Durable Medical Equipment &
DME Audits: Passing the Exam
If we think of a DME audit as an exam, the way we
prepare for it is to review and apply the regulations that makes us compliant.
If we haven't prepared well enough, we may fail. Unlike a real exam, we
never know when we will be tested. If we fail the audit, we may be subject
The following email exchange developed after discussion about DME documentation
in an earlier issue of FootZine. The first person (aka Dr. John Doe) who
wrote volunteered the information about their own audit experience. At the
suggestion of Dr. Rick Horsman, we then contacted another office (aka Dr. Jim
Doe) that had also undergone the audit process recently. Below are their
emails, edited and with names changed for privacy concerns, as well as emailed
comments by Dr. Horsman.
I was recently randomly audited by CMS for DME. The gal [auditor] gave me
the list of what a supplier is expected to do. You can find the list on
the Web at:
PalmettoGBA.com/Other Partners/National Suppliers Clearinghouse (NSC)/Standards
and Compliance/CMS 21 Supplier Standards [*_* Editor's note:
You may find it easier to go to the Palmetto home page: http://palmettogba.com/
Use the site's search function to enter the phrase "CMS 21 Supplier
Standards" and click on the first of the resulting links. *_*]
This will give anyone the list of things they need to do to be in compliance
with DME Medicare standards. By the way - I passed - I think!
Dr. John Doe
*_* *_* *_*
...... another person you should speak to is Dr. Jim Doe. He and his wife
[Jane Doe] told me about the emergent meeting with DMERC, what they expected,
and how he complied. It was NOT pretty, or comfortable. But Jim Doe
would certainly provide a useful insight into what was demanded.... "for
the good of the order"
*_* *_* *_*
Also, the APMA [www.apma.org]
Members-only website lists the 21 standards that must be followed.
Dr. John Doe
*_* *_* *_*
We are so sorry to be returning this message so late, but Jim Doe does not check
his email very often so am reading your question for the first time on the 18th
of Jan. I will try to share our experience with the DMERC Audit. In
a previous email the web site at Palmetto GBA was given, which does indeed have
all the forms needed to be in compliance. If you just follow the CMS 21
supplier standard form you will be in good shape.
Our audit did not get off to a good start, as the gentleman came into our office
and gave his name and company that he worked for, but had no proof that he was
here on behalf of CMS so we would not discuss anything with him and told him he
would have to come back at a later time after we confirmed who he was. He
came back a second time with a letter from Medicare indicating that he had
permission to perform a DMERC audit.
In the meantime I made some phone calls and confirmed that he was legit.
The auditor was fairly gracious the second time around. He took pictures
of our medical supplies and office to show that we had a physical address and
actual medical supplies. Apparently they have been having problems with
so-called offices billing for products [but the "offices"] are merely
post office boxes with no physical place of business and no inventory. You
need to give the patient several forms which give a guarantee, a formal way for
them to lodge a complaint about the product, and written directions for how to
apply the product. You must also document in your chart that you dispensed
said product and forms. Again all these forms are on the Palmetto GBA
website. We just keep several copies of each form in a binder along with
directions on how to wear the product and keep this binder with our shelves of
inventory to pull out when needed to dispense a product to a Medicare patient.
This binder was satisfactory to the auditor. We were not in complete
compliance when the auditor came and he gave us 24 hours to correct the few
areas that we were remiss in and that was fine.
I hope this helps-
*_* *_* *_*
Thank you for sharing your DME experiences with Gayle. .... I felt it
important for all practitioners who prescribe and dispense items of DME to
realize that there are multiple (i.e. a LOT of) underlying documentation and
procedural requirements which must be fulfilled by ANYONE who provides these
services - regardless of volume - and that the listing
of those requirements is hidden deeply in bureaucratic verbiage. You may
or may not be aware of them, but if you bill for these services, and get paid
for ANY of them, you had better have all that stuff in place.
