created the whole HCPCS code system, and the HCPCS code system was created, and after that the system went live. So basically, now let's try to understand that the payer's system is basically, understand it like a language barrier.

It cannot understand any kind of context. It cannot understand any context, it cannot understand a standard wheelchair. That is why, for the payer's system to understand, it is necessary that everything is in it in the form of codes. This means that if it is a product, the code for the product is used. If there is a modifier, then there is a code for the modifier. If there is a diagnosis, then it is in a code. If there is a prognosis, then it is in a code.

Whatever things the system needs and the system is receiving and the system is processing, they are in the form of codes. Just as we saw in the earlier classes too, the taxonomy has a taxonomy number, a taxonomy code. In the same way, your Provider Identification Number is a code, your tax ID is a code. So all these codes are kept so that the system can understand them. And in HCPCS, the product categories are different from CPT codes. This is how it is. The full form of CPT is Common Procedure Terminology.

Basically they are used in inpatient and doctor's offices. They are also used in outpatient, but those are mostly procedures. Where tangible supplies come in, where products come in, there these HCPCS codes come in. Okay, these CPCS codes are called HCPCS codes. So the system basically cannot understand a description. What the system understands, what the system understands is the code. So that is why these codes are necessary. Okay, Usman bhai, one thing. One thing to correct: the full form of CPT is Current Procedure Terminology.

4:21HCPCS Level I (CPT) vs Level II

Okay, so what did I say? Which one? Okay, the full form of CPT, and the full form of CPT is Current Procedure Terminology. Okay, the CPT that I told you all, its full form is Common Procedure Terminology. Okay, so now let's move ahead. Okay, let's come to the next slide. Okay, so basically there are two levels of HCPCS codes. As I told you earlier as well, first there were CPT codes and after that the product codes, which were added later, in the nineteen eighties. So basically the Level II codes in HCPCS have one letter at the beginning, with which it identifies which category the product is in, and after that there are four numbers which tell you exactly which product it is.

Inside it there are classifications. So from this we learn about the main product. Okay, I mean, in US healthcare, what happens is that whenever a product is manufactured, there is a lab, which we will also read about later, that lab we will discuss in these same slides, in this same session. That lab basically identifies, and it looks at which HCPCS category this code will go into and which number will be assigned to it. Okay? So if any product is newly manufactured, it is given an HCPCS code.

If it does not have an HCPCS code, it cannot enter any national program, because if it enters a national program, then obviously the money comes from the federal government. If the money comes from the federal government, then their billing system is just one, and the billing system only understands codes. So that is why product codes are necessary and procedure codes are also necessary. Okay? So we have understood this, now let's move ahead. Okay, this is an anatomy of a code, in which the first letter tells you about the category and the last four letters, the last four digits, tell you about the exact item.

6:37How a HCPCS code is built: the first-letter map

Five examples are given in it, in which E one three nine zero. Let me tell you one more thing: wherever an E code is used, an E code is used for durable products, meaning those that are used again and again, that have durability. What do you call it in Urdu? What would we say in Urdu for durable? E codes are mostly used I mean, they are approximately used for durable products, but not all durable products come under E codes either. There are some exceptions, which I will tell you about too.

Okay, so now an oxygen concentrator is a durable product. Okay, it is not a supply, it is not an accessory, it is not basically some refill, so this product can be used again and again, so that is why it is in the E category. Now this must be coming to your mind, that why is a wheelchair in the K category? A wheelchair is also a durable product. So I will tell you about the wheelchair later on as well, why it is in the K category and why it is not yet in the durable products category.

Now the second example is CPAP. Now you can see that CPAP also is in one category, E zero six zero one is its code. Next to it, the blue-colored strap you can see has the code A. Now you must always remember that A is for supplies. This code is for accessories, for supplies. I mean, if there are supplies of any code, for instance, these are CGM supplies, then they will fall in an A code. In the same way, the supplies of CPAP also fall in an A code.

Okay? In the same way, if there are supplies of any product, if there are BGM supplies, then they will fall in an A code. Okay, whatever refills there are and whatever accessories there are, whatever supplies there are, for them there is an A code. Okay, the code of the manual wheelchair, which is K triple zero one, comes in the K code for this reason. The reason is that K codes are temporary codes. I mean, when any product comes into the billing program, comes into the lab, then first of all it is quickly given a temporary code so that billing can continue, billing keeps running, and then identifying it and parking it in a code is a fairly long procedure.

So that it does not have to wait, it is given a K code so that it stays parked in one place, and once its code comes, then the code gets assigned to it. Just as you all would have seen earlier, those of you who understand a little bit of CGM billing, you will remember that in 2022 the CGM code was also in a K code, but later its receiver was put in an E code and its supplies were put in an A code, which is how it was done.

