- September 17, 2026
- Posted by: Josh Knoll
- Category: DME Billing
You’re losing money right now on claims that should have been paid or accepted on the first submission. And the reason could be that the order is incomplete, maybe the medical record does not support coverage, or even maybe the claim carries the wrong modifier. It can also probably be that your biller coded a rental as a purchase. The reasons can be plenty. A DME billing company handles the submission, coding, and collection of claims for durable medical equipment — wheelchairs, CPAP machines, hospital beds, oxygen concentrators, anything a physician prescribes for home use — and bills your durable medical equipment correctly so you no longer have to worry anymore. In short, the good ones cut your denial rate and speed up your cash, and the bad ones just move your problems to someone else’s desk, at a markup.
Here’s what your checklist should be before you sign anything with a DME billing company.
- DME-specific experience (not general medical billing)
- HIPAA compliance documentation and security certifications
- Their actual first-pass collection rate, not a marketing number
- Compatibility with your existing software (Brightree, NikoHealth, CPR+HME, TeamDME, DMEWorks and more)
- Pricing model and what’s excluded from it
- How they handle denials and appeals, step by step
- Prior authorization turnaround time
- Reporting on real-time dashboards or a monthly PDF
- Contract length and exit terms
- References from suppliers running similar claim volume
Related Reading: Best Practices in DME Billing For Modern Healthcare
DME-Specific Experience
Why it matters for DME providers:
General medical billing and DME billing aren’t the same skill. A biller who’s spent five years solely on physician billing and its claims operation doesn’t automatically know that DME billing splits into rentals and purchases.
Moreover, HCPCS Level II codes carry different documentation requirements than the CPT codes used for office visits. DME billing relies heavily on HCPCS Level II codes, modifiers, medical-necessity documentation and product-specific coverage requirements. That workflow differs from professional billing, which frequently uses CPT codes for physician services. Also, confusion like E0601, which is a CPAP device, and E0607, a home blood glucose monitor, can be confusing if you are not aware. Get the code wrong, and the claim doesn’t just get delayed, it gets denied outright, and now you’re refiling.
What to look for:
Ask what percentage of their total business is DME versus other specialties. A company that does DME as one line among fifteen specialties isn’t going to have the same depth as one where DME is the core business. Ask how many years their DME team specifically has been doing this, not the company’s founding date.
Red flags:
Vague answers about medical billing experience without DME specifics. A sales rep who can’t name the HCPCS code structure or explain the rental-versus-purchase distinction unprompted. That’s not someone who’s actually done the work.
Compliance and Security Credentials
HIPAA compliance isn’t optional, and neither is a real answer about how a company protects PHI. Ask for their compliance documentation directly; don’t take “we’re HIPAA compliant” at face value, because that phrase shows up on every billing company’s homepage whether it’s backed by anything or not.
ISO 27001 certification is a stronger signal. It means an outside auditor reviewed their information security processes, rather than relying solely on the vendor’s statements. Further, question how they transmit and store patient data, whether it’s encrypted, and who has access.
First-Pass Collection Rate and Denial Handling
Why it matters
Your first-pass rate is the percentage of claims that get paid on the first submission, no resubmission required. Every claim that fails on the first pass costs you time. Moreover, every failed submission increases administrative work and delays reimbursement.
What to ask
Get the actual number and ask how they calculate it. Some companies count a claim as clean the moment it’s submitted and not the moment it’s paid, which inflates the figure.
Also, some vendors report clearinghouse acceptance rather than first-pass payment or resolution, which can make the metric appear stronger. So when you ask what happens when a claim is denied, you need to further know whether there is a dedicated denial-management step or if it sits in a queue until someone gets to it.
Red flags
A company that does not have the real first-pass percentage or talks in ranges is absolutely not the one.
Software Compatibility
This one is practical and not glamorous, but it decides how much friction you deal with in month one. Ask whether the billing company works inside your existing platform like Brightree, NikoHealth, CPR+HME, TeamDME, DMEWorks, which are the common ones in this space, or whether you’re expected to migrate to theirs. A forced migration adds weeks to onboarding and risk to your existing data. Some companies are comfortable working inside a client’s proprietary system too; ask directly rather than assuming.
Pricing Model and Total Cost
DME billing companies typically price one of three ways:
Percentage of collections — You pay a cut of what they actually collect, usually somewhere in the mid-single digits to low double-digits depending on claim volume and complexity. More often, the fee is calculated as a percentage of defined collections. Rates vary according to claim volume, service scope, payer mix and account complexity. This aligns their incentive with yours; they only get paid when you get paid, but ask what counts toward collections. Some exclude patient-pay balances or secondary insurance recoveries.
Per-FTE or hourly rate — You pay for dedicated staff time regardless of collection outcome. This can be cheaper at high volume, but it shifts the collection risk back onto you.
Per-claim rate — A flat fee per claim submitted. Simple to budget, but it doesn’t reward the company for chasing down denials once they’ve submitted the claim; they’ve been paid whether it clears or not.
Ask what’s excluded from each model. Prior authorization work, denial appeals, and patient collections calls are sometimes billed separately even under an all-in-sounding contract.
Common Mistakes When Choosing a DME Billing Company
Picking on price alone — The cheapest quote often means the thinnest service: fewer eligibility checks, slower prior auth turnaround, less proactive denial management. You end up paying for it in lost claims instead of lost dollars upfront.
Not asking about staffing continuity — High turnover on a billing team means your account gets reassigned repeatedly, and every handoff loses institutional knowledge about your specific payer mix.
Skipping the reference check — A glowing testimonial on a website tells you nothing. A phone call with a current client running similar volume tells you everything.
Assuming HIPAA compliance without documentation — Ask for it in writing.
Ignoring the contract’s exit terms — Some contracts lock you in for a year with penalties for early termination. Know this before you sign, not after you’re stuck.
What does a DME billing company actually do?
DME billing companies handle the full billing cycle for durable medical equipment claims. From eligibility verification, prior authorization, HCPCS coding, claims submission, denial management, and accounts receivable follow-up. Some also handle patient collections and CPAP compliance tracking for rental equipment.
How much does it cost to outsource DME billing?
It depends on the pricing model. Percentage-of-collections arrangements typically run in the mid-single digits to low double digits of what’s collected. Per-FTE or hourly models vary by market and volume. Get quotes from at least three companies before comparing, since one quote alone tells you nothing about whether you’re getting a fair rate.
What’s the best DME billing software?
There isn’t one universal answer, it depends on your equipment mix and payer volume. Brightree is the most widely used platform in the space. NikoHealth, CPR+HME, and TeamDME are common alternatives.
Related Reading: DME Billing for Continuous Glucose Monitors: Codes, Coverage, and Denials
Ready to Compare Options?
If you want a reference point while you’re collecting quotes, we are here to help. A DME billing services provider working with three of the country’s top 10 DME companies publishes its own first-pass collection rate at 97% and helps clients cut billing costs by up to 80% after switching from in-house teams. Numbers like that are worth using as a benchmark when you’re asking other vendors for theirs; a real comparison point beats a vague “we’re competitive” every time. Looking to know more details on how we are the best DME billing company in the USA, call our expert for a no-commitment call. Get the actual numbers, check the software fit, read the contract’s fine print, and call the references; that’s your job and we will take care of the rest.