Part 4: Coding Complexities – OTS vs Custom Fit and Modifier Traps

Part 4: Coding Complexities – OTS vs Custom Fit and Modifier Traps

Coding is one of the most common stumbling blocks in durable medical equipment (DME) billing. Choosing the right HCPCS code seems straightforward, but subtle distinctions—such as whether an item is off-the-shelf (OTS) or custom fit—can mean the difference between approval and denial. On top of that, incorrect use of modifiers can trigger audits or lead to lost reimbursement.

The Challenge of HCPCS Coding

DME items are billed using HCPCS Level II codes. Many braces, supports, and orthotics fall under similar code families, which can easily cause confusion. For example, knee orthoses often have multiple valid codes depending on the complexity and fitting process.

• Source: CMS HCPCS Quarterly Update

OTS vs Custom Fit: What’s the Difference?

• Off-the-Shelf (OTS): Braces that can be used with minimal adjustment by the patient, requiring little to no expertise from a healthcare professional.
• Custom Fit: Braces that require significant modification, adjustment, or fitting by a trained healthcare professional for proper use.

The distinction matters because custom-fit codes often reimburse at higher rates. Billing a custom-fit code when documentation supports only OTS use can be considered misrepresentation.

• Source: Noridian Medicare – Knee Orthoses Coverage & Coding

Common Coding Errors

1. Choosing the Wrong Base Code – Example: Billing L1833 (OTS hinged knee orthosis) when the brace was actually dispensed as L1820 (prefabricated knee orthosis).
2. Custom vs OTS Confusion – Failing to document modifications but billing under a custom-fit code.
3. Missing Modifiers – Some payers require modifiers (e.g., RT/LT for right/left) that, if missing, cause automatic denials.
4. Sticker vs Actual Use – Billing based on manufacturer stickers or labels rather than how the brace was dispensed and documented.
5. Bundling Mistakes – Adding unnecessary codes when a single HCPCS code should cover the device.

• Source: Palmetto GBA – Orthoses Documentation & Coding

Why Modifiers Matter

HCPCS codes for braces often require side-specific modifiers (RT/LT) or even a -KX modifier when documentation supports medical necessity. Missing these modifiers results in denials, while misused modifiers raise compliance flags during audits.

• Source: CGS Medicare – Modifier Guidance

Best Practices to Avoid Coding Pitfalls

• Train Staff Thoroughly – Coding staff should be up to date on HCPCS changes and payer rules.
• Match Documentation First – Always align coding with clinical notes and proof of fitting.
• Verify with Payers – Maintain payer-specific coding references, especially where policies differ.
• Use Internal Audits – Random claim reviews help catch miscoding trends early.
• Track Revisions – Stay alert to quarterly HCPCS updates and adjust coding processes accordingly.

Why It Matters

Coding errors are a leading reason for both claim denials and post-payment recoupments in DME billing. They also draw unwanted attention from payers and auditors, especially when custom-fit vs OTS codes are misapplied. Careful coding, backed by solid documentation, reduces risk and protects reimbursement.

👉 Next in the series: Part 5 – Denials and Appeals: Fixing the Cycle