Traditional Medicare Provider Payment—Assistive Technology and Durable Medical Equipment


Under Part B, Medicare covers many types of medically necessary assistive technologies that improve health and functioning, including durable medical equipment (DME), prosthetics, orthotics, and supplies. The most common types of DME are mobility devices such as wheelchairs and walkers. Newer or less familiar forms of assistive technology, such as speech generators, may not be covered even when medically necessary because of questions about their clinical efficacy or appropriate use.

Some DME suppliers have engaged in fraud and abuse. CMS has imposed supplier conditions to address this problem, including surety bonds, criminal background checks, and unannounced site visits. Since 2009, with some exceptions, DME suppliers must be accredited and post a surety bond. The ACA requires that providers have face-to-face visits with beneficiaries to determine medical necessity before the need for power wheelchairs and other DME items can be certified. In addition, DME suppliers must undergo fingerprinting, criminal background checks, and unannounced site visits. CMS may withhold DME payments for 90 days when investigating suspected fraud.

To slow the growth of Medicare spending, most durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) suppliers must submit competitive bids. CMS has estimated that competitive bidding, in its first year of operation (2012), reduced Medicare spending on DMEPOS by 42 percent and that it will save almost $26 billion over ten years. Initially, observers were concerned that requiring competitive bidding could negatively affect beneficiaries, but early indications are that access to DMEPOS and health outcomes have not suffered.


Access and integrity

In this policy: Federal

The Department of Health and Human Services (HHS) should continue to monitor and control the incidence of fraud and abuse associated with durable medical equipment (DME) and monitor Medicare beneficiaries’ access to durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).

HHS should strictly enforce regulations on accrediting and minimum quality standards for DMEPOS suppliers in order to deter unnecessary utilization of devices while ensuring Medicare beneficiaries have access to safe, high-quality, medically necessary, and appropriate DMEPOS.

Competitive bidding should continue to be used for pricing all DMEPOS, as long as quality and access are not compromised by the competitive bidding process.

HHS should ensure that the competitive bidding process includes exact individual specifications for DMEPOS. The agency also should monitor and publicly report on whether Medicare beneficiaries are receiving the appropriate quality of service and value from their DMEPOS, as indicated by safety, cleanliness, and cost (see also Chapter 11, Financial Services and Consumer Products - Product Safety in the Home).