So the reason for that was also the same. When CGM was approved for billing in the Medicare program, it was immediately given a K code. But now, wheelchair, obviously the question must be coming to your mind that why the wheelchair has not yet come into durable products. The reason is that, first of all, there were a lot of wheelchair codes coming in, totally different, different types of wheelchairs coming in, and different wheelchairs coming in, so this K code became famous by the name of the wheelchair, and now all the wheelchairs fall under it.

But the K code is mainly for parking temporary products, and all the orthotics come all the orthotics come under L codes. They fall under L codes. And I also told you earlier about the difference between orthotics and prosthetics, if you remember. What is the difference between an orthotic and a prosthetic? And a prosthetic is one that is attached to some part inside your body, just like this back brace, L 650, this is the one that comes over your back to support your back, but if a patient's leg has been cut off and an artificial leg has been fitted, then it will be called a prosthetic, okay, because it is attached from inside your body.

So whatever goes inside, that is why prosthetic devices and devices are called those that go internally and go inside your organs, and prosthetic devices always stay outside your body. Okay, this is one difference you have to remember. So now let's move ahead. I told you the first slide. I told you the first slide that durable medical equipment is all in E codes, and supplies and accessories are in A codes. And besides that, temporary DMEPOS codes fall under K codes, and the wheelchair is there for this reason, because a lot of wheelchairs came in, and this K code became famous as the wheelchair code like that, so all wheelchairs are in it too, but a hospital bed you will always find under this code, okay?

I told you the difference between orthotic and prosthetic, and I told you that the orthotics and prosthetics codes will always start with an L code, okay? And enteral and parenteral nutrition, the feeding pumps and formulas, fall in the B category. I mean there will be one letter, B, and then numbers will come after it. And the state codes, the state Medicaid codes, understand that they always start with T. And since incontinence supplies are covered by Medicaid, the category where incontinence supplies are placed is the T category.

So basically, even if you are not a coder, but you are within the structure of DMEPOS and you understand DMEPOS, you should understand these codes. You should know that whenever any K code comes to your mind, comes in front of you, you understand right away that this code would be a wheelchair's, or this is some temporary code, okay?

14:00Respiratory: oxygen, CPAP and nebulizers

Now, Ansar, let's move ahead. Okay. Now first let's talk about respiratory products, which include oxygen supplies and sleep therapy devices, and resupply devices, and other things besides that. First, in oxygen, look, the concentrator, as I told you, the concentrator is a durable product, so it is in the E category, and in the same way the portable oxygen concentrator is also in the E category. Besides that, CPAP and BiPAP are both devices, and they are also in the E category. In the same way, all its supplies, the mask, the tubing, the filters, these are all supplies that are issued to the patient on a recurring basis, so these are all in A codes, okay?

And along with that, if you talk about the nebulizer and the ventilator, these are also in the E code category, and I have already told you the reason. Okay, and these devices are covered by Medicare. Okay, category 2, mobility equipment, mobility equipment.

15:18Mobility: manual and power wheelchairs

I told you earlier that manual wheelchairs start with K, their code starts with K, and there is a separate code for lightweight, a separate code for a power wheelchair, a separate code for a standard wheelchair, and a separate code for high-strength lightweight. The code for a power wheelchair is separate, you can see it on the screen too. It is K A A 2 3, and the walking aids, which include walkers and canes and crutches, have E codes. That is why they are in supplies, but above, look at wheelchairs and look at power wheelchairs, they are in K codes.

Okay, let me tell you one thing about mobility equipment. In mobility equipment, power wheelchairs are a highly audited product. The reason is that when there are a lot of schemes in a product and suppliers do not take care of documentation, then that product, because of being high-tech, also becomes highly auditable. The reimbursement for a power wheelchair is high, it can be thousands of dollars, say it starts from two thousand dollars, and then goes well above that, so this is a high-tech product. So because of that, first of all, this is also a high-audit product, and its medical necessity is also different for every wheelchair.

Now these HCPCS codes, we will understand that this slide I have just opened in front of you, that a code is also connected to the LCD and NCD, meaning it is connected to coverage.

17:09Coverage rules: LCD, NCD and prior authorization

Second, it is connected to the payment fee schedule, meaning the fee schedule of every code is different for Medicare, okay? And in the same way, for every code, to be eligible so that you can bill that code and get reimbursement, its documentation is also different, okay? The coverage criteria of every code is also different. I mean, when I told you the difference between Local Coverage Determination and National Coverage Determination, that local coverage means, national means that the overall payer coverage is determined, and local coverage means that if, state-wise or region-wise, in that same product there is some other policy, some additional policy, which is not in the NCD, then you have to look at that too.

So every code basically has its own LCD and NCD, its own fee schedule. If a patient needs a wheelchair, and he wants to get a power wheelchair, then he can get a power wheelchair whenever he wants it out of pocket and wants to pay from his own pocket, then there is no problem, but if he wants that insurance will pay on his behalf, so in this case what will happen is that the insurance guidelines will be checked for every HCPCS code. Now if for this HCPCS code of the wheelchair, the patient's medical necessity is not being met with respect to this code, then this code claim will not be billed, its reimbursement will not come, and of course it will be rejected.

