Durable Medical Equipment

FamilyAssets Staff

October 14, 2022

A clinician helps and older adult man use a walker.

Durable Medical Equipment (or DME) is a term used to describe non-disposable devices in the home that assist someone living with a medical condition. Wheelchairs, glucose monitors, and CPAP machines are frequently prescribed DME. Keep reading to learn more about the different kinds of home equipment prescribed and the financing options available.

Types of home equipment

Durable Medical Equipment is an umbrella term encompassing many types of home equipment that provide therapeutic relief from physical impairments. This equipment is always prescribed by a physician and is intended for long-term, repeated use. Wheelchairs, ventilators, and crutches are all examples of DME.

For a piece of home equipment and supplies to be considered DME, it must directly address your loved one’s health condition. Typically, DME provides little to no value to someone who doesn’t require it for relief. If your loved one uses a type of medical equipment that fits these criteria, Medicare will likely qualify it as DME and provide coverage for its costs.

As your loved one ages, they may need Disposable Medical Equipment to help them overcome their health conditions. Disposable Medical Equipment includes tools to manage blood sugar, catheters to manage incontinence, and bandages to dress wounds. These tools don’t qualify as Durable Medical Equipment because the patient uses them only once, and then disposes of them.

These two categories of medical equipment and supplies have similarities, but they are classified differently by Medicare. It’s important to understand which category your loved one’s medical equipment belongs to so you can understand Medicare’s role in coverage.

Any type of home health equipment designed to withstand regular, repeated use can qualify as Durable Medical Equipment. What differentiates basic home equipment from DME is whether Medicare will cover it or not.

There are some types of home equipment that Medicare explicitly defines as DME, and will cover for those enrolled in Part B. According to Medicare’s coverage guidelines, the following types of home equipment are classified as DME:

Walkers
Traction Equipment
Suction Pumps
Sleep Apnea Devices (i.e. Continuous Positive Airway Pressure [CPAP] machines)
Patient Lifts
Oxygen tanks and accessories
Nebulizers
Manual Wheelchairs
Power Mobility Devices
Infusion pumps and medical supplies to administer medications
Hospital Beds
Crutches
Continuous Passive Motion (CPM) machines
Commode Chairs
Canes
Glucose Monitors and Test Strips
Support Surfaces (i.e. air-fluidized beds)

Who needs durable medical equipment?

In many cases, Durable Medical Equipment isn’t designed with a specific health condition in mind. Rather, DME is created to assist with a function or set of functions. For example, a wheelchair isn’t designed to help someone with paralysis specifically; it is designed to help anyone with a condition who can benefit from it. A wheelchair also benefits those with broken hips or legs, allowing it to assist people with a wider range of conditions. For this reason, it can be challenging as a caregiver to understand when your loved one may need to begin using DME.

In some cases, you’ll immediately know your loved one needs home equipment. This is common in the case of broken limbs and other emergency health situations. Other times, your loved one may begin to show symptoms of impairment slowly, and their need for DME isn’t immediately apparent. You may notice them struggling to walk from one room to another, or they may show gradual symptoms of respiratory distress. These observations are important and will play a key role in maintaining your loved one’s quality of life as they age.

Whether a person needs DME or not depends on their condition, their functionality, and the severity of their impairments. These factors will help their physician determine which type of DME is best for the situation. For example, a doctor may prescribe a wheelchair for someone with a broken hip, but crutches for someone with a sprained ankle.

It’s important for your loved one to be honest about their pain levels and their ability to function for their doctor to determine which type of DME may best suit their needs. Each person is different, and there’s no “one-size, fits-all” piece of home equipment. It’s a process of learning what your loved one struggles with, and figuring out what the best options are to help them find relief from their impairments.

Getting a DME prescription

Before your loved one can purchase home equipment, they need a prescription from a doctor or therapist. Medicare, Medicaid, and other insurance plans typically require a physician to determine it as medically necessary for a patient before they will consider coverage, so while some items are available without a prescription, they won’t qualify for financial assistance if you purchase them without a doctor’s orders.

When your loved one’s doctor outlines their discharge plan, they’ll typically include details about any necessary DME. They’ll usually recommend items they know are covered services by Medicare and other primary insurance providers. In some cases, doctors don’t list any recommendations at all, which requires a follow-up appointment for further assistance.

Many times, DME prescriptions are written in the case of an emergency health condition. Falls, strokes, and other illnesses or injuries can require the assistance of home equipment immediately following your loved one’s discharge. In these cases, it’s easier for their physician to understand what their needs are and they can provide an accurate idea of which DME to prescribe.

In other situations, health conditions develop over time and the physician can’t see everything that’s changed in between the patient’s visits. In these cases, the doctor will prescribe DME once they’ve confirmed it’s a medical necessity to assist their patient and they know the solution is applicable in a home environment. To determine if DME is medically necessary for your loved one, their physician will ask you to share detailed observations of their struggles and behavior. As a caregiver, you should share as much information as you can to help the physician determine what’s best for your loved one.

How long will you need DME?

For most seniors, DME is a long-term solution. The amount of time your loved one needs to use DME will depend on their health condition and their prospects for recovery, meaning they may need it for a few months or a few years. For example, your loved one may need crutches for 10 weeks to recover from a foot injury, but they may need a CPAP machine for the rest of their life to treat sleep apnea. The only way to determine how long your loved one needs DME is to speak to their doctor, who can give you an estimated time frame.

Medical equipment costs

Each type of Durable Medical Equipment has varying costs. These costs fluctuate depending on the equipment’s manufacturer, the materials used to make it, and its purpose. Some seniors need customized equipment for their conditions, which can further increase their out-of-pocket costs. In addition, some equipment costs vary by location, so your loved one may pay more or less than the average rate depending on where they live.

According to a 2016 cost analysis on Durable Medical Equipment, you can expect the following average costs when your loved one needs to buy DME:

Hospital bed (including the mattress and rails): $1,224
Oxygen concentrator: $412 – $1,630
Positive Airway Pressure machines (CPAP and BiPAP devices): $300 – $748
Walkers: $25 – $250
Manual Wheelchairs: $111 – $156

While these numbers represent averages, some types of DME (including extensive home modifications) can cost significantly more than others. To get an accurate idea of how much your loved one’s DME will cost, you need to talk to their doctor or speak to a DME supplier.

Paying for durable medical equipment

Like many prescriptions, Durable Medical Equipment is often expensive. Many seniors are hesitant to accept their need for DME because they don’t think they can afford it, thanks to high out-of-pocket costs. Fortunately, there are a handful of resources that may pay for your loved one’s DME if they meet certain qualifications. These include Medicare, Medicaid, and the Department of Veterans Affairs (VA).

Medicare

Whether Medicare will cover your loved one’s DME or not depends on their Medicare plan and the specifics of their equipment. Medicare considers Part B as Supplementary Insurance, and it provides coverage for DME. Over 50.7 million people have Medicare Part B, making it a common payer for home equipment.

Those with Medicare Part A are only partially covered services for DME. Their plan covers limited types of equipment for a predefined range of conditions. Medicare considers Plan A as Hospital Insurance, and it doesn’t inherently cover DME. If your loved one has Medicare Plan A, they’ll need to qualify for the Home Health Benefit for their benefits to extend to home equipment. To qualify for the Home Health Benefit, your loved one must prove they cannot leave their home and require skilled nursing assistance.

If your loved one has Medicare Part B or is approved for the Home Health Benefit, Medicare will cover their DME with limitations. Medicare covers up to 80 percent of the allowable amount of DME, as long as a physician prescribes it as medically necessary. The allowable amounts are set by each state individually and vary for each type of DME.

To put this coverage in perspective, picture your loved one needing a $100 cane, but your state’s allowable amount for canes is $50. Medicare will cover 80 percent of the $50 allowance, amounting to $40. Your loved one will be responsible for the remaining $60.

If your loved one is enrolled in an Original Medicare plan, they may be eligible for the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. Medicare created the Competitive Bidding Program to reduce the costs of DME and other medical supplies for themselves and for their beneficiaries. This program allows suppliers to submit competitive bids for their items, allowing Original Medicare beneficiaries to purchase them at reduced prices. Medicare uses the bids to determine how much they’re willing to pay for certain items. These policies are only applicable in competitive bidding areas and apply to everyone with an Original Medicare plan within those regions. In some cases, this program allows seniors to get equipment at a fraction of the cost they would have paid otherwise, but it isn’t applicable to all Medicare beneficiaries.

Medicaid

Medicaid will reimburse the entire cost of some DME for those who qualify, depending on the state in which your loved one resides. If they have Medicaid, they’ll need to be eligible for the Home and Community-Based Services (HCBS) waiver to qualify for DME coverage. Typically, Medicaid benefits are intended for skilled nursing home care, but the HCBS waiver extends these benefits to home health care.

