Navigating the 2024 CMS Hospice Payment Update: The Crucial Role of DME Management in Cost Optimization

As hospice DME experts, Qualis closely follows all CMS updates, and the most recent update has proposed an increase to 2024 hospice payment rates. While it is exciting that CMS has finalized a 3.1% payment increase to provide financial assistance to hospices, industry stakeholders are expressing concerns that this adjustment might not adequately address the heightened operating costs hospices are facing. In response to this challenge, hospices must explore cost optimization options in various areas of their business, with DME management emerging as a crucial focus.

The CMS 2024 Hospice Payment Update and Industry Concerns

The CMS 2024 hospice payment update comes as a relief for many hospice organizations dealing with rising costs. However, industry stakeholders argue that a 3.1% payment increase may not be sufficient to fully compensate for the myriad of challenges hospices are experiencing. The hospice care landscape has evolved, with patients presenting more complex medical needs and requiring a broader range of services. As a result, hospices are grappling with heightened expenses, including labor costs, staff transportation, Rx, DME, medical supplies, and general overhead.

Addressing Cost Optimization through DME Management

To offset the impact of these rising expenses, hospices must turn their attention to effective cost-optimization strategies. One area where significant cost-saving opportunities may lie is DME management. Durable hospice equipment plays a vital role in delivering high-quality end-of-life care, making efficient management of these resources a critical component of hospice care.

Here are a few areas where you can address cost optimization:

1. Streamlined DME Ordering

In hospice, ordering and tracking equipment deliveries and pick-ups can become a large part of clinician duties, robbing the clinician of precious time. A hospice agency should choose a DME manager that has software that integrates with their EMR and auto-populates the patients’ demographic and biographic data. With Qualis’ efficient ordering process, hospice staff can save up to 10 hours per week on managing DME orders. Our user-friendly online ordering portal eliminates the need for phone calls and faxes, enabling hospice staff to place and monitor the status of orders with just a few clicks.

2. Reduced Administrative Burden

Efficient DME management can significantly reduce the administrative burden on hospice staff. By implementing advanced technology and software solutions, hospices can automate billing adjudication and streamline the billing and payables processes. This streamlining not only saves time but also reduces the likelihood of human errors related to DME billing. Hospice staff can save an additional 10 hours per week by partnering with Qualis. Our team of experts handles all administrative tasks associated with managing DME orders, including billing, claims management, and compliance. This frees up hospice staff to focus on patient care instead of paperwork.

Our latest whitepaper highlights that hospices regardless of size achieve up to a 50% reduction in administrative time and effort by adopting effective DME management practices. This reduction in administrative burden translates to significant cost savings and allows hospice staff to dedicate more attention to patient care and family support.

3. Optimized Non-Formulary Management

Non-Formulary management is a critical aspect of DME management that directly impacts hospice finances. Industry best practices, staff education, and utilization safeguards are elements of an effective strategy to maximize the value (and thus lower the cost) of each piece of non-formulary DME. There are proven examples of hospices improving patient care while decreasing non-formulary utilization which we would welcome the opportunity to share.

Qualis’ DME Evaluation service emphasizes the importance of conducting regular reviews of the formulary and non-formulary items to ensure it aligns with patient needs and industry best practices. By focusing on the most appropriate and efficient DME options, hospices can maximize their cost savings and maintain quality care standards.

4. Competitive Pricing & Contract Negotiation

Strategic pricing and effective contract negotiation are crucial for achieving cost optimization in DME management. By working with a well-connected and trusted DME manager, hospices can benefit from negotiating volume-based discounts with DME suppliers, resulting in an average savings of 10-20%. By leveraging purchasing power and engaging in competitive bidding, Qualis secures more favorable pricing and contract terms with best-in-class DME providers – working as a team to achieve great patient care, education, support, and value. These practices and relationships allow hospices to allocate their financial resources efficiently and invest in essential DME supplies while minimizing unnecessary costs.

Qualis has established relationships with DME providers of all sizes and in all locations, from large national providers to your small-town community provider. This relationship allows us to negotiate favorable pricing and terms for our hospice clients nationwide.  


While the CMS 2024 hospice payment update provides some financial assistance, it will not fully address the mounting operating costs faced by hospices today. Effective cost optimization through DME management can help mitigate the financial burden and ensure the continued delivery of high-quality care to patients in need. To learn more about how much time and money your hospice can save by partnering with Qualis, check out our latest whitepaper.

To speak with a DME expert, contact us today.

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