Fulfilling DME orders for items that Medicare does not cover may result in loss of dollars in the Medical Supply Industry faster than many other actions. Once an order is shipped and a claim is denied, it is typically impossible to recover payment. Therefore, in order to protect your profit margin, you must be able to identify if a particular item on the list of DME items is not covered by Medicare.
Below is a breakdown of the list of DME items that are excluded from coverage by Medicare, in the hopes that this information will allow you to stop giving away inventory at no cost.
The Ultimate Guide to DME Items Not Covered by Medicare
| Item Name | Category | Reason for Non-Coverage |
| Raised Toilet Seats | Statutorily Excluded (Bathroom Safety) | Classified as personal convenience; not primarily medical. |
| Grab Bars | Statutorily Excluded (Bathroom Safety) | Considered an environmental modification, not medical equipment. |
| Tub Transfer Benches | Statutorily Excluded (Bathroom Safety) | Useful to individuals without illness; considered convenience. |
| Bath/Shower Chairs | Statutorily Excluded (Bathroom Safety) | Non-mechanical item used for comfort/safety, not treatment. |
| Bathtub Lifts | Statutorily Excluded (Bathroom Safety) | Viewed as a convenience item for bathing rather than medical. |
| Air Cleaners / Purifiers | Statutorily Excluded (Comfort) | Environmental control item useful to healthy individuals. |
| Humidifiers / Dehumidifiers | Statutorily Excluded (Comfort) | Household appliance useful in the absence of illness. |
| Massage Devices | Statutorily Excluded (Comfort) | Considered soothing/comforting rather than medical treatment. |
| Stair Lifts | Statutorily Excluded (Comfort) | Classified as a home modification, not durable medical equipment. |
| Elevators | Statutorily Excluded (Comfort) | Structural home modification; totally excluded from DME. |
| White Canes | Statutorily Excluded (Sensory) | Classified as a self-help item, not a mechanical medical device. |
| Braille Teaching Texts | Statutorily Excluded (Sensory) | Educational/Self-help material, not medical equipment. |
| Braille Writers | Statutorily Excluded (Sensory) | Non-medical equipment used for communication. |
| Hearing Aids | Statutorily Excluded | Generally excluded by law (with very few surgical exceptions). |
| Dentures | Statutorily Excluded | Dental devices are excluded from Medicare DME benefits. |
| Eyeglasses / Contact Lenses | Statutorily Excluded | Excluded (unless following cataract surgery with lens implant). |
| CPAP Supplies | Not Medically Necessary | Denied if patient usage is <4 hours/night on 70% of nights. |
| Power Wheelchairs | Not Medically Necessary | Denied if patient can walk safely inside their home (In-Home Rule). |
| Oxygen Therapy | Not Medically Necessary | Denied if blood oxygen saturation levels are >88%. |
| Hospital Beds | Not Medically Necessary | Denied if patient does not require specific body positioning (e.g., >30°). |
| Motorized Scooters | Not Medically Necessary | Denied if patient has sufficient mobility to operate inside the home. |
| Walkers / Canes (in SNF) | Bundled (Consolidated Billing) | Cost is included in the facility’s daily payment (Part A stay). |
| Wound Care Supplies | Bundled (Home Health) | Included in the Home Health Agency’s payment during an open episode. |
| Ostomy Supplies | Bundled (Home Health) | Included in the Home Health Agency’s payment during an open episode. |
| Catheters | Bundled (Home Health) | Included in the Home Health Agency’s payment during an open episode. |
| Surgical Gauze | Bundled (Home Health) | Included in the Home Health Agency’s payment during an open episode. |
There is usually a reason behind every DME claim that Medicare denies. Most of the time when Medicare denies a claim for DME billing, it is because the DME item fits in to one of three categories that Medicare doesn’t cover. Therefore as a supplier, you should be able to take an order and quickly identify where the item may fit into one of the categories prior to dispensing the item to a patient.
As a general rule, if an item is classified under any of these three categories, Medicare will NOT pay you for providing this item:
- Statutorily Excluded: This category includes items prohibited from coverage under federal statute.
