The Complete Guide to Durable Medical Equipment (DME) & Medicare Coverage

What Exactly is Durable Medical Equipment (DME)?

The Centers for Medicare & Medicaid Services (CMS) has a very strict definition of what qualifies as Durable Medical Equipment. For an item to be classified as DME and eligible for coverage under Medicare Part B, it must meet all five of the following criteria:

DME vs. HME: What Is the Difference?

The healthcare industry is full of acronyms, and two of the most common in the mobility space are DME (Durable Medical Equipment) and HME (Home Medical Equipment). While they are often used interchangeably by patients and even some medical professionals, there is a distinct difference between the two, especially when it comes to insurance coverage.

Home Medical Equipment (HME) is a broad umbrella term. It encompasses any medical device, equipment, or supply that is used in a patient's home to manage a health condition or improve quality of life. This can include everything from grab bars and bath benches to advanced power wheelchairs.

However, to be classified specifically as DME by Medicare, the item must meet the strict 5-point criteria listed above. Many HME items, like grab bars or elevated toilet seats, are considered "convenience items" by Medicare and do not meet the strict definition of DME, meaning they are often not covered by insurance. All DME is HME, but not all HME is DME.

Does Medicare Cover DME? The 80/20 Rule

One of the most common questions we receive is whether Medicare will cover the cost of a power wheelchair or other mobility device. The short answer is yes—Medicare Part B (Medical Insurance) covers medically necessary DME that your doctor prescribes for use in your home.

Understanding how Medicare pays for equipment is crucial for budgeting. Once you have met your annual Medicare Part B deductible, Medicare typically pays 80% of the Medicare-approved amount for the equipment. You are responsible for the remaining 20% coinsurance.

"If you have a secondary insurance policy, Medicaid, or a Medigap plan, it may cover the remaining 20%. In many cases, this results in little to no out-of-pocket cost for the patient. Always provide all your insurance cards to your DME supplier so they can coordinate benefits."

Renting vs. Buying DME Through Medicare

When you need DME, you might wonder whether you should rent or buy it. Under Medicare rules, you don't always get to choose. Depending on the type of equipment, Medicare may require you to rent it, allow you to buy it outright, or give you the option to choose between the two.

• Capped Rentals Many items, including standard power wheelchairs and hospital beds, fall under a category called "Capped Rentals." Medicare pays a monthly rental fee to the supplier for up to 13 continuous months. After 13 months, the equipment transfers to your ownership. During the rental period, the supplier is responsible for all maintenance and repairs at no additional cost.
• Lump-Sum Purchase For more expensive, customized equipment like Complex Rehab Technology (CRT) power wheelchairs, Medicare often allows for a lump-sum purchase option, paying for the equipment upfront rather than renting it over time.

What Is a DMEPOS Supplier and Why Does It Matter?

When searching for mobility equipment, you might see companies advertising themselves as "DMEPOS Suppliers." DMEPOS stands for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies. But this isn't just a descriptive term—it's a formal, highly regulated designation.

The Centers for Medicare & Medicaid Services (CMS) requires all DMEPOS suppliers to be accredited by a CMS-approved accreditation organization in order to bill Medicare. To achieve and maintain accreditation, a supplier must pass rigorous inspections and demonstrate compliance with strict quality standards.

Navigating this process can be complex, but you don't have to do it alone. Check our Medicare & Insurance Guide for more details, or contact our team for assistance.