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Maximizing DME Reimbursement for Complex Billing Scenarios (Part 1 of 3)
November 18, 2024Part 1: Navigating Complex Reimbursement Pathways for DME and Remote Monitoring
As healthcare continues shifting towards more decentralized care models, integrating Durable Medical Equipment (DME), telehealth, and remote monitoring solutions has transformed how and where patients receive care. This transition, however, brings its own set of complex reimbursement challenges that can lead to missed revenue opportunities. Successfully navigating these complexities is crucial to ensuring financial stability and optimizing the patient experience.
This three-part blog series explores XiFin-recommended practices for maximizing reimbursement for DME, medical devices, and remote monitoring providers. This first blog in the series explores the multifaceted reimbursement pathways and common challenges in DME and remote monitoring billing, with insights to help healthcare providers capture revenue more effectively.
Understanding Reimbursement Pathways
- Traditional Public and Private Payor Medical Benefits: Most payors, including Medicare, Medicaid, and private insurers, categorize DME and remote monitoring services as medical benefits. However, each payor has unique coverage criteria and reimbursement policies, making it difficult for providers to adopt a standardized approach that maximizes reimbursement.
- Pharmacy-Billed Medical Benefits: Certain devices like continuous glucose monitors (CGMs), managed by pharmacies for chronic disease care, are billed through medical benefits rather than traditional prescription drug benefits. This pathway is often seen in pharmacies and retail health clinics but involves unique challenges, including specific documentation and medical necessity requirements.
- Telehealth-Specific Models: Telehealth and remote patient monitoring services have billing frameworks that vary by payor. For example, Medicare might cover a particular set of services for remote monitoring under its telehealth benefit but have different stipulations when billed as a medical benefit. Some DME and remote patient monitoring providers rely on patient self-pay models that require the patient to file a claim for reimbursement from their insurer. Coverage varies significantly by payor and plan, so the amount patients are reimbursed by their insurer can differ dramatically even for the same device, equipment, or service. Using the self-pay model, providers must be able to accurately estimate a patient’s out-of-pocket expenses up front to maintain a positive patient experience.
The nuances of each reimbursement pathway can lead to regulatory and payor policy compliance challenges, as diagnosis codes and documentation requirements are often payor-specific. Due to these variations, missing or mismatched information on claims can result in denials, delayed payments, and increased administrative workloads for providers and their teams.
Common Billing Challenges for DME, Medical Device, and Remote Patient Monitoring Providers
In addition to facing hurdles related to the different reimbursement pathways, DME and telehealth providers encounter challenges because they are often different from the treating physician. In this case, additional communication and the gathering of clinical information from a different provider or system are required.
Other common billing and reimbursement challenges in the DME and telehealth segment include:
- Coding Misalignment: Inconsistent or inaccurate coding, especially without payor-specific adjustments, is a significant cause of denials. For instance, submitting a code for a device that does not match the payor’s requirements can prevent payment. This requires additional coordination and documentation to refile or appeal a denied claim.
- Inconsistent Documentation: Each payor’s reimbursement rules differ. Documentation must demonstrate medical necessity, detail the patient’s condition, and prove that the prescribed equipment or monitoring service meets coverage guidelines.
- Payor Coverage Rules: Even within a single payor, coverage rules may change frequently or vary by plan, affecting eligibility and reimbursement criteria. Private insurers, for example, may update their medical policies quarterly, which can alter reimbursement pathways and coding requirements without notice. Understanding these requirements is critical for providers to avoid denials and revenue loss. Moreover, rectifying each denial requires a time-consuming and costly process, which burdens administrative staff and leads to operational inefficiencies.
- Siloed Systems: Clinical, patient intake, and inventory systems do not talk to billing systems, and clearinghouses might not provide the complete picture regarding denials, underpayments, or rejections. This disconnect means that the billing teams are constantly chasing after missing data, which slows down the reimbursement process. Providers need real-time, bidirectional capabilities within all the systems they use for billing, including clinical systems, billing platforms, clearinghouses, and communication tools to streamline workflows. In addition, seamless connectivity between systems is vital to achieving complete financial visibility to understand and improve payor performance, client profitability, and patient and referring client engagement. Effective connectivity and communication are essential for ensuring maximum reimbursement through portals, APIs, or other digital tools.