- Not Medically Necessary: Items that are not considered medically necessary, based on established clinical criteria (LCDs).
- Bundled (Consolidation billing): Items included in a hospital or agency’s bill.
Let’s break down each of these categories below.
1). The “Statutorily Excluded” Items
Medicare has created a “Statutorily Excluded Items” list. It is essentially a hard stop on covering certain items, no matter what the patient’s health issues may be. In other words, there is a specific list of items that Medicare almost never pays for, and these items are banned from coverage under the Durable Medical Equipment (DME) benefit as per the Social Security Act (the act that sets up Medicare).
As a supplier, identifying “statutorily excluded” items is the most important step in your business. Documentation will never change the result for these types of items. You can get a letter of medical necessity from dozens of doctors, and Medicare will deny the claim simply because the law prohibits paying for the items included in the “statutorily excluded” list.
Below, are the three primary categories of “statutorily excluded” items:
a). “Bathroom Safety”
The bathroom safety items category is likely to be one of the most frequent areas of conflict for both suppliers and patients. Family members, especially elderly family members, commonly believe that if a doctor recommends purchasing a shower chair to prevent falls, then the shower chair must be a medical expense. However, Medicare views these types of items completely different.
Medicare views bathroom safety items as personal convenience items instead of medical equipment. The reason for this classification is that while these products are beneficial, they don’t treat an illness or injury, and they’re not primarily mechanical. Instead, they’re seen as environmental changes that anyone, including someone without a medical condition, could use for comfort.
Examples of bathroom safety items that are excluded from coverage by Medicare include:
- Raised toilet seats
- Grab bars
- Tub transfer benches
- Bath chairs and shower seats
- Bathtub lifts
b). Comfort & Convenience
The general rule for DME is that the item must not be something a person in good health would buy to enhance their living environment. If a healthy individual could purchase an item to make their living environment more comfortable, Medicare typically will not cover it.
Medicare places these types of devices into a category called “comfort and convenience” items. It assumes that although these items may alleviate some of a patient’s symptoms, they are not primarily medical in nature. For example, a humidifier could help a patient breathe better, but since it is also a household appliance that healthy individuals use for comfort, it is statutorily excluded from regular DME coverage.
Examples of comfort & convenience items include:
- Air cleaners and purifiers
- Humidifiers and dehumidifiers
- Massage devices
- Stair lifts and elevators (these are generally considered home modifications)
c). Sensory Items
The category of sensory items includes items that are designed to assist with sensory impairments, particularly blindness. Although these tools are a must-have for a patient with visual impairments to live an everyday life, Medicare generally considers them to be self-help items, as opposed to durable medical equipment.
In many cases, the decision regarding whether or not these items qualify as “equipment” versus “treatment of a medical condition,” is based on how Medicare defines “equipment” and “medical treatment”. Medicare does not consider these items to replace a body function mechanically like a prosthetic or a wheelchair would.
Examples of sensory items include:
- White canes for the blind
- Braille teaching texts
- Braille writers and typewriters
2). Not Medically Necessary Items
The second category of Medicare’s non-covered DME list are those classified as “Not Medically Necessary”. This can be the most frustrating category for suppliers because it often feels like a technicality. Unlike the statutorily excluded list where the item itself is banned, items in this category are actually covered benefits. Medicare frequently pays for CPAPs, hospital beds, and wheelchairs. However, they will refuse to pay for them if the patient’s specific health status does not line up perfectly with their strict coverage rules.
Understanding the LCD (The Rulebook)
To understand why these claims are denied, you have to review the Local Coverage Determination (LCD), or the “rulebook” used by Medicare to evaluate each claim.
Essentially, the LCD is a check-list for the provider and the supplier to follow in order to get paid. Simply having a doctor state that a patient needs a piece of DME equipment is not sufficient to get Medicare to pay for it. The medical notes have to prove the patient meets 100% of the LCD requirements for that specific item.
Example:
Suppose two patients, Patient A and Patient B, both want a hospital bed.
