Top 5 Reasons DME Claims Get Denied (And How to Fix Them)
If you're running a DME or HME business, claim denials aren’t just frustrating — they’re costing you revenue. On average, DME providers lose 15–30% of their revenue to preventable claim rejections.
At Mastermind Healthcare, we’ve analyzed over 47 DME practices and found the same 5 reasons behind most denials. The good news? Each one is 100% fixable with the right systems in place.
Let’s break down the top 5 culprits — and how to eliminate them for good.
1. Missing or Incorrect KX Modifiers
The KX modifier certifies that documentation supports medical necessity for Medicare-covered DME items. Forgetting it or using it incorrectly is one of the fastest ways to get a claim denied.
Example: Billing for a power wheelchair (K0835) without the KX modifier triggers an automatic rejection.
How to Fix It
Implement a pre-billing checklist that flags all claims requiring KX modifiers. Train your team on Local Coverage Determinations (LCDs) for oxygen, CPAP, wheelchairs, and orthotics.
2. Incomplete or Missing ABNs (Advance Beneficiary Notices)
If an item might not be covered by Medicare, you must obtain a signed ABN from the patient. Skipping this step means you can't bill the patient if Medicare denies the claim.
Common ABN-required items: diabetic shoes, certain orthotics, and non-covered CPAP supplies.
How to Fix It
Create a digital ABN workflow integrated with your EHR (e.g., Brightree). Store signed copies securely and link them to claims.
3. Failure to Verify Eligibility & Benefits
Billing for a patient whose insurance doesn’t cover the item — or has exhausted their benefit — is a common and costly mistake.
Example: Submitting a claim for a BiPAP machine (E0470) for a patient without respiratory coverage.
How to Fix It
Verify eligibility before delivery. Use automated tools to check Medicare, Medicaid, and private payer benefits in real time.
4. Undercoding or Upcoding
Undercoding (billing a lower-level item) leaves money on the table. Upcoding (billing a higher-level item without justification) risks audits.
Example: Billing E0431 (stationary oxygen) instead of E0433 (portable) when both were delivered.
How to Fix It
Use certified coders trained in HCPCS Level II. Conduct monthly coding audits to ensure accuracy and compliance.
5. Poor Documentation & Missing Orders
Medicare requires a valid Physician’s Written Order (PWO) before delivery. Missing, incomplete, or unsigned orders are a top audit trigger.
Also required: face-to-face encounter notes, medical records, and proof of delivery (POD).
How to Fix It
Digitize your documentation workflow. Use templates to ensure all required fields are completed and stored securely.
Summary: Prevent Denials with Proactive Systems
DME claim denials are preventable with the right mix of technology, training, and compliance.
- Always use KX modifiers where required
- Obtain and store ABNs for at-risk items
- Verify eligibility before delivery
- Code accurately — no under or overcoding
- Maintain complete, audit-ready documentation
Stop Losing Revenue to Denials
Let our DME billing experts audit your claims and recover up to 30% more revenue.
Get My Free Revenue AuditBased on results from 47 DME providers served in 2024. Individual results may vary.