To qualify for the HCBS waiver, a doctor must document the need for home equipment. Medicaid will not cover any DME until the beneficiary proves it is medically necessary for them. Once their physician confirms the equipment is medically necessary, your loved one can choose their DME from a list of Medicaid-approved suppliers.

After your loved one finds a supplier, they need to send a prior authorization application to their state’s Medicaid office. This allows Medicaid to review the piece of equipment before the beneficiary places an order. When the Medicaid offices make their decision to approve or deny the application, they will inform the beneficiary and the supplier. Medicaid will offer an explanation if they deny an application, and the beneficiary will have a chance to repeal the decision for approval. If your loved one’s application is approved, the supplier is allowed to deliver the equipment. Their bill is then sent directly to Medicaid.

The Department of Veterans Affairs (VA) health care and insurance

The Department of Veterans Affairs (VA) covers DME costs for thousands of elderly veterans in need. If your loved one is a veteran (or is the surviving spouse of a veteran), they may qualify for financial assistance from one of the VA’s health insurance programs or grants. These include the TRICARE and TRICARE for Life Plans, the CHAMPVA for Life program, and the Cash and Counseling for Veterans program.

TRICARE for Life (TFL) serves as supplemental insurance for retired veterans. It’s considered a secondary payer to Medicare, meaning your loved one needs to have Plan A or Plan B enrollment to qualify for benefits. Medicare will cover up to 80 percent of the state’s predefined allowable amount for home equipment, but your loved one may still hold responsibility for hundreds of dollars in copays. TRICARE for Life covers the remaining balance due on a piece of equipment after Medicare pays its share. This can help your loved one pay the 20 percent of costs Medicare doesn’t cover; however, it’s important for them to confirm with the VA that their item is covered before they commit to a purchase.

The basic TRICARE plan will also cover DME, but to a lesser extent than TFL. Your loved one needs to prove the item is medically necessary, and they must not reside in a nursing home to be eligible for coverage. TRICARE doesn’t cover any piece of equipment which could be preferable to your loved one if it isn’t crucial to the performance of the item they need. For example, they may cover a wheelchair, but they may not cover elevated leg lifts.

The VA also offers the Veterans Directed Home and Community Based Services (VD-HCBS) program, which works similarly to the Medicaid HCBS waiver. Sometimes known as the Cash and Counseling for Veterans Program, the VD-HCBS outlines a care budget for veterans, which they can use to pay for their care. The programs cover DME and will pay for it when it is determined medically necessary by a physician.

If your loved one chooses to pay for their DME with the VD-HCBS program, they must budget their allotment of funds for equipment on their own. The program gives your loved one a set amount of funds to work with, which they can use how they please to pay for their DME. For example, if your loved one receives $1000 from the VD-HCBS program to pay for their equipment, they may choose to use $500 for a hospital bed and $500 for a CPAP machine.

Finally, the VA offers a specific program for seniors who aren’t veterans themselves, but for the family of permanently disabled or deceased veterans. The CHAMPVA for Life (CFL) health insurance program is for retired persons aged 65 years or older and serves as a secondary payer to Medicare (much like TRICARE for Life, although a person cannot qualify for both programs). The CFL program will help cover any DME costs remaining after Medicare pays its portion, and can greatly reduce copays for your loved one.

Your loved one may also use their Aid and Attendance benefit to pay for DME.

Assistive technology projects

Depending on where your loved one lives, they may qualify for specialized state assistance programs to cover their DME costs. These programs vary, but each state offers some type of benefit additional to Medicaid to help seniors pay for home equipment and other types of home health care.

Directed by the U.S. federal government, the Assistive Technology Act provides funding for projects in all states and territories. Assistive Technology (AT) Projects were created to help seniors get better access to home health care devices. Each state operates its AT Project individually, but medically necessary DME is covered in most cases.

Instead of paying for DME outright, the AT Projects place their focus on renting and recycling programs to bring equipment to seniors. Many DME Loan Programs offer their items free of charge in an effort to reduce the costs of home equipment. This offers numerous financial benefits to seniors and can assist them when they have no other way to pay for equipment. Most renting periods last between two weeks and six months, but some seniors qualify for an extended loan period.

A rented piece of equipment gives your loved one a chance to try out the item on a short-term basis. This trial period allows them to determine how well it fits their needs. By renting, your loved one can get an accurate idea of what they should look for when they purchase their own equipment. Renting isn’t intended as a long-term solution, but it can help your loved one while they search for permanent options.

