There are three key components of medical coding: patient history, physical examination, and medical decision-making. With these components in mind, we developed a simple five-step guide to orthopaedic coding that will help to reduce the amount of claims errors, payment denials, and time spent waiting for corrections to be accepted.

Step 1: Determine If They Are A New Patient

Determining whether a patient is considered “new” or “established” depends on same-practice and same-specialty rules.

Same-practice refers to two or more physicians within the same group, regardless of where each physician works individually. Physicians in a multispecialty practice who are in the same specialized area are considered same-specialty.

If a patient has seen at least one physician in the same specialty, at the same practice, within the past three years they are considered an “established” patient. Otherwise, they are considered a new patient.

For example, if a patient has seen someone a foot and ankle specialist, then goes to see a hip and knee specialist in the same practice, they are still considered a new patient at the time of their appointment with the hip and knee specialist.

This three-year rule still applies, even if a patient changes insurance providers within that period.

Step 2: Review Patient History

A patient’s history consists of the following sections: 

• Chief complaint (CC)
• History of present illness (HPI)
• Review of systems (ROS)
• Past, family, and social history (PFSH)

Chief Complaint 

The patient (or patient’s parent or guardian) usually states their chief complaint(s) in their own words. 

History of Present Illness

The HPI section uses descriptive elements to document the development of the patient’s current problem(s), from the first sign/symptom or from the previous encounter to the present appointment. HPI elements include:

• Location (e.g. left arm)
• Quality (e.g. sensation of aching, burning, radiating pain)
• Severity (e.g. on a scale of 1-10)
• Duration (e.g. “problem started two weeks ago”)
• Timing (e.g. constant or on and off)
• Context (e.g. lifted large object on the job)
• Modifying factors (e.g. better when heat is applied or soaked in hot water)
• Associated signs and symptoms (e.g. tingling in fingers)

Depending on the patient’s insurance plan, the HPI may need to be documented by the physician who is sending the insurance claim. If a patient is on Medicare, physicians must document that they have reviewed the patient’s history and verify whether the history was taken by assisting staff or from a patient portal questionnaire.

Review of Systems

ROS is an inventory of body systems. This inventory is obtained by asking a series of descriptive questions to identify signs or symptoms related to what the patient may be experiencing. The Center for Medicare and Medicaid Services (CMS) recognizes 14 systems.

Past, Family, and Social History

PFSH includes a review in three areas:

1. Past History: The patient’s past illnesses, operations, injuries, medications, allergies, and/or medical treatments
2. Family History: A review of the patient’s family and their previous medical events, especially diseases or conditions that may be hereditary, or may place the patient at risk for disease or treatment complications
3. Social History: An age-appropriate review of past and current activities, such as jobs, marital status, exercise level, etc.

At the outpatient service level for an established patient, you need to document at least one specific item from two of these three areas for a complete PFSH. However, for new patients, you need to document at least one specific item from all three of the history areas.

Assisting staff or the patient (or patient’s parent or guardian) may document the information related to PFSH, as long as the physician includes notation supplementing or confirming this information.

Additional Considerations

The amount of history that needs to be taken to get the correct coding level depends on whether a patient is considered new or established. For example, if an established patient has no changes in symptoms or history then the physician can note that there are no changes, as long as the physician references the date of the last ROS and PFSH and report that they have reviewed the patient’s current and prior history, and found no changes in their conditions or history.

Step 3: Review Physical Examination

A musculoskeletal single-specialty evaluation includes general exam elements and the six musculoskeletal areas: neck, back, right and left upper extremities, and right and left lower extremities. For each musculoskeletal system, there are five exam components:

1. Inspection/palpation: Note any misalignment, asymmetry, crepitation, osseous deformity, defects, tenderness, effusions
2. Range of motion: Note pain, crepitation or contracture, and active and passive limits
3. Stability: Note laxity, subluxation/dislocation
4. Muscle strength and tone (documented on a scale from 0-5, with zero being complete lack of strength and tone, and five being full strength): Note atrophy, abnormal movements, flaccid, cogwheel, spastic, etc.
5. Skin: Note scars, lacerations, ecchymosis, rashes, lesions, cafe-au-lait spots, ulcers, etc.

To properly code a comprehensive physical examination you’ll need documentation of each of the first four exam components, and assessment of the skin in 4-6 body areas. A comprehensive exam also includes evaluation of at least four out of seven vital signs, the lymphatic system, and a review of the neurological/psychological system.

