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Durable Medical Equipment, Prosthetics/Orthotics & Supplies Fee Schedule

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

On Tuesday, December 13, 2016, the 21st Century Cures Act (the Cures Act) was enacted into law. Section 16007(a) of this new law extended the 6 month phase in period for adjusting DMEPOS fee schedule amounts using information from the competitive bidding program from June 30, 2016 to December 31, 2016. The fee schedule amounts paid during this 2016 phase in period are based on 50 percent of the fee schedule amounts adjusted in accordance with Federal regulations at 42 CFR 414.210(g) and 50 percent of the unadjusted fee schedule amounts (i.e., 2015 fee schedule amounts updated by the 2016 covered item update). The statute and regulations specify that the adjusted fee schedule amounts (50 percent of the blended phase in rates) must be updated each time new pricing information from the competitive bidding program becomes available, such as the recompeted Round 2 payment amounts that took effect on July 1, 2016. Therefore, the blended phase in rates used to pay claims for items furni shed from January 1, 2016, through June 30, 2016, are different than the blended phase in rates used to pay claims for items furnished from July 1, 2016, through December 31, 2016, since the adjusted fee portion was updated on July 1, 2016, in accordance with section 1834(a)(1)(F)(iii) of the Social Security Act. Revised blended fee schedule public use files for payment of claims from July 1, 2016 through December 31, 2016 in accordance with section 16007(a) of the Cures Act are now available.

The Centers for Medicare & Medicaid Services (CMS) issued on February 10, 2017 Transmittal 3716, Change Request 9968 titled “Extension of the Transition to the Fully Adjusted Durable Medical Equipment, Prosthetics, Orthotics and Supplies Payment Rates under Section 16007 of the 21st Century Cures Act”. This instruction provides contractor requirements for the implementation of section 16007 for claims with dates of service from July 1, 2016 through December 31, 2016.

The revised DMEPOS fee file is now available and contractors will begin the process of adjusting the claims to correctly apply the 50/50 blended rate immediately after the fee file update is completed. Due to the volume of adjustments anticipated, the contractors have been provided 6 months to complete all adjustments. No supplier action is required to initiate the adjustments to correct payments for the 50/50 blended rate. However, for claims that the KE modifier would have been applicable to, the supplier may perform adjustments to append the KE modifier or notify their MAC to adjust those claims after the mass adjustments for the 50/50 blended fees have been completed.

2017 Fee Schedule Amounts for CMS Ruling 1682-R

CMS issued a ruling on January 12, 2017 concluding that certain continuous glucose monitors (CGMs), referred to as therapeutic CGMs, that are approved by the Food and Drug Administration for use in making diabetes treatment decisions are considered durable medical equipment. The ruling is effective on or after January 12, 2017 for CGM products covered by the ruling. The  2017 fee schedule amounts for therapeutic CGMs [PDF, 94KB]  are available for download.

2017 Calculations for Ensuring Annual Budget Neutrality of Payment Classes for Oxygen Generating Portable Equipment, Stationary Oxygen Contents, and Portable Oxygen Contents

Each year, the monthly fee schedule payment amounts for stationary oxygen equipment, Healthcare Common Procedure Coding System (HCPCS) codes E0424, E0439, E1390, and E1391, are adjusted in order to make additional payment classes for oxygen and oxygen equipment added in 2007 budget neutral.  The authority to add separate payment classes for oxygen and oxygen equipment, and the requirement that these classes be annually budget neutral is located at section 1834(a)(9)(D) of the Social Security Act.  Separate payment classes were added in 2007 for oxygen generating portable equipment (OGPE) consisting of portable concentrators (HCPCS code E1392) and portable oxygen transfilling systems (HCPCS codes E0433 and K0738), stationary oxygen contents (HCPCS codes E0441 and E0442), and portable oxygen contents (HCPCS codes E0443 and E0444).  The methodology for achieving the annual budget neutrality of these separate payment classes was established through notice and comment rulemaking, and the final rule was published in the Federal Register on November 9, 2006 (71 FR 65884).

As required by statute and regulations, the addition of the separate payment classes for OGPE, stationary oxygen contents, and portable oxygen contents must be annually budget neutral. Medicare expenditures for each year may not be more or less than they would have been if these separate payment classes had not been established.  Therefore, the fee schedule amounts for stationary oxygen equipment are reduced by a certain percentage each year to balance the increase in payments made for the additional separate payment classes.  The calculations of the percentage reduction in the 2017 fee schedule amounts for stationary oxygen equipment necessary to ensure budget neutrality of the payment classes added in 2007 [ZIP, 153KB]  is available for download.