Patient A has severe congestive heart failure. The medical records for Patient A demonstrate that he is unable to breathe while lying flat and requires his body to be placed at a specific angle greater than 30 degrees to sleep safely. He meets the requirements listed in the LCD. Medicare will pay for the bed because the bed is treating a specific medical condition.
Patient B has general back pain and finds sleeping on a flat mattress uncomfortable. He wants an adjustable bed because it allows him to relax and get a better night’s rest. He does not meet the requirements listed in the LCD. Although the bed would help Patient B, Medicare sees this as a comfort issue, rather than a medical necessity, because there is no medical condition that requires that he position himself at a specific angle to survive or function.
Three of the most common items that fall into the “Not Medically Necessary” category and result in claims rejection for suppliers include:
a). CPAP Supplies and the Usage Rule
Many sleep therapy patients encounter this issue. Essentially, Medicare places new CPAP patients on probation for the first few months. Medicare requires proof that the patient is actually using the CPAP machine. Specifically, the patient must use the machine for at least 4 hours per night on 70% of nights over a consecutive 30-day period. If the data card shows that the patient is only using the machine 50% of the time, Medicare deems the therapy as not medically necessary because the patient is not compliant. Therefore, the supplies will be denied and the reimbursement for the machine will stop.
b). Power Wheelchairs and the “In-Home” Rule
This is perhaps the most misinterpreted rule in the DME industry. Patients need a power wheelchair to visit the grocery store or attend church, however, Medicare’s criteria are strictly based on the “In-Home” rule. Medicare only cares about the patient’s ability to move around within the four walls of their house. If a patient can walk from their bedroom to the bathroom safely, even if they cannot walk a block down the street, Medicare will reject the claim for the power wheelchair. They reason that since the patient can function inside their home without assistance, the device is not medically necessary for daily living.
c). Oxygen and the Numbers Game
Oxygen therapy is strictly governed by test results. Medicare has established a rigid standard for blood oxygen levels, typically requiring a saturation level of 88% or less. If a patient’s test results come back at 90%, the patient technically exceeds the threshold. Even if the patient feels short of breath or their physician believes oxygen will assist the patient, Medicare will reject the claim as not medically necessary because the patient’s objective test results do not substantiate a need for oxygen therapy according to Medicare’s specific policy parameters.
3.) Bundled Items (Consolidation Billing)
This category is tricky to understand. The equipment itself is not banned and is medically necessary. It is, however, not payable to you, as the provider. This is due to the Medicare’s Consolidation Billing Rule.
Medicare consolidates all services provided to a patient into a single payment when that patient receives care in a facility such as a Skilled Nursing Facility (SNF) or in some cases, a Home Health Agency (HHA).
Instead of making separate payments to the Doctor, Physical Therapist, etc., and the DME Supplier, Medicare makes one large payment to the facility (SNF/HHA) which covers all the patient’s care, including their medical equipment.
Therefore, Medicare considers the equipment “paid” since the facility received a payment for the equipment in the large payment made by Medicare to the facility. When you make a claim to Medicare for this equipment, you are essentially asking Medicare to make a second payment for the same equipment.
Common Example
A patient is recovering at a Skilled Nursing Facility (SNF) after a surgery (Part A Stay) and you provide a walker to them for rehabilitation.
❌ Result: Your claim is denied immediately.
➡️ Reason: The daily rate Medicare pays the SNF already includes the cost of purchasing/renting a walker to provide to the patient for their rehabilitation while in the SNF.
By providing the walker, you simply gave the SNF free equipment. The SNF gets the money for the walker and you get the denial.
Note: During a Home Health episode, the rules are divided:
Bundled: Medical supplies (wound dressings, surgical gauze, ostomy bags, catheters) are nearly always bundled. Therefore, the Home Health Agency is paid for these items, not you.
Unbundled: Heavy DME (hospital beds, wheelchairs, lift chairs) are usually unbundled. You may generally bill Medicare Part B for these items even though the patient has a nurse visiting.
How do you protect yourself as a DME supplier?
The only way to prevent these denials is to determine the patient’s status prior to providing the patient the equipment.
