DME is covered by Medicare, but only when specific conditions are met. Medicare defines Durable Medical Equipment (DME) as reusable medical items intended for home use that can withstand repeated use and have an expected lifetime of at least three years. DME must serve a medical purpose and generally not be useful to someone who is not ill or injured. Understanding the rules for obtaining and paying for this equipment is important for beneficiaries.
Medicare Part B Coverage for DME
Medicare Part B (Medical Insurance) is the program component responsible for covering Durable Medical Equipment. Part B covers equipment prescribed by a doctor for use at home, along with a wide range of outpatient medical services and supplies. Coverage is conditional on the equipment being deemed medically necessary for treating an illness or injury.
A requirement for coverage is the “home use” rule, meaning the equipment must be appropriate for use in the patient’s residence. A hospital or skilled nursing facility stay covered under Part A does not qualify as the home, though a long-term care facility can sometimes meet the definition. Covered DME examples include manual and power wheelchairs, hospital beds, oxygen equipment, nebulizers, and walkers. Certain supplies and accessories, such as tubing for oxygen or test strips for diabetes, are also covered if they are necessary for the effective use of the equipment.
Establishing Medical Necessity and Approved Suppliers
To qualify for coverage, DME must be deemed “medically necessary.” This requires a formal written order from a treating practitioner, such as a doctor, nurse practitioner, or physician assistant. The order must document that the equipment is appropriate for the beneficiary’s specific illness or injury and will have therapeutic value. For many items, the practitioner must conduct a face-to-face examination with the beneficiary to determine this need.
The patient’s medical record must contain objective information that supports the need for the ordered item. This documentation justifies the claim for payment and substantiates the medical necessity of the equipment. Medicare only covers items primarily and customarily used for a medical purpose. Equipment used only for comfort or convenience, such as grab bars or stair lifts, is generally not covered.
The equipment must be acquired from a supplier enrolled in and approved by Medicare, sometimes referred to as a DMEPOS supplier. These suppliers must meet strict quality and compliance standards to participate. If a beneficiary obtains equipment from a supplier who does not accept assignment or is not enrolled, the claim may be denied. In this case, the beneficiary may be responsible for a much higher cost.
Your Out-of-Pocket Costs for Durable Medical Equipment
Under Original Medicare (Part B), the beneficiary is responsible for a portion of the cost of covered DME. The annual Part B deductible must be satisfied before Medicare begins to pay. Once the deductible is met, Medicare pays 80% of the Medicare-approved amount for the equipment.
The remaining 20% of the Medicare-approved amount is the beneficiary’s coinsurance responsibility. This payment structure applies whether the item is purchased or rented. For inexpensive or routinely purchased items, such as canes or blood sugar monitors, Medicare requires a lump-sum purchase. The beneficiary pays the 20% coinsurance on the total purchase price in these cases.
For more expensive items, such as manual and power wheelchairs, Medicare mandates a capped rental period. Medicare makes monthly rental payments for 13 continuous months, and the beneficiary pays the 20% coinsurance on each payment. After the 13-month rental period is complete, the supplier must transfer ownership of the equipment to the beneficiary. Oxygen equipment follows a different rule, remaining a rental for a 36-month period. After this period, the supplier must still provide the equipment and necessary supplies for a total of five years.
DME Coverage Through Medicare Advantage Plans
Medicare Advantage Plans (Part C) must cover all the same items and services as Original Medicare, including DME. A Part C plan cannot deny coverage for an item that would be covered under Part B, provided medical necessity criteria are met. However, the way a beneficiary accesses the equipment and the resulting out-of-pocket costs can differ significantly from Original Medicare.
These private plans may use different cost-sharing structures, such as copayments instead of the 20% coinsurance required by Part B. They often use a specific network of approved DME suppliers, and using an out-of-network supplier may result in higher costs or claim denial. Medicare Advantage plans frequently require prior authorization for DME. Beneficiaries must consult their specific plan’s Evidence of Coverage document for the exact rules regarding supplier networks and financial responsibility.