The Centers for Medicare and Medicaid Services (CMS) issues continuous updates for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Fee Schedules. Every year, they become effective in the first few days of the new year. This article throws light on information related to the fee schedule. For CY 2021, an update factor of 0.2 percent is applied to some of the DMEPOS fee schedule amounts. You will find some interesting facts about the DMEPOS fee schedule.
For DMEPOS fee schedule items, reimbursement is the lower of the U&C or the fee schedule rate. Additional handling, shipping, or tax charges may not be billed. For most of the DMEPOS codes, the details can be found on the individual state’s Fee Schedule.
Fee Schedule Amounts for Areas within the Contiguous United States
To decide on the adjusted fee schedule amounts, the average of Single Payment Amounts from CBPs from 8 different regions of the contiguous United States are referred to adjust the fee schedule amounts for the states.
These regional SPAs or RSPAs also depend on a national ceiling of 110 percent of the average of the RSPAs for all contiguous states including the District of Columbia) and a national floor (90% of the average of the RSPAs for all contiguous states plus the District of Columbia).
This process also applies to enteral nutrition and most competitively bid DME items manufactured and sold in the contiguous United States, which is also included in more than 10 Competitive Bidding Areas (CBAs). Fees schedule amounts for competitively bid DME items included in 10 or fewer CBAs.
Fee Schedule Amounts for Areas outside the Contiguous United States
The items furnished outside the contiguous United States areas including Alaska, Guam, Hawaii are based on a mix of 50% of the adjusted fee schedule amount and the remaining of the unadjusted fee schedule amounts updated by the covered item updates specified in Sections 1834(a)(14) and 1842(s)(B) of the Act.
These areas receive adjusted fee schedule amounts so that they equal to the higher the average of SPAs for CBAs currently only applicable to Honolulu, Hawaii or the national ceiling amounts described and calculated based on SPAs for areas within the contiguous United States.
In the January 1st, 2020 fee schedule update, the adjusted fee schedule amounts in non-bid areas received a CPI-U update per Section 414.210(g) about the adjustments being based on SPAs.
Manufacturer Suggested Retail Price (MSRP)
If ‘Code is Manually Priced’ is mentioned on the fee schedule, reimbursement is lower of (MSRP less 16.69%) or the provider’s U&C.
- The provider needs to have a copy of the item’s invoice and documented MSRP.
- The documented MSRP needs the name of the provider’s employee that received and documented the MSRP as well as the date the MSRP was received.
- For either state sales tax collection or shipping costs, providers may not submit for reimbursement.
- Providers need to add the ‘SC’ modifier while using the MSRP for pricing.
- Providers must attach a copy of the MSRP on all claims.
- Providers may manually indicate on the MSRP documentation the actual quantity supplied to the member if it differs from the claim total.
- Providers may not use MSRP pricing for procedure code A9901.
If ‘Code is Manually Priced’ is stated on the fee schedule and the product is missing MSRP, reimbursement is the lower of the Actual Acquisition Cost plus 21.90% or the provider’s U&C.
Actual Acquisition Costs are stated as the list price from the manufacturer for the item less any standard trade discount applicable to lower the actual cost to the provider but excluding any time-sensitive or other conditional discounts available to the provider. The provider needs to have a copy of the item’s invoice.
To receive the maximum allowable reimbursement for By Invoice items, ONE unit of procedure code A9901 with the ‘UB’ modifier needs to be included on the claim. The Submitted Charge for A9901 should then reflect the provider’s U&C minus the Actual Acquisition Cost.
Reimbursement for A9901 will be lower of (U&C – Actual Acquisition Cost) or 19.50% of the Actual Acquisition Cost.
Providers need to include a copy of the invoice on all claims.
Line items that are reimbursed by invoice must:
- Include the ‘UB’ modifier, and
- The Submitted Charge must match the amount on the invoice (excluding A9901).
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