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Medicare’s Coverage of Durable Medical Equipment and Supplies

Medicare’s DME Policy	Medicare Suppliers
Buying Upgraded Equipment	Medicare’s Excluded Items	Allowable Limits

Does Medicare Pay for Home / Durable Medical Equipment?

Medicare is a federal health insurance program for the aging, elderly or disabled and the short answer is yes Medicare does pay for durable medical equipment (DME). Prior to a more thorough discussion, it is important to distinguish between the different types of Medicare coverage because the benefits with regards to medical equipment and supplies change depending on the type of coverage. Medicare Part A is hospital insurance, Part B is for outpatient services and Part C also called Medicare Advantage, is a combination of Part A and Part B sold by private companies instead of provided by the government.

Part A has strict requirements. Individuals must be Homebound, meaning they cannot leave their home without assistance and they must require skilled nursing care. If the equipment is medically necessary and purchased from an approved supplier, Part A will pay for 80% of the allowable amount for any specific item. The individual is responsible for the remaining 20% and any amount over the allowable limit.

Part B pays for home medical equipment for most Medicare recipients even if they are not Homebound. The equipment must be for use in the home or long term care facility such as assisted living but not in a nursing home. Home medical equipment must be medically necessary and purchased from a Medicare-approved supplier. Medicare Part B pays for 80% of the allowable purchase price and the individual is responsible for the remaining 20% and any amount over the allowable limit.

Part C, also known as Medicare Advantage Plans, is required by law to provide at least the same coverage as Part A and Part B. Therefore, if one has Medicare Part C, their plan will pay at least 80% of the allowable limit.

What Types of Durable Medical Equipment does Medicare Cover?

It is best to think of Medicare’s durable medical equipment coverage as having 2 levels: DME that is covered when determined to be medically necessary and DME that is never covered despite the need. For example, grab bar rails may be completely necessary for an individual however Medicare does not consider them to be medical equipment and therefore does not cover the cost.

Regarding medical supplies, generally speaking Medicare does not pay for disposable medical supplies with the exception being for diabetes and ostomy patients.

The table below outlines commonly requested durable medical equipment which is not covered and Medicare’s reason for denying coverage. This list is by no means complete, rather it is meant to provide the reader with a sense of Medicare’s denial logic so they may apply that to their own situation.

Item Type	Medicare’s Reason for Denying Coverage
Air Cleaners / Conditioners	Environmental control equipment; not primarily medical in nature
Beds (Oscillating)	Institutional equipment; inappropriate for home use
Blood Glucose Analyzers	Unsuitable for home use
Catheters	Nonreusable disposable supply
Dehumidifiers and humidifiers	Environmental control equipment; not primarily medical in nature
Diathermy Machines	Inappropriate for home use
Disposable Sheets	Nonreusable disposable supplies
Electrical Stimulation for Wounds	Inappropriate for home use
Elevators	Convenience item; not primarily medical in nature
Esophageal Dilators	Physician instrument; inappropriate for patient use
Exercise Equipment	Not primarily medical in nature
Fabric Supports	Nonreusable supplies; not rental-type items
Grab Bars	Self-help device; not primarily medical in nature
Heat and Massage Foam Pads	Not primarily medical in nature; personal comfort item
Incontinent Pads	Nonreusable supply; hygienic item
Injectors (hypodermic jet)	Not covered self-administered drug supply; pressure powered devices
Irrigating Kits	Nonreusable supply; hygienic equipment
Massage Devices	Personal comfort items; not primarily medical in nature
Overbed Tables	Convenience item; not primarily medical in nature
Preset Portable Oxygen Units	Emergency, first-aid, or precautionary equipment; not therapeutic
Raised Toilet Seats	Convenience item; hygienic equipment; not primarily medical in nature
Spare Tanks of Oxygen	Convenience or precautionary supply
Speech Teaching Machines	Education equipment; not primarily medical in nature
Telephone Alert Systems	Emergency communications systems and not diagnostic or therapeutic
Toilet Seats	Not medical equipment
Treadmill Exercisers	Exercise equipment; not primarily medical in nature

What are Medicare Suppliers vs. Medicare Participating Suppliers?

To ensure that Medicare beneficiaries pay the least amount possible out of pocket for durable medical equipment, it is important to distinguish between Medicare Suppliers and Medicare Participating Suppliers.

Medicare Participating Suppliers are suppliers that have agreed to accept “assignment” or the Medicare approved price for a particular of item of DME. Purchasing from a Medicare Participating Supplier will ensure the individual pays the least amount out-of-pocket.

Medicare Suppliers are enrolled in Medicare’s program, meaning they will accept Medicare as a form of payment, but they have the flexibility to set their own prices. By using a Medicare Supplier, the individual may or may not spend the least amount out-of-pocket.

There are also DME suppliers that are not approved by Medicare. If one purchases from these suppliers, Medicare will not pay.

Where Can I Find Medicare Approved Suppliers?

Medicare provides a searchable database of all approved suppliers. One can search by item type and by zip code. Results can be sorted to show Participating Suppliers first. Search for Medicare Approved Suppliers.

Renting vs Buying Medical Equipment with Medicare

Typically for any single item of durable medical equipment, there are multiple sources of payment. For example, Medicare will contribute, Medicare supplemental insurance may also help and an individual may pay a portion out-of-pocket as well. To minimize out-of-pocket costs, it is helpful to be aware of all the possible sources of funds that may be available to the elderly or disabled.

What are Medicare’s Allowable Limits for Home Medical Equipment?

Medicare has determined the maximum dollar amount their Participating Suppliers are allowed to charge for any particular item of home medical equipment. This is referred to as the “allowable limit”. Medicare updates this regularly and communicates this information to all their suppliers.

Making sure suppliers only charge the allowable limit is a self-regulating process in that Medicare will only reimburse suppliers the allowed amount. If suppliers attempt to bill for more than the allowable limit, they run the risk of not being reimbursed at all.

What is Upgraded Equipment and How Does One Purchase it with Medicare?

Typically when Medicare approves an item of durable medical equipment, they will approve only the most basic item available. For example, Medicare may approve the purchase of a walker, but not one with wheels and a hand brake; this would be considered “upgraded equipment”.

It is possible that an upgrade is medically necessary and if so, Medicare will pay for its portion of the upgrade cost. One’s prescription must state specifically the medical reason for why an upgrade is necessary. For example, the individual does not have the physical strength or balance required to lift a standard walker and therefore one with wheels is required.

Upgrades are also possible simply because the individual prefers a different model. However in this situation, Medicare will not pay the additional cost instead the individual or the supplier is responsible for making up the difference. Medicare has developed a specific process for this situation to help avoid fraud and abuse. When an upgrade occurs, the suppliers provide the individual with a document called an Advance Beneficiary Notice (ABN) which requires their signature. The ABN states the nature of the upgrade and that the individual is responsible for the additional cost. It is worth noting that sometimes suppliers will reduce the cost of the upgraded equipment in order to make a sale. The ABN is then provided to Medicare by the supplier when requesting reimbursement.

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