Medicare is a federally funded health insurance program, designed to provide health insurance to people age 65 and over and certain people with disabilities. The Health Care Financing Administration (HCFA) runs the Medicare program, and the Social Security Administration helps by enrolling qualified participants into the program.
Medicare has two parts. Part B is the medical insurance part of Medicare that pays for Durable Medical Equipment (DME). In order for Part B carriers to be reimbursed for DME, two conditions must be met. First, the DME must be necessary and reasonable either in the treatment of an injury or illness, or in improving the function of an impaired body part. Second, the DME must be for use in the individual’s home. The necessary part of the first requirement is met by obtaining a doctor’s prescription that includes the diagnosis and prognosis for that individual, the reasons behind prescribing the DME, and the length of time that DME will be needed. The requirements for reasonableness is much more complex. The guidelines the Part B carrier can use in determining reasonableness include weighing the expense against the anticipated therapeutic benefits, investigating less costly alternatives, and determining if the DME will serve the same purpose as equipment readily available to the individual. If the DME fails the reasonableness test, reimbursement in full is usually denied.
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