DME supplier marketing: how to grow a medical equipment business inside the rules

Durable medical equipment suppliers live on referrals and repeat business: a discharge planner needs a hospital bed delivered, a sleep clinic sends a patient for supplies, a family looks for a wheelchair or a walker after a fall. Getting found by those people, and making it easy for them to order, is legitimate marketing that most suppliers can do better. For items ordered online or by phone and shipped, the FTC mail order rule also governs shipping promises, delay notices and refunds.

DME is also one of the most heavily policed corners of health care marketing. Medicare limits how suppliers may contact beneficiaries by phone, OIG has issued repeated fraud alerts about telemarketing and lead schemes, and the anti-kickback statute shapes every relationship with a prescriber. This guide covers those rules, then lists marketing ideas that work inside them. Practices that refer patients for home oxygen should read COPD program marketing.

The rule on unsolicited phone calls

Social Security Act section 1834(a)(17), codified at 42 U.S.C. 1395m(a)(17), says a supplier of a covered item may not contact a Medicare beneficiary by telephone regarding the furnishing of a covered item unless one of three exceptions applies:

1. Written permission. The beneficiary has given the supplier written permission to contact them by telephone about furnishing a covered item.
2. An item you already furnished. The supplier has furnished a covered item to the beneficiary and is contacting them only about that item.
3. A recent customer. For a different covered item, the supplier has furnished at least one covered item to the beneficiary during the 15 months before the call.

The consequences are written into the statute. Under 1395m(a)(17)(B), if a supplier knowingly contacts a beneficiary in violation of the rule, no payment may be made for any item subsequently furnished to that person by the supplier. Under 1395m(a)(17)(C), a supplier whose knowing violations establish a pattern must be excluded from Medicare and other programs. The DMEPOS supplier standards repeat the rule: under 42 CFR 424.57(c)(11), a supplier must agree not to contact a beneficiary by telephone when supplying a Medicare-covered item unless one of the same three exceptions applies, with the second phrased as contacting the individual to coordinate the delivery of the item.

OIG’s updated special fraud alert adds two points that matter for marketing plans. First, a physician’s preliminary written or verbal order is not a substitute for the beneficiary’s written consent. Second, the ban covers calls made by another party on the supplier’s behalf: in OIG’s words, suppliers cannot do indirectly that which they are prohibited from doing directly.

Third-party marketers and purchased leads

The same alert says a DME supplier is responsible for verifying that marketing activities performed by third parties it contracts with do not involve prohibited activity, and that information purchased from them was not obtained or derived from prohibited activity. If a claim is submitted for items generated by a prohibited solicitation, OIG says both the supplier and the telemarketer are potentially liable for criminal, civil and administrative penalties.

OIG’s July 2022 special fraud alert describes a related pattern: companies that recruit people through telemarketing, call centers, health fairs, or internet, television or social media advertising for free or low out-of-pocket cost items, then pay practitioners to order durable medical equipment and other items with little or no patient contact. Among the suspect characteristics it lists are practitioners who lack sufficient contact with the patient to assess medical necessity, compensation based on the volume of orders, and companies that only furnish one product or a single class of products, with durable medical equipment as an example.

For a supplier, that points to a few practical rules:

• Do not buy lists of Medicare beneficiaries or leads for covered items, and do not pay anyone per lead, per order or per patient for Medicare business without counsel’s review.
• Read every marketing vendor contract for who calls whom, how consent is collected and documented, and what data you are buying.
• Keep written permission for any call that relies on the first exception, and record which exception applies to each outbound call.
• Be wary of order sources that send large volumes of orders from prescribers who never saw the patient.

Referral relationships with prescribers

Most DME orders start with a physician or other practitioner, so supplier marketing often targets prescribers, hospitals, home health agencies and therapists. The federal anti-kickback statute, 42 U.S.C. 1320a-7b(b), makes it a crime to knowingly and willfully offer or pay remuneration, in cash or in kind, to induce referrals of items or services payable by a federal health care program. The statute has exceptions and the regulations add safe harbors, but each has specific conditions.

Build relationships on service: clear ordering instructions, the documentation you need, fast delivery and setup, and status updates the referring office can rely on. Do not give referral sources gifts, meals, free staff time or payments tied to referrals, and ask counsel before any marketing, consulting or staffing arrangement with someone who can send you orders. Our guide to patient and physician referrals explains the basics. For the prescriber side, such as a lung practice that orders home oxygen, see our guide to pulmonology and respiratory clinic marketing.

