7 changes affecting HME payments
by Miriam Lieber

Although home medical equipment (HME) providers are accustomed to constant change, the uncertainties of the pandemic have left them in a crisis unlike any other. The key coping mechanism—adaptability—remains the constant for the industry. Knowing that Competitive Bidding Round 2021 is looming and has not been delayed (as of this writing) and that some audits have resumed, HME providers are focused on controlling costs for today while trying to plan for tomorrow. Maximizing reimbursement now is the first step in securing a spot for the future. Let’s take a look at some of reimbursement changes that have impacted HME operations.

1. Telehealth

For now, during the public health emergency (PHE), telehealth visits are permissible. This means that patients who cannot get to a doctor in person are able to get equipment ordered through an audio and video visit. Always document why the patient was unable to have a face-to-face visit and make sure to include COVID-19 in the narrative section of the claim as well as in the medical record information. Expect audits requesting this information and also remind staff that the best option for the patient is to visit the doctor in person whenever possible.

The question is: Will telehealth stick around after the pandemic is over? While the current administration would like the technology wave to outlast the emergency, whether it does remains to be determined. One striking statistic, as published by the Centers for Medicare & Medicaid Services (CMS) on Aug. 4, 2020, is that “before the PHE, only 14,000 beneficiaries received a Medicare telehealth service in a week, while over 10.1 million beneficiaries have received a Medicare telehealth service during the PHE from mid-March through early-July.” CMS included physicians, nurse practitioners, clinical nurse specialists and physician assistants on the list of approved providers.

Regardless of the increase in telehealth visits and the leniency in requirements due to the pandemic, be certain that the items you are dispensing are “reasonable and necessary.” This should be documented in the patient’s medical record. Further, as mentioned, expect a substantial audit initiative on claims after the pandemic ends.

2. CR & Other Modifiers

To inform Medicare that a claim you are submitting involves a COVID-19 related issue, append the CR, or “catastrophe/disaster related” modifier. This modifier is not new—in fact, it is frequently used for disasters such as hurricanes, tornadoes, wildfires, etc. It applies specifically to the pandemic when an item is dispensed outside the policy requirements.

For example, use the CR modifier in lieu of the oxygen certificate of medical necessity. In addition to appending the CR modifier on the claim, enter “COVID-19” in the narrative. What this means operationally is an extra step during the intake process to ensure the modifier and narrative are added and substantiated as “reasonable and necessary” items are provided. Incidentally, the KX modifier is also still enabled, despite loosened regulations for COVID-19.

3. Prior Authorizations

Similar to the loosening of the medical necessity rules, prior authorizations (PAs) and Medicare requirements have been relaxed. In fact, requirements for Medicare PAs for power mobility devices, support surfaces and some prosthetics only resumed in September. During the first months of the pandemic, CMS stated they were not required but a provider was still able, if they chose, to use the Medicare PA process.

4. Audits

Another reimbursement challenge is keeping up with the plethora of audits, especially from Medicare. The pandemic granted a reprieve for providers until Aug. 3, 2020, when some of the audits restarted (durable medical equipment Medicare administrative contractor post-payment audits, as well as recovery audit contractors and supplemental medical review contractors for dates of service prior to the PHE). The targeted probe and educate (TPE) audits have not yet resumed, giving HME companies a little less to worry about—at least for now.

Regardless, continue to conduct your own internal audits, especially since it’s well known that CMS will ramp up audits in a serious way after the pandemic ends. In other words, do not get lackadaisical because of the reprieve. Be vigilant about maintaining audit proof documentation and use COVID-19 leniencies when you need to, but substantiate medical need via documentation as stated above.

5. National Supplier Clearinghouse

Analogous to auditing, the National Supplier Clearinghouse (NSC) paused its site visits and revalidations, etc. In fact, CMS made it easy to enter the medical equipment market by allowing almost no scrutiny from the NSC, including but not limited to site visits. Now that the NSC and accreditation agencies have resumed site visits as of July 6, 2020, HME businesses should be ready for inspectors. In fact, consider the precautions mandated for employees as well as customers before allowing an inspector to enter the premises. They, too, have to follow policies as required by state and local orders.

6. Competitive Bidding

A considerable business influence for many HME companies, competitive bidding Round 2021 is still slated to begin Jan. 1, 2021. In fact, competitive bid single payment amounts were due out by the end of September. Shortly thereafter, contracts will be sent to the bid awardees. This means contract providers will be planning for the influx of patients, transitioning away from one provider and over to another. For those not contracted with Medicare for competitive bidding, how will they handle both “grandfathering” and new patients they can no longer service?

The main concern is for patients and their continuity of care. Access for new patients may be a real threat, especially if providers cannot stay in business, even if the awardees are contractually mandated to serve all Medicare recipients in their awarded categories. A delay in the next round of competitive bidding makes the most sense, at least until the pandemic is over. The last thing we need to worry about is our ability to keep patients out of the hospital during a national health crisis.

7. Other Insurance

Although this article addresses CMS-related matters, the trickle-down impact on other payers is significant and should be considered as well. Audits by payers other than Medicare are surging and HME providers should bolster their compliance departments to handle the influx, even during the pandemic. Furthermore, unpaid claims and passing the buck to a secondary or tertiary payer is real. Approving authorizations and denying claims thereafter is running rampant.

Denials for submitting claims to the wrong payer are commonplace and thus, insurance verification has become an analytically-minded task where it once was straightforward and simple. Allocating key staff for these positions and managing the contractual and other relationships with payers are essential today. Sophisticated team members are needed to withstand the pressure associated with reimbursement in today’s often confusing and conflicting third party environment.

A Moving Target

As you can tell, adaptability, flexibility and the need to change on a dime are all part of the current HME landscape. From moving to a work-from-home model to working with relaxed and then retightened rules, along with audits and site visits and more, it is an understatement to say that reimbursement is a moving target.

The key is to stay nimble and ensure that your staff remain closely tied to CMS and other payer changes. Remain an active participant in state, regional and national associations. Work in tandem with payer relations in the organization and meet to discuss the operational impact of the constant revisions to the reimbursement guidelines. The bottom line is: If you can handle this, you can handle anything.


In addition to the relaxation of specific requirements during the PHE, CMS also increased allowables, including these temporary changes:

  1. Temporary suspension of 2% sequestration—this is automatic, suppliers do not need to take any action to receive this money.   
  2. Increase in allowables/fee schedule rates (to 75% adjusted and 25% unadjusted rates) for Items that were reimbursed at 100% of the competitive bidding adjusted fee schedule in non-rural/non-CBAs. This started March 6, 2020 and will last through the end of the PHE.
  3. Append the KE modifier for manual wheelchair option codes and certain complex manual option codes (in order to receive the higher allowable).

Miriam Lieber is president of Lieber Consulting, LLC, and a member of HomeCare’s Editorial Advisory Board. Visit