What is HME in Healthcare?

The rise of home-based treatment has transformed U.S. healthcare, enabling millions of patients to manage chronic conditions with fewer lifestyle restrictions and logistical challenges.¹ But none of that would be possible without home medical equipment (HME)—the range of innovative products that support patients in their home environment.

This article provides an expert overview of HME and reveals how digital ordering can significantly improve patient experience and care outcomes. We answer questions like: 

• What is the difference between HME and DME?
• Can HME reduce care costs or improve medical outcomes?
• How will ePrescribing change HME order management?

Home Medical Equipment (HME): An Overview

What is HME?

In medical terms, HME refers to home medical equipment—a broad range of medical devices designed for use in patients' homes rather than clinical settings. They are typically intended to monitor or manage chronic conditions, and can be broken into three broad categories:

• Mobility and Transfer Equipment: Devices like manual and power wheelchairs, walkers, canes, scooters, patient lifts, and seat-lift mechanisms. This equipment enables independent movement and safe transfers, reducing fall risk and caregiver burden.
  
  
• Respiratory Care Equipment: Devices such as oxygen equipment and accessories, nebulizers, and medications, as well as CPAP/BiPAP devices that address critical breathing disorders. Respiratory equipment saves lives and prevents emergency department visits when properly prescribed and maintained. 
  
  
• Chronic Condition Management: Devices like glucose monitors, test strips, infusion pumps, and commode chairs support ongoing disease management. These devices enable patients to monitor vital signs, receive medications, and maintain safety during recovery.

HME vs. DME: What’s the Difference?

Many healthcare providers treat HME and durable medical equipment (DME) as interchangeable, but they are distinct product categories. HME represents the broader concept of medical equipment used at home, while Medicare defines DME as meeting the precise criteria.² To qualify as DME, equipment must be:

• Durable (can withstand repeated use)
• Appropriate for use in the “home” (“primarily used at home,” but not exclusively)
• Primarily and customarily needed for a medical purpose
• Necessary and reasonable for the treatment of a condition or injury.

For example: Disposable items or comfort products such as disposable incontinence supplies are considered HME, but don’t typically meet DME criteria.

Why HME is So Important

The expanded availability and improved quality of HME has transformed ongoing treatment for millions of patients. Rather than making regular, costly trips to hospitals or living as in-patients, they can reclaim a largely normal daily life with the assistance of medical equipment.

The clinical and operational benefits of this are twofold:

1. Accelerate Recovery

   HME allows many patients to be discharged sooner and recover in a familiar home environment. This has a profound impact on patient experience, with studies suggesting home-based care leads to better sleep³ and higher overall patient satisfaction.⁴

   Home-based care may also lead to better care outcomes. A recent meta-analysis demonstrated a lower risk of readmission or long-term care admission with at-home acute care.⁵ The combination of high-quality HME and telehealth makes it far easier for patients to manage complex conditions and avoid flare-ups.

2. Reduce Costs

   Analysis from Nature suggests the U.S. requires more efficient healthcare delivery systems, especially with increasing hospital expenditures and patient volumes.⁶ HME enables more patients to avoid prolonged hospitalization and reduce the cost of care; earlier research suggested HME often costs more than 50% less than the same treatment or support would in a hospital setting.⁷

   These cost savings benefit patients, providers, and insurance providers. One study found that every dollar spent on durable equipment produced $23-41 in savings for the health system.⁸

The HME Order and Billing Basics

What is HME Ordering and How Does it Work?

The ordering process for Home Medical Equipment (HME) involves three key players working in coordination:

• Clinicians: Healthcare providers start the HME ordering process. They evaluate the patient, document medical necessity, and prescribe the right equipment based on health status and home environment. 
  
  
• HME Providers: An HME provider is a company that supplies medical equipment for patients to use at home. They don’t just deliver devices—they train patients, handle insurance paperwork, provide service and maintenance, and ensure equipment is used safely and effectively. Without strong providers, patients face delays, confusion, or even unsafe use of equipment.
  
  
• HME Insurance Plans: An HME insurance plan—whether Medicare Part B or commercial insurance—covers qualified medical equipment when criteria are met. These plans define what equipment is eligible, how much patients pay out-of-pocket, and whether items must be rented before ownership. Understanding your health plan’s policies ensures you know what’s covered, when prior authorization is needed, and what your costs will be.

Clear communication and documentation among these three parties are critical. Without it, patients can experience delays, denials, or may receive inappropriate equipment.

Step-by-Step Ordering

1. Assessment and Documentation
   

   Clinicians document medical necessity with specific clinical indicators that directly justify the equipment prescribed. This forms the foundation for coverage approval.
   
   

2. Standard Written Order (SWO)
   

   A Standard Written Order must be completed and submitted to the HME provider before delivery. The SWO replaced the old Certificate of Medical Necessity (CMN), streamlining the process while keeping quality controls in place.
   
   

3. Face-to-Face Encounter and Prior Authorization

   Certain items on CMS’s Master List require a face-to-face physician visit before the order is valid. Some high-cost or high-risk equipment also requires prior authorization. These checks ensure the right utilization of Medicare funds while protecting patients from unnecessary items.
   
   

4. Provider Fulfillment and Patient Education

   The HME provider delivers the equipment, trains the patient on safe use, and provides maintenance and support services. High-quality providers continue to support patients to ensure equipment remains safe and effective.

How HME Billing Works (Medicare Part B)

• Cost Sharing: After meeting the Part B deductible, patients typically pay 20% coinsurance if the HME provider accepts assignment.⁹
  
  
• Rent vs. Buy: Many items are capped for rentals, meaning they become the patient’s property after a certain number of payments.¹⁰
  
  
• Coverage Denials and ABNs: When coverage is uncertain, HME providers must issue an Advance Beneficiary Notice (ABN). This form gives patients the choice to accept financial responsibility and move forward with delivery.

Three Challenges Patients Face When Ordering HME 

1. Caregiver Knowledge

   Caregivers are essential to help patients use their HME, but many lack formal training with the equipment. According to the FDA’s Medical Device Home Use Initiative White Paper, this gap can make it difficult to set up and operate devices correctly. Inadequate knowledge leads to misuse, safety risks, and poor adherence to prescribed therapy.¹¹

2. Environmental Unpredictability

   Homes are not controlled clinical settings. The FDA highlights that factors such as space constraints, lighting, and household interruptions can impact device performance and safety. A device that works well in a hospital may be harder to operate reliably in a home environment, which is why clinicians must be able to offer their patients more options to ensure the equipment they receive can function within their specific home.

3. Order Delays and Lack of Visibility

   Even when clinicians and patients do everything correctly, delays can occur due to paperwork issues, insurer authorization, or HME provider backlog. Manual fax-based orders are notoriously difficult to process, resulting in routine delays and miscommunication between clinicians and HME providers.

   Patients and clinicians often have little visibility into order status, creating frustration and prolonging hospital stays. This leaves all parties frustrated: clinicians must phone providers for updates; providers potentially lose orders; and patients are left waiting for essential equipment—often meaning they cannot leave the hospital.

How Digital HME Ordering Improves Patient Experience

ePrescribing has transformed HME order management, enabling clinicians and providers to eliminate tedious manual processes and coordinate quick, accurate deliveries that improve the patient experience. 

Parachute Health is the nation’s largest and most popular ePrescribing network. The Parachute Platform integrates with major EHRs like Epic, Cerner, Athena, eCW to make ordering seamless—allowing users to:

• Simplify Processing: The Parachute Platform features AI intake to digitize fax-based orders, making life easier for both clinicians and HME providers.
  
  
• Enhance Transparency: The connected digital ecosystem unlocks transparency and accountability across the entire order cycle, with patients able to follow their order status via mobile web app and text messages⁠.
  
  
• Accelerate Orders: The Parachute Platform's built-in logic helps clinicians avoid inputting the same information multiple times and accelerates both the ordering and management process.

Over 270k clinicians and 3k HME providers trust the Parachute Platform to:

• Fulfill orders 10x faster
• Eliminate 80% of manual work
• Deliver 98% clean order rates*

Want to ensure patients get vital DME faster?

* Clean orders are orders that are accepted by the HME provider upon first submission.
¹ https://www.statnews.com/2021/07/02/outdated-medicare-rules-threaten-older-americans-access-to-home-medical-equipment/
² https://medicareadvocacy.org/wp-content/uploads/2021/08/CMA-Guide-to-DME.pdf
³ https://pubmed.ncbi.nlm.nih.gov/30018067/
⁴ https://pubmed.ncbi.nlm.nih.gov/16970642/
⁵ https://www.nature.com/articles/s41746-024-01040-9
⁶ https://www.nature.com/articles/s41746-024-01040-9
⁷ https://www.fda.gov/files/medical%20devices/published/Medical-Device-Home-Use-Initiative----White-Paper.pdf
⁸ https://www.statnews.com/2021/07/02/outdated-medicare-rules-threaten-older-americans-access-to-home-medical-equipment/
⁹ https://www.medicare.gov/coverage/durable-medical-equipment-dme-coverage
¹⁰ https://www.medicare.gov/coverage/durable-medical-equipment-dme-coverage
¹¹ https://www.fda.gov/files/medical%20devices/published/Medical-Device-Home-Use-Initiative----White-Paper.pdf