Durable Medical Equipment - Medicare General guidelines

Expenses incurred by a beneficiary for the rental or purchases of durable medical equipment (DME) are reimbursable if the following three requirements are met:

• The equipment meets the definition of DME (§110.1);
• The equipment is necessary and reasonable for the treatment of the patient’s illness or injury or to improve the functioning of his or her malformed body member (§110.1); and
• The equipment is used in the patient’s home.

The decision whether to rent or purchase an item of equipment generally resides with the beneficiary, but the decision on how to pay rests with CMS. For some DME, program payment policy calls for lump sum payments and in others for periodic payment. Where covered DME is furnished to a beneficiary by a supplier of services other than a provider of services, the DMERC makes the reimbursement. If a provider of services furnishes the equipment, the intermediary makes the reimbursement. The payment method is identified in the annual fee schedule update furnished by CMS.

The CMS issues quarterly updates to a fee schedule file that contains rates by HCPCS code and also identifies the classification of the HCPCS code within the following categories.



Category Code Definition
IN  Inexpensive and Other Routinely Purchased Items
FS Frequently Serviced Items
CR Capped Rental Items
OX Oxygen and Oxygen Equipment
OS Ostomy, Tracheostomy & Urological Items
SD Surgical Dressings
PO Prosthetics & Orthotics
SU Supplies
TE Transcutaneous Electrical Nerve Stimulators



The DMERCs, carriers, and intermediaries, where appropriate, use the CMS files to determine payment rules. See the Medicare Claims Processing Manual, Chapter 20, “Durable Medical Equipment, Surgical Dressings and Casts, Orthotics and Artificial Limbs, and Prosthetic Devices,” for a detailed description of payment rules for each classification.

Payment may also be made for repairs, maintenance, and delivery of equipment and for expendable and nonreusable items essential to the effective use of the equipment subject to the conditions