1). Check “Place of Service”: Verify where the patient is living (legally) at the time of delivery. If the patient is in a Skilled Nursing Facility (POS 31), do NOT bill Medicare directly. You MUST either contract with the SNF to receive payment for the equipment or wait until the patient is discharged to their home.
2). Check for Open Home Health Episode: Prior to providing medical supplies, determine whether the patient has an open “episode of care” (specific 60 day period that a Home Health Agency has claimed responsibility for the patient’s treatment and medical supplies) with a Home Health Agency. Many heavy DME items may be billed during a Home Health episode, however, most medical supplies (such as wound care and ostomy supplies) are typically bundled. If a Home Health episode is open, the agency is responsible for providing those medical supplies, not you.
What to Do When a Patient Requests Supplies During a Home Health Episode?
If the patient requests a bundled item (such as wound dressings), you CANNOT bill Medicare for this item. If you attempt to submit the claim, it will be automatically denied with a CO-97 code, indicating the service is part of another payment.
You must explain the situation to the patient. Here is an example statement:
“Mr./Ms. Jones, since you have a nurse visiting you from [Agency Name] currently, Medicare will pay the agency for these specific medical supplies. Please contact your nurse to request she bring the needed supplies to you. At this time, I am unable to submit a claim to Medicare for these supplies.”
However, if you have a good relationship with that Home Health Agency, you don’t necessarily have to turn the business away. You can still provide the supplies, but you must bill the agency instead of Medicare.
To do this, you need to contact the agency first. Obtain a purchase order or other written confirmation from the agency that they agree to pay for the medical supplies. After obtaining this documentation, you can deliver the item(s) and bill the agency for the supplies.
DME Coverage Checklist for Suppliers
Use this 3-step check for every new order. If the answer to any of these questions is “Yes,” do not bill Medicare directly without further action.
✅️ Is the item Statutorily Excluded?
Check if the requested item falls into one of these banned categories. Medicare does not cover products which are statutorily excluded. Statutorily excluded categories include:
- Bathroom Safety: Raised toilet seats, grab bars, tub benches, shower chairs.
- Comfort & Convenience: Humidifiers, air purifiers, stair lifts, massage devices.
- Sensory Items: White canes, braille devices.
➜ Action: If you determine that the product is statutorily excluded, do not proceed with billing Medicare. Tell the patient that Medicare cannot cover this product due to federal statutes. You may offer to sell it to the patient as a cash sale (private pay).
✅️ Is the item “Not Medically Necessary”?
Check if the patient’s medical records show a medical necessity for the product based on the Local Coverage Determination (LCD) criteria.
- LCD Criteria: See if the diagnosis code is in line with the coverage policy.
- In-Home Rule: If the patient is requesting a mobility device, can the patient safely walk within their own home? (If the patient can safely walk inside, they are not eligible for a mobility device).
- Documentation: Have you received the actual physician documentation supporting the medical necessity of the product (not just the prescription)?
➜ Action: If the documentation is lacking, or if the patient does not meet all of the LCD criteria, do not bill Medicare. The claim will be denied. You must request better documentation from the doctor. If the patient still wishes to purchase the product, you must have the patient complete an Advance Beneficiary Notice (ABN). This will allow you to bill the patient privately if Medicare denies the claim.
✅️ Is the item Bundled?
Check if there is another facility receiving payment for the same item at the time of billing.
- Skilled Nursing Facility (SNF): Is the patient currently residing in a Skilled Nursing Facility (POS = 31)?
- Home Health Agency (HHA): Does the patient have an active Home Health Episode? If yes, is the patient requesting medical supply products such as wound care or ostomy products?
➜ Action: If the patient is in a Skilled Nursing Facility, or in an active Home Health episode requesting supplies, do not attempt to bill Medicare Part B. You should either send the bill directly to the facility (if you have a contract), or you should direct the patient to request the item through their facility/nurse.
You are ready to ship and bill ONLY if:
[✔] Item is not statutorily excluded.
[✔] Physician documentation clearly supports that the patient meets all requirements of the LCD.
[✔] Patient is not in a Skilled Nursing Facility or has an open Home Health episode for supplies.