CMS, accountants define DME differently

Wednesday, April 30, 2003

BALTIMORE — The Medicare Trustee’s Report to Congress that details expenditures from healthcare sector to sector within the Medicare program raises questions about the size of the durable medical equipment market.

While the Trustees Report marked Medicare DME expenditures at $6.5 billion for 2002, yet another authoritative CMS study — the National Health Care Expenditures Projections: 2001-2011 report (NHCEP) — projected DME expenditures to reach $5.1 billion for 2002.

Both reports were written by CMS’s Office of the Actuary. But since they were written for different audiences, durable medical equipment is defined differently in each report. Several reasons explain the difference between the numbers:

First, the Trustees $6.5 billion includes $0.8 billion in DME drugs — mainly albuterol and ipratropium bromide — expenditures; the NHCEP projections do not.

Second, while managed care DME expenditures are divided into other healthcare sectors, depending on which provider does the billing for the NHCEP report, the Trustees Report includes managed care DME expenditures.

And third, since the NHCEP report was issued March 26, 2002, the 2002 expenditures in that report are pure projections while the Trustees Report is partly based on actual expenditures.

The figures reckoned in the Trustees Report do not include DME expenditures in managed care organizations, nor does it include expenditures for enteral or parenteral nutrition.

For the best appreciation of the size of the Medicare DME market, a source inside CMS recommends reliance on expenditures from the Trustees Report. HME