- Split Billing: Split billing happens when two healthcare providers participate in the same diagnostic or therapeutic process. For example, one healthcare provider may order and fit a device and bill for that part of the service, which is considered the technical component (TC). Another provider may conduct the monitoring related to said device and bill separately for the monitoring service, regarded as the professional component (PC). Payors have different rules for TC/PC billing, so it is crucial to have granular edits and flexible workflows. Providers must customize their billing processes by service type, payor, and ordering physician. The system must adapt to these rules to minimize denials and payment delays.
- Prior Authorization Requirements: In specialties like cardiac care, prior authorization is often necessary and can be complicated. DME and remote monitoring providers do not fit neatly into payors’ traditional model. This means they face extra hurdles, from fragmented communication with referring entities to needing to extract information from clinical systems they do not control. Providers need robust tools to manage prior authorizations and appeals. Without the right tools, this process can become time-consuming and delay reimbursement.
Payor Policies Bring Unique Complexities to the Reimbursement Process
Payor policies and behavior that prove especially challenging for DME, medical device, and remote monitoring providers fall into three main categories:
- Frequent Updates to Medicare Local Coverage Determinations (LCDs): These updates often make certain diagnosis codes obsolete, which affects the proper use and reimbursement of devices. Providers must stay updated on the latest changes to avoid denials due to outdated codes.
- Medical Records Requirements: Payors increasingly demand more medical records for claims, which increases denials for Missing Documentation (N706) and Missing/Invalid Patient Medical Record (M127). Even when medical records are submitted, claims are still frequently denied. This adds additional complexity and affects providers’ ability to get paid, impacting the demand and adoption of the equipment, devices, and monitoring services.
- Diagnosis Code Challenges: Many payors, including UnitedHealthcare (UHC), Aetna, Cigna, Medicare, and Priority Health, have their own LCDs, making it difficult for providers to comply with various billing requirements. One potential way to mitigate this is to use “No ABN received for limited coverage” (LCNOABN) logic, which can help flag potential diagnosis code issues early in the process, reducing denials and improving reimbursement.
Staying ahead of these challenges through proactive support, real-time updates, and flexible billing solutions is essential to ensure a smoother, more efficient reimbursement process.
Overcoming Billing Challenges
While technology can help overcome the billing challenges outlined above, it must be complemented by the right expertise and optimal processes. Five essential capabilities address the complexity of billing and reimbursement for DME, medical device, and remote monitoring providers.
- Patient Engagement: Tools and real-time connectivity ensure that patients are actively involved, reducing errors and improving adherence, directly impacting reimbursement outcomes. Digital patient communication tools improve transparency and reduce confusion about billing.
- Connectivity: Real-time data exchange with payors and seamless integration with prescriber systems are paramount for improving the speed and efficiency of the billing and reimbursement process.
- Understanding Payor Policies and Behavior: Providers will succeed by continuously adapting to evolving payor requirements and leveraging data analytics to proactively make the required adjustments to improve the likelihood of timely and complete reimbursement.
- Automation and AI: Technology and AI can automate prior authorizations, manage denials, optimize workflows, and uncover patterns in payor policies, flagging potential issues before they become denials. People play a vital role in interpreting insights and adjusting processes accordingly. While automation and AI streamline workflows, the teams behind them refine processes to maximize efficiency and reimbursement.
- Business Intelligence (BI): BI and analytics create the bridge that ties technology, people, and processes together. BI provides the visibility needed to track performance, understand financial trends, and continuously improve operational and financial performance.
While technology is invaluable in overcoming billing challenges for DME and telehealth providers, the combination of engaged patients, connected systems, and empowered teams drives success. In our next post in this three-part series, we will discuss how technology and AI applied to improve the patient experience is essential in maximizing revenue for DME, medical device, and remote monitoring providers.
Watch our on-demand webinar, “Maximizing Reimbursement for Complex Billing Scenarios,” to dive more deeply into the topics covered here.