What 2022-2025 CMS HCPCS Decisions Reveal About DME Reimbursement

Many MedTech companies view HCPCS coding as a tactical milestone. Build the product. Obtain FDA authorization. Submit the coding application. Secure a code.

But after reviewing four years of CMS HCPCS Workgroup decisions, a different story emerges.

The HCPCS process has become increasingly sophisticated, evidence-driven, and payer-focused. Across hundreds of applications spanning DME, rehabilitation technologies, neuromodulation systems, digital health products, home-use diagnostics, wound care products, and orthotics, CMS has consistently signaled what it values—and just as importantly, what it does not.

For DME and home-use device companies, these decisions provide a roadmap for how CMS is thinking about innovation, coding differentiation, benefit categories, and reimbursement strategy.

Here are seven trends that stand out.

Trend #1: Novel Technology Alone Is Not Enough

One of the clearest lessons from recent HCPCS decisions is that CMS does not create codes simply because a product is innovative.

Many applicants present technologies that are genuinely novel. They incorporate new materials, sophisticated software, digital connectivity, sensors, artificial intelligence, or entirely new approaches to delivering care. Yet CMS frequently arrives at the same conclusion: innovation by itself does not create a coding need.

Instead, CMS appears to ask a much more practical question. Does the healthcare system need a new code to process claims for this product?

That distinction is important. HCPCS is fundamentally a claims-processing system, not an innovation-recognition system. The existence of proprietary technology, unique engineering, or FDA clearance does not automatically justify separate coding.

Recent decisions involving products ranging from wound care technologies to injection support devices demonstrate this principle. Even when manufacturers successfully established that their products differed from existing alternatives, CMS often assigned existing codes when the agency concluded that current descriptors adequately captured the product's function. The question was not whether the technology was new. The question was whether a payer needed a new code to identify and process it.
For manufacturers, this means coding applications should spend less time explaining why a product is innovative and more time explaining why payers require coding differentiation.

Trend #2: Clinical Evidence Matters More Than Product Features

The intermittent urinary catheter review may be one of the most revealing HCPCS decisions of the past several years. Manufacturers requested extensive coding distinctions based on numerous product features, including coatings, activation methods, protective sleeves, and other design elements. Rather than accepting those distinctions at face value, CMS commissioned an independent evidence review through MITRE to better understand whether those differences translated into meaningful clinical outcomes.

The resulting analysis found evidence supporting improved outcomes associated with hydrophilic-coated catheters, particularly with respect to urinary tract infections. However, CMS found far less evidence supporting distinctions based on many of the other requested features. As a result, CMS gravitated toward coding distinctions tied to demonstrated clinical outcomes rather than engineering characteristics alone.

This reflects a broader trend that appears repeatedly throughout recent HCPCS cycles. Product features may be interesting. Product features may even be valuable. But unless those features produce measurable differences in patient outcomes, CMS may be reluctant to establish separate coding.

For DME companies, this creates an important implication for evidence generation. Reimbursement-focused evidence strategies should focus not only on demonstrating that a product works, but also on demonstrating why specific product attributes create clinically meaningful differences that justify coding separation.

Trend #3: CMS Increasingly Asks, “Why Can’t Existing Codes Work?”

Historically, many manufacturers approached HCPCS applications assuming that uniqueness itself was sufficient justification for a new code.

Recent decisions suggest CMS is becoming increasingly conservative in this regard.

Across multiple product categories, CMS repeatedly appears to begin its analysis by asking whether existing coding structures can adequately accommodate the product. If the answer is yes, the burden shifts to the applicant to demonstrate why a new code is necessary.

This shift is evident across wound care products, diagnostic technologies, rehabilitation devices, orthotics, and numerous other categories. In many cases, CMS acknowledged differences between products but ultimately concluded that those differences did not create a claims-processing need that warranted a new code.

The strongest applications increasingly demonstrate that current coding structures are failing in some meaningful way. They show that payers cannot adequately distinguish products, that coverage policies require differentiation, or that existing codes create operational challenges.

Simply showing that a product is different is no longer enough. Increasingly, applicants must demonstrate that existing codes are inadequate.

Trend #4: Home Diagnostics Face an Uphill Battle

Several recent HCPCS decisions involving home diagnostic technologies reveal another consistent theme.

Many companies assume that because a product is used in the home, it should naturally fit within the DME framework. CMS has repeatedly challenged that assumption.