It's a wholly separate issue of, once you know and understand those
requirements, are you still willing to provide those services? Might be an
So... I hope you do not mind that I passed your name on to Gayle.... I felt that
MANY practitioners would learn from your experience, and you need not be named
If there is anything I can offer to assist, explain, etc., please let me know
*_* *_* *_*
Dear Gayle and Rick-
Rick does bring up a very valid point which definitely did cross my mind as I
was scrambling to rectify everything in my 24 hour period of reprieve. The
only products we dispense that DMERC will pay for are removal walking casts,
night splints and occasional ankle supports. We do not do the diabetic
shoe program. The requirements for the 3 products we do are the same as if
you were a medical supply company and that is all you did. They do not
differentiate between a huge medical supply corporation and a single provider's
office. I did wonder whether it was all worth the hassle of getting
The reason I stated that I thought the auditor was fairly gracious was that he
could have been a real jerk since I made him come back a 2nd time and questioned
whether he was legitimate or not. We were not compliant, as we had never
even heard of the 21 CMS supplier form, let alone following it. The
auditor was basically nice enough to point me in the right direction, tell me
what forms I needed and then gave me 24 hours to get it done. He also
wanted directions on how to apply these products on letterhead and "blown
up" to a larger size so it was easier for the Medicare patient to read.
The instructions that come with the products that we were dispensing are fairly
hard to read since the print is small. Also, you have to carry minimal of
$300,000 general liability coverage on your building and product insurance.
We did have that but I am not sure all podiatric practioners carry that.
(It is different insurance than your general liability and malpractice
insurance.) There are many other requirements listed on that CMS supplier
form that make you just want to roll your eyes and hit the nearest bar.
Anyway, yes it was a hassle, it does make you question whether you really want
to do it, especially if you only dispense a few products like we do.... It
could have been a worse nightmare than it was, but the guy was willing to
basically tell me what to do and gave me the short period of time to get it
done. I do not know if all auditors would have been as flexible as this
one ultimately was.
Gayle - yes you are welcome to use our experience in your FootZine.
We would prefer to leave our name out, though.
This information is offered as a "study guide". We appreciate
the generosity of all the parties involved in sharing this information with us.
We hope it helps.
Editor's Note: In response to the letter from Renee in Volume 94 about documentation for DME, we have
replies from Drs. Rick Horsman and Paul Kesselman. ~ Gayle
This is my first time writing in and I hope you can help me with a DME question.
I am an office manager for a practice in Connecticut and came about an article in the Podiatry Management magazine about DME receipts.
I bill to Region A, Are we supposed to issue receipts to patients on our products we bill for the patient, ie: cast boot walker, diabetic shoes, etc. Also, what other documentation is required that we keep in the patient's chart?
The article refers to Region D. I have tried to get info online but no success.
For the most authoritative answer, I suggest bouncing this off Paul Kesselman.
But in brief, YES, the provider of any item of durable medical equipment (under Medicare, etc) MUST provide a receipt, a return policy, a warranty.. and there must be printed documents that support ALL of that. So...you don't just start providing this stuff. Before you dispense items, you must carefully review your own (and the patients') responsibilities (trust me, you have more responsibilities and obligations than the patient).
I would add that these onerous requirements are undoubtedly the response to fraud; once again, the vast majority of ethical providers have to carry a burden created by a small but outrageously unethical few.
Rick Horsman, DPM
Dr. Rick is right on the money. Just as one shouldn't start chipping and clipping before they find out what the local carrier decision policies
are, the DPM (supplier) shouldn't be dispensing before they are fully aware of All the rules. For DME you are beholden to 3 venues.
1. The National Supplier Clearinghouse which determines how you are to
2. The Regional DME carrier.
3. SADMERC who issues the product codes, and has product verification.
I would urge anyone to attend a DME billing seminar (many of which I conduct throughout the country) and to fully read the NSC guidelines, DME
payment policies, and SADMERCS, all of which are on their websites.
Dr. Paul Kesselman
A final point. The coding and documentation guidelines are very strict for a reason... they have been subject to outrageous abuse and fraud.
Resultantly, these codes and services are very closely scrutinized by payers... especially Federal ones.
The guidelines are presented in multiple locations, and providers are responsible for adhering to ALL of it.
Dr. Kesselman has published a series of articles on DME, and they stand as the "bible" on the topic. It is far too tempting to read one or two survey articles, and think you've learned all you need to know.
I suggest reading multiple good authoritative references, and (for the majority of us), attend a good quality seminar such as Dr. Kesselman provides. With E/M and procedural services, if you don't document it well, you may not be adequately reimbursed, but you're not out a lot of money. With DME, if it is not documented and coded correctly, you can lose a lot of money real fast. Or worse, you can get paid, and then on subsequent review be asked to give everything back... that really hurts. This is not simple stuff, and there's a lot of crossing t's and dotting i's that must be just right.
Rick Horsman, DPM