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Durable Medical Equipment (DME) Center

Announcement of Important Changes Impacting Medicare Coverage of Continuous Glucose Monitors

Based on input from patients and other stakeholders, The Centers for Medicare & Medicaid Services (CMS) is announcing important changes in its written policies regarding how Medicare covers continuous glucose monitors (CGMs). These changes are consistent with the Agency’s approach of putting patients first and incentivizing innovation and use of e-technology. 

CGMs are items of durable medical equipment (DME) that provide critical information on blood glucose levels to help patients with diabetes manage their disease. In January 2017, CMS issued a ruling providing for Medicare coverage of therapeutic CGMs. The ruling was followed by a policy article issued by the Durable Medical Equipment Medicare Administrative Contractors on March 23, 2017 to provide coverage guidance for these devices.

CMS heard from numerous stakeholders who shared their concerns that Medicare’s CGM coverage policy limited their use of CGMs in conjunction with their smartphones, preventing them from sharing data with family members, physicians, and caregivers.

After a thorough review of the law and our regulations, CMS is announcing that Medicare’s published coverage policy for CGMs will be modified to support the use of CGMs in conjunction with a smartphone, including the important data sharing function they provide for patients and their families.

The Durable Medical Equipment Medicare Administrative Contractors will issue a revised policy article in the near future, at which time the published change will be effective.

Establishment of Medicare Fees for Newly Covered Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS)

For newly covered items of DMEPOS paid on a fee schedule basis where a Medicare fee does not exist, the Centers for Medicare & Medicaid Services (CMS) uses a process to establish fees called gap-filling. This allows Medicare to establish a price that aligns with the statutory requirements for the DMEPOS fee schedule.

Sections 1834(a), (h), and (i) of the Social Security Act mandate that the fee schedule amounts for durable medical equipment (DME), prosthetic devices, prosthetics and orthotics, and surgical dressings, respectively, be calculated based on average reasonable charges paid for the item or device under Medicare from a past period (“the base year”). For example, the exclusive payment rule for DME items requiring frequent and substantial servicing indicates that the fee schedule amounts must be based on the average reasonable charge in the state for the rental of the item or device for the 12-month period ending with June 1987.

Under current gap filling guidelines outlined in Chapter 60.3 of the Medicare Claims Processing Manual, Medicare establishes a new fee schedule amount based on (1) the fee schedule amount for a comparable item in the DMEPOS fee schedule, or (2) supplier price lists or retail price lists, such as mail order catalogs, with prices in effect during the base year. In establishing fees for newly covered DMEPOS, Medicare first looks to identify a comparable DMEPOS item for which a fee schedule amount already exists, as existing fee schedule amounts are based on average reasonable charges for items paid during the base year. CMS determines whether a comparable item exists based on the purpose and features of the device, nature of the technology, and other factors, and then applies that fee to the new item.

Supplier price lists include catalogues and other retail price lists (such as internet retail prices) that provide information on commercial pricing for the item. Going forward, potential appropriate sources for such commercial pricing information can also include verifiable information from supplier invoices and non-Medicare payer data (e.g., fee schedule amounts comprised of the median of the commercial pricing information adjusted as described below).

If the only available commercial pricing is from a period other than the base year, CMS first deflates pricing data to the mid-point of the base year (e.g., December 1986) using the percentage change in the Consumer Price Index for All Urban Consumers from the mid-point of the pricing year to the mid-point of the base year. CMS then inflates that amount to the payment year using the update factors required by law. This allows Medicare to establish a fee for the newly covered item consistent with the law.

CMS expects to update the Medicare Claims Processing Manual to reflect the gap-filling method described above.

NEW:  Exclusion from Fee Schedule Adjustments for Accessories used in Conjunction with Group 3 Complex Rehabilitative Power Wheelchairs Effective July 1

CMS is issuing a new policy on how adjustments to the fee schedule based on information from competitive bidding programs apply to wheelchair accessories and back and seat cushions used with group 3 complex rehabilitative power wheelchairs.  Section 16005 of the 21st Century Cures Act currently allows higher payments for these items but is set to expire after June 30, 2017.  By continuing these higher payments, this new action will help to protect access to complex rehabilitative power wheelchair accessories on which people with significant disabilities depend.

