Medical equipment represents a growing portion of workers’ compensation medical costs. According to industry data, the average cost of medical equipment increased by a whopping 87% from Service Year (SY) 2012 to 2024. This jump is primarily driven by an increase in the average cost of Durable Medical Equipment (DME), a subset of medical equipment which now comprises 28% of total medical equipment costs in workers’ comp.
This increase in costs can be explained by new DME products hitting the market as well as high demand. According to one source, that demand could stem from several factors: the increasing penetration of home healthcare services, high occurrence of chronic conditions, and rising elderly population.
For the workers’ compensation industry, the growing cost of DME is especially concerning because the costs are not always transparent. Many DME products are classified as “miscellaneous,” meaning payers don’t typically know which type of DME product they’re being asked to cover – and E1399 (DME Miscellaneous) is now the top DME code driving up cost share.
Let’s take a deeper look at the current state of DME as well as strategies for increasing transparency and ultimately keeping costs down.
DME Defined
DME is defined as medical equipment that is:
- Durable (can withstand repeated use)
- Used for a medical reason
- Typically only useful to someone who is sick or injured
- Used in your home
- Expected to last at least three years
Examples of DME in Workers’ Comp
- Prosthetics
- Thermal compression devices
- Orthotics
- Wheelchairs
- Bone growth simulators
- Crutches
- Walkers
- Oxygen tanks
The Coding Conundrum
According to Healthesystems data, more than half of DME spend every year is classified under a miscellaneous code. And of all miscellaneous codes – more than 50 – code E1399 is by far the most used, making up 25% of DME spend in 2025. This is a catch-all code for items that don’t have specific Healthcare Common Procedure Coding System (HCPCS) designations. HCPCS is used to classify medical supplies for billing and reimbursement purposes.
Continue reading the article in full at RxInformer magazine online.