Many AT Projects offer recycling and exchange programs in addition to equipment loans. When individuals no longer need their equipment, they may donate it to a state recycling or exchange program so it may go to another person in need. Once the items are tested, sterilized, and refurbished, they are available for purchase. If your loved one is comfortable buying a refurbished product, they may find the item they need at a discounted price through their state’s recycling or exchange program.

Tax Deductions

If your loved one is over the age of 65 years old, they may qualify for senior medical tax deductions for the purchase of DME. Seniors who spend more than 7.5 percent of their Adjusted Gross Income (AGI) on medical equipment can receive this deductible, and use the tax credit to reduce their taxable income for the year. Although these deductions won’t pay for DME outright, they can help your loved one recuperate some of their funds if they pay for any items out-of-pocket.

As a caregiver, you can claim an elderly dependent on your taxes if you meet certain criteria. For your loved one to qualify as a dependent on your taxes:

You must provide more than 50 percent of your loved one’s financial support.
You must be related, or you must have lived together for at least one year.

If you and your loved one meet these conditions, you may qualify for a tax deduction as the tax filer, which you can use to help pay for your loved one’s DME.

Reverse mortgage

Reverse mortgages don’t behave like normal loans and require greater consideration. In a reverse mortgage, a financial institution offers a loan relative to the value of a person’s home. The person is responsible for paying back this loan with interest, but only after they’ve passed away or lived outside of the home for a full calendar year. For this reason, most reverse mortgages are paid back in full, rather than in monthly increments like a typical loan. These loans also offer more money up-front than other types of loans.

A reverse mortgage isn’t necessary for many seniors to pay for DME, but serves as an option for those requiring highly specialized home care. If your loved one requires extensive assistance from home equipment, or if they need significant home modifications, a reverse mortgage can be an effective way to cover the costs.

Long-term care insurance

If your loved one has long-term care insurance, they should check with their provider to see if they have coverage for home equipment. Most long-term care insurance plans have a defined budget per diem for the beneficiary’s costs of care (for example, one might have a $200 spending limit for their care each day), but some plans offer solutions to pay for DME as well. Many plans will offer coverage for DME as long as the beneficiary can prove it is medically necessary. To confirm your loved one’s plan will cover their costs, they’ll need to speak to a provider representative.

Life insurance and personal injury settlements

There are two main types of settlements your loved one may have to pay for their DME: life insurance settlements and personal injury settlements.

As people age, they may purchase life insurance to give themselves and their family security as they age. If your loved one is the beneficiary of a life insurance policy, they may use those funds to pay for their home equipment.

Alternatively, your loved one may have access to personal injury settlement funds if they were injured in an accident. For example, if your loved one was the victim of nursing home neglect and broke their hip as a result of an employee’s negligence, they may pursue a personal injury lawsuit. They can demand compensation for any DME they need as a result of their injury. If the case settles in their favor, the other party (or their insurance carrier) will pay a lump sum to cover any damages they caused. This option isn’t available to everyone who needs DME but provides great financial assistance for those who are eligible.

Choosing equipment

Not all types of home equipment are created equally. Your loved one may need customized equipment or tools made by a specific manufacturer to fit their needs. Up front, some choices may seem like they will work as needed, but may not work as well as others.

Various manufacturers make Durable Medical Equipment. Many offer basic options for equipment, which ship quickly and generally cost less, and others offer customization. Customized equipment isn’t necessary for everyone, and the extended shipping times and higher costs can be a hindrance for patients who don’t need special features. It’s important to take your loved one’s needs into consideration as you compare types of equipment – for some people, customized DME will help them far more efficiently than the basic options.

For example, a motorized power wheelchair with a customized seat costs more than a manual wheelchair and will take longer to ship. For some, this makes the manual wheelchair look like a more attractive option, but the motorized version offers more benefits. If your loved one could benefit more from a motorized power wheelchair than a manual one, consider this during the purchasing process.

In addition to the equipment’s features, consider the manufacturer. Never order DME from a manufacturer you or your loved one’s physician doesn’t trust. Quality home equipment manufacturers have a history of good customer satisfaction, but their products are typically costly. As you decide on your purchase, consider the price and the manufacturer’s reputation to make the right decision. Never choose a piece of equipment for the cost alone, but understand the most expensive piece of equipment doesn’t always offer the best quality, either. Your loved one’s DME will play an important role in their well-being as they learn to live with their health condition, and choosing the right equipment can make a substantial difference for them as they adapt.