Prosthetic and orthotic suppliers face the same phone rule plus their own questions about custom wording, supplier standards and patient stories; see our prosthetics and orthotics marketing guide.

Free offers and product claims

Free delivery, free supplies or a gift card for switching suppliers can look like ordinary retail marketing. For Medicare and Medicaid customers, 42 U.S.C. 1320a-7a(a)(5) penalizes offering remuneration likely to influence a beneficiary’s choice of supplier, and defines remuneration to include items and services given free or for less than fair market value. HHS OIG’s 2016 policy statement interprets nominal value as no more than 15 dollars per item or 75 dollars in the aggregate per patient per year. Have counsel review any offer aimed at beneficiaries before you advertise it, and avoid at no cost to you headlines unless counsel confirms them.

Section 5 of the FTC Act, 15 U.S.C. 45, prohibits deceptive acts or practices, and the FTC Health Products Compliance Guidance says health benefit claims for health-related products need competent and reliable scientific evidence, including implied claims. Describe what equipment does and who it is for, as the manufacturer’s labeling supports, rather than promising outcomes such as prevents falls or ends back pain. The same applies to statements about where your products are made: see our guide to Made in USA claims.

Reviews and privacy

The FTC rule on consumer reviews and testimonials, 16 CFR Part 465, prohibits fake reviews, and section 465.4 prohibits incentives conditioned on reviews expressing a particular sentiment. Ask every customer for honest feedback. If you are a HIPAA covered entity, using customer information in marketing generally requires written authorization under 45 CFR 164.508, so reply to reviews without confirming what someone ordered; see our guides to replying to patient reviews and HIPAA marketing rules.

DME marketing ideas that work inside the rules

1. Product category pages people can search. Mobility aids, hospital beds, respiratory supplies, diabetic supplies or whatever you carry: what each is, who it is for, how ordering works and what documentation a prescriber needs. Our healthcare SEO page explains how we plan pages around real searches.
2. A page for prescribers and discharge planners. How to send an order, the fax and phone numbers, the documentation checklist, delivery areas and turnaround times.
3. An accurate Google Business Profile. Google’s guidelines require the business name, address and categories to reflect the real business. Keep hours and delivery areas current; see our guide to Google Business Profile for doctors.
4. Inbound calls answered well. Since outbound calls are restricted, the calls people make to you matter more. Answer quickly, and let staff or an AI front desk handle order status and delivery questions after hours.
5. A documented consent step. If customers want reminder or resupply calls, collect written permission on a form that says exactly what you will call about, and keep it with the account.
6. Clear coverage language. Say that coverage depends on the customer’s plan and documentation, and that you check it before delivery, instead of promising Medicare covers it.

Suppliers that work closely with sleep clinics, wound care programs or home health agencies may find our guides to sleep clinic marketing, wound care marketing and home health agency marketing useful for understanding their side of the referral.

Sources

• 42 U.S.C. 1395m: Special payment rules for particular items and services (unsolicited telephone contacts, subsection a(17))
• 42 CFR 424.57: Special enrollment and billing requirements for DMEPOS suppliers (supplier standard c(11))
• HHS OIG: Updated Special Fraud Alert, Telemarketing by Durable Medical Equipment Suppliers (PDF, January 2010)
• HHS OIG: Special Fraud Alert on arrangements with purported telemedicine companies (PDF, July 20, 2022)
• 42 U.S.C. 1320a-7b: Criminal penalties for acts involving Federal health care programs (anti-kickback statute, subsection b)
• 42 U.S.C. 1320a-7a: Civil monetary penalties (beneficiary inducement, subsection a(5))
• HHS OIG: Policy Statement Regarding Gifts of Nominal Value to Medicare and Medicaid Beneficiaries (December 7, 2016)
• FTC: Health Products Compliance Guidance (December 2022)
• 15 U.S.C. 45: Unfair methods of competition and unfair or deceptive acts or practices
• 16 CFR Part 465: Use of consumer reviews and testimonials
• 45 CFR 164.508: Uses and disclosures for which an authorization is required
• Google: Guidelines for representing your business on Google

More in Facilities, care services and pharmacy