The law provides the categories of items that are subject to the durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) Competitive Bidding Program.  This provision excludes certain complex rehabilitative power wheelchairs recognized by the Secretary as classified within group 3 or higher (and related accessories when furnished in connection with such wheelchairs).   CMS has reconsidered its policy on adjusting fee schedule amounts using information from the competitive bidding program for these items under 1834(a)(1)(F) of the Social Security Act to take into consideration the exclusion at section 1847(a)(2)(A).  As a result, effective July 1, 2017, payment for these items will be based on the standard unadjusted fee schedule amounts.       

Suppliers should continue to use the KU modifier when billing for wheelchair accessories and seat and back cushions furnished in connection with Group 3 complex rehabilitative power wheelchairs with dates of service beginning July 1, 2017.   No additional action will be required by suppliers.

For more information, view the revised  Frequently Asked Questions on Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) 2015 Medicare Payment Final Rules (CMS‐1614‐F) [PDF, 204KB]

Section 16007(a) of the 21st Century Cures Act

CMS has announced the revised July through December 2016 blended fee schedule payment amounts required under Cures Section 16007(a) and has begun the adjustment process.

PAMPA Code List

The Centers for Medicare & Medicaid Services has released the list of HCPCS codes for wheelchair accessories affected by the Patient Access and Medicare Protection Act (PAMPA).  Section 2 of PAMPA mandates that adjustments to the 2016 Medicare fee schedule amounts for certain durable medical equipment (DME) based on information from competitive bidding programs not be applied to wheelchair accessories (including seating systems) and seat and back cushions furnished in connection with Group 3 complex rehabilitative power wheelchairs. CMS welcomes public input on this list.  The list should only include codes for wheelchair accessories that can be used with Group 3 complex rehabilitative power wheelchairs and had revised fee schedule amounts calculated for 2016 based on information from competitive bidding programs.  Please note, since posted, the list has been revised to include codes E1012 and E2378.

21st Century Cures Act

Section 16005 of the 21st Century Cures Act extends the PAMPA provisions of unadjusted fee schedules for Group 3 wheelchair accessories and cushions used with Group 3 complex rehabilitative power wheelchairs through June 30, 2017.  To implement the extension, the 2016 KU fee schedule amounts have been updated by the 2017 0.7 percent covered item update and will be added to the 2017 DMEPOS fee schedule file.  Suppliers should continue to use the KU modifier when billing for wheelchair accessories and seat and back cushions furnished in connection with Group 3 complex rehabilitative power wheelchairs with dates of service  January 1, 2017 through June 30, 2017.

In addition, Section 16007 of the 21st Century Cures Act extends the transition period for the 50/50 blend of unadjusted and adjusted fees for competitive bid items in non-competitive bid areas.  The law requires that adjustments be made to the fee schedule amounts for certain items furnished on or after January 1, 2016 in areas that are not competitive bid areas, based on information from competitive bidding programs (CBPs).    The fee schedule adjustments were phased in for claims with dates of service January 1, 2016 through June 30, 2016, so that each fee schedule amount was based on a blend of 50 percent of the fee schedule amount that would have gone into effect on January 1, 2016, if not adjusted based on information from the CBP, and 50 percent of the adjusted fee schedule amount.  Section 16007 of the Cures Act extends this transition period from June 30, 2016 to December 31,2016 with the full implementation of the 100 percent adjusted fee schedule amounts applying on or after January 1, 2017.  CMS is currently working to implement this section and will be providing contractor instructions for re-processing the applicable claims.  There is no action required for the suppliers at this time.  Formal instructions will be issued in the near future.

Medicare DMEPOS Competitive Bidding contract suppliers for Round 1 2017 have been announced. View Fact Sheet.