 

CMS-1526-P

Medicare is proposing to clarify the 3-year minimum lifetime requirement (MLR) for Durable Medical Equipment (DME) and the definition of routinely purchased DME.  This rule also proposes the implementation of budget-neutral fee schedules for splints and casts, and intraocular lenses (IOLs) inserted in a physician’s office.  Finally, this rule would make a few technical amendments and corrections to existing regulations related to payment for DMEPOS items and services in the End-Stage Renal Disease Prospective Payment System Proposed Rulemaking.  View  CMS-1526-P .

 

Diabetic Testing Supplies Provisions of the American Taxpayer Relief Act of 2012

On Wednesday, January 2, 2013, the President signed into law the American Taxpayer Relief Act of 2012.  Section 636 of this new law revises the Medicare non-mail order fee schedule amounts for diabetic testing supplies.  Effective for items furnished on or after April 1, 2013, the non-mail order fee schedule amounts for Healthcare Common Procedure Coding System (HCPCS) codes A4233, A4234, A4235, A4236, A4253, A4256, A4258 and A4259    will be recalculated by removing the 5 percent covered item update for calendar year 2009 and applying a 9.5 percent reduction.  This will result in the fee schedule amounts for non-mail order diabetic testing supplies being equal to the fee schedule amounts for mail order diabetic testing supplies (denoted by KL modifier).  In addition, effective for items furnished on or after the date of implementation of the national mail order competitions of the Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program, the new law requires that the Medicare non-mail order fee schedule amounts for diabetic testing supplies be adjusted so that they are equal to the single payment amounts established under the national mail order competition for diabetic testing supplies.  Rules related to assignment of claims for non-mail order diabetic testing supplies are not affected by this new law.

Given the new legislation, CMS expects to no longer consider the application of its inherent reasonableness authority for the Medicare fee schedule amounts for non-mail order diabetic testing supplies.   Additional information about the fee schedule changes for non-mail order diabetic testing supplies will be provided in the April 2013 DMEPOS Fee Schedule Update that will be posted on the CMS transmittals website: http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/index.html  The April quarterly update to the fee schedule file is generally available in late February and is posted on the CMS website: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/DMEPOS-Fee-Schedule.html.

 

Public Meeting Regarding Inherent Reasonableness of Medicare Fee Schedule Amounts for Non-Mail Order (Retail) Diabetic Testing Supplies

Monday, July 23; 9am-1pm ET

CMS hosted a public meeting on July 23, 2012 that provided an opportunity for consultation with representatives of suppliers and other interested parties regarding options to adjust the Medicare payment amounts for non mail order diabetic testing supplies.  An audio recording and written transcript of the meeting are now available in the Downloads section below.   The audio begins at the 16:30 mark.

Please note that the deadline for submission of written comments has been extended to 5 p.m. EDT on Friday, August 10, 2012.   Written comments may either be emailed to DMEPOS@cms.hhs.gov or sent via regular mail to Elliot Klein, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Mail Stop C5-03-17, Baltimore, MD 21244-1850.

View the Federal Register Notice: Public Meeting Regarding Inherent Reasonableness of Medicare Fee Schedule Amounts for Non-Mail Order (Retail) Diabetic Testing Supplies (CMS-1445-N) [Published:  June 26, 2012].

 

Changes in Medicare Payment for Oxygen and Oxygen Equipment

Medicare payment for durable medical equipment (DME), prosthetics and orthotics (P&O), parenteral and enteral nutrition (PEN), surgical dressings, and therapeutic shoes and inserts is equal to 80 percent of the lower of either the actual charge for the item or the fee schedule amount calculated for the item, less any unmet deductible. The beneficiary is responsible for 20 percent of the lower of either the actual charge for the item or the fee schedule amount calculated for the item, plus any unmet deductible. The DME and P&O fee schedule payment methodology is mandated by section 4062 of the Omnibus Budget Reconciliation Act (OBRA) of 1987, which added section 1834(a) to the Social Security Act. OBRA of 1990 added a separate subsection, 1834(h), for P&O. The DME and P&O fee schedules were implemented on January 1, 1989 with the exception of the oxygen fee schedules, which were implemented on June 1, 1989. Section 13544 of OBRA of 1993, which added section 1834(i) to the Social Security Act, mandates a fee schedule for surgical dressings; the surgical dressing fee schedule was implemented on January 1, 1994. Section 4315 of the Balanced Budget Act of 1997, which added section 1842(s) to the Social Security Act, authorizes a fee schedule for PEN, which was implemented on January 1, 2002. Section 627 of the Medicare Modernization Act of 2003 mandates fee schedule amounts for therapeutic shoes and inserts effective January 1, 2005, calculated using the P&O fee schedule methodology in section 1834(h) of the Social Security Act.

Contact Information:

Who should you contact to determine which HCPCS code to use for billing?

PDAC Helpline:  877-735-1326

 

DURABLE MEDICAL EQUIPMENT (DME) CENTER

For a one-stop resource web page focused on the informational needs and interests of Medicare Fee-for-Service (FFS) DMEPOS suppliers, go to the DME Center (see under "Related Links Inside CMS" below).