Home Medical Equipment Industry Terminology

A Medicare form used to notify a beneficiary that an item or service may not be covered and that they may be financially responsible if they choose to receive it. Must be issued before delivery when coverage is uncertain.

Certification from an approved accrediting organization (e.g., ACHC, HQAA, The Joint Commission) verifying a supplier meets Medicare’s DMEPOS quality standards. Required for Medicare billing privileges.

A sleep metric expressing the average number of apneas and hypopneas per hour of sleep; used to determine eligibility and efficacy for PAP therapy.

The maximum amount a payer agrees to reimburse for a specific code/item; basis for patient cost-share calculations.

Authorization from the patient allowing the payer to pay the supplier directly for covered services.

A credential (RESNA) indicating expertise in evaluating, selecting, and configuring complex rehab technology (CRT). Often required by payers for power wheelchair evaluations.

A noninvasive ventilation mode delivering two pressure levels (IPAP/EPAP) to support breathing; HCPCS E0470/E0471.

A Medicare payment category in which certain DME items are rented monthly up to 13 months, after which title or maintenance responsibility may change per policy.

A Medicare program that sets single payment amounts (SPAs) in selected areas/categories based on supplier bids; impacts rates and contract eligibility.

CMS audit program measuring improper payments by reviewing a sample of claims and documentation.

A claim that passes payer edits and contains all required data and attachments, enabling first-pass adjudication.

The standard professional claim form (paper analog of 837P) used by DMEPOS suppliers to bill most payers.

The percentage of the allowable that a patient pays after any deductible (e.g., 20% for Medicare Part B).

Positive airway pressure therapy delivering constant pressure to keep airways open during sleep; HCPCS E0601.

Individually configured mobility and seating systems for complex needs (e.g., Group 3 power wheelchairs, specialty seating), often requiring ATP involvement.

Regional Medicare contractors that process DMEPOS claims, publish LCDs, and conduct education.

The Medicare supplier category encompassing home medical equipment and related items billed under Part B.

A receivables metric indicating average days to collect payment; key to cash-flow management.

A payer statement explaining claim adjudication, allowed amounts, patient responsibility, and denial reasons.

A required clinical encounter between patient and prescriber documenting need; for some items it must occur within a defined timeframe prior to the order.

HCPCS modifier indicating a valid ABN is on file when an item is expected to be denied as not reasonable and necessary.

Alphanumeric codes used to describe DMEPOS items and supplies for billing (e.g., E0601, K0001).

US regulations governing privacy and security of protected health information (PHI) and transaction standards.

Industry term for equipment and supplies used in the home to support medical care, including respiratory, mobility, and support surfaces.

Front-end process of accepting orders: verify demographics, VOB, medical necessity, documentation, and schedule delivery.

Temporary/rehab-related HCPCS codes commonly used for wheelchairs and accessories (e.g., K0001 manual chair, K0823 power chair).

HCPCS modifier used to attest that coverage criteria outlined in policy have been met and supporting documentation is on file.

Coverage policy published by DME MACs specifying indications, documentation, and coding for items.

A clinician’s narrative detailing why an item is medically necessary, supporting the order beyond basic notes.

Private Medicare Part C plans with their own coverage rules, prior auth processes, and fee schedules.

Clinical justification that an item is reasonable and necessary for diagnosis or treatment per payer policy.

CMS-established payment amounts for HCPCS codes, adjusted by locality and policy (e.g., rural blends).

Nationwide Medicare policy that sets coverage criteria; supersedes LCDs when applicable.

A unique 10-digit identifier for providers and suppliers used in HIPAA transactions and claims.

A device that extracts oxygen from ambient air for patients requiring supplemental oxygen; commonly E1390.

CMS contractor that maintains DMECS, provides coding verification, and publishes product-specific coding guidance.

CMS system for enrolling and managing Medicare provider/supplier records; ordering/referring providers must be PECOS-enrolled.

Documentation showing the beneficiary received the item (e.g., signed delivery ticket, tracking info), required for payment and audits.

Payer pre-approval process confirming medical necessity and coverage before delivery of certain items.

CMS-contracted auditors that retrospectively review claims to identify and recoup improper payments.

End-to-end processes that convert orders into cash: intake, coding, claims, posting, denials, AR follow-up.

HCPCS modifiers indicating rental (RR), new purchase (NU), or used purchase (UE) to define payment method and pricing.

Modifiers indicating right (RT) or left (LT) side; used for bilateral items and to distinguish units.

Medicare policy denying items that duplicate active or recently provided equipment of the same or similar function.

Medicare-required order that includes beneficiary name/MBI, order date, detailed item description, quantity, treating practitioner name/NPI, and signature/date.

Remote clinical encounters via audio/video used for certain F2F requirements and ongoing therapy management, subject to payer rules.

FDA system assigning a unique identifier to medical devices for tracking, recalls, and documentation.

CMS integrity contractors that investigate potential fraud, waste, and abuse across Medicare/Medicaid.

Life-support device providing mechanical ventilation in the home (e.g., E0465–E0467), with stringent coverage and documentation requirements.

Upfront process confirming a patient’s eligibility, coverage limits, deductibles, coinsurance, rental/purchase rules, and pre-auth requirements.