Piecing Together DME Regulation Effects

The durable medical equipment industry is rapidly changing due to increased regulation. In this RapidInsight, we examine the challenges for the durable medical equipment (DME) industry as well as the opportunities for DME suppliers and partners. Regulation has drastically changed the DME industry, largely for DME suppliers but also for beneficiaries of Medicare and Medicaid. This article also delves into the how regulation has affected the DME industry, the competitive bidding process for DME suppliers, results from the Center of Medicare and Medicaid Services (CMS) Round 1 recompete competitive bidding process, and opportunities for DME suppliers to grow.

The DME industry produces items as such as hospital beds, oxygen tents, catheters, nebulizers, wheelchairs, and diabetes testing equipment. DME can be used at home or in medical facilities and is designed to help improve patient quality of life over a prolonged period and, by definition, must be reusable (i.e., last for five years). Besides investments in the equipment itself, over its lifespan, most DME requires substantial use of consumable medical products, such as needles, test strips, masks, and hoses. According to CMS, the DME industry will grow at compounded annual growth rate (CAGR) of 6.7% a year from 2013 to 2021.