CMS Releases 2016 Medicare DMEPOS Fee Schedule – Reflecting Steep Cuts Based on DMEPOS Competitive Bidding Rates

Today CMS released the Medicare durable medical equipment (DME), prosthetics, orthotics, and supplies (DMEPOS) fee schedule for the first half of 2016 – reflecting the agency’s first 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.  On November 6, 2014, CMS published its methodology to make such adjustments, which included a phase in of adjusted payments over six months.  Specifically, effective January 1, 2016 through June 30, 2016, the adjusted fee schedule amounts are based 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, the adjusted fee schedule amounts will reflect 100% of the adjusted fee schedule amounts. Notwithstanding this transition period, DMEPOS suppliers nationwide still will be subject to steep cuts on January 1 for many items that have been subject to CBP.  For instance, CMS issued a fact sheet listing the following average 2015 fees and average 2016 blended fees for the contiguous United States (both for urban areas and rural areas) for select items, effective January 1, 2016 (rates will be subject to fully-adjusted rates effective July 1, 2016):

Separate rates apply to Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands.