CMS Proposes Rent-to-Own as Only Option for Speech-Generating Devices

August 9, 2013

The Centers for Medicare and Medicaid Services (CMS) has released proposed regulations [PDF] affecting 80 items of durable medical equipment (DME), including the six types of speech-generating devices (SGDs). The proposal

  • reclassifies items from routinely purchased equipment to a capped rental class,
  • maintains the beneficiary's cost at 20% of the purchase price,
  • allows total payment to the supplier at 105% of purchase price, which includes the patient's co-pay.

ASHA will not contest the implementation of this policy, because there are no significant detriments to patient usage. However, we will seek verification that coverage for SGDs will not be interrupted when a patient is institutionalized. This positive "institutionalization interpretation" is supported by CMS staff for situations in which the patient can use the SGD as an inpatient. The obligations of the supplier would remain the same as they are under current rental requirements:

  • the supplier must maintain the SGD in good working condition throughout its reasonable useful lifetime;
  • the SGD cannot be issued unless the physician presents an order accompanied by an evaluation by a certified speech-language pathologist.


Medicare payment rates for SGDs are based on charge data and consumer price indices, as opposed to competitive bidding. A supplier will receive a lump sum payment (includes the beneficiary's 20% co-payment) when the item is purchased. When SGDs are rented, the payment (105% of purchase price) is extended over 13 months. CMS staff has cautioned beneficiaries that, when considering current rental arrangements, they should carefully examine the contract. Suppliers who do not accept Medicare assignment can enter into arrangements that allow them to bill for extra services that are not medically necessary.


For further information, see the July 8, 2013, Federal Register [PDF] or contact Mark Kander, ASHA's director of health care regulatory analysis, at or 800-498-2071, ext. 5669.

ASHA Corporate Partners