Navigating Compliance and Reimbursement in Lymphedema Compression Therapy

Published in Member Communities on June 24, 2025

Lymphedema compression therapy has taken a significant step forward in accessibility and reimbursement with its designation as a DME benefit under Medicare. But with opportunity comes complexity. In a recent episode of the Industry Matters Podcast, Ronda Buhrmester, Senior Director of Payer Relations and Reimbursement at VGM & Associates, and Noel Neil, Chief Compliance Officer at ACU-Serve, unpack the nuances of this evolving opportunity and what it means for suppliers.

Market Outlook: Lymphedema Compression Therapy

The market outlook for lymphedema compression therapy is promising, with rising demand and a noticeable shortage of suppliers. Although the benefit was officially implemented in January 2024 following legislation passed in December 2022, many providers remain hesitant to enter the space. For those considering it, a thorough market analysis is essential—evaluate referral sources, local demand, and reimbursement rates before making the leap.

“There are more patients than providers right now,” Neil notes. “But you have to understand the documentation and compliance requirements before jumping in.”

Documentation: The Cornerstone of Compliance

One of the most critical pieces of this is the importance of thorough documentation. While Medicare has issued some guidance, there is no formal Local Coverage Determination (LCD) yet. That means suppliers must rely on diagnosis codes and ensure that medical necessity is clearly documented in the patient’s medical records—not just on the prescription.

“If the diagnosis is only on the order and not in the medical record, it won’t hold up in an audit,” Buhrmester warns.

Medicare Advantage and Other Payers: Proceed with Caution

While Medicare Fee-for-Service (FFS) has relatively clear guidance, Medicare Advantage (MA) plans and commercial payers vary widely in their implementation. Some require prior authorization, and others may not yet recognize the benefit.

“Always get payer policies in writing,” Buhrmester advises. “Verbal confirmation isn’t enough.”

New HCPCS Codes and Billing Updates

It is important to note the recent updates to HCPCS codes, including the addition of custom compression wrap codes and the separation of daytime and nighttime compression garments. These changes aim to improve billing accuracy and utilization tracking.

“The new codes help distinguish between different types of garments and their replacement schedules,” Neil explains.

Compliance Pitfalls: Upgrades and Assignment

A recurring issue in the industry is the misuse of upgrades. Suppliers cannot charge patients extra for a more expensive product if it falls under the same HCPCS code. The only workaround? Non-assigned billing, which allows suppliers to charge patients directly and submit claims without accepting Medicare’s fee schedule.

“You can’t upgrade within the same code. That rule changed in 2016,” Buhrmester clarifies.

Getting Started: What Suppliers Need to Know

If you're considering entering the lymphedema compression therapy space, here are the key steps:

Evaluate your market – Identify referral sources and patient demand.
Understand compliance – Know the documentation and billing requirements.
Update your 855S or PECOS – Reflect new product categories in your Medicare enrollment.
Check state licensure and accreditation – Requirements vary by state.
Educate your team – From intake to billing, everyone should understand the process.

Final Thoughts

Lymphedema compression therapy as a DME benefit represents a significant opportunity for suppliers—but only if approached with diligence and compliance in mind. Education, documentation, and preparation are key to success in this space.

“We want to make sure that when you get paid, you keep the money in the bank,” Neil concludes.

To listen to the podcast episode, click here.