Navigating the process between “DME” and “pharmacy” benefits when discussing CGM or insulin pump insurance options can be confusing—we’re here to help! Our guide below can help break it down for you, and possibly save those in your care some money.
DME and Pharmacy benefits cover similar, but sometimes different, diabetes prescriptions. Depending on someone’s insurance, diabetes technology might be covered under DME benefits…and/or pharmacy benefits.
If someone has insurance, there are four likely possibilities for coverage:
- CGM and pump supplies are only covered under DME benefits
- CGM and pump supplies are only covered under pharmacy benefits
- CGMs are covered under pharmacy benefits, and pump supplies are covered under DME, so you order appropriately.
- CGM and pump supplies are covered under both DME and pharmacy benefits, and you can choose which ones you use!
*Note that currently, only Omnipod 5 and Sequel twiist are widely covered by pharmacy benefits.
To find this out, you, your team, or those in your care can look at the summary of benefits or call their insurance provider.
- If coverage falls under option #1, they’ll will need a prescription or order for the device. You must state in the prescription that it is medically necessary, and then you will need to contact a DME supplier covered by the person’s insurance.
- If coverage falls under option #2, this process will be similar to how you’ve prescribed other prescriptions like insulin or oral medications (pills). You will send a prescription to their preferred pharmacy, and then the person with diabetes or their caregiver will pick it up and pay their co-pay. Depending on the insurance plan, there might be a preferred pharmacy to use.
- If coverage falls under option #3, you would prescribe your CGM through the pharmacy, similar to how you’ve prescribed other prescriptions like insulin or oral medications (pills). For pump supplies, you will need to write a prescription or order for the device. You must state in the prescription that it is medically necessary, and then you, your team, or the person in your care will need to contact a DME supplier covered by insurance.
- If coverage falls under option #4, there might be price differences between DME and pharmacy benefits coverage. Insurance companies will often have different copays for different benefits, meaning that even if the same things are covered under both DME and pharmacy benefits, the cost might be different.
For example, an insurance company might charge 20% of the overall cost if it goes through DME benefits, but only 10% of the overall cost if it goes through pharmacy benefits. In this case, going through pharmacy benefits would be a better deal.
What is DME?
Durable medical equipment (DME) refers to medical equipment and devices used at home, often prescribed by a healthcare professional. These products can be ordered from companies called “DME suppliers.” Some DME suppliers only provide products for certain health needs. Suppliers that provide diabetes supplies typically carry:
- Continuous glucose monitors (CGM)
- Blood sugar and ketone meters
- Test strips
- Insulin pumps and pump supplies
- Smart pens for insulin injections
- And more, depending on the insurance plan
For many people, their private insurance will provide “DME benefits”, which means they will provide coverage for these expenses. To determine if someone’s insurance covers products from DME suppliers, they can look at their summary of benefits (usually available on their online insurance portal) or your practice can contact health insurance provider directly.
If you have people in your care on Medicare, scroll to the bottom of this article to see their specific DME coverage!
Depending on insurance plans, diabetes technology might be covered under DME benefits. Recently, more diabetes tech has been covered under pharmacy benefits, so it’s important to look into what pharmacy benefits entail.
What are pharmacy benefits?
Pharmacy benefits include insurance coverage for a variety of different medicines and devices available at retail or mail-order pharmacies, and can include:
- Oral and injectable medicines (insulin, GLP-1s, SGLT-2s, metformin, etc.)
- Continuous glucose monitors (CGM)
- Blood sugar and ketone meters
- Test strips
- Some Insulin pumps and pump supplies
- Smart pens for insulin injections
- And more, depending on the insurance plan
People with diabetes can pick these supplies up from a retail pharmacy or they can be shipped via mail-order pharmacy. This is likely how those in your care get their other non-diabetes medications.
Benefits differ vastly between private insurance carriers. If someone is on Medicare and have opted into Part D, benefits will also vary by the plan they chose. No matter how someone is covered, it’s helpful for them to look at their summary of benefits or call their insurance provider to see exactly what is covered under their pharmacy benefits and how much their co-pay would be.
Here’s where it gets a little more confusing—but never fear, we’re here to help and lay it all out for you!
How can you help people with diabetes save money?
To find out if there’s a difference in costs, people with diabetes can call their insurance company and ask the following questions:
- Can you tell me what the out-of-pocket cost for *your specific CGM or pump supplies* will be under DME benefits?
- Can you tell me what the out-of-pocket cost for *your specific CGM or pump supplies* will be under pharmacy benefits?
If their insurance company can’t tell them the out-of-pocket costs, they can ask them what DME suppliers are covered under their plan, and call the DME supplier and their preferred retailer directly to ask them the same questions. Once you know which benefits they’d like to move forward with, you can send your prescriptions to the right place.
If someone uses an insulin pump, sometimes the pump rep can help with collecting the necessary documentation and figuring out the preferred DME or pharmacy.
While these steps might seem a little complicated, they can help people with diabetes save money in the long run and access the tools that fit their needs. If you know someone in your care is looking for a CGM but aren’t sure if they’d be covered, check out our resources for getting started.
*DME coverage for Medicare beneficiaries:
If someone is on Medicare (Part B), they are covered for these supplies and can find a supplier by visiting www.medicare.gov/medical-equipment-suppliers/.
Traditional Medicare only covers CGM through DME, while Advantage plans often cover CGM at the pharmacy. Medicare Advantage Plans must cover the same medically necessary categories of DME items as Original Medicare (Part A and Part B). However, the suppliers someone gets their DME from and theur specific costs will depend on which Medicare Advantage Plan they belong to.