The landscape for home medical equipment (HME) providers is shifting rapidly. With new legislation and regulatory proposals on the horizon, 2025 is proving to be a defining year for reimbursement, compliance and operational sustainability.
From sweeping Medicaid reforms to intensified supplier oversight and reimbursement cuts, providers must act now to safeguard their margins and maintain access to care.
Here are the three of the most significant policy developments affecting the HME industry and what you can do to stay ahead.
1. The One Big, Beautiful Bill Act (OBBBA)
Signed into law on July 4, 2025, the One Big, Beautiful Bill Act (H.R. 1) introduces broad changes aimed at reducing federal healthcare spending by nearly $1 trillion over the next decade. It affects Medicaid, ACA subsidies and potentially Medicare reimbursements, putting financial pressure on HME providers.
Key risks for HME:
- Reduced Medicaid enrollment and ACA subsidy cuts may lead to fewer covered patients and higher rates of uncompensated care.
- Eligibility redeterminations every six months will increase denials and strain intake teams.
- A 4% cut to Medicare payments could begin as early as 2026 under PAYGO.
What providers can do:
- Automate eligibility checks and prior auth workflows to minimize denials.
- Strengthen denial management to address rising eligibility-related rejections.
- Reassess your payer mix to reduce reliance on Medicaid and ACA-covered patients.
2. DMEPOS Reaccreditation and Oversight
As part of its effort to combat fraud and protect Medicare beneficiaries, CMS is proposing stricter requirements for DMEPOS suppliers and accrediting organizations (AOs).
Proposed changes include:
- Annual reaccreditation surveys instead of every three years.
- Greater data transparency and performance monitoring of AOs.
- Expanded authority to revoke supplier enrollment retroactively if compliance lapses are found.
These updates are designed to ensure HME suppliers meet quality standards continuously, not just at the time of accreditation.
What providers can do:
- Maintain detailed documentation of compliance activities and quality standards year-round.
- Proactively prepare for annual surveys and strengthen internal quality programs.
- Monitor your accrediting body’s performance and communication closely.
3. Competitive Bidding & Medicare Payment Cuts
CMS’s proposed rule for CY 2026 includes permanent and temporary payment reductions to recoup overpayments made under the Patient-Driven Groupings Model (PDGM). Although PDGM is focused on home health agencies, HME providers face related headwinds, especially as competitive bidding programs are poised to expand and payment categories are being restructured.
Key proposals:
- A permanent 4.059% cut to Medicare payment rates under PDGM.
- A temporary 5.0% cut to recoup $5.3 billion in overpayments from 2020–2024.
- Upcoming competitive bidding program changes, including reclassifying insulin pumps and CGMs under “frequent and substantial servicing” to better support advanced technology access.
What providers can do:
- Stay alert for bidding announcements and plan resource allocation accordingly.
- Evaluate your Medicare product mix and margins under current and proposed payment rates.
- Use analytics platforms to forecast cash flow impact and proactively adjust.
How Prochant Can Help
At Prochant, we help HME providers navigate regulatory shifts with confidence by combining expert teams with powerful technology. Our end-to-end revenue cycle services are built to improve financial performance and reduce operational strain, especially during times of change. From denial and appeal management to real-time analytics with Prochant Pulse™ and automation that streamlines workflows, we provide the strategic support you need to stay compliant, agile and profitable.
We offer:
- Scalable RCM services and automation
- Denial and appeal management
- Real-time analytics via Prochant Pulse™
- Strategic guidance on payer trends and compliance risk
Prepare Now for 2026 and Beyond
These three policy shifts (OBBBA, reaccreditation reforms and payment pressures) signal a more complex, less forgiving environment for HME providers. Now is the time to invest in your revenue cycle infrastructure, streamline processes and work with a partner who understands the road ahead.
Let’s talk about how Prochant can help future-proof your revenue cycle.
Frequently Asked Questions
1. What is the One Big, Beautiful Bill Act (OBBBA) and how does it affect HME providers?
The OBBBA, signed into law on July 4, 2025, introduces sweeping healthcare reforms targeting Medicaid, ACA subsidies, and Medicare. For HME providers, it means reduced Medicaid enrollment, stricter eligibility redeterminations, and potential Medicare reimbursement cuts—leading to more denials and financial pressure.
2. How should HME providers prepare for stricter DMEPOS reaccreditation requirements?
CMS is proposing annual reaccreditation surveys and greater oversight of accrediting organizations (AOs). HME suppliers should maintain year-round compliance documentation, enhance internal quality programs, and stay in close contact with their AO to prepare for more frequent reviews.
3. What changes are coming to Medicare payments and competitive bidding for HME suppliers?
CMS’s CY 2026 proposal includes a permanent 4.059% PDGM cut and a temporary 5% clawback on prior overpayments. Competitive bidding is also expanding, with insulin pumps and CGMs now under new servicing classifications. HME providers must reassess product mix and forecast cash flow impacts.
4. What steps can HME providers take to reduce the risk of reimbursement cuts and denials?
To safeguard margins, providers should automate eligibility and prior auth workflows, strengthen denial management processes, diversify their payer mix, and leverage analytics to monitor cash flow under shifting policies.
5. How can Prochant support HME providers during regulatory and reimbursement changes?
Prochant offers scalable revenue cycle management services, including denial and appeal management, workflow optimization, and real-time analytics through Prochant Pulse™. Our expert teams help HME providers stay compliant and financially resilient amid industry-wide changes.
