Medicare vs Medicaid vs Commercial Insurance: Who Pays for DME?

Rules to know

• 01Medicare Part A is hospital insurance, Part B is medical insurance and generally contains the DME benefit, Part C is Medicare Advantage delivery through private plans, and Part D covers outpatient prescription drugs rather than the general DME benefit.
• 02For covered DME under Original Medicare, the claim generally routes to the appropriate DME MAC. After the Part B deductible, Medicare commonly pays 80% of the Medicare-approved amount and the beneficiary commonly owes 20%, subject to assignment, secondary coverage, item-specific rules, and other exceptions.
• 03A Medicare Advantage member uses the plan shown on the current card and eligibility response. The plan must cover at least what Original Medicare covers but may use its own network, authorization, supplier, documentation, and cost-sharing rules.
• 04CMS February 2026 data reports 51.2% of Medicare enrollment in Medicare Advantage and other health plans. That dated national statistic never substitutes for checking the individual member's coverage on the date of service.
• 05Medicaid is jointly federal and state administered. DME benefits, limits, fee schedules, prior authorization, supplier enrollment, incontinence-supply coverage, and managed-care routing vary by state, eligibility category, age, and plan.
• 06EPSDT requires states to furnish Medicaid-coverable, medically necessary services needed to correct or ameliorate conditions for eligible members under age 21; this can make pediatric coverage broader than the state's adult benefit but does not eliminate medical-necessity or documentation review.
• 07For a person with both Medicare and Medicaid, Medicare is generally billed before Medicaid for Medicare-covered DME. Verify payer order, QMB status, state crossover behavior, managed-care enrollment, and supplier participation before collecting money.
• 08Federal law prohibits Medicare providers and suppliers from billing QMB members for Medicare Part A or Part B deductibles, coinsurance, or copayments, even when the state pays little or none of that cost sharing.
• 09Commercial DME payment depends on the actual contract and benefit: active eligibility, network status, covered benefit, authorization, medical policy, HCPCS, rental or purchase terms, deductible, coinsurance, coordination of benefits, and timely filing must align.
• 10An insurance card is an identification clue, not proof of active coverage, authorization, network status, medical necessity, or payment. Read the payer and plan identifiers, then verify electronically and resolve inconsistencies before delivery.

Operational workflow

1. 01Capture both sides of every current insurance card and identify the exact legal payer, plan, member ID, group, claims address or payer ID, and service contacts.
2. 02Run date-specific eligibility and benefits for the DME service type; confirm active dates, plan type, primary and secondary order, deductible, coinsurance, limits, and managed-care enrollment.
3. 03Confirm the supplier and location are enrolled, credentialed, contracted, or otherwise eligible for that payer and product on the date of service.
4. 04Research the item using the correct HCPCS, payer medical policy, Medicare NCD or LCD when applicable, state Medicaid manual, quantity, replacement, rental or purchase, and same-or-similar rules.
5. 05Obtain required prior authorization or pre-service review and ensure the approval matches the member, supplier, item, code, quantity, dates, and place of service.
6. 06Before delivery, complete a final benefits and documentation check, including order, treating record, medical necessity, delivery method, refill rules, financial notice, and QMB protections.
7. 07Submit to the correct primary payer with accurate provider roles, modifiers, units, authorization, and coordination data; then route the adjudicated balance to the legitimate secondary payer when required.
8. 08Post the remittance by contractual and legal liability, correct root causes promptly, appeal when supported, and never transfer prohibited or unverified balances to the patient.

Common failure modes

• Billing Original Medicare because a person has a red, white, and blue Medicare card even though a Medicare Advantage plan controls current benefits.
• Treating a 270/271 eligibility response or authorization number as a guarantee of payment.
• Applying one state's Medicaid DME rules, incontinence limits, or fee schedule to another state or managed-care plan.
• Billing a QMB member for Medicare cost sharing after Medicaid pays zero or less than the full coinsurance.
• Assuming Medicare always pays first without investigating workers' compensation, liability, employer coverage, ESRD coordination periods, or other Medicare Secondary Payer facts.
• Delivering commercial-plan equipment before confirming network status, prior authorization, rental terms, patient responsibility, and the exact contracted billing entity.

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