It will be denied, saying that medical necessity was not met, okay? And the second thing is that these high-tech products, Medicare has now, for some years, put prior authorization on them. Earlier there was no prior authorization, but now prior authorization has been put on. And prior authorization means that you have to submit the patient's condition and the patient's notes to Medicare with the form, and document what his problem is and why he needs it, and if the insurance feels that his coverage is actually met, that there is medical necessity, then they approve it.

If it is approved, then the prior authorization approval number, you use it in your bill, and if it is denied, you will not bill it, the insurance has denied it. For the power wheelchair this is the case, and in the same way for a motorized scooter it is also the same, that it also has prior authorization. But now in 2026 Medicare has changed a rule, and it is this: if a supplier maintains a 90% prior authorization approval ratio for one year, then it is exempt from the prior authorization rule, meaning it will not have to take prior authorization.

Prior authorization actually adds an extra process, which increases the time in patient care. I mean, a patient needs a wheelchair, and he is about to be discharged from the hospital, so with prior authorization the process will get longer by two or three days, up to 72 hours. First the approval will come, then the supplier will ship, and shipping will also take time. So with prior authorization, understand that two or three additional days are added to the journey of a product, the journey of an intake. And earlier, when there was no prior authorization, there were a lot of problems, people would bill Medicare and Medicare would pass the bills, and later when the report came out, it was found that 50, 60, 70% had incomplete documentation, incomplete prior authorization, I mean the coverage was not met, and the medical necessity was not met, and the product was not even reasonable.

And in this way there was a big loss to cash flow, there was a big loss to Medicare's budget, so Medicare basically created this system, put this rule of prior authorization, so that there is no wastage. But now in 2026 it has brought this new rule, because with prior authorization there were a lot of issues in patient care, so now they have made it that a supplier who maintains a prior authorization ratio of 90% for one year, I mean you submitted 100 prior authorizations and 90 of them should be approved, because you yourself also know whether it will be approved or not, because CMS has put all its guidelines on its website, and going ahead we will also find out, in the videos I will tell you how, by making AI boards, you can make prior authorization forms, can make prior authorization templates and check coverage, how you can make skills of them, one by one for each product, and how you can make gems of them.

So, inshallah, we will understand that going ahead, but for now let me tell you that all the documentation is available on the CMS website. For each of their products there is a product article, a product policy, which you can look at and understand what the patient's medical necessity is and what the reasonability is for which you have to give the product. If you keep maintaining 90% with the authorization form, then you are exempt, but even after that, if you want to say, no, brother, I will do prior authorization only, I do not accept these exemptions, because tomorrow if one of my bills is denied for medical necessity, then with prior authorization, what happens is that 90-95% of claims are billed, approximately 100%, if some other problem comes up, that is different.

Besides prior authorization, if you have a prior authorization approved number, then the bill will not be rejected for that, okay? So this is about prior authorization, you understand this, now we move ahead from here. Ansar, do you want to add anything here? No, no, Usman bhai, you have covered it very well and explained it. Okay, okay. Now, I told you earlier about the bed, that the bed is in the E category, in the Durable category, its code starts with E, and one more thing I want to say here is that the bed is a rental product, within Medicare.

23:33Hospital beds and capped rental

Okay, remember that most of the things in these slides are about Medicare. We will talk less about Medicare Advantage coverage, but we will talk about that too. Always remember that earlier, when we started, and in the beginning when I started to understand this, at that time, I remember the ratio was, I think I told you before too, 80-20. The ratio used to be 80-20. The market was eighty percent traditional Medicare, Medicare FFS, original Medicare, I mean, out of a hundred, eighty patients had original traditional Medicare, and twenty people had Medicare Advantage, okay?

But now the market is fifty and fifty. About 50% of people have traditional Medicare and 50% have Medicare Advantage. It is very important for you to understand this, and as this keeps growing, in the coming years people will have 60% and 70% Medicare Advantage, okay? So now within Medicare, this beds category is capped rental. It goes to the patient on a rental basis, and the patient and the insurance pay you rent. Now it has rules, and let me tell you the simple rule out of them: when thirteen months are done, the patient has the option to take the product, but if the patient does not respond, then up to the 14th and 15th month of rental Medicare pays, and after that it stops, and even then the supplier still has the right to that device, that bed or that wheelchair, so it belongs to the supplier, and the supplier can pick it up whenever they want, okay?

So you will need to understand this. Now in beds there are categories too: there are semi-electric beds and there are fully electric beds, and there are manual hospital beds too, but what the patient needs depends on his medical necessity. If his medical necessity, I mean his diagnosis codes, I mean his diagnosis and prognosis, are such that they are within the coverage criteria, then the product will become eligible. Nothing will happen just because he wants it. If he wants it, he can go and take it out of pocket, but if he wants to get it from insurance, then the insurance has made a criteria that if you have a falling risk, a risk of falling, and you are bedbound, then you are eligible for a hospital bed, otherwise you are not eligible.