Data used in monitoring the impact of the 2016 DMEPOS fee schedule adjustments is available on the Fee Adjustment Monitoring page. The data has been updated using claims processed through August 2, 2016. The data will continue to be updated as more claims are processed.

CMS has announced the Medicare DMEPOS Competitive Bidding single payment amounts for Round 1 2017 and has begun sending contract offers. For additional information click here.

Corrections Being Made to the July 2016 DMEPOS Fee Schedule Amounts for Certain Items

On June 23, 2016, CMS announced the release of the 2016 July Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) fee schedule amounts, including adjusted fees based on DMEPOS Competitive Bidding Program information. CMS identified errors in the fee schedule amounts for some items and has released revised DMEPOS public use fee schedule files on August 31, 2016. The corrections do not impact the PEN public use file. One of the corrections identifies E2378 as a code subject to Section 2 of the Patient Access and Medicare Protection Act (PAMPA) and adds unadjusted fee schedule amounts for this code to the July 2016 fee schedule file. In addition, errors were identified in the E1012RR fees in the July DMEPOS text file and these fees have been corrected.

A list of the codes affected by the revisions is included as a separate public use file along with the revised July 2016 fee schedule public use files. The percentage change in fees resulting from the corrections range from a 4 percent decrease to a 3 percent increase with an average change in fees for the affected codes as a 0.03 percent decrease. Of the corrected fees that increase, the average increase was $0.38 with the maximum increase being $6.27. Suppliers may submit previously processed claims for adjustment with dates of service on or after July 1, 2016.

For additional information:

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Replacement of Accessories used with a Beneficiary-Owned Continuous Positive Airway Pressure (CPAP) Device or a Respiratory Assist Device (RAD) Purchased by Medicare

This message applies to the replacement of essential accessories used with a beneficiary-owned CPAP device or RAD purchased by Medicare following 13 months of continuous use.  For the purpose of processing claims for replacement of essential accessories for this equipment, the medical necessity for the beneficiary-owned base CPAP device or RAD is assumed to have been established.  This does not mean that the Centers for Medicare & Medicaid Services (CMS) or its contractors cannot determine that the payments for the equipment were inappropriate based on additional information or investigations related to auditing previously processed Medicare claims.  This assumption is merely made so that initial claims for essential accessories used with a beneficiary-owned CPAP device or RAD purchased by Medicare following 13 months of continuous use can be processed timely to ensure beneficiary access to these items.

In accordance with this assumption, all of the documentation needed to establish medical necessity for the equipment (e.g., sleep tests) are not needed for the purpose of establishing medical need for replacement accessories alone.  As long as no other information is uncovered or reviewed that would result in a determination that the equipment furnished and paid for by Medicare was not medically necessary, then all that is necessary for the purpose of processing claims for replacement of essential accessories used with a beneficiary-owned CPAP device or RAD purchased by Medicare following 13 months of continuous use is a determination that the medical need for the equipment continues, and that the claims for the accessories themselves are reasonable and necessary.  In that regard, CMS will ensure that the supplier's documentation records support the need to replace the accessory to maintain the equipment's functionality and meet the beneficiary's medical need. In the event that certain accessories are furnished for the first time, such as a heated humidifier or heated tubing, CMS will ensure that the accessories are medically necessary.

This policy DOES NOT apply to replacement of accessories for a CPAP device or RAD that has been used for less than 13 months of continuous use or for replacement of accessories for a CPAP device or RAD that is owned by the beneficiary but was not purchased by Medicare. In these cases, all medical necessity documentation needed for the initial use of the CPAP device or RAD must be furnished, but the 120 day grace period above would apply for transitions to contract suppliers at the start of the Round 2 Recompete.

