CMS Provides Additional Clarity Regarding 2024 DMEPOS Reimbursement

Published in Billing, Reimbursement, Audits and Compliance on December 20, 2023

The VGM Government Relations team dives deep into the current state of reimbursement, the CPI-U adjustments, blended rates, and other noteworthy changes coming in 2024.

A Reimbursement Update and Strategic Insights from VGM's SVP of Strategy, Alan Morris

Over the past couple of days, HME providers have been given more clarity regarding the Medicare reimbursement landscape for 2024. For starters, CMS will release the full fee DMEPOS fee schedule for 2024, which you can find here, under file name DME24-A.

In addition to that, CMS has released their document titled “Calendar Year 2024 Update for Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Fee Schedule,” which contains several additional updates regarding DMEPOS reimbursement changes that are happening for 2024, many of which are outlined below. That full document can be found here, and several of the key provisions are outlined below.

CPI-U Increases for 2024

The reimbursement rates contained within the newly released fee schedule include the annual inflation factor (CPI-U), which is discussed in detail in the article linked above. These new rates will be applied to DMEPOS items effective for dates of service Jan. 1, 2024 and after, with an implementation date of Jan. 2, 2024. The applicable CPI-U adjustments vary slightly and are dependent upon both the item provided and the location of the patient to whom it was provided. The breakdown of adjustments is as follows:

  • Competitive bid (CB) items in former CBAs: +2.9% 
  • CB items in non-CBAs: +3% 
  • Non-CB items: +2.6% 
    *calculating the new rates for items in areas with blended rates in place, the CPI-U increase only applies to the fully adjusted portion of the rate, not the unadjusted portion.

Other Noteworthy Changes to Reimbursement

  • Therapeutic Shoes
    • Updates being made to A5503 – A5507, as well as A5512, A5513, A5514.
  • Diabetic Testing Supplies
    • Mail order diabetic testing supplies, billed with the KL modifier, will receive a 2.9% CPI-U increase for 2024.
  • Oxygen Maintenance and Service (MS modifier) – 2.6% increase
  • Labor/Repair/Service Codes (K0739, L4205, L7520) – 3% increase
  • Suppliers may continue to use the KE modifier for wheelchair accessories when applicable
  • New and deleted HCPCS Codes and Fee Schedule Amounts
    • Approximately 70 new codes were created for compression garments and related accessories that will be covered beginning Jan. 1, 2024, for patients diagnosed with lymphedema.

Blended Rates

Despite the additional clarity provided by CMS, the future of the blended rates, namely the 75/25 blended rates for non-rural, non-competitive bid areas, remains undetermined. While those rates are currently set to expire on

Dec. 31, 2023, there are two pieces of legislation, S.1294 and H.R. 5555, containing language which would extend those blended rates for another 12 months, through Dec. 31, 2024. H.R. 5555 initially included language that would introduce a 90/10 blended rate for the 130 CBAs for 2024, but that language was removed from that bill as it passed through committee hearings.

While the newly released fee schedule does not currently include the 75/25 blended rates, there is still a good chance those rates will be extended for 2024. Should that happen, CMS will apply those higher reimbursement rates retroactively to Jan. 1, 2024. It is entirely up to you whether you want to submit claims right away in 2024 and have CMS reprocess them if the fee schedule does change early in the year, or wait to see whether the fee schedule changes, and if it does, wait to submit your claims until the change is implemented.

VGM will be watching this issue closely and will update you as needed with any new developments related to this topic. Please reach out to VGM Government Relations with any questions at 800-642-6065.

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