I am giving you this as an example, there is a full guideline for it, but later when we do a deep dive on each product, we will understand these things too, okay? Okay, now let's move ahead to diabetes care, the products for controlling diabetes and managing it, CGM, Continuous Glucose Monitor, it is a highly auditable product, and it is highly watched by Medicare, to see how suppliers are billing it, because within DME products the most fraud has happened in CGM.

27:04Diabetes care: CGM, glucose monitors and insulin pumps

Now let me tell you what the fraud was, what people did: without having medical necessity, because CGM has a medical necessity, that the patient should have a hypoglycemic event. Now what is a hypoglycemic event? Before the hypoglycemic event, let me tell you what the basic difference is between CGM and BGM. CGM is a Continuous Glucose Monitor, and BGM is a Blood Glucose Monitor. Now BGM is the traditional one you must have seen, for checking the sugar level. In it, to draw blood, they prick the finger, and after pricking, they put the blood on the test strip, and then it basically checks the glucose level and gives you a one-time result.

I mean, BGM will tell you the level of glucose in your blood at that moment. Now understand what glucose is too. Okay, the sugar level in the blood is called glucose, okay? The energy that we have inside our body comes from the blood sugar level. I mean, if this sugar level goes down and down, and for instance 54 mg/dL is a level, if it suddenly falls below that, the patient I mean, immediately, say, he can feel dizzy, he can fall, and he may need a caretaker, and his brain can stop working, so that is why a sudden drop in sugar is very dangerous for the patient, and that is called hypoglycemic, and hyperglycemic means the sugar level rising.

A rise in sugar level is controlled very easily with medicines, and it can be maintained very easily with BGM, a blood glucose monitor, because BGM, the sense of BGM is that BGM gives you the vitals of that one time only, but the sense of CGM is that CGM gives you continuous readings, that is why this glucose monitor is called continuous. I mean, it has a sensor that basically gets placed on that spot, and it connects with its receiver, and there is an app for it on your mobile, or on your laptop, in your system, where your glucose levels keep coming continuously, so, and it also predicts ahead.

If the sugar level is suddenly going down, it sounds an automatic alarm, so you can immediately do something, I mean maintain it, okay? So this is an expensive device, and its care is also expensive, that is why Medicare has added it in its fee schedule, added it in the fee schedule, and the reimbursement for CGM is also high. But the main thing is that there is a specific medical necessity for it. If the patient does not have a hypoglycemic event and does not have type 2 diabetes, then he will not qualify for CGM, but a lot of suppliers did this, because of which Medicare had to tighten its rules, and later they took repayments and recoupments.

Okay, one thing you should also understand: the product that is for maintaining diabetes, for maintaining diabetes, for managing diabetes, this product, CGM, falls in the category of prosthetic devices, because its sensor is of course placed on top, but it is attached to an inner layer of your skin, and basically it takes readings from there. It is also a little slower than BGM, ten, fifteen minutes, because in BGM your blood comes out immediately and it tells you its vitals at a macroscopic level, but since this is placed on your skin, and it basically determines your blood sugar levels from a certain level of your skin, so it is a little slower than BGM, I mean less efficient, but its real job, which is monitoring glucose continuously and telling the patient before any kind of hypoglycemic event happens, for that it is the best.

Then there are two categories in it too, within CGM, okay? And we will understand about that going ahead too. But now of course Medicare has made it mandatory, you could say, for patients with hypoglycemia, because it will save their later expenses. If the patient has a hypoglycemic event, then there will be separate hospital expenses, separate bills there, separate medicines there, separate lab tests, and whatever other personalized care there is, and after that he will come into rehab, separate rehab expenses, then he will come home, he will need home health, separate expenses for that, so a lot of expense will be incurred, so before that the idea is, brother, at the grassroots level, manage it.

Anyway, you must know that diabetes is like a termite, and if it is not maintained properly, then going forward it starts to affect the kidneys too. Anyway, those are doctors' matters, so now let's leave that here and move on from these things. Okay, what is an external insulin pump? An external insulin pump is basically attached to your body, attached to the body, and to maintain insulin, insulin is delivered from there. One is the traditional one, the pen type, where you inject, you inject, okay? And the external one, external basically means it is placed outside.

Internal means it is inside the body, external means it stays outside the body. But of course, since its needle goes in and part of its system goes a little inside the body, that is why it comes under the prosthetic devices category. So insulin basically goes from there, and insulin is maintained from there, so it is attached to your body, otherwise you would again and again need to use pens. You must have seen diabetic patients, that their skin gets very damaged from repeatedly using pen needles, giving injection after injection, so basically this external insulin pump is for that purpose, okay?

