Medical Equipment Distributors NAICS 423450

Mar 3, 2026 - CMS Announces Pause On New Durable Medical Equipment Suppliers

• The Centers for Medicare and Medicaid Services announced in late February a nationwide moratorium on new suppliers of medical equipment such as gauze, oxygen tanks, urinary catheters, and breast prostheses for postmastectomy patients. The Trump administration cited a need to address “fraud, waste, and abuse” in the industry. The decision to enact a moratorium came after an analysis of current and historic Medicare enrollment and claims data, according to a Federal Register notice. The affected suppliers, who provide durable medical equipment, prosthetics, orthotics, and supplies, make up a very small portion of the agency’s $1.7 trillion budget, but the industry has recurring issues with fraud, according to the notice. Federal investigations have found that Medicare improperly paid $34 million between 2015 and 2017, and $22.7 million between 2018 and 2024 to suppliers.
• Many existing medical devices don't meet the FDA's current cybersecurity standards, according to Today's Medical Developments. About 53% of connected medical devices tested by healthcare cybersecurity company Cynerio had known critical vulnerabilities, and approximately one-third of healthcare IoT devices have an identified critical risk, potentially affecting the technical operation and functions of medical devices. Many of the devices weren’t designed to support updated encryption standards and modern security measures long-term so there’s no easy fix. For example, a device that was cleared 20 years ago using encryption that was state of the art at the time will most likely be considered insecure now, but the hardware on which that device is based likely doesn’t support modern encryption.

• A significant proportion of essential medical goods come from international sources despite efforts to bolster the domestic supply chain, according to the American Hospital Association (AHA). Nearly 70% of medical devices marketed in the US are manufactured exclusively overseas. In 2024 alone, the US imported over $75 billion in medical devices and supplies, according to an AHA analysis of Census Bureau data. These imports include many low margin, high-use essentials in hospital settings — such as syringes, needles, blood pressure cuffs, and IV saline bags. Hospitals also rely on imports for advanced surgical tools and other critical technologies.
• Medical equipment distributor industry employment decreased slightly and average wages for nonsupervisory employees increased moderately during the first 11 months of 2025, according to the US Bureau of Labor Statistics. Professional and commercial equipment distributor sales are forecast to grow at a 3.99% compounded annual rate from 2025 to 2029, slower than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund.