Diversification: Build a balanced portfolio

Q. How can DME providers diversify revenue streams to reduce dependence on Medicare and mitigate risks associated with competitive bidding? 

A. The key is shifting from a reactive reimbursement model to a proactive business development strategy. Competitive bidding and Medicare fee schedules have long constrained margins, making it risky to rely solely on traditional payer sources. To build resilience, providers should explore business-to-business revenue streams that offer more predictable cash flow and less regulatory friction. 

One effective approach is establishing service agreements with long-term care facilities, hospices and PACE programs. These relationships often operate outside the Medicare framework and can be structured around a combination of service level and fee-for-service billing. By embedding DME into broader care coordination models, providers can deliver value-added services like expanded equipment and supply offerings and clinical services, creating new revenue layers. 

Technology plays a critical role in enabling this shift. Streamlined intake and order processing systems can reduce administrative time from minutes to seconds, freeing up staff to focus on higher-value tasks like insurance coordination and customer service. When delivery teams have real-time access to orders, fulfillment becomes faster and more accurate, enhancing client satisfaction and reducing delays in patient care. 

Transparent portals that allow referring organizations to view order status, approve high-cost items, and access easy-to-interpret invoices eliminate billing confusion and improve communication. When integrated with both the referring entity’s EMR and the DME provider’s system, these portals enable seamless data exchange, reducing duplicate entry, minimizing errors and accelerating approvals. While they enhance visibility and operational efficiency, it’s important to note that these portals do not function as benefit managers; rather, they support coordination and transparency across teams. These efficiencies build trust with B2B customers, who gain control over their spending while benefiting from a more connected care experience. 

Ultimately, diversifying revenue isn’t about abandoning Medicare; it’s about building a more balanced portfolio. By reducing uncertainty through B2B channels and operational automation, providers gain financial stability and strategic flexibility to weather regulatory shifts and reimbursement cuts. 

Gabe Buckner is director of partnerships for VirtueRN. Reach him at gabe@virtuern.com.