Now let's move ahead. Ansar, if you have anything to add, add it. No, Usman bhai, I have understood all the things and categories well. Going to the next topic, if I need to add anything I will add it there. Okay, now let's try to understand wound care, and this too comes in a DME product category from which DME earns, and earns from CGM too. I mean, some DMEs are such that they do not do any other products, they only do CGM.

35:32Choosing a product focus

Some DMEs are such that their major product is only CPAP and BiPAP, and they do nothing else, because they work with their focus on that. In the same way, some DMEs. If you ask me what a DME collects revenue from, whatever I am telling you now are the major products. Now the mobility products are also called legendary products, so the margin in them is a little lower, but it is there, and there are one or two techniques in it too. If you are giving it to a patient, you are selling to the patient out of pocket, in that, money is saved, for example if you give them a basket or some bag that can be attached to the mobility equipment, I mean something like a pouch, you can bill that to the patient out of pocket, because it is not covered, so that is one technique.

So mostly, basically, what a DME earns from is those products: CGM, incontinence supplies, wound care. Besides that, respiratory, for a DME that works in respiratory, because for oxygen cylinders the license and its accreditation are also separate. Accreditation is separate, meaning in accreditation its rules are different, because to keep cylinders there is a whole compliance package. So anyway, wound care is a major product of DME, because this is basically wound care supplies, the supplies of wound care, which are surgical dressings, those too, so say this is in a major product category, and it falls in an A code category for this reason, the code of the foam dressing that is written here, A six two zero nine, and hydrocolloid A six two one four, and besides that hydrogel A six two four five, because these are all supplies, so they fall under A codes.

37:23Wound care: surgical dressings and NPWT

Besides that, negative pressure wound therapy follows, and now in wound care let me tell you one more thing, in it you have to pick the code by looking at the size and condition of the patient's wound. According to the condition, that kind of surgical dressing will be applied, and according to the wound size, a dressing of that size will be applied, okay? There is one thing in it, I mean the size and whatever the depth of the wound is, according to that, the surgical dressing is applied, and of course you will have to check the LCD for it and you will have to check coverage.

Only then will you be able to bill the right code and ship the right product, ship the right dressing, okay? I mean, you will understand, if a doctor's office has written on the prescription that the patient needs foam dressing, and when you open the chart notes and look at the wound conditions and the wound size, you realize that this foam dressing is not eligible at all, another dressing will go for this, so of course then the claim will be denied, and if it is denied, if it even gets paid, then later there will be a problem in an audit, and second, when it is not eligible, then it is not reasonable for the patient either.

Reasonable is also that dressing which fits according to his medical necessity. It is very important to understand this here, so let's move ahead, and these are the incontinence and urology urological supplies.

40:15Ostomy, urological and incontinence supplies

Now in urological supplies catheters also come in, and besides that ostomy pouches also come in. Ostomy pouches come in urological supplies, in ostomy supplies, and its supplies come in, and besides that in urological supplies one is these catheters, and second, these incontinence supplies also go in incontinence supplies, say urological supplies come in, and the bedside urine bags also come in this, okay, and in ostomy supplies there are ostomy bags, which are also a prosthetic device, it is connected with your body. And if, before any post surgery, to relax your stomach and after surgery to let it relax a little, a pouch is put on you for drainage, I mean stool also passes through it, and stool is passed through it basically, so that is put on your ostomy, on your tube, on the tube of your waste, that is what is put on, and from outside, and in it also there are two categories, the categories of pouch are that when it fills up, you you can again drain it and put it on again, and one kind is for one-time use, so you waste it, okay, so Medicare now the medical necessity of both of these ostomy pouches is separate, and Medicare has also fixed separate quantities, that beyond this the patient will not have to take out of pocket, I mean it is this much, and it is this much that it is enough for the patient, okay?

It was made specifically for state Medicaid, so now diapers, these are basically not, they come in the daily routine products, not to treat a medical condition of yours, absorbent supplies, diapers and pads are not used for that, so these are for daily use, that is why Medicaid covers them, and these come in the T series, and this is also a major product of DME products, and you could say even before wound care, as much as my experience is, as many DMEs as I have seen, their major products are wound care, incontinence and urological.

Now Medicare's 2028 guidelines are a little disturbing for DME. The reason is that now Medicare has put these incontinence and urological supplies, both of them, into bidding, just as they earlier put braces into bidding, so of course now the patients, the suppliers who bid, first of all the fee schedule will be lower, but now the scene is that earlier, in braces, they excluded the lowest bid and selected the prices and reimbursement, but it will not be like that now.

43:42Competitive bidding

Now it will be like this, they have made a policy that the prices will be approved at the seventy-fifth percentile bid, but of course the lowest bidder will win, and now there will not be just one bid winner, bid winners will basically be different in different regions, and the small DMEs, the DMEs that are medium size, have also been given the full gap in bidding, and they will also be bid winners, and 300 basically in one category suppliers will win bids. So now what competitive bidding is, let me tell you briefly here, then later in a detailed video I will explain it to you.