CMS Announces the Release of the July 2016 DMEPOS Fee Schedules that Include Adjusted Fees Based on DMEPOS Competitive Bidding Program Information

On June 23, 2016, CMS announced the release of the July 2016 Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) fee schedule amounts.  The DMEPOS and PEN public use files contain fee schedules for certain items that were fully adjusted based on information from the Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program in accordance with Section 1834(a)(1)(F) and 1842(s)(3)(B) of the Act.

For additional information:

Medicare DMEPOS Competitive Bidding contract suppliers for Round 2 Recompete and the national mail-order recompete for diabetes testing supplies have been announced.  View the fact sheet.

CMS has announced the Medicare DMEPOS Competitive Bidding single payment amounts for Round 2 Recompete and national mail-order recompete and has begun sending contract offers.  For additional information, visit the Competitive Bidding Implementation Contractor website.

Implementation of Section 2 of the Patient Access and Medicare Protection Act Fact Sheet

CMS is implementing the Patient Access and Medicare Protection Act to ensure that beneficiaries have access to wheelchair accessories and seat and back cushions when furnished with Group 3 complex rehabilitative power wheelchairs.  To ensure beneficiary access to these accessories particularly for these vulnerable populations, advance payment may be available for suppliers.  Prior to July 1, suppliers will be paid the adjusted fee schedule rates. The average reduction during this period for these items is approximately 10%. During this time, CMS has announced that suppliers are able to submit a single advance payment request for multiple claims if the conditions described in CMS regulations at 42 CFR Section 421.214 are met. Additional information is below.

MESSAGE TO SUPPLIERS

The Patient Access and Medicare Protection Act (PAMPA) was recently signed into law on December 28, 2015.  Beginning January 1, 2016, the DME fee schedule rates are adjusted to reflect information from the DMEPOS competitive bidding program as required by section 1834(a)(1)(F)(ii) of the Social Security Act.  These adjustments are being phased in during the initial 6 months of 2016 so that the fee schedule amounts in all areas will be based on a 50/50 blend of current rates and adjusted rates. Section 2 of PAMPA mandates that adjustments to the 2016 Medicare fee schedule amounts for certain durable medical equipment (DME) based on information from competitive bidding programs not be applied to wheelchair accessories (including seating systems) and seat and back cushions furnished in connection with Group 3 complex rehabilitative power wheelchairs.  Group 3 complex rehabilitative power wheelchair bases are currently described by codes K0848 through K0864 of the Healthcare Common Procedure Coding System (HCPCS).

Although this change is effective January 1, 2016, changes to the Medicare claims processing systems cannot be implemented any sooner than July 1, 2016.  Until these changes are implemented, payment for these items will be based on the adjusted fee schedule amounts. Suppliers can submit claims for these items with dates of service on or after January 1, 2016, but payment will be based on the adjusted fee schedule amounts.  On or after July 1, 2016, suppliers can adjust previously paid claims with dates of service on or after January 1, 2016, to receive the full fee schedule amount. For these items, the average adjustments to the 2016 rates in the transition period is about a reduction of 10 percent.

Additional information, including a list of HCPCS codes for accessories affected by this change, as well as further instructions regarding the submission and processing of these claims, will be provided in the coming months. https://www.cms.gov/Center/Provider-Type/Durable-Medical-Equipment-DME-Center.html

Because the changes to the Medicare claims processing system cannot be implemented any sooner than July 1, the Part B Medicare contractors are unable to process claims within established time limits and an advance payment may be available.  Suppliers are able to submit a single advance payment request for multiple claims for an eligible period of time.  Note an advance payment is a conditional partial payment, which requires repayment, and may be issued when the conditions described in CMS regulations at 42 CFR Section 421.214 are met.

To apply for an advance payment, the Medicare supplier is required to submit the request to their appropriate Medicare Administrative Contractor.  CMS will not make advance payments in the case where a supplier is unable to submit a valid claim for services rendered.

