Maximize Efficiency with Outsourced DMEPOS Business Functions

Published in Member Communities on December 08, 2025

By Craig Douglas, SVP of HME, Respiratory, and Wellness, VGM & Associates

Be better. Be faster. Be more flexible. Do more WITH less. Do more FOR less. These are all demands that DMEPOS providers are faced with on a regular basis. These demands come from patients, referral sources, and payers alike. Some come from just one of those sources, but many of them come from multiple, or even all, of those sources. Even if those words don’t actually come to you verbatim in verbal or written form, they are implied in a myriad of ways. It could be a payer lowering a fee schedule, CMS implementing their competitive bidding program, a patient telling you they can find the same product(s) online for “much cheaper,” or a referral source telling you if you can’t get a walker delivered to the hospital within two hours for a payer that requires prior auth for all DME, they will find a new DME partner for all of their referrals. Okay, that last one might be a bit drastic, but I’m willing to bet some of you have some stories that aren’t too far from that.

With many costs going up and reimbursements going down, DMEPOS providers, without question, need to look at several facets of their business to find where it’s possible to gain efficiency and lower operational costs and other overhead costs. You may have become as lean as you can possibly stand from a staffing perspective but may also be finding that effort alone is not enough. Even if your preference has always been to “keep everything in house,” you may now see it as necessary to outsource certain functions to protect narrowing margins. For some, failure to become more efficient could even be the difference between keeping your business or closing/selling it.

For the purposes of this article, outsourcing refers to the delegation of specific business processes to external service providers. If you find yourself looking to outsource some business functions, I promise that you are not alone. Some companies may outsource only one thing, while others may outsource several business functions. Whether you want to become more efficient, reduce costs, give staff that spends too much time on repetitive or menial tasks more t ime and freedom to focus on other critical business functions, scale your services or your business more rapidly, avoid the cost and time drains associated with constantly hiring and training new staff, or tap into specialized expertise that you can’t find or retain on your own, outsourcing could provide the solutions you are seeking. Some outsourced solutions are very people and process-oriented, while others are facilitated using artificial intelligence (AI).

Commonly Outsourced DMEPOS Business Functions

The full list of tasks that can be outsourced is quite extensive, but the most commonly outsourced business functions for DMEPOS providers include the following:

1. Order Processing and Revenue Cycle Functions

For DMEPOS providers, functions such as intake and fax wrangling, insurance verification, prior authorization, claims submission (payer billing), payment posting, patient billing, and appealing denials are all critical to their financial success. Outsourcing these and other RCM-related functions can improve cash flow, reduce days in accounts receivable, and enhance compliance with payer requirements. Companies who specialize in RCM functions have highly trained staff who learn your preferences, your payers’ rules, your contractual obligations, overarching regulatory rules, etc. to make sure they keep you in compliance with all of those things.

2. Customer Service and Call Centers

Outsourcing customer service allows providers to offer 24/7 support, multilingual capabilities, and consistent service quality. Vendors often use CRM systems and call analytics to optimize performance.

3. IT/Data Management/Cybersecurity

Managing electronic health records (EHRs), cybersecurity, and data analytics requires specialized skills and infrastructure. Outsourcing IT functions can enhance data security, ensure regulatory compliance (e.g., HIPAA), and support digital transformation initiatives.

4. Human Resources (HR) Functions

Yes, you can even outsource things like payroll processing, payroll taxes, employee benefits, retirement benefits, workers’ compensation benefits, etc.

5. Other miscellaneous categories

• Payer contracting: Fee schedule & contract language negotiation, credentialing, etc.
• Inventory/delivery management
• Artificial intelligence (AI) and technology solutions

Potential Risks Related to Outsourcing

There are certainly some risk considerations to make when outsourcing, including: 

1. Data Security and Privacy Risks

Handling sensitive patient information requires robust data protection measures. Providers must ensure that vendors comply with HIPAA and other relevant regulatory requirements. Some payers are very strict about sensitive patient information being accessible to staff located outside of the U.S., so if the company you outsource to has offshore staff that would have access to that type of sensitive data, you must know and understand what your payers’ requirements are and what you agreed to in your contracts with them.

2. Loss of Control

Outsourcing can lead to reduced visibility and control over your processes.

3. Cultural and Communication Barriers

Offshore outsourcing may introduce language, time zone, and cultural differences that affect service quality.

Best Practices

To maximize the benefits and minimize the risks of outsourcing, DME providers should adopt the following best practices:

1. Define Clear Objectives From Day One, Both for Your Company and Your Outsourced Partner

Know what you are outsourcing and what you hope to accomplish for your business by doing so. Make sure your outsourced partner knows your goals and how you will define success for the partnership. Then you can mutually align vendor performance metrics with these objectives.

2. Choose the Right Partner 

Select vendors with proven experience in the DMEPOS sector, a commitment to compliance and quality, and request references. Conduct thorough due diligence and site visits if possible.

3. Choose the Right Partner

Service Level Agreements (SLAs) should outline expectations for performance, timelines, data security, reporting, and overall outcomes. If applicable, include penalties for non-compliance and provisions for continuous improvement.

4. Maintain Oversight and Communication

Regular meetings, performance reviews, and shared dashboards help maintain transparency and foster collaboration.

5. Start Small and Scale Gradually

When initiating a new vendor, start with a pilot project or a single function to test the partnership. Use lessons learned to refine processes before expanding the scope. That way, if there are hiccups or unseen hurdles at implementation, it isn’t impacting the entire business all at once. 

Healthcare in general, and more specifically the DMEPOS industry, is experiencing an evolution driven by regulatory changes, reimbursement pressures, technological advancements, and evolving customer expectations. As providers strive to maintain profitability while delivering high-quality care, outsourcing certain office functions has emerged as a strategic lever to enhance efficiency, reduce costs, and improve scalability. Outsourcing certain office functions allows providers to streamline operations, reduce costs, and focus on delivering high-quality care. However, success depends on careful planning, vendor selection, and ongoing oversight. By adopting a strategic approach to outsourcing, DME organizations can position themselves for sustainable growth and operational excellence in a dynamic healthcare landscape. As the industry continues to evolve, outsourcing will play a pivotal role in helping providers meet rising customer expectations and may even help us create or adapt to new reimbursement models.

As noted, there are several functions that can be outsourced, and VGM has partnered with several companies that can help you if you are looking to outsource any of the business functions mentioned above. Additionally, there are even a few functions that you can outsource to VGM itself, including:

• Website design, SEO, and reputation management
• Education, training, and CEU needs for you and your staff
• Financial services, leasing programs, SBA loans/ lending, and M&A activity
• Several CPAP-related business functions, including AI mask fitting, machine setting/shipping, therapy adherence/compliance, resupply fulfillment, and asset recovery/return management
• Compliance, audits, appeals, and provider enrollment
• Market intelligence and top referral sources by product & geography plus payer-specific intelligence
• Business insurance such as general & professional liability, excess liability, cyber liability, property, business auto, and surety bonds
• Web, digital, and print marketing services

If you have any questions about who VGM has vetted and partnered with from an outsourced business function perspective, please reach out to your VGM Account Manager.

This article was originally featured in the "VGM Playbook: Disrupting the Traditional HME Strategy." To read the full article and more like this, download your copy of the playbook today! 

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