Introduction
As more Americans are aging in place or remain living at home instead of moving into skilled nursing homes or assisted living residences, there has been an increased need for seniors to buy home or durable medical equipment (DME). Last year, Americans spent approximately $55 billion on durable medical equipment in the U.S. Fifteen percent of that, over $8 billion, is paid for directly out-of-the-pocket of consumers. It is the objective of this article to help individuals maximize the assistance they receive from their insurance coverage, find other forms of financial assistance, and minimize their out-of-pocket spending on DME.
Definitions and Terminology
Before a discussion about paying for durable medical equipment, it is helpful to have a clear understanding of what durable medical equipment is and to define some of the related terms and acronyms.
Durable Medical Equipment (DME), as well as the terms, Home Medical Equipment (HME) and home healthcare equipment, are used interchangeably. They refer to re-usable, long lasting, medical equipment for use in the home that helps individuals to function on a daily basis. This includes mechanical items, such as wheelchairs, walkers, commodes, and handrails, and electrical items like hospital beds, scooters, blood and glucose monitors, ventilators, and nebulizers.
DMEPOS is a Medicare-specific acronym that stands for Durable Medical Equipment, Prosthetics, Orthotics and Supplies. From the consumer’s perspective, DMEPOS is essentially synonymous with DME.
Assistive Technology (AT) and Assistive Devices are terms favored by the independent living community and refer to any item, electrical or mechanical, that helps individuals with their activities of daily living. What is the difference between Assistive Technology vs. Durable Medical Equipment? Actually, there is very little difference. The official definition of AT, according to the Assistive Technology Act of 1998, is as follows:
“any item, piece of equipment, or product system, whether acquired commercially, modified, or customized, that is used to increase, maintain, or improve functional capabilities of individuals with disabilities.”
Home Medical Supplies should be differentiated from Durable Medical Equipment. Supplies refer to single use items, such as adult diapers and other incontinence supplies, or diabetes test strips. Read more about paying for home medical supplies.
Prescriptions and DME
Most durable or home medical equipment can be purchased without a prescription, with medical oxygen being the notable exception. However, a prescription is extremely valuable in helping to get insurance to pay for an item. As an alternative to a prescription, individuals can prepare a Justification Statement of Medical Necessity which describes the condition, the need and why a specific brand and model item are necessary.
Who Determines What is Necessary
A variety of different medical professionals have the expertise to assist individuals in determining what durable or home medical equipment is necessary. These include doctors, nurse practitioners, physical and occupational therapists, hospital discharge planners, and most home care agencies.
Caregivers, because of their proximity to the individual in need of care, often have a good sense of what would be helpful. However, they sometimes lack knowledge about the types of durable medical equipment that exists and some of the subtle differences between manufacturers. It is also worth noting that sometimes older individuals will attempt to hide the extent of their need from their caregivers. Medical professionals may be better suited than family caregivers to recognize this tendency and discover the true extent of the individual’s needs.
As important as having the expertise to help in the selection of DME is having the authority to authorize paying for it. Insurance coverage usually requires a prescription or a “justification statement”. The higher degree of medical education held by the authorizing party, the more likely insurance will pay for the item.
For some medical equipment, it is necessary to make home modifications. For example, older homes often require the widening of doorways to allow for wheelchair access or the addition of power outlets to accommodate electrical equipment. In these instances, the expertise of home contractors may be required to assess the extent of home modifications required and to provide a bid for the cost. Learn more about paying for home modifications.
Financial Assistance and Payment Options
Typically, for any single item of durable medical equipment, there are multiple sources of payment. For example, Medicare will contribute. Medicare supplemental insurance may also pay a portion, and the individual may pay a part out-of-pocket as well. To minimize out-of-pocket costs, it is helpful to be aware of all the possible sources of funds that may be available to the elderly or disabled.
Did You Know? Seniors are eligible to receive free, non-binding quotes for bathroom safety modifications.
Medicare and Private Insurance
Medicare or other private health insurance covers the majority of spending on durable and home medical equipment. Medicare Part A (hospital coverage) may contribute, but has more restrictive eligibility criteria. Medicare Part B (medical coverage) is much more likely to help. In either case, there will be copayment requirements. Full details on Medicare’s DME policy.
Medicaid and HCBS Waivers
Medicaid will pay for home medical equipment, often covering 100% of the cost. However, Medicaid is only for individuals with very low incomes and extremely limited assets. There are many different Medicaid programs and Medicaid Waiver programs. And each one has different rules and benefits with regards to durable medical equipment. For details and state specific HCBS (Home and Community Based Services) Waiver information, please visit our Medicaid and DME page.
Veterans Health Care and VA Insurance
The Department of Veterans’ Affairs, either through insurance, grants, or other assistance programs, helps elderly veterans with the cost of medical equipment. Assistance may come in the form of paying Medicare’s co-payments, cash, or actual equipment and supplies. Assistance may come from a variety of sources within the VA such as: TRICARE for Life, CHAMPVA for Life, VD-HCBS, or HISA and other grants. Read more about Veteran’s assistance for durable medical equipment.
State Assistance Programs
Separate from their Medicaid programs, every state provides some form of assistance to elderly and disabled individuals in need of home or durable medical equipment. While some states have more robust programs than others, all states offer Assistive Technology Projects, which help with the acquisition of DME, and Protection and Advocacy Programs, which primarily offer legal assistance to ensure insurance programs pay their part.
In addition, many states have assistance programs specifically designed to keep individuals off of Medicaid. Some of these non-Medicaid programs help individuals by providing financial assistance for home medical equipment. The theory being that the state will save money by paying for home medical equipment that enables a person to remain living at home. Otherwise, the state might end up paying a far greater amount for nursing home care.
Non-Profits and Foundations
Both national foundations and local non-profits offer assistance programs for home and durable medical equipment. Some programs limit their assistance to persons with specific conditions, for example, Parkinson’s Disease. Other programs have financial, but not functional requirements. Learn about specific non-profit and foundation assistance for home medical equipment.
Other Options
Tax Deductions
Durable or home medical equipment is tax deductible under the Medical and Dental Expense Tax Credit. One must be able to make a valid argument that the purchase of the item was a medical necessity. The easiest and strongest evidence for this argument is a written prescription or a “Certificate of Medical Necessity” from a doctor. Although this is not required.
Alternatively, the cost of durable medical equipment can be claimed using the Dependent Care Tax Credit if: 1. One is caring for a family member or loved one who, for tax purposes, is considered a dependent and 2. The equipment is purchased to increase the care recipient’s ability to function independently so that the caregiver can work.
Reverse Mortgages
In rare circumstances, getting a reverse mortgage may make sense as a way to generate funds to buy medical equipment. For example, when the equipment is coupled with a significant home modification that will allow the individual to remain living at home for several years. More about the pros and cons of reverse mortgages is available here.
Life Settlements
Selling a life insurance policy, called a life settlement, can provide individuals with the option to receive large amounts of cash, which can fund the purchase of expensive home medical equipment and any necessary home modifications. However, this option will only make good economic sense in some very limited situations. More information.
Injury Settlements
If an elderly individual requires medical equipment because they were injured in an accident or fall, they may be eligible for compensation or reimbursement for the cost of the medical equipment and additional expenses. Learn more about receiving compensation for injuries and accidents.
Long Term Care Insurance
Most long-term care insurance policies work by paying out specific, agreed upon, daily dollar amounts directly to the insured individual or the designated payee. For example, a policy may cover up to $150 / day for long-term care. However, the definition of what long-term care is varies with every policy. Fortunately, most policies consider the cost of medically necessary, durable or home medical equipment to be a covered long-term care expense. Existing policy holders should check with their insurance providers to determine if durable medical equipment is covered. Purchasers of new long-term care insurance policies should make certain DME is an allowable expense. Learn more about long-term care insurance.
Local Programs
Local Area Agencies on Aging and Independent Living Centers may have programs that offer assistance that have not been mentioned here. There are over 1000 of these organizations nationwide. Find your local Area Agency on Aging or Independent Living Center.
Out-of-Pocket / Private Pay
The unfortunate reality is that there are occasions when individuals are forced to pay out-of-pocket for their durable or home medical equipment. The good news is when one must spend their own money, there are options that can help them save a considerable amount.
Purchasing durable medical equipment online enables individuals to avoid the difficulty of transporting bulky or heavy equipment, as most websites will provide free shipping. Another option is purchasing equipment used. There are pros and cons, but used equipment can offer considerable savings. Read our guide to purchasing used durable medical equipment. Renting equipment is another option, read our guide to renting durable or home medical equipment.
When Insurance Won’t Pay
When insurance refuses to pay for durable or home medical equipment, one has 3 options. These are appealing the claim, suing one’s insurance company or buying the DME out of pocket.
To appeal a denied claim, one’s insurance will have a fairly straight-forward process. However, unless there was a filing error, an appealed claim without additional, stronger justification will usually be denied. One may need to re-visit their doctor or receive medical justification from an additional medical professional, as well as take the time to prepare a strong Justification Statement.
Suing an insurance company is an expensive and time-consuming option. However, many lawyers work on a “contingency fee basis,” meaning they do not charge the client unless they win. If they win, they take a percentage of the settlement: usually in the 20% – 40% range. While this is a low-risk way to fight for durable medical equipment, it is worth noting that if one wins, they may still have to pay the 20% – 40% out-of-pocket that went to their attorney. Another option to get legal assistance to fight an insurance company is to contact your State Protection and Advocacy Program.
