DMEPOS mismanagement drives a staggering 40%1 increase in fraud, waste, and abuse, leading to overbilling. Delays in fulfillment increase readmission risks by 30%2, while poor service can reduce Net Promoter Scores (NPS) by 20 points3.
The Financial Case for DMEPOS Management
Effective DMEPOS management is crucial for controlling healthcare costs. Every dollar spent on DMEPOS saves the healthcare system $23 to $414, highlighting the need to optimize this spend. For instance, the cost of a year’s oxygen therapy at home is equivalent to a single day in the hospital, where an average stay costs $3,0255. Beyond cost savings, quality care is directly impacted—88%6 of Medicare beneficiaries consider DMEPOS essential to their satisfaction, which affects Star Ratings and CAHPS scores. By improving home-based care, health plans can reduce readmissions and ER visits, driving savings and better patient outcomes.
Challenges in Managing DMEPOS
DMEPOS management presents several challenges, including:
- Manual Processes & Tracking Issues: Errors and paperwork increase administrative costs.
- Authorization Delays: Bottlenecks slow operations and delay care.
- Fragmented Networks: Disjointed supplier networks reduce efficiency.
Manual processes and tracking errors lead to costly administrative burdens. Authorization delays create bottlenecks that slow care, resulting in delivery delays for 45% of patients, according to AJMC and the Journal of Managed Care & Specialty Pharmacy7. Fragmented networks add further inefficiency, with up to 16 calls8 required to manage complex DMEPOS orders, complicating coordination between prescribers and suppliers. Furthermore, limited visibility adds frustration, with 68%9 of providers unable to monitor order status.
Impact on Member Experience and Health Outcomes
Proper DMEPOS management improves member outcomes. Consider Jessika, a 23-year-old with congenital muscular dystrophy, who needed a specialized hospital bed. Delays in receiving her equipment extended her recovery, negatively affecting her experience with her health plan. Navigating the confusing fulfillment process added unnecessary stress. Better coordination can reduce relapse risks, lower costs, and enhance satisfaction, ultimately improving health plan performance.
Operational Strain on Providers and Suppliers
Mismanagement also burdens providers and suppliers. Providers divert their attention from patient care to administrative tasks, with manual workflows requiring up to 40 pages of documentation and 90 minutes of processing per order, often sent via fax10. This contributes to burnout and declining care quality. Suppliers face rising costs due to inventory challenges and logistical delays, further straining the system and lowering service standards.
The Role of CMS Requirements: Prior Authorization and Digitization
CMS reforms around prior authorization are accelerating, particularly for high-volume, low-cost services like DMEPOS. In 2023, 99%11 of Medicare Advantage enrollees required prior authorization for DME, with many health plans still using outdated methods like phone or fax, which can take up to 30 days. To remain compliant and avoid penalties, health plans must adapt to these changes.
Technology’s Role in DMEPOS Management
Technology provides solutions to DME inefficiencies. Tomorrow Health’s platform streamlines processes, reducing the time required to deliver critical and life-saving DME and supplies by 85%12. Key features include:
- Clinical Automated Rules Engine (CARE): Ensures orders are accurate and compliant, reducing errors and review time.
- Administrative Cost Reduction: Automation cuts manual work, lowering operational expenses for suppliers by 30%13.
- Improved Member Outcomes: 97% of members start care on time, exceeding the industry average of 50%13, resulting in measurable health improvements.
Tomorrow Health’s digitized solution includes digital prior authorization case development, automated utilization management, and dedicated support for prescribers and suppliers, enhancing efficiency, reducing delays, and ensuring CMS compliance.
Turning Hidden Costs into Visible Savings
Addressing inefficiencies in DMEPOS management leads to significant cost savings and better member care. Tomorrow Health’s technology helps health plans meet CMS requirements while optimizing operations for long-term success. By adopting proactive DMEPOS management, health plans can unlock savings, boost member satisfaction, and improve Star Ratings, positioning themselves for growth in an increasingly competitive market.
Sources
1 Government Accounting Office (GAO), 2020
2 Inadequate DME coordination contributed to a 30% increase in hospital readmissions among patients with chronic conditions, Journal of General Internal Medicine
3 Results of Tomorrow Health survey of partnered health plan members, 2024.
4 The Case for Medicare Investment in DME, Brian Leitten
5 KFF and Consumer Shield Report, 2022
6 Results of Tomorrow Health survey of partnered health plan members. 2024
7 Huckfeldt et al., 2020, AJMC and Journal of Managed Care & Specialty Pharmacy
8 Tomorrow Health clients report before program is deployed, 2022.
9 Healthcare Information and Management Systems Society (HIMSS), 2020
10 Beckers Hospital Review, 2023.
11 Kaiser Family Foundation (KFF), 2023
12 Results from Tomorrow Health, 2024.
13 Data provided by Tomorrow Health case study with Geisinger Health Plan, 2024.
