CMS has released the July 1, 2016 update to Medicare durable medical equipment (DME) prosthetic orthotics and supplies (DMEPOS) fee schedule amounts in non-competitive bidding areas, reflecting full implementation of adjustments to nationwide rates based on DMEPOS competitive bidding program (CBP) pricing. As previously reported, the Affordable Care Act mandates that CMS use pricing information from competitive bidding to adjust DME fee schedule amounts for items furnished in areas where the CBP is not implemented. CMS is implementing these adjustments in two steps. For the period 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 will implement new fee schedules reflecting 100% of the adjusted fee schedule amounts. The July 1 rates will also reflect new pricing information from the Round 2 Recompete and National Mail Order Recompete programs.

According to a CMS fact sheet announcing the July 1 rates, the cumulative cuts to DMEPOS fee schedule amounts under the fully-adjusted rates are substantial, with fees for many items reduced by 50% – 80% compared to 2015 rates, as illustrated in the following table:

Selected DMEPOS Items: Fees and Percentage Change from 2015 to 2016 (Contiguous US)

DMEPOS Item HCPCS¹ 2015 Fee 2016 Urban Fee-July % Change Urban 2016 Rural Fee-July % Change Rural
Oxygen Concentrator (monthly) E1390 $180.92 $78.74 -56% $86.61 -52%
CPAP (rental) E0601 $101.94 $40.60 -60% $44.66 -56%
Hospital Bed (rental) E0260 $134.38 $60.50 -55% $66.55 -50%
NPWT Pump (rental) E2402 $1,642.09 $646.98 -61% $711.68 -57%
Manual Wheelchair (rental) K0001 $57.06 $22.79 -60% $24.97 -56%
Power Wheelchair (rental) K0823 $577.42 $272.45 -53% $299.69 -48%
Walker (purchase) E0143 $110.92 $46.57 -58% $51.23 -54%
Commode Chair (purchase) E0163 $117.62 $52.15 -56% $57.36 -51%
TENS (purchase) E0730 $399.67 $71.51 -82% $78.93 -80%
Nebulizer (rental) E0570 $17.87 $5.80 -68% $6.35 -64%
Powered Mattress (rental) E0277 $662.42 $190.94 -71% $206.55 -69%
Insulin Pump (rental)² E0784 $463.44 $418.23 -10% $418.23 -10%
Enteral Pump (rental) B9002 $121.70 $61.06 -50% $67.90 -44%
Enteral Supplies (daily) B4035 $11.95 $5.31 -56% $5.84 -51%
Enteral Nutrients (per 100 calories) B4150-B4154 $1.12 $0.63 -44% $0.70 -38%
¹ HCPCS = Healthcare Common Procedure Coding System; codes used to identify items for billing purposes

 

² Item included in 10 or fewer CBAs

CMS contends that the phase-in of adjusted rates has not negatively impacted health outcomes or access to DMEPOS (based on data indicating that suppliers continue to accept the revised rates established in January 2016 as payment in full for most claims). Nevertheless, based on concerns that the deep reimbursement cuts will jeopardize the availability of DME for Medicare beneficiaries, particularly in rural areas, Congress is considering legislation to extend the transition to the fully-adjusted DMEPOS fee schedule.  Earlier this month, the Senate approved S 2736, the Patient Access to Durable Medical Equipment Act of 2016, which would extend the current transitional blended rates through June 30, 2017; fully-adjusted rates would then be implemented for services furnished on or after July 1, 2017.  Scheduled House consideration of its version of the bill was delayed, but Congress could still take action to block the July 1 rates retroactively.