As previously reported, the Affordable Care Act mandates that CMS use pricing information from the durable medical equipment (DME), prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program (CBP) to adjust Medicare fee schedule amounts for items furnished in areas where the CBP is not implemented. CMS is phasing in these adjustments. Specifically, effective January 1, 2016 through June 30, 2016, CMS is basing fee schedule amounts on a blend of 50% 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% of the adjusted fee schedule amount. Beginning July 1, 2016, CMS is scheduled to implement new fee schedules reflecting 100% of the adjusted fee schedule amounts.

Yesterday the Senate approved legislation, S 2736, the Patient Access to Durable Medical Equipment Act of 2016 (as amended), that would extend the current transitional blended rates through June 30, 2017. Fully-adjusted rates would be implemented for services furnished on or after July 1, 2017. The legislation also would modify the factors that CMS would use in determining adjustments using information from CBPs beginning January 1, 2019. The legislation would be financed by accelerating implementation of a Consolidated Appropriations Act of 2015 provision that limits state Medicaid DME reimbursement amounts to the Medicare fee-for-service payment rates, including applicable competitive bidding rates. While this provision currently is scheduled to take effect January 1, 2019, S. 2736 would implement the cap three months early, on October 1, 2018. The House is also expected to consider this week alternative legislation calling for a three-month delay in CBP-based fee schedule reductions (H.R. 5210, as amended).