Competitive bidding is that, to save its expenses, Medicare says, brother, everyone bid on this HCPCS code, and whoever bids the lowest, in bidding it is like that, right, will win the bid, so that their expense is saved, but then only that one will bill Medicare, and all the other DMEs will become contractors and they will be almost wiped out of the market. Okay, what happened in braces was that they put bidding on some braces and some categories of braces, some braces and some brace categories, they put bidding on, and after that, only the region where the bidding was in place, there, if any patient, I mean of that zip code, came to you and you were not a bid winner, you could not give them a brace.

Then they shut that program down. Now they are launching that 2028 again. In 2028, the respiratory products that we saw earlier, they had also kept respiratory in bidding, but AAHomecare, which I have told you about before, which fights cases for suppliers' rights and goes forward and talks to CMS, got respiratory taken out, along with the legendary products, I mean the legendary products, meaning mobility, and besides that respiratory. Now it is not in bidding in 2028, and they are still trying to somehow get the incontinence supplies also taken out of it, and along with that get CGM taken out too, because CGM has also gone into bidding this time, so understand that the fifty percent traditional Medicare market will be affected a lot, I mean a small supplier who has not won any bid cannot touch that product, he will only be able to do the legendary products, CPAP, BiPAP, and mobility, but he will not be able to do CGM and incontinence and urological supplies and ostomy if he has not won a bid.

So competitive bidding is that Medicare basically gives the bid to the one with the lowest price, and then that one supplies to the patient, cares for the patient, takes care of the patient, and then bills Medicare on the patient's behalf. So we will make a detailed video on competitive bidding going ahead, inshallah, on how the structure was made, how it came about, why. If you want, there is one big reason for it, to reduce expenses, because this health market is. health issues, you know in the US the senior citizen population is very large, and they also have a lot of problems, so the expenses are also very high.

So now they just keep growing, I mean they say that every month around ten thousand patients are added to the Medicare program, I mean they turn sixty-five, so in a year about twelve thousand people are added, maybe, I am telling you a slightly lower value. Or you all can research it too and tell me in the comments below. So the market size keeps growing, right? And the expenses have to be reduced, so this competitive bidding structure was created, and that is one of the reasons too, okay?

Okay, now I told you in the beginning that I would tell you which lab it is that analyzes the products and after that places them in the right code, in the category of the right code. It is the PDAC, okay?

48:38Who assigns codes: the PDAC and code updates

Pricing, Data Analysis and Coding Contractor. It is CMS's coding contractor, okay? It basically selects the pricing of the HCPCS code and analyzes the data, and besides that, looking at the whole coding, it gives the right place within HCPCS codes, gives the right place to that code, okay, within that category and that classification, that characteristic. Okay, here is an example. Say you have a product, you newly developed it, and you went into the Medicare program so that you could give it to patients, so that Medicare I mean you made a product, and you went to Medicare and said that this product should be there, that you should reimburse, because it will make the patient's care much better, and many of your later expenses will be saved.

So Medicare said, let's analyze it, this product is very good, okay, let's take it into the program. So what will the PDAC do? First of all, it will issue a temporary code for it, and it will come into the K codes, where the wheelchairs are, okay, it will come there, and then there is a whole procedure, and after that whole procedure, what will the code be? Apart from the K code, if it is a durable code, it will go into the durable category, if it is a supply, it will come into the supply category, if it is prosthetic and orthotic, it will go into the L codes, okay?

So this is how the procedure will be. The other thing you should understand is that every January and July some come off the list, some come onto the list, and the medical necessity of some is different, so in January and July, whatever major product you are doing, if a new document is coming for it in January and July, I mean new policies are being added to the product, and to be eligible now this medical necessity is also necessary, so January and July, because in January and July, in January and July, in it, HCPCS code policies change twice a year, but not for every product, for some, additions come, so those change, CGM and some products that are very high-running, they keep going up and down, and the drugs, the medicines, for which inshallah a detailed course will start in a few months, when this one is finished, in the year of it, they keep getting added, their codes and the regulations of the codes keep changing, okay?

Now let's move ahead. Ansar, do you want to add anything here? So people don't forget that you are on the call too. I just want to add one thing, in incontinence supplies, because each state's Medicaid has a different rule, so now some states have made prior authorization required, because earlier prior authorization was not required on incontinence. So that is why, because now some DMEs work more on incontinence, because its reimbursement is good, since the supplies go out every month, so that is why now some states have made prior authorization required and have also made the medical necessity very strong. Absolutely, absolutely right, you raised a good point. One thing was left out, and you added that too, okay?

52:40How a code connects to coverage, payment and documentation

Now let's move ahead, and I told you earlier that a code, an HCPCS code, now remember, here I click on this site, it goes forward and back. So this code starts with A, so you understand that this is a supply, and the four digits that follow basically take it to that category and that classification, okay? So this code is connected with coverage, I mean every code has separate coverage, every code has a separate fee schedule, I mean if there are two different wheelchairs, they will have two different codes, their coverage will be different, the coverage criteria will be different, and the fee schedule of both will be different, and the documentation will also need to be different for both.

