CMS has announced revised Medicare durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) fee schedule amounts for the period of July through December 2016, as required by the 21st Century Cures Act. By way of background, the Affordable Care Act mandated that CMS use pricing information from competitive bidding to adjust certain DMEPOS fee schedule amounts for items furnished in areas where the competitive bidding program (CBP) is not implemented. A CMS rule implemented these adjustments in two steps:

  • January 1, 2016 – June 30, 2016: Blend of 50% of the unadjusted fee schedule amount that would have gone into effect on January 1, 2016 and 50% of the adjusted fee schedule amount.
  • Beginning July 1, 2016: 100% adjusted fee schedule amounts, incorporating data from the most recent round of competitive bidding.

The Cures Act requires the Secretary to extend the transition period retroactively from June 30, 2016 to December 31, 2016, with full implementation of adjusted rates for dates of service or after January 1, 2017. CMS has posted the revised blended fee schedule amounts applicable July through December 2016. Note that CMS did not simply extend the pre-July 2016 rates, since the statute and regulations specify that the adjusted fee schedule amounts must be updated each time new CBP pricing information becomes available (e.g., the recompeted Round 2 payment amounts that took effect on July 1, 2016). According to an AA Homecare analysis, this generally results in rates that are higher than CMS’s prior July 1, 2016 fee schedule, but below the amounts in effect January 1, 2016. Contractors have begun the adjustment process to reflect the revised blended rates; CMS is giving contractors six months to complete all adjustments.