Durable Medical Equipment Vs. Disposable Medical Supplies
Both durable medical equipment (DME) and disposable medical supplies play very important roles in our health care systems. Both of these categories house a wide range of tools and equipment that are necessary in the daily aid of those individuals suffering illnesses and ailments. Generally, these items are used in hospitals or for at-home care to manage daily needs of the elderly, the ill, or the disabled.
While both categories serve the purpose to support, protect, and aid health care professionals and patients, there are some significant differences between the two. Whether you are a part of a company that sells these items, you use them for patients, or you use them for personal needs, it is important to know how these categories differ, especially when it comes to taxes and deductions.
Consider the following information, which will help to identify the main differences between durable medical equipment and disposable medical supplies.
Durable Medical Equipment
DME is designed for long-term use, and covers a wide range of equipment, including mobility aids (walkers, wheelchairs); orthotics (therapeutic footwear); personal aids (dressing aids, bath chairs); prostheses (artificial limbs); hospital beds, etc.
These pieces of equipment are not for one-time use, but rather are meant to be used for long periods of time by either a single patient or multiple patients over time. Because these items are often larger and more durable, they tend to be more expensive and made of longer-lasting materials.
Disposable Medical Supplies
Disposable medical supplies, on the other hand, are generally meant for one-time usage by a single patient, and are usually thrown out when finished. The products in this group are not considered by Medicare to be a part of the DME category. Examples of items in this category include, but are not limited to, wipes, pull-ups, bandages, rubber gloves, lotions, etc.
When it comes time for an individual to require assistive devices, these items will need to be ordered by either the patient themselves, a nurse, or a family member. Not all patients will have the physical or cognitive ability to order their equipment or supplies, which is when medical professionals or family members will need to step in.
Medicare is a federal insurance program that is available to a few specific groups, including individuals 65 and over, disabled individuals, and those with permanent kidney failure. Two types of insurance exist in this program: Medicare Part A and Medicare Part B.
Medicare Part A partially covers DME if the patient in question is not able to leave their residence, and they are in need of a high level of nursing care. These individuals are eligible for the Home Health Benefit, and Medicare will cover 80% of the cost of their DME. Every state will have its own set of allowable prices for each required piece of equipment.
Under Medicare Part B, patients do not have to be eligible for the Home Health Benefit. Similar to Part A, they will have to co-pay 20% of the cost of the items and any excess expenses after that.
When it comes to DME, not everything is covered by Medicare, and this list will differ by state. Items such as lifts, ramps, and hearing aids are generally not included in the coverage. When it comes to disposable medical supplies, Medicare covers very little. Exceptions can be made for those with diabetes, feeding tubes, and ostomy patients.
For those patients trying to cover the cost of their medical supplies, it does not hurt to do your research ahead of time. While some insurance companies may cover some of the cost, it can often be more affordable to search for deals and pay out of pocket.
Tax deductions vary from state to state, so you’ll need to perform research in your home state to get the full explanation of what can and cannot be written off for tax purposes.
As a general guideline, DME, as well as accessories and supplies, are taxable. They are no longer taxable when they are sold for home use, or when they have been covered by Medicare or Medicaid. Even if the items are not sold for home use, they cannot be taxed if they have been paid for by these two programs.
Home use means that the items have been sold to an individual for use in their home; it does not matter where the individual is located. These individuals can reside in homes, nursing homes, school dormitories, and in assisted living centers.
A nursing home that purchases DME or disposable supplies is not exempt from taxes; for those institutions that are non-profit, they may be exempt from taxes for DME purchases under their Nonprofit Exempt Status.
When it comes to disposable medical supplies, the purchase of these items by any licensed health care facility or professional is exempt from taxes. However, this is only true if the supplies are used directly on patients as a part of their treatment.
Items that are used for sanitary reasons but not for treatment cannot be written off, including tongue depressors, and rolls of paper for exam tables. These tax guidelines can give you more specific guidelines based on your unique situation.
While there are some general rules when it comes to the differences between DME and disposable medical supplies, it is best to do some research in your specific state. Each area has its own definitions of these items and what can be taxed, so it is important to recognize what items you absolutely need and where you can find some potential savings.
- Becky McDowell