This Medicare policy depends on what documentation it is keeping for which product. Some documentation is needed in every product, like a written order, and besides that the chart note, which people also call a progress note, also call a medical note, so the medical notes, and besides that the face-to-face visit, which is very important in healthcare. And what happens in it is that some products are like this, let's talk about CGM, in it the patient must have had an encounter with the doctor within six months, if he is eligible for CGM, I mean if he is having some issue, then he should have been seen by the doctor within six months, and the doctor should have checked his vitals, and he should have had a hypoglycemic event, and besides that his level, his blood glucose, should be going below 54, and then he will be eligible, and once that is done he will start getting CGM supplies with the CGM monitor.

So after six months the prescription will also have to be renewed, and after six months he will again need a face-to-face from the doctor's office, or he can also contact via telemedicine and tell his conditions, and a telemedicine assessment will also count as a face-to-face encounter, it will also count as an encounter, and that too is necessary for documentation, okay? So documentation like this, if there is a medical necessity form, that also counts within the documentation, but its value is not high. Remember, the value in medical necessity is the medical note, I mean the chart notes.

What diagnosis is in the chart notes, what conditions are in the chart notes, the diagnoses in the chart notes, those are what create the strong possibility of whether this product will be reimbursed or not, I mean whether it is eligible, whether medical necessity is being made with the patient's condition, or it is not being made, okay? Now let's move ahead. Modifiers. Okay, these modifiers are very important, I mean, understand that a code is incomplete without a modifier.

56:13Modifiers explained

HCPCS codes have modifiers too, just as diagnosis codes have modifiers, in the same way HCPCS codes have modifiers too, CPT codes also have modifiers. Okay, the modifiers of HCPCS codes, understand that they are not separate from the codes, they come along with the codes, they are very important, because if you did not take care of them and they were not attached properly to the claim form, the claim will be denied, there will be issues in the claims going forward, okay? So in it, the KX modifier, this is there so that all the policy requirements of the payer and the documentation have been fully matched.

And the GA modifier is there to show that an ABN is on file. What does ABN mean? Advance Beneficiary Notice. The Advance Beneficiary Notice is there because you know that the patient's medical necessity is not fully met, and there are chances of the bill being rejected, so you get the patient to sign that if the insurance rejects it, the patient will pay. You have to get the patient to sign that if the insurance does not pay, then you will bill the patient. And the GZ modifier that is used is for expected denial without ABN, I mean you know that a denial is expected, and you have not taken an ABN from the patient yet, and there is no ABN form.

The NU modifier is used for a new product, because in a DME product rental products are billed and used products are also billed. NU means that it will be billed one time, it will be billed on a new purchase, not a rental. The RR modifier means that this will be billed as a rental. UE means that it is used, I mean this is a wheelchair that has come back from a patient, its rental was completed and now it is going out to another patient, it is used.

And yes, there is a saving in this, in mobility the saving is like this, that you gave a wheelchair on rental to, say, a hundred patients, and after that wheelchairs came back from 20-30 patients, because their rentals were completed and the patients returned them within 13 months, then you can give those under the used category to other patients, okay? The RT and LT modifiers are used for the right side, RT is for the right side, and LT is for the left side, I mean if you are giving a brace, you will use RT, which is for the right knee, and LT is for left, I mean then before it there will be the code of the brace, of the knee or ankle or wrist, and RT will tell whether it is for the right or the left.

KH, KI and KJ, these are for rental months. Now what happens in this is that in the first month you bill the KH modifier, after that up to the third month you bill the second one, and after that up to the end you bill the KJ modifier, okay? These are used for that. Modifiers are very important, any missing modifier equals denial. You need to remember that if you are not putting a modifier at all or you are misusing the KX modifier, misusing the KX modifier is wrong, and it is a crime if the policy requirements and documentation are not met, you cannot put the KX modifier.

If you put the KX modifier and tomorrow there is an audit, then all the policy requirements and all the documentation must be met, otherwise you will get a penalty or it can even come to your license, because people misuse this modifier a lot, the KX modifier, the policy and documentation are not met and they bill with KX so that the money keeps coming in, and completely okay, so basically in this whole chain, if anything in the middle is wrong, understand that the claim will be denied.

1:00:30The clean-claim chain: quantity, timely filing and appeals

I mean the code should be right, the modifier should be right, the diagnosis code should be right, exactly according to what is in the policy, the documentation needed for this product code should be the documentation maintained, and if you gave more documentation than needed, then the policy says this much documentation should be billed, not more than that, then it will be flagged there too. If you are billing Medicare, then of course you will bill Medicare, if the patient is a Medicare Advantage patient, then you will bill Medicare Advantage, if a claim goes to the wrong payer, it will automatically be denied, right?

