VGM DC Link Blog Home

Medicare fee schedule as of Jan. 1, 2016

HME providers should be aware that as of Jan. 1, 2016 CMS began the “initial phase in” of downward adjustments to the Medicare fee-for-service fee schedule amounts for HCPC codes included in Rounds 1 and 2 of the competitive bidding program.

On Nov. 23, 2015, CMS released the 2016 DMEPOS and Parenteral and Enteral Nutrition (PEN) fee schedules, which included the adjustments. These schedules, along with CMS Fact Sheets, a listing of all codes affected by this program, ZIP code files designating regional and rural areas, and additional implementation information is available at vgmncbservices.com.

Background:

The Affordable Care Act amended the Medicare Modernization Act statute to “mandate use of information from the DMEPOS competitive bidding program to adjust the fee schedule amounts for DME in areas where competitive bidding programs are not implemented by no later than Jan. 1, 2016”. More simply stated, if an item (HCPC code) was included in the Round 1 rebid, Round 1 recompete, Round 1 2017, Round 2, or Round 2 recompete programs, reimbursements for these items will be reduced in all non-bid areas to an amount based on a regional average of the current competitive bid “single payment amounts”. Details of the methodologies may be found by clicking here.

For the competitive bid DME items, the final rule phases in, over six months, a new reimbursement rate for noncompetitive bidding areas (CBAs). On Jan. 1, 2016, the reimbursement rate for these claims (with dates of service from Jan. 1, 2016 through June 30, 2016) will be based on 50 percent of the un-adjusted (current) fee schedule amount and 50 percent of the adjusted (reduced) fee schedule amount which will be based on the regional competitive bidding rates. The exact July 1, 2016 fee schedule for these items may only be estimated at this time, as the program requires that the most recent competitive bid program “single payment amounts” (SPAs) update the payment amounts. We will not know the Round 2 SPAs until this spring.

Please click here to view the general methodologies for adjusting the fee schedule amounts.

January 1, 2016 DMEPOS fee schedule

January 1, 2016 ENTERAL supplies fee schedule