CMS issued the Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) final rule (CMS-1738-F, CMS-1687-F, and CMS-5531-F) that updates payment and benefit category policies and other provisions for DMEPOS items. See a summary of key provisions.
Consolidated Appropriations Act of 2021 Changes to the Oxygen and Oxygen Equipment Fee Schedule Amounts in the Medicare DMEPOS Fee Schedule
The Consolidated Appropriations Act of 2021 (Public Law 116-260) was signed into law on December 27, 2020. Effective April 1, 2021, section 121 of this Act eliminates the budget neutrality requirement set forth in section 1834(a)(9)(D)(ii) of the Act for separate classes and national limited monthly payment rates established for any item of oxygen and oxygen equipment using the authority in section 1834(a)(9)(D)(i) of the Act. Effective for claims with dates of service on or after April 1, 2021, the fee schedule amounts for HCPCS codes E0424, E0431, E0433, E0434, E0439, E0441, E0442, E0443, E0444, E0447, E1390, E1391, E1392, E1405, E1406, and K0738 are adjusted to remove a percentage reduction necessary to meet the budget neutrality requirement previously mandated by section 1834(a)(9)(D)(ii) of the Act.
These adjustments result in an increase in fee schedule amounts ranging from $6.72 to $8.19 in former competitive bidding areas, $5.17 to $5.43 in other non-rural areas, and $4.41 to $6.82 in noncontiguous and rural areas.
Temporary Gap in the DMEPOS Competitive Bidding Program and New Regulations Affecting Payment for DMEPOS and PEN
All Medicare Durable Medical Equipment, Prosthetics, Orthotics, & Supplies (DMEPOS) Competitive Bidding Program contracts expired on December 31, 2018. As of January 1, 2019, there is a temporary gap in the entire DMEPOS Competitive Bidding Program that CMS expects will last until December 31, 2020. For additional information, please go here.
On November 14, 2018, CMS had published a final rule that affects the 2019 and 2020 DMEPOS and parenteral and enteral nutrition (PEN) fee schedules. Corrections were published on December 28, 2018 in CMS-1691-CN. This rule established a methodology for adjusting fee schedule amounts for certain items using information from the DMEPOS Competitive Bidding Program (CBP) for items furnished from January 1, 2019, thru December 31, 2020. This final rule implements the requirements of section 16008 of the 21st Century Cures Act (for calendar years 2019 and 2020 only), which requires that certain information be considered in making fee schedule adjustments using competitive bidding information for items furnished on or after January 1, 2019. The rule adjusts fee schedule amounts in rural and non-contiguous areas where competitive bidding has yet to be implemented using a 50/50 blend of competitive bidding pricing and historic (“unadjusted”) fee schedule amounts. The fee schedule amounts for other areas where competitive bidding has yet to be implemented are adjusted using competitive bidding pricing only. The rule also adjusts fee schedule amounts for former competitive bidding areas using competitive bidding pricing when there is a gap in the DMEPOS CBP.
This final rule also establishes new payment classes for portable liquid oxygen equipment, portable gaseous oxygen equipment, and high flow portable liquid oxygen contents. It establishes a new methodology for ensuring that all new payment classes for oxygen and oxygen equipment are budget neutral in accordance with section 1834(a)(9)(D)(ii) of the Act. Finally, this rule establishes special payment rules for multi-function ventilators, revises the payment methodology for mail order items furnished in the Northern Mariana Islands, and includes a summary of the feedback we received for a request for information related to establishing fee schedule amounts for new DMEPOS items and services.
2019 Calculations for Ensuring Annual Budget Neutrality of Payment Classes for Oxygen and Oxygen Equipment
A final rule published in the Federal Register on November 14, 2018 (83 FR 56992) establishes new, separate payment classes for portable liquid oxygen equipment, portable gaseous oxygen equipment, and high flow portable liquid oxygen contents beginning January 1, 2019. It establishes a new methodology for ensuring that all new payment classes for oxygen and oxygen equipment are budget neutral in accordance with section 1834(a)(9)(D)(ii) of the Act. This includes a separate, higher paying class for oxygen generating portable equipment, as well as separate classes for delivery of portable and stationary portable oxygen contents created in 2006. The initial 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). The worksheets that calculate the budget neutrality factors (ZIP) are also available.
Interim Final Rule with Comment Period (CMS-1687-IFC) Durable Medical Equipment Fee Schedule, Adjustments to Resume the Transitional 50/50 Blended Rates to Provide Relief in Rural and Non-Contiguous Areas
On May 11, 2108, CMS published an interim final rule with comment period (IFC) that increases the fee schedule rates for items furnished from June 1, 2018, through December 31, 2018, for certain durable medical equipment (DME) and enteral nutrition furnished in rural and non-contiguous areas of the country not subject to the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program (CBP). To safeguard beneficiary access to necessary items and services, this rule increases the fee schedule amounts for certain DME and enteral nutrition in rural and noncontiguous areas to a blend of 50 percent of the fee schedule amounts that would have been paid from June 1, 2018, through December 31, 2018, had no adjustments been made and 50 percent of the adjusted fee schedule amounts. For areas other than rural or non-contiguous areas, the fee schedules for certain DME and enteral nutrition codes will continue to be based on 100 percent of the adjusted fee schedule amounts from June 1, 2018 through December 31, 2018.
Revised 2018 DMEPOS public use fee schedule files, effective June 1, 2018, are now available. Because the revised fee schedule amounts are based in part on unadjusted fee schedule amounts, the June 1, 2018 through December 31, 2018 DME and PEN fee schedule files will include KE modifier fee schedule amounts for certain HCPCS codes that are only applicable to items furnished in rural and non-contiguous areas. For certain accessories used with base equipment included in the CBP in 2008 (e.g. power wheelchairs, walkers, and negative pressure wound therapy pumps), the unadjusted fee schedule amounts include a 9.5 percent fee reduction in accordance with Federal law if these accessories were also included in the 2008 CBP. The 9.5 percent fee reduction only applies to these accessories when they are furnished for use with the base equipment included in the 2008 CBP. In cases where accessories included in the 2008 CBP are furnished for use with base equipment that was not included in the 2008 CBP (e.g., manual wheelchairs, canes and aspirators), suppliers should append the KE modifier to the HCPCS code for the accessory beginning June 1, 2018, for beneficiaries residing in rural or non-contiguous, non-competitive bid areas. Suppliers should not use the KE modifier for accessories that were included in the 2008 CBP when these accessories are furnished to beneficiaries residing in non-rural, non-CBA areas. Please note that the non-rural fees for these KE codes will be set to zero on the files since KE is not a valid option in non-rural areas.
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) are available for download.
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: /Regulations-and-Guidance/Guidance/Transmittals/index The April quarterly update to the fee schedule file is generally available in late February and is posted on the CMS website: /Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/DMEPOS-Fee-Schedule.
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.
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" below).