And you are filing on time, because Medicare has a timely filing limit and Medicare Advantage has a timely filing limit, and if you did not file the claim within that limit, and you find out later that you never filed this claim, and that timely filing limit has passed, then you cannot submit the claim after that, and the procedure after that we will understand going ahead, but here it is important to understand that you have to file within the claim's timely filing limit, and then going ahead, of course, there is a filing limit, when we take a corrective action plan in denial management or we do denial management, that also has a timely filing limit, and then the five levels of appeals, we will understand that going ahead too, what the first level is, what the second level of appeal is, at which level the ALJ comes in, at which level how much the claim should be, only then can you appeal at that level, because to go to the first level, the second level, the third level and the fourth level, your claim amount also needs to be high, I mean for small products you cannot go to higher levels and appeal.

I mean at Level 1 it gets denied, you go to Level 2, at Level 2 it gets denied, you go to Level 3, then Level 4 and then Level 5, okay, in these there are different amounts, what amount your claim should be, okay? Now coding.

1:03:06Back-office coding checks

Now this last slide is that, coding in the back office. Here it is written, verify, do not guess. I mean you should not code by guessing, you should not select the HCPCS code by guessing, you verify that the HCPCS code that the doctor's office has written on the order is what the patient needs, I mean they need something from that category, that it is not the case that they are understanding something else, I did not need it. Okay? Because of the code the whole problem will get ruined.

So you always have to verify, brother, this wheelchair is what is needed, right, its code is not this. You wrote it wrong, should I now write this code? Because doctor offices make such mistakes. Check modifiers. Laterality, rental versus purchase, KX, criteria. Okay, so you put in the modifier after checking it, whether it is a rental modifier or a purchase modifier, and use KX only when your criteria, the coverage criteria, is fully met, whenever you use it, for that, for that, for that, for that, for that, for that, for that, for this way he can manage the whole code book that is updated every January and July, whatever product that DME is working on, and and again, it is necessary to have a coder who understands coding very well, but in the DME category I have mostly seen that the billers themselves become the coders, but this is a dangerous thing, if one person is a coder and also a biller, then no one job will be done properly, but in DME it happens that often the billers themselves are the coders, because if a DME is working on only two, three, four products, then the team on those four products has specialized, they have become very expert in billing CGMs or billing incontinence, okay, or besides that billing mobility equipment, so understanding the medical necessity of every payer, and besides that understanding the coverage, which payer will allow what, which payer will allow what, is not difficult for them, but the value of a coder is less, and the value of a coder remains there, and in our team there is also a coder, Dr.

Altaf, he is also a doctor, a medical doctor, inshallah, an MBBS doctor, inshallah I will bring him along in some of the next videos I make on coding, so that he can also teach you some things, inshallah I will bring him on that, okay, so this was basically our session today, in which we tried to understand HCPCS codes, we understood which products fall in HCPCS codes and how, and besides that, which three things an HCPCS code is tied to, and what its value is in medical billing, coding, revenue cycle management, what its value is in DMEPOS, and why codes are in the system.

1:06:33Recap and closing

I told you that codes are in the system because of a small example, the language barrier, I mean you have gone to a country where they do not know your language and you do not know their language, so the systems, the payers' systems, the only language they understand is the language of codes, they understand, whether it is a product code, whether it is modifiers, whether it is diagnosis codes, whether it is prognosis codes, whether it is a procedure, it will have its codes, in the same way everything will be in codes.

I hope you have seen some value in it and are enjoying it, and are getting ready for what is next. Going ahead, we will keep going deeper, as the course moves ahead, we are going further into depth. What do you say about this, Ansar? Yes, the way you covered it, a lot of things, first of all we understood the categories, the ones in the course lists, first E, A, K, L, B, T, so when we were looking at the course we did not understand what this is for.

So now you explained it well in simple words, very simple words, and it is very useful for those watching, so they can understand well, and that is the same point, that unless you have good knowledge of your industry, there is no benefit. So our aim is also that you understand everything in depth, and that you understand it in depth. Absolutely, because there are very few such people in every industry, and in our industry, in healthcare too, I have met many people in these ten years, but their knowledge pool and their understanding about any topic is very limited.

So this is what I recommend to the team and to everyone, that at least one to one and a half hours of your workflow should be for research, where you understand new things and strengthen the basics, because the better your basics are, the more you can understand the industry, the better decisions you can make, the better decisions you can make, the better level you can work at, and the better the level you work at, the more money you can make. So yes, this needs a lot of hard work and needs understanding things well, so I think we should end here now, and inshallah we will start the next session from where we left off.

If you have any suggestions, you can tell us in the comment box, and I do not think I will ever say on the channel that you should like, subscribe and share, because these videos and these sessions are for serious people who really want to understand this industry and excel in it. They are for those people. So if you want to promote the channel in some way, you can do that, but for now, that is all. Jazakallah khair. Assalamu alaikum wa rahmatullah.