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CMS Releases Medicare Reimbursement Schedule for DMEPOS Items

CMS has published the updated Medicare reimbursement schedule for certain DMEPOS items, which reflects payment amounts based on competitive bidding prices starting in July.

By Jacqueline LaPointe

- The Centers for Medicare & Medicaid Services (CMS) has released an updated fee schedule for Medicare Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS), which adjusts Medicare reimbursements to suppliers based on competitive bidding prices.

CMS releases adjusted Medicare reimbursement schedule for certain DMEPOS items

The adjusted fee schedule for certain DMEPOS items will go into effect on July 1, the federal agency stated.

Under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, CMS was tasked with replacing the current Medicare DMEPOS reimbursement amounts, which reportedly did not reflect current market values for medical supplies, with a single payment amount.

The upcoming reimbursement amounts are calculated using the bids submitted by DMEPOS suppliers in the Competitive Bidding Program, which awards contracts to Medicare suppliers in certain areas for specific DMEPOS items. Generally, CMS only reimburses the contract supplier for furnishing certain items in that area. Supplier Medicare payment amounts are derived from the median of all winning bids for a certain item.

Earlier this year, CMS phased in single payment amounts for DMEPOS items based on competitive bidding areas in non-competitive bidding areas. The fee schedule included 50 percent of current rates and 50 percent of adjusted amounts.

Under the fully adjusted fee schedule starting in July, Medicare reimbursements for DMEPOS items will account for new pricing information from the Round 2 Recompete and National Mail Order Recompete programs. CMS has updated the payment amounts to reflect additional items that were added to competitive bidding programs and recompeted contracts.

CMS also reported that the upcoming fee schedule will adjust payment amounts based on regional competitive bidding prices, but the prices must fall within a national price ceiling of 110 percent of the average of the regionally adjusted rates and a national floor of 90 percent.

However, rural areas will face a slightly modified fee schedule to ensure beneficiaries maintain access to affordable medical supplies. For DMEPOS items that are included in ten or more competitive bidding programs, fee schedule amounts for items furnished in that area cannot dip below the 110 percent national ceiling amount.

Areas outside of the contiguous US will also follow a moderately different fee schedule methodology. CMS will calculate Medicare reimbursement amounts for DMEPOS items so that they are equal to the higher average of the single payment amounts for competitive bidding areas outside the contiguous US or the national ceiling amount.

For DMEPOS items that are included in ten or fewer competitive bidding areas, CMS stated that adjusted payment amounts will be equal to 110 percent of the average of the single payment amounts from the applicable competitive bidding areas. The average will not be weighted.

As of January 2016, DMEPOS items that fall into this category are commode chairs, nebulizers, infusion pumps, patient lifts, seat lifts, TENS devices, Group 2 complex rehabilitative power wheelchairs, and certain wheelchair accessories.

CMS intends for the updated fee schedule to reduce Medicare spending and increase beneficiary access to quality medical supplies in more than specific competitive bidding areas.

For example, under the 2015 fee schedule, hospital bed suppliers would have been reimbursed $705 on average for providing a hospital bed for six months to a beneficiary, who would have paid $141 in coinsurance payments.

Starting in July, the supplier would be paid $318 for the same service in urban areas and $349 in rural locations under the updated fee schedule. In terms of coinsurance payments, beneficiaries would only pay $64 in urban areas and $70 in rural areas.

The agency has also seen some success with the adjusted fee schedules in non-competitive bidding areas, reported the fact sheet.

“The data released thus far from 2016 indicate that suppliers are continuing to accept assignment of almost every claim, accepting the revised rates established in January 2016 as payment in full for furnishing the items and supplies,” wrote CMS. “Health outcomes data has also been posted and shows no negative impact as a result of the revised rates established in January 2016.”

CMS will continue to analyze assignment rates of adjusted Medicare reimbursement amounts and patient outcomes following the last phase of the updated fee schedule, according to the fact sheet.

To view the complete list of fee schedule amounts for DMEPOS items, please click here.

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