Navigating Medicare Approval for New DME Products
- Elite Accreditation Consultants
- Sep 22
- 4 min read
Updated: Oct 7
Understanding the DME Definition
Medicare defines DME as equipment that is:
Able to withstand repeated use.
Primarily and customarily used for medical purposes.
Generally not useful to someone who isn’t sick or injured.
Appropriate for use in the home.
👉 If the product doesn’t fit these criteria, CMS will not cover it.
The HCPCS Code Process
Medicare reimbursement requires a HCPCS code (Healthcare Common Procedure Coding System). If no existing code applies, you must request a new one.
Submit to CMS’ HCPCS Workgroup:
- Applications are typically submitted to CMS (or the DME MAC contractor) during their annual cycle.
- You’ll need clinical evidence, FDA clearance (if applicable), and proof of medical necessity.
- CMS reviews requests and may issue a new Level II HCPCS code or instruct billing under a miscellaneous code (“E1399 – DME, miscellaneous”) until a permanent code is assigned.
FDA Clearance (If Applicable)
If your DME product is considered a medical device, CMS will require FDA clearance/approval (510(k) or PMA). Without FDA clearance, Medicare will not consider coverage.
National Coverage Determination (NCD) or Local Coverage Determination (LCD)
NCD: If the product is novel or high-impact, you can request CMS to issue a National Coverage Determination. This is a formal process, requiring submission of clinical evidence, peer-reviewed studies, and expert consensus.
LCD: Alternatively, one of the DME Medicare Administrative Contractors (MACs) may create a Local Coverage Determination, which can serve as the initial pathway for reimbursement in certain jurisdictions.
Coverage With Evidence Development (CED)
In some cases, CMS may allow conditional coverage while additional data is collected (e.g., clinical trials, registries). This allows limited reimbursement while proving long-term efficacy and safety.
Building the Reimbursement Case
You’ll need to present:
Clinical evidence: Studies showing safety, efficacy, and improved patient outcomes.
Cost-effectiveness: Comparisons to existing covered items.
Patient impact: Evidence that lack of coverage limits access to medically necessary care.
Support from providers & societies: Endorsements from professional medical groups can help.
Submission and Advocacy
File the HCPCS code application (CMS publishes deadlines each year).
Engage with your DME MAC’s Medical Directors.
Consider submitting a Coverage Request Letter with supporting documentation.
Be prepared for a 12–24 month process for permanent coverage approval.
✅ Bottom Line: To get Medicare approval for a new DME product:
Ensure FDA clearance (if applicable).
Apply for a new HCPCS code.
Work through either an LCD (via MAC) or an NCD (via CMS) for coverage policy.
Provide strong clinical, economic, and patient outcome evidence.
Use “miscellaneous” HCPCS codes (like E1399) for interim billing until approval.
Phase 1: Pre-Assessment (0–3 Months)
Goal: Confirm that the product qualifies as DME and gather baseline documentation.
Confirm DME Eligibility
Meets CMS definition: durable, serves a medical purpose, not useful to non-patients, for home use.
Regulatory Check
Verify FDA clearance or approval (510(k) or PMA, if applicable).
Collect labeling and device classification information.
Evidence Collection
Gather peer-reviewed studies, white papers, or clinical trial data.
Collect letters of medical necessity from physicians using the product.
Document competitor products and current gaps in coverage.
Phase 2: Coding Application (3–6 Months)
Goal: Obtain a pathway for billing through HCPCS codes.
HCPCS Application
Submit a request for a new Level II HCPCS code to CMS.
Provide supporting documentation: FDA clearance, clinical data, pricing, and sample claims.
Application deadline: January each year, decisions published in November.
Interim Billing
Until a code is assigned, bill using E1399 (DME, miscellaneous).
Must include a detailed description, invoice, and medical necessity documentation for claims.
Phase 3: Coverage Determination (6–18 Months)
Goal: Establish CMS approval for reimbursement.
National Coverage Determination (NCD)
Request if the product has nationwide implications or broad use.
Requires extensive clinical evidence.
Local Coverage Determination (LCD)
Work with one of the DME MACs to secure regional approval first.
Build relationships with Medical Directors.
Provide case studies and real-world outcomes.
Coverage With Evidence Development (CED) (if applicable)
Allows conditional coverage during ongoing studies.
Phase 4: Advocacy & Adoption (Ongoing)
Goal: Drive awareness, support, and payer adoption.
Engage Professional Societies
Obtain letters of support from specialty medical associations.
Provider Outreach
Educate clinicians on proper documentation of medical necessity.
Insurance Alignment
Provide a copy of CMS approval to private payers — most will follow CMS policy.
Business Preparation
Update billing workflows with the new HCPCS code.
Train staff on documentation and claim submission.
Timeline Overview
Key Contacts
CMS HCPCS Workgroup: Oversees coding decisions.
DME MACs:
- Jurisdiction A: Noridian Healthcare Solutions
- Jurisdiction B: CGS Administrators
- Jurisdiction C: CGS Administrators
- Jurisdiction D: Noridian Healthcare Solutions
📌 Next Step for Your Client:
Begin with Phase 1 assessment (confirm FDA clearance + evidence).
Prepare HCPCS code application for the next CMS deadline.
Draft letters of medical necessity and engage a DME MAC Medical Director early.
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