In decisions involving home diagnostic platforms and testing technologies, CMS frequently emphasized that products used primarily to diagnose disease often do not satisfy Medicare's definition of durable medical equipment. The agency has consistently distinguished between products that treat illness and products that diagnose illness, often viewing diagnostic technologies as extensions of clinical services rather than DME.

This distinction has significant implications for digital health and diagnostics companies. A product may be used in the home, prescribed by a physician, and clinically valuable, yet still struggle to establish a DME benefit category if its primary purpose is diagnosis rather than treatment.

Many reimbursement challenges encountered by home diagnostics companies are therefore not coding problems at all. They are benefit category problems.

Companies that recognize this distinction early can avoid investing years pursuing a reimbursement pathway that may never align with Medicare policy.

Trend #5: Benefit Category is Determined Before Coding

One of the most common reimbursement mistakes among early-stage companies is treating coding as the primary objective.

Recent HCPCS decisions suggest that coding is often only the beginning of the reimbursement journey.

CMS has repeatedly established HCPCS codes while simultaneously determining that no Medicare benefit category exists or that no Medicare payment pathway applies. In other situations, CMS has granted coding recognition while making clear that existing payment methodologies remain unchanged.

These decisions highlight an uncomfortable reality for many manufacturers. A code does not create reimbursement. A code creates identification.

Coverage, benefit category placement, payment methodology, and payer adoption remain separate challenges that frequently determine commercial success far more than coding itself.

The companies that consistently succeed in market access tend to ask a different question. Rather than asking, "Can we get a code?" they ask, "Can we establish coding, benefit category eligibility, coverage, and payment?" The latter is the far more important strategic question.

Trend #6: Functional Classification Is Winning Over Technology Classification

Another pattern visible across recent HCPCS decisions is CMS' increasing emphasis on function rather than technology.

Manufacturers often describe products through the lens of their engineering. They discuss proprietary algorithms, software architectures, novel materials, sensors, digital platforms, or connectivity features. CMS, however, appears to evaluate products through a different lens.

The agency consistently focuses on what the product does, how it is used, and whether another code already describes that function.

This helps explain why many products that seem dramatically different from an engineering perspective are nevertheless assigned existing codes. CMS frequently evaluates products based on functional equivalence rather than technological architecture.

For commercialization teams, this has important implications. Investors may care about technology differentiation. Engineers may care about technology differentiation. Regulators may care about technology differentiation.

CMS often cares most about functional differentiation.

The strongest applications therefore focus less on describing the technology and more on explaining why the function, use case, or patient outcome differs in a way that requires separate identification.

Trend #7: The Strongest Applications Demonstrate System-Level Need

Perhaps the most important lesson from recent HCPCS decisions is that successful applications increasingly make arguments that extend beyond the product itself.

The strongest applicants do not simply explain what their technology does. They explain why the healthcare system needs a separate code.

They demonstrate payer confusion. They show that current codes prevent meaningful claims analysis. They provide evidence that different coverage policies are warranted. They document coding workarounds. They establish that clinically meaningful distinctions exist and that those distinctions matter operationally.

In other words, they frame their request from the perspective of the payer rather than the manufacturer.

This may be the single most important shift occurring within the HCPCS process. CMS increasingly appears to ask not, "Why does this company want a code?" but rather, "Why does the healthcare system need this code?"

The companies that answer the second question effectively appear far more likely to succeed.

What This Means for DME Companies

Taken together, the HCPCS decisions issued between 2022 and 2025 suggest that CMS is moving toward a more disciplined, evidence-based approach to coding. Novel technology remains important, but novelty alone is rarely sufficient. Clinical outcomes matter more than product features. Benefit category considerations often matter more than coding. Functional differentiation increasingly outweighs technological differentiation. And the most successful applications demonstrate value not only for manufacturers, but for payers and the healthcare system as a whole.

For DME companies, the implication is straightforward: reimbursement strategy should begin long before a HCPCS application is submitted. The organizations most likely to succeed are those that build evidence around clinical outcomes, validate benefit category assumptions early, understand payer operational needs, and treat coding as one component of a broader market access strategy.

The past four years of HCPCS decisions offer a clear message. CMS is not asking whether a product is innovative. CMS is asking whether the innovation creates a meaningful need for the healthcare system to recognize it differently.

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