There is not a single set of rules regarding Medicaid’s role in paying for durable medical equipment, instead there are hundreds of different sets depending on one’s state and Medicaid sub-program.
Before discussing Medicaid’s role in paying for durable medical equipment (DME), it is helpful to briefly explain how Medicaid works. Medicaid is an insurance program for Americans with low incomes (and usually limited assets), primarily the elderly or disabled but also some adults and children. Within each state, there are multiple Medicaid programs and several Home and Community Based Services Waivers. Eligibility rules and benefits are determined at the program or waiver level by each individual state. Therefore, there is not a single set of rules governing Medicaid’s role in paying for durable medical equipment. Instead, there are hundreds of different sets of rules depending on the state and the Medicaid program in which one is enrolled.
Given there are many different sets of rules, generally speaking, Medicaid will pay for medical equipment when it is determined to be medically necessary, cost effective and meet their strict definition of what is durable medical equipment. Most states define DME as “equipment that can withstand repeated use, is primarily used to serve a medical purpose, is appropriate for home use and is not useful to a person without an illness or injury.” “Cost-effective” usually means that Medicaid will pay for the most basic level of equipment only. For example, it may be clear that it is a medical necessity for an aging or disabled individual to have a powered wheelchair. However, Medicaid may determine that the individual only needs a less-expensive, rear-powered chair instead of a center-powered chair that has a tighter turning radius.
Assistive technology vs. durable medical equipment … What is the difference? From a Medicaid perspective, most durable medical equipment falls under the broader category of assistive technology. For the purposes of this article, we use the phrases interchangeably. However, the reader should be aware that nuances exist and not all states or organization agree on the differences.
Despite there being hundreds of different Medicaid programs, most programs have similar processes for DME acquisition. These processes largely depend on the location in which the individual resides and intends to use the item. The process and rules are different for those living at home vs. in a nursing home. It is worth noting that the definition of “at home” is more broadly interpreted by some states than others. “At home” can include living in a family member’s home, in independent living or, in some cases, even in assisted living communities.
When an individual resides in a Medicaid approved nursing home, the process of acquiring durable medical equipment is largely invisible to the care recipient. The acquisition and approval process occurs behind the scenes. And the individual is provided with the durable medical equipment item for which they have been approved.
Medicaid can be provided outside of nursing homes. When this occurs, it is referred to as Home and Community Based Services or Waivers. Individuals participating in a Medicaid Waiver program typically have a higher degree of personal involvement in the acquisition of DME than Medicaid nursing home residents.
Individuals must obtain a medical justification letter for the durable medical equipment item from their doctor or therapist. They select a Medicaid-approved DME supplier and provide them with the medical justification letter. The supplier completes a Prior Approval (PA) application and sends it to the state Medicaid office for approval. The Medicaid office approves or denies the purchase and notifies both the individual and the supplier of their decision. If approved, the item is delivered by the supplier with the bill sent directly to Medicaid. If denied, the individual should receive the reason why and notification of the process to appeal the decision.
As one might assume, this process can be rather lengthy. For less expensive items, some seniors choose to buy the item out-of-pocket rather than waiting months to gain approval. Buying durable medical equipment online is usually the least expensive route.
There are multiple types of Medicaid programs. Which type of program may impact the process for acquiring durable medical equipment / assistive technology.
Often called Medicaid State Plan, this is the program most people think of when they hear the term Medicaid. Of the Medicaid programs, this will have the most restrictive eligibility requirements and the narrowest definition of durable medical equipment / assistive technology.
Also called Home and Community Based Services or 1915 Waivers, these are limited enrollment programs that help Medicaid beneficiaries live outside of nursing homes. Most (but not all) waivers will cover a broad range of durable medical equipment / assistive technology. Some waivers allow for Consumer Direction (sometimes referred to as Cash and Counseling). This means that the participants are allocated a budget and the flexibility to manage their own care providers and suppliers. Individuals’ care needs are assessed, and they are allocated the financial resources to pay for their care services, medical equipment and supplies. Since these individuals are working within a defined budget and have the freedom to allocate it as they see fit, they have significant incentive to buy inexpensive durable medical equipment and supplies to preserve their budget for other purposes. A complete list of waivers covering DME / AT is available at the bottom of this page..
This is a special Medicaid program designed to help individuals who currently live in nursing homes return to their homes or to living in the community. To make this possible, the program will purchase some durable medical equipment to enable participants to live at home. This can include hospital beds and wheelchair lifts. There are currently MFP programs in 44 states. The following six states do not have MFP programs: Alaska, Arizona, Florida, New Mexico, Utah and Wyoming. Read more about the Money Follows the Person Program. Readers should be aware that while 44 states have MFP programs, the programs may be referred to using different names in different states.
This list includes both HCBS Waivers, 1915 Waivers and some programs with consumer direction. It was last updated August 2022. There are also many non-Medicaid programs that cover DME.