Earlier this month, CMS is reported to have published a final rule that implements significant changes to Medicare payment policies for durable medical equipment, prosthetics, orthotics, and supplies. Among the changes, according to a report from Reed Smith LLP, is a new methodology for adjusting Medicare DMEPOS fee schedule payment amounts nationwide that uses data from the Medicare DMEPOS Competitive Bidding Program (CBP).

The source at Reed Smith LLP also notes that CMS projects that from fiscal year 2016 through 2020 the new methodology will reduce Medicare DMEPOS reimbursement by more than $4.4 billion. Furthermore, Reed Smith LLP reports, The final rule locks in a mechanism to test the use of bundled monthly payment amount for specific DME that fall under the competitive bidding process. It also modifies CBP change of ownership (CHOW) and termination of contract rules.

Details were also provided regarding adjustment to DMEPOS Pricing in Non-CBAs. Following a January 2, 2016 mandate from the Affordable Care Act, CMS reportedly will use pricing information from competitive bidding to adjust DME fee schedule amounts for items furnished in areas where the CBP is not implemented. CMS also is authorized (but not mandated) to make such adjustments for off-the-shelf (OTS) orthotics and enteral nutrients, supplies, and equipment furnished outside of competitive bidding areas (CBAs).

Mobility Devices

Special Bundled Payment Rules for Certain DME under the CBP are also addressed by the final rule. CMS reportedly is adopting its proposal to test a limited phase-in of bundled payments for certain types of DME subject to competitive bidding, under the CMS Center for Medicare and Medicaid Innovation’s demonstration authority. Under the final rule, CMS will provide continuous bundled monthly payments for the equipment, supplies, accessories, and any necessary maintenance and repairs for certain items under competitive bidding in place of capped rental policies. CMS will only apply this policy initially to standard power wheelchairs and continuous positive airway pressure (CPAP) devices furnished under the CBP (CMS had initially proposed including a broader array of products in this initiative). CMS will initially test this payment model in no more than 12 CBAs in conjunction with competitions that begin on or after January 1, 2015; any expansion of the program would follow program evaluation and future notice and comment rule-making.

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[Source: Reed Smith LLP]