There must be a medically necessary reason for a physician to perform an examination on a body part outside of the chief complaint. 

Step 4: Review Medical Decision-Making (MDM)

MDM relates to how complex establishing a diagnosis and/or management plan will be. There are three elements that determine the type of complexity:

1. Number of diagnoses or management options (minimal, limited, multiple, or extensive)– Must be documented with every patient encounter
2. Amount and/or complexity of data to be reviewed (minimal or none, limited, multiple, or extensive)– Should include documentation about tests to be ordered, records to be pulled and re-examined, and consultations with other treatment providers, among other things.
3. Risk of significant complications, morbidity, and/or mortality (minimal, low, moderate, high)– Based on the risk anticipated between the current patient encounter and the next one, and includes risk associated with diagnostic procedures and/or management options

There are four types of medical decision-making: straightforward, low complexity, moderate complexity, and high complexity. To qualify for a certain type (and produce the right orthopaedic coding), at least two of the three elements must be met or exceeded.

For example, a patient may have a limited number of diagnoses, and there is a limited amount of data to be reviewed in relation to making or managing a diagnosis, but a minimal risk of complication. The type of complexity would be considered low complexity, as opposed to straightforward.

Step 5: Apply The Appropriate Code

For a new patient, each of the three key components (history, examination, and MDM) must be at or above a specific coding level for it to be applied. However, for established patients, only two of the three key components need to meet or exceed a certain coding level for it to apply.

For example, if an established patient has a moderate level of complexity, a low/limited number of diagnoses, and a moderate level of risk, then MDM the code you would choose would relate to a moderate component.

Consider Time

If most (over 50%) of encounters with the patient and/or their family involve counseling or coordination of care (e.g. counseling on how to manage pain), then it’s important to document the total amount of time spent before, during, and after the encounter on patient care. The amount of time corresponds to a certain code.

Streamline Your Orthopaedic Coding Efforts

There are many components involved in getting the correct orthopaedic coding: a completed patient history, either gathered by the patient or an assisted staff; the physician, who has to sign off on everything; a previous physician (if applicable), who current caretakers have to contact in order to pull previous records and histories; and the person inputting the medical coding to send out claims.

Keeping up with training, changing policies, and the requirements to ensure the correct coding language is in place is crucial to patient care and your bottom line but undeniably tedious. That’s why many practices are streamlining their efforts with an all-in-one DME coding, insurance billing, documentation review, and denied claims management solution.

That’s where Select Ortho comes in. Our easy-to-use DME billing and revenue cycle management software and highly qualified DME experts have helped practices large and small reduce errors and increase their collection rates.

By partnering with Select Ortho, you and your staff can stop worrying about whether you’ve got the right orthopaedic coding, the efficiency of your process, or getting denied for claims, and instead focus on what you do best: providing the highest quality care to your patients.

Successful DME compliance requires effort not just on your part, but on the part of your patients and insurance providers. Mistakes made can result in financial or legal consequences for your orthopaedic practice, or worse, a patient not getting the care they need. 

To help you avoid any missteps, we’ll share the top three most common DME compliance issues, and how to avoid them.

1. Errors: Paperwork mistakes result in claim denials or recoupments.

A large component of DME compliance is ensuring the paperwork is properly filled out for insurance companies’ review. The simplest error can result in a denied claim. The following are especially common: 

1. Claim submission errors (coding, modifiers, etc.)
2. Lack of or missing prior authorization
3. Encounter documentation does not meet Medical Necessity Criteria
4. Improper or missing Physician Orders and Proof of Delivery Documentation

For example, someone in your practice may prescribe an orthotic device to a patient. However, you find you can’t bill the payor for that prescription because the documentation doesn’t meet Medical Necessity Criteria. This means that not only will the practice not be paid for the equipment but your patient cannot get the equipment they need. 

2. Lack of Dedicated Staff: Your practice is missing the DME compliance expertise and focus required to keep up with payor changes.

The Office of the Inspector General (OIG) from the Department of Health and Human Services (HHS) recommends that every DME supplier designate a DME compliance officer and committee. They oversee activities such as:

• Making sure outside suppliers maintain compliance on their end
• Developing a system to flag potential DME compliance issues
• Determining how to go about resolving these issues
• Monitor changing laws and regulations
• Internally and externally auditing the company’s DME compliance systems to reflect payor changes

A dedicated DME officer shows the OIG-HHS that your practice is dedicated to maintaining compliance and that you take potential fraud very seriously. This makes your practice much less likely to come under federal scrutiny, and much less vulnerable to DME compliance mistakes.

The OIG-HHS does recognize, however, that smaller practices may not be able to afford a team—or single individual—whose sole job is maintaining compliance. Many practices simply add compliance-related activities to an existing employee’s list of responsibilities.

While this may seem like a cost-effective way to show the OIG-HHS that your practice cares about compliance, simply shoving compliance activities onto an employee who already has a full workload may come off as suspicious. It can certainly lead to more common, avoidable DME compliance issues.

3. Loss Of Revenue: DME compliance errors eat into your profits.

When done right, the DME component of your orthopaedic practice should be an additional revenue stream and make the patient care experience more streamlined. 

However, without hiring someone with extensive knowledge of both DME compliance and supply chain management, you risk making critical errors resulting in loss of revenue. In fact, many practices lacking in DME resources only collect on 50-60% of claims they send.

How to Avoid These Common DME Compliance Issues

The real solution for these errors is revolutionary, yet simple: a cost-effective DME compliance team that continually monitors your practice for compliance and helps to increase claims collections.

Get the technology you need to avoid paperwork errors and the experts to look out for your practice.

Select Ortho is a complete DME compliance and supply chain management service. Our proprietary software audits your current DME compliance system and makes recommendations to correct any paperwork errors before your practice suffers the consequences. 

Our company has been helping practices increase their profitability for over ten years with members of our staff having over thirty years of experience in DME compliance. We have the resources and the knowledge to not only keep up with compliance but also manage billing and follow-ups with insurance providers and inventory management.

What about your profitability? Is partnering with a full-service DME point-of-sale provider worth it?

Our clients have gone from collecting on only 50-60% of insurance claims to 97% or more. They also see two more patients per day, on average, with satisfied patients returning over and over. Other benefits include: 

• A dedicated staff is available for compliance-related activities, without the need to hire someone full-time. 
• Your current employees will be more efficient without extra tasks on their plate.
• We manage your supply chain and help you choose the most cost-effective DME-compliant providers.
• Access to your practice’s client portal where you can see real-time metrics and reports on the state of your program.

Avoiding DME compliance issues shouldn’t be hard. 

Protect your patients, your practice, and your profits with a top-of-the-line DME solution provider. Select Ortho provides a free financial and compliance report to help you see where your orthopaedic practice is making the simple mistakes, where you’re lacking in expertise, and where your program could be more profitable.

Get back to what matters most: taking care of your patients while knowing their needs (and your own) are taken care of.

DME billing can be a complex, tedious task, especially if it’s assigned to someone without direct experience. You may find yourself drowning in claims forms submissions and waiting too long to be paid due to filing errors. In some cases, you may not get paid at all. 

To avoid the pain of figuring out the right forms to fill out at the right times, as well as trying to keep up with ever-evolving policies, follow these DME billing guidelines for your orthopaedic clinic.

1. Collect Necessary Documents

Missing just one small item could result in a delayed payment. That’s why it’s imperative to ensure you’ve collected all the necessary documentation. This includes: 

• Prescription– a written order from a medical practitioner that states the recommended DME a patient needs for their treatment
• Certificate of Medical Necessity– a form verifying that the DME will be used for the treatment or prevention of disease; must be signed off on by the patient’s physician and the DME provider
• Prior authorization and/or Written Order Prior to Delivery (WOPD)– Approval from Medicare for the prescribed DME; prior authorization is required to submit reimbursement claims and get paid for dispensing DME
• Proof of Delivery– as of March 2020, a signed delivery slip is no longer a requirement for proof of delivery to limit contact between DME delivery drivers and equipment recipients; sometimes, a photo of the delivered DME and/or the recipient of the DME is required

As of January 2020, Medicare has replaced the WOPD with the Standard Written Order (SWO). An SWO must be completed and provided to a supplier before you can bill Medicare for any DME and include the following six elements:

1. The beneficiary’s name or Medicare Beneficiary Identifier (MBI)
2. Order date
3. Description of the item, which can include a general description of the item (e.g. wheelchair, back brace), a Healthcare Common Procedure Coding System (HCPCS) code, a HCPCS code narrative, or a brand name and model number
4. Quantity to be ordered, if applicable
5. Treating Practitioner Name or National Provider Identifier (NPI)
6. Treating practitioner’s signature

Note: Each piece of DME that will be separately billed must also be listed separately. 

