Have you heard the terms “DME” and “pharmacy” when discussing CGM or insulin pump insurance options? It can be confusing to figure out the difference and what you’re covered for—our guide below can help break it down for you, and possibly save you some money.
DME and Pharmacy benefits cover similar, but sometimes different, diabetes prescriptions. Depending on your insurance, your diabetes technology might be covered under DME benefits…and/or pharmacy benefits.
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 your insurance
For many people, their private insurance will provide “DME benefits”, which means they will provide coverage for these expenses. To determine if your insurance covers products from DME suppliers, you can look at your summary of benefits (usually available on your online insurance portal) or contact your health insurance provider directly.
If you’re on Medicare, scroll to the bottom of this article to see your specific DME coverage!
Depending on your insurance plan, your 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 your insurance
You can pick these supplies up from a retail pharmacy (think CVS, Walgreens, etc.) or they can be shipped to you via mail-order pharmacy. This is likely how you get your other non-diabetes medications.
Benefits differ vastly between private insurance carriers. If you’re on Medicare and have opted into Part D, benefits will also vary by the plan you chose. No matter how you’re covered, it’s helpful to look at your summary of benefits or call your insurance provider to see exactly what is covered under your pharmacy benefits and how much your 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!
If you have insurance, there are four likely possibilities for coverage:
- Your CGM and pump supplies are only covered under DME benefits
- Your CGM and pump supplies are only covered under pharmacy benefits
- Your CGMs are covered under pharmacy benefits, and your pump supplies are covered under DME, so you order appropriately.
- Your 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 can look at your summary of benefits or call your insurance provider.
- If your coverage falls under option #1, you will need a prescription or order for the device. Your healthcare provider must state in the prescription that it is medically necessary, and then you or your healthcare team will need to contact a DME supplier covered by your insurance.
- If your coverage falls under option #2, this process will be similar to how you’ve received other prescriptions like insulin or oral medications (pills). Your healthcare team will send a prescription to your preferred pharmacy and you will pick it up and pay your co-pay. Depending on your insurance plan, there might be a preferred pharmacy to use.
- If your coverage falls under option #3, you would order your CGM through the pharmacy, similar to how you’ve received other prescriptions like insulin or oral medications (pills). For your pump supplies, you will need a prescription or order for the device. Your healthcare provider must state in the prescription that it is medically necessary, and then you or your healthcare team will need to contact a DME supplier covered by your insurance.
- If your coverage falls under option #4, there might be price differences between your 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, your insurance company might charge you 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.
How can I save money?
To find out if there’s a difference in costs, call your 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 your insurance company can’t tell you the out-of-pocket costs, you can ask them what DME suppliers are covered under your plan, and call the DME supplier and your preferred retailer directly to ask them the same questions. Once you know which benefits you’d like to move forward with, let your healthcare team know so they can send your prescriptions to the right place.
If you use an insulin pump, sometimes your 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 you save money in the long run and access the tools that fit your needs. If you are looking for a CGM but aren’t sure if you’d be covered, check out our resources for getting started.
*DME coverage for Medicare beneficiaries:
If you are on Medicare (Part B), you are covered for these supplies (as long as they are deemed medically necessary—talk to your healthcare provider), 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 you get your DME from and your specific costs will depend on which Medicare Advantage Plan you belong to.