Corrections Being Made to the 2016 DMEPOS Fee Schedule Amounts for Certain Items

On November 23, 2015, CMS released the 2016 Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) fee schedule amounts. The DMEPOS and PEN public use files contain fee schedules for certain items that were adjusted based on information from the Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program in accordance with Section 1834(a)(1)(F) and 1842(s)(3)(B) of the Act.  CMS identified errors in the fee schedule amounts for some items and has therefore released revised fee schedule files on December 8, 2015.  A list of the codes affected by the revisions is included as a separate public use file along with the revised 2016 fee schedule public use files. In addition, errors were identified in the Fact Sheet under the “Examples of New Payment Rates for January” chart for the contiguous United States.  Under the 2016 blended urban fee column, the average 2016 blended fees for codes E0163, E0730 and E0784 have been revised.  Please be aware that on December 14, 2015, CMS replaced the December 8, 2015 PEN text file (DMEPEN_JAN_V1208) to correct format errors.

For additional information:

CMS Announces the Release of the 2016 DMEPOS Fee Schedules that Include Adjusted Fees Based on DMEPOS Competitive Bidding Program Information

On November 23, 2015, CMS announced the release of the 2016 Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) fee schedule amounts.  The DMEPOS and PEN public use files contain fee schedules for certain items that were adjusted based on information from the Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program in accordance with Section 1834(a)(1)(F) and 1842(s)(3)(B) of the Act. 

For additional information:

Durable Medical Equipment Prosthetics Orthotics Supplies (DMEPOS) Rural Zip Code File & Fee Schedule Public Use File Formats

The Centers for Medicare and Medicaid Services (CMS) has released revised PUF formats for the CY 2016 DMEPOS and Parenteral and Enteral Nutrition (PEN) fee schedules.  Also released is a preliminary DMEPOS rural ZIP Code file containing Quarter 4 2015 rural ZIP codes.  Beginning January 1, 2016, fee schedule amounts for certain items will be adjusted based on information from the DMEPOS competitive bidding program, and for some items, the adjusted fee schedule amounts for items furnished in rural areas within the state will be different than the adjusted fee schedule amounts in other areas of the state.  The ZIP codes for areas defined as rural areas per regulations at 42 CFR 414.202 are based on current ZIP code boundaries.  Changes to the ZIP code public use file will be made, as needed, based on future changes to ZIP codes by the United States Postal Service.  The public use files for the DMEPOS and PEN fee schedules do not contain fee schedule amounts, but are being posted to show what changes are being planned for the file formats to accommodate the fee schedule amounts for rural areas, as well as statewide fee schedule amounts for enteral nutrition. Please be aware that effective October 21, 2015, revised 2016 DME and PEN TEXT file formats were made available as part of an updated DMEREADLAYOUTS16 document.  

The revised TEXT files and the other PUF formats are available at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/DMEPOS-Fee-Schedule.html.

Additional Time to Establish Protocols for Newly Required Face-to-Face Encounters for DME

Due to concerns that some providers and suppliers may need additional time to establish operational protocols necessary to comply with face-to-face encounter requirements mandated by the Affordable Care Act (ACA) for certain items of Durable Medical Equipment (DME), CMS will start actively enforcing and will expect full compliance with the DME face-to-face requirements beginning on October 1, 2013.

Section 6407 of the ACA established a face-to-face encounter requirement for certain items of DME. The law requires that a physician must document that a physician, nurse practitioner, physician assistant, or clinical nurse specialist has had a face-to-face encounter with the patient. The encounter must occur within the 6 months before the order is written for the DME.

Although many DME suppliers and physicians are aware of and are able to comply with this policy, CMS is concerned that some may need additional time to establish operational protocols necessary to comply with this new law.  As such, CMS expects that during the next several months, suppliers and physicians who order certain DME items will continue to collaborate and establish internal processes to ensure compliance with the face-to-face requirement. CMS expects durable medical equipment suppliers to have fully established such internal processes and have appropriate documentation of required encounters by October 1, 2013.  

CMS will continue to address industry questions concerning the new requirements and will update information on our Medical Review and Education website. CMS and its contractors will also use other communication channels to ensure that the provider community is properly informed of this announcement.

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