2. Contact The Patient’s Insurance Provider

You are responsible for collecting any and all information about all possible forms of a patient’s possible insurance. This includes insurance they may receive from a family member or spouse’s insurance plan, worker’s compensation, or liability insurance. If your patient receives Medicare benefits but has another form of insurance, then Medicare is a secondary insurance provider, and you have to attempt to contact the primary insurance provider first.

You need to collect the name, address, and group policy number from the primary insurance policyholder, as well as the individual number, on group health plans if applicable.

A patient’s insurance information should be on their insurance card, which they should bring with them at the time of their appointment.

Then, contact their provider to determine what equipment is covered, whether your patient has met their deductible, whether there have been any changes to their insurance status, etc.

3. Code the Equipment

To file a claim, you must provide a description of the equipment you are providing to your patient. This description includes an HCPCS code.

HCPCS codes are standardized descriptions of different medical services and equipment, used by Medicare, Medicaid, and other insurance providers.

Temporary HCPCS codes are updated quarterly, and the permanent code set is updated yearly, which means you have to keep up with coding practices. You cannot simply copy codes for years—you have to keep up with provider updates.

Create an Invoice

An invoice is a document listing the: 

• DME supplies you have obtained or will obtain for a patient
• DME provider’s information
• HCPCS code
• Description of item(s)
• Quantity of supplies
• DME supplier’s requested price of each item
• Subtotal (which does not include shipping and handling fees)

This invoice will help you when it comes to claim filing and in the event that your DME supplier practice gets audited. 

4. File the Claim

DME providers typically fill out form CMS-1500 before billing Medicare, Medicaid, Tricare, or another insurance provider. In addition to your patient’s insurance information and equipment codes, this form details:

• The date(s) procedures, services, and/or supplies were provided
• Any unusual circumstances that may require a modifier code such as equipment rentals or servicing fees; not all modifiers are required, but if a modifier is required and you do not include it, your claim may be denied and you may lose out on profits
• Diagnosis code(s)
• Prior authorization number
• Service facility location information
• Billing provider information
• The total cost of listed procedures, services, and/or supplies provided
• Signature of both patient/authorized person and physician/provider

There are also several other fields that depend on your patient’s particular circumstances. And, if you miss any of the required parts of this form, your claim will be denied.

You must file claims electronically unless your DME supply business has less than 10 full-time employees. 

To file claims electronically, you must have a computer that meets HIPAA requirements. You also must enroll in an electronic data interchange program, especially for Medicare/Medicaid claim submissions. Various insurance providers may have additional claims filing registration requirements.

Streamline Your Billing Efforts

If you want to avoid having to resubmit claims and wait for approval or be denied payment entirely, simplify and streamline your billing process with a dedicated DME supply management software and an experienced team.

Select Ortho’s revenue cycle management service will help your DME supplier business manage prior authorizations, review your coding and documents, enter charging and payment information, and follow up with insurance companies about collecting payment and resolving claims issues.

With our powerful, easy-to-navigate software and our guidance, our clients collect on 95-98% of claims filed, compared to the industry average of 50%.

Make sure your orthopaedic DME program always follows these essential DME filing guidelines by adopting a full-scale DME supply and billing solution. Then, you can focus on getting more patients in the door, and providing adequate care for each one.

DME compliance is a necessity. When you consider the complexity of the billing process for Medicare, Medicaid, and Tricare beneficiaries—who make up the majority of patients who need DME–it makes hiring the right people even more crucial.

What does your current hiring process for DME compliance look like? Should you hire a full-time DME compliance officer, or is there a better solution? Are DME consultants/managed services more cost-effective? Is it worth it to outsource your DME compliance needs?

Get all your DME compliance hiring questions answered here.

Important Things to Know About DME Compliance

The Department of Health and Human Services’ Office of Inspector General (HHS-OIG) and the Centers for Medicare and Medicaid Services (CMS) are the major federal overseers of DME compliance. The most common violations are caused by billing errors, incompliant marketing practices, and the payment of illegal kickbacks or referral fees.

