The Impact of COVID-19 on the Durable Medical Equipment Market

The Impact of COVID-19 on the Medical Equipment Market

DME is a vital tool to care for patients with COVID-19 as well as provide support to patients who are in-home care so their chronic conditions can be well-managed. We all are aware of COVID-19 is still disrupting the healthcare sector specifically when it comes to supply chains such as repeated shortages of a mask, personal protective equipment (PPE), etc.

Moreover, these challenges also extend to durable medical equipment (DME) and supplies required by often at-risk patients in their homes to manage chronic conditions and other medical issues. Manufacturers and distributors have levied surcharges and passed along increases in their costs in response to the COVID-19 pandemic. Also, Suppliers are incurring additional operating expenses, for instance, utilizing personal protective equipment (PPE), providing IT equipment for staff to work remotely, or obtaining additional vehicles to make DMEPOS deliveries to keep their employees safe.

In these uncertain times of pandemic, suppliers are being financially harmed. They are unable to plan either their costs or the level and stability of revenue streams associated with delivering a product to patients. Overall, the covid-19 has impacted the DME market in both the short term and long term.

Short term and long term risk

In short term, we have seen supply chain disruptions cause shortages and delays of DME which could logically mean poorer population health, including increases in emergency department (ED) visits and hospitalizations due to chronic condition exacerbations.

The patients will face a costly medical crisis if it lags to get critical DME. Moreover, In the case of patient’s home care their care teams also need access to PPE, which remains in short supply in many areas of the country.

Most of the time, physicians who write a DME prescription for a patient are not aware that a supply chain shortage exists due to unanticipated DME shortages, payers and providers need to work together to ensure patients have ready access to much-needed home medical equipment. Hence, payers and providers need to work together to ensure patients have ready access to much-needed home medical equipment.

To counter the adverse effect of the pandemic, CMS has come with temporary regulatory waivers and rule changes, let’s see what are they?

Response from CMS to Covid-19 pandemic

With temporary regulatory waivers and rule changes, CMS is attempting to equip the healthcare system with the flexibility to respond to the 2019 Novel Coronavirus (COVID19) pandemic. For, instance, when DMEPOS is lost, destroyed, irreparably damaged, or otherwise rendered unusable, DME Medicare Administrative Contractors now have the flexibility to waive replacement requirements under Medicare. CMS is also waiving prior authorization and accreditation requirements for DME suppliers. Now, let’s look at the latest CMS waiver published in (Nov-Dec 2020).

Temporary waived to certain requirements for DME

Certain requirements for Durable Medical Equipment (DME), as well as prosthetics, orthotics, and supplies, are waived temporarily which are demonstrated below:

  • The waiver for Commercial members is effective March 6, 2020, through March 31, 2021. The waiver is subject to re-evaluation for the duration of the public health emergency.
  • The waiver for Medicare Advantage members is effective March 6, 2020, through the duration of the public health emergency.

Requirements from Professional providers and suppliers

Professional providers and suppliers must still:

  • Provide a standard written order (SWO) for all items
  • Document and communicate to the DME supplier that the professional provider has had a face-to-face encounter (i.e., an in-person or telehealth encounter between a treating professional provider and an individual) with the member within the six months preceding the date of the written order/prescription for Power Mobility Devices (PMDs);
  • Ensure that the items or services are reasonable and necessary;
  • Continue documenting the medical necessity for all services. Accordingly, the medical record must be sufficient to support payment for the services billed (that is, the services were provided, were provided at the level billed, and were medically necessary)

The COVID-19 pandemic has proved the gaps in an existing supply chain that have downstream quality and economic effects far broader than PPE and ventilators alone. Hence healthcare providers and health plan partners need to implement successful supply chain quality improvement initiatives to benefits all the stakeholders.

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