5 DME Billing Challenges and How to Solve Them

In 2023, insurers denied roughly 15% of all medical claims, and providers spent nearly $18 billion disputing denials that should have been paid in the first place. For DME providers, these numbers hit even harder due to the unique complexities of equipment billing.

If you're running a DME operation, you already know that billing isn't as straightforward as submitting a claim and getting paid. Between HCPCS codes, prior authorizations, rental cycles, and proof of delivery requirements, there are plenty of places where revenue can slip through the cracks.

Here are the five most common DME billing challenges we see—and practical ways to solve them.

1. Missing or Incomplete Proof of Delivery

Proof of Delivery (POD) is one of the most common reasons DME claims get denied or clawed back during audits. Medicare and most commercial payers require documented evidence that equipment actually reached the patient.

What goes wrong:

• Delivery tickets are lost or illegible
• Patient signatures are missing
• Delivery date doesn't match the claim
• Required information (item description, quantity, serial numbers) is incomplete

The fix: Capture signatures digitally at the point of delivery. A mobile solution that records the signature, timestamp, and delivery details eliminates paper-based errors and creates an audit-ready record automatically. When auditors come knocking, you'll have everything in one place.

2. Documentation That Doesn't Meet Payer Requirements

Every piece of DME requires a qualifying medical diagnosis and supporting documentation. The problem? Different payers have different requirements, and they change frequently.

What goes wrong:

• Physician orders are incomplete or missing required elements
• Medical necessity documentation doesn't match payer criteria
• Face-to-face encounter notes aren't obtained when required
• Documentation exists but can't be located when needed

The fix: Build documentation requirements into your workflow. When creating an order, your system should prompt for required documents based on the item and payer. Store everything digitally and link it to the patient and order record so it's accessible during billing and audits.

3. Complex HCPCS Coding and Modifier Errors

DME billing uses HCPCS Level II codes rather than the CPT codes used in most medical billing. Add in modifiers that indicate rental vs. purchase, new vs. used equipment, and right vs. left side, and there are countless opportunities for errors.

What goes wrong:

• Wrong HCPCS code selected for the item
• Missing or incorrect modifiers
• Billing for items not covered under the patient's plan
• Coding doesn't match the documentation

The fix: Use software that ties HCPCS codes to your inventory items. When a specific wheelchair or oxygen concentrator is added to an order, the correct code should populate automatically. Build modifier logic into the system based on payer rules and equipment type.

4. Prior Authorization Delays and Denials

Many DME items—especially high-value equipment like power wheelchairs, hospital beds, and CPAP machines—require prior authorization before delivery. Without it, claims are almost always denied.

What goes wrong:

• Staff forgets to obtain prior auth before delivery
• Authorization expires before the claim is submitted
• Auth is obtained for the wrong item or quantity
• No system to track pending authorizations

The fix: Flag items that require prior authorization in your system and block delivery until auth is confirmed. Track authorization numbers, effective dates, and expiration dates. Set up alerts for authorizations approaching expiration so you can request renewals proactively.

5. Rental Billing Cycle Misalignment

Recurring rentals are common in DME—think oxygen equipment, hospital beds, and wheelchairs. But rental billing has strict rules about billing periods, and mistakes lead to denials or underpayments.

What goes wrong:

• Billing before the rental period is complete
• Overlapping claims for the same rental period
• Missing the capped rental conversion to purchase
• Continuing to bill after equipment is returned

The fix: Automate rental billing cycles in your software. The system should know when each rental period starts and ends, generate claims at the right time, and stop billing automatically when equipment is picked up or the rental cap is reached.

The Common Thread: Better Systems

Notice the pattern? Most billing challenges come down to manual processes, disconnected information, and lack of visibility. When delivery, documentation, and billing live in separate systems (or worse, on paper), errors multiply.

The DME providers who avoid these problems have integrated systems where:

• Orders flow from intake through delivery to billing
• Documentation is captured and stored with the order
• Proof of delivery is digital and automatic
• Coding is tied to inventory
• Authorization status is visible before delivery

That's exactly why we built DME Engine—to connect every part of your operation so nothing falls through the cracks.