To guide DME suppliers towards compliance (and away from monetary and legal consequences), the HHS-OIG has provided a list of seven necessary elements for an effective DME compliance program:

1. Implement written policies, procedures, and standards of conduct to all parties involved in the DME ordering, supplying, and delivery chain.
2. Designate a compliance officer and compliance committee to ensure company-wide compliance.
3. Conduct effective training and retraining among employees to demonstrate your commitment to keeping compliance at the forefront of business activity.
4. Maintain open and effective lines of communication by making the DME compliance officer available to anyone who has a DME compliance concern (and allowing employees to report concerns anonymously.)
5. Enforce well-publicized disciplinary consequences of failing to meet DME compliance standards.
6. Conduct internal monitoring and auditing to identify compliance risks throughout the company.
7. Promptly investigate and respond to DME compliance violations, then develop a plan of action to remedy the violation.

In essence, these seven elements offer a loose framework for what your practice needs to do to become a compliant DME supplier. Having a dedicated DME employee or team behind you also shows your commitment to mitigating fraud if and when you get audited by federal overseers.

DME Compliance Job Responsibilities

Most practices don’t hire a specific DME compliance employee and split the workload amongst their existing staff instead. This leaves the compliance officer no choice but to add DME compliance to their already large workload.  

DME compliance entails many responsibilities, including but not limited to:

• Reviewing and validating referrals for appropriateness and completeness
• Ensuring that patients are eligible for DME supplies
• Procuring DME supplies and services according to established purchasing standards
• Coordinating DME equipment delivery between vendor, physician, and/or patients
• Reviewing medical billing and coding in DME system for any discrepancies and resolve any apparent issues
• Ensuring that everyone involved in the DME supply chain are acting in accordance to ethical business standards
• Developing and distributing DME compliance materials to other employees
• Researching DME practices and updating the DME system/process to reflect updates in legal guidelines

Delegating DME compliance to your busy staff leaves your practice vulnerable to violations with monetary and legal penalties.

Hiring and Training DME Employees

Some entry-level medical equipment managers may require DME system and coding training, as well as education concerning Medicare practices. Most medical equipment managers are also expected to have prior healthcare and/or management experience. DME directors, on the other hand, will already have experience with DME systems and with coordinating large-scale DME compliance training and audits. But naturally, with more experience comes higher salary expectations.

On average, full-time medical equipment managers are paid an annual salary of $52,073, with more experienced DME directors making an average of $131,694 per year. This does not include medical or dental insurance, paid time off, 401(k) offerings, and any other benefits that are available to most full-time administrative employees in the health sector.

Your practice may only need one trained DME professional to protect against increased federal scrutiny and mitigate legal risks. However, if you assist in operating a large-scale practice or a hospital setting, you will likely require a team of DME compliance officers, with a DME manager to train everyone on the team.

Utilizing a Consultant

Hiring DME consultants is another option that can help medical practices gain accreditation as DME suppliers, develop and improve DME systems, and teach current employees how to follow the guidelines outlined by CMS. 

However, DME consultants only show employees how to follow compliance standards. It still falls on current employees to scour through existing medical files for billing and coding issues, find and procure DME supplies and maintain inventory, communicate with everyone involved in the supply chain, and continually assess patients’ needs for their current equipment.

And there’s always the chance that trained staff members who manage your entire DME system will move on in their careers, leaving your practice vulnerable. But what if you could outsource the entire DME supply and billing process to DME experts that sit onsite in your practice? 

Outsourcing to DME Experts

Outsourcing some or all of your medical equipment ordering, billing, insurance authorization, and compliance reporting needs to a service specifically staffed by DME experts, is the fastest, most cost-effective way to hire the right people for DME compliance.

Then, you can focus less on worrying about compliance and more on what matters most—seeing patients.

Find the Right Partner

The right DME experts to meet your practice’s needs should:

• Have an understanding of retail-grade supply chain management
• Provide a comprehensive multi-vendor product mix 
• Scale resources according to your needs
• Have a proven track record when it comes to passing DME compliance audits
• Use an easy-to-navigate software solution that addresses every part of the DME procurement and delivery process
• Be able to assess  your existing DME systems for areas of improvement
• Show you how they are impacting your profit margins

Select Ortho’s DME compliance experts audit existing DME practices and optimize them so that our clients achieve over 95% net collection rates. Our team has over 10 years of combined experience in compliance which has enabled our clients to have 100% pass rates on payer audits and reviews.

In addition to DME compliance solutions, our clients also have access to proprietary software that optimizes their inventory, revenue, insurance authorizations, compliance requirements, payment tracking, and more.

No matter how large or small your practice is, no matter how well-developed your current solution is, Select Ortho will ease any and all DME compliance burdens so you can worry less about getting paid, and more about working with your patients.