CMS Releases Calendar Year 2022 Update (Inflation Adjustment) for DMEPOS Fee Schedules

Published in Government Relations on December 03, 2021

Yesterday, December 2, CMS announced that the 2022 DMEPOS fee schedule increase is 5.1 percent for non-competitive bid items, 5% for competitive bid items in the 130 “former” CBAs, and 5.4% for competitive bid items in non-CBAs. This is larger than any annual Medicare increase in the last 30 years. You may reference the Calendar Year 2022 Update for DMEPOS Fee Schedule (Change Request 12521) for additional detail here.

The effective date (date of service) is January 1, 2022.

The annual increase to the Medicare DMEPOS Fee schedule is based on the annual change to the Consumer Pricing Index for all urban areas (CPI-U) from June to June of the previous year adjusted by an annual productivity adjustment. The CPI-U from June 2020 to June 2021 was 5.4 percent. The adjustment is the change in the economy-wide productivity equal to the 10-year moving average of changes in annual economy-wide private non-farm business multi-factor productivity (MFP). The MFP adjustment is 0.3 percent and the CPIU percentage increase is 5.4 percent. Thus, the 5.4 percentage increase in the CPI-U is reduced by the 0.3 percentage increase in the MFP resulting in a net increase of 5.1 percent for the update factor.

Readers may access the DMEPOS fee schedule(s) here: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/DMEPOS-Fee-Schedule. The DMEPOS fee schedule file contains fee schedule amounts for non-rural and rural areas. Also, the PEN fee schedule file includes state fee schedule amounts for enteral nutrition items and national fee schedule amounts for parenteral nutrition items. This recurring update notification provides updates for the following files:

DMEPOS fee schedule file
DMEPOS Rural ZIP code file
DMEPOS Parenteral and Enteral Nutrition (PEN) fee schedule
Former Competitive Bidding Areas (CBA) Fee schedule file
Former CBA National Mail Order diabetic testing supply fee schedule
Former CBA ZIP Code

Note: As of this writing, the 2022 fee schedule has yet to be posted.

Other items of interest within Change Request 12521:

A budget neutrality offset, set forth in section 1834(a)(9)(D)(ii) of the Act, is no longer applied to oxygen payment classes and items in accordance with section 121 of division H of title II of the Consolidated Appropriations Act of 2021 (P.L. 116-260) effective April 1, 2021. Therefore, for CY 2022, a budget neutrality offset will not be applied and the fee schedule amounts for the following oxygen codes will be updated only by the applicable adjustment methodologies outlined in 42 CFR §414.210(g): E0424, E0431, E0433, E0434, E0439, E0441, E0442, E0443, E0444, E0447, E1390, E1391, E1392, E1405, E1406, and K0738. For example, the CY 2022 update percentage is 5.0 percent in former CBAs.
The fees in the January 2022 fee schedule update continue to reflect the requirements of the CARES Act. Sections 3712(a) and (b) of the CARES Act, respectively, require the following:
- (a) For items and services subject to the fee schedule adjustments furnished in rural or non-contiguous areas, the fee schedule amounts will continue to be based on a blend of 50 percent of the adjusted fee schedule amounts and 50 percent of the unadjusted fee schedule amounts through December 31, 2020, or the duration of the COVID-19 public health emergency, whichever is later.
- (b) For items and services subject to the fee schedule adjustments furnished in non-rural contiguous non-CBAs, the fee schedule amounts will be based on a blend of 75 percent of the adjusted fee schedule amounts and 25 percent of the unadjusted fee schedule amounts for claims with dates of service beginning March 6, 2020, and continuing until the end of the COVID-19 public health emergency. Since the public health emergency has not ceased, the update for the 2022 DMEPOS and PEN fee schedule files continue to include the rural and non-contiguous non-CBA 50/50 blended fees and the non-rural contiguous non-CBA 75/25 blended fees required by section 3712 of the CARES Act.
For items that were included in Round 2021 but where contracts have not been awarded in Round 2021 of the CBP, pursuant to §414.210(g)(10),the fee schedules for these items and services furnished in CBAs are based on the SPAs in effect in the CBA on the last day before the CBP contract period of performance ended (i.e., December 31, 2018), increased by the projected percentage change in the CPI-U for the 12-month period on the date after the contract periods ended. A former CBA ZIP code file contains the competitive bidding area ZIP codes used in pricing a claim for an item furnished in a CBA and will be updated on a quarterly basis as necessary. Beginning January 1, 2022, the former CBA ZIP code file will contain the CBA ZIP codes for the items in the 13 product categories where contracts were not awarded in from Round 2021 of the CBP.
The fee schedule amounts for non-mail order Diabetic Testing Supplies (DTS) (without KL modifier) for codes A4233, A4234, A4235, A4236, A4253, A4256, A4258, A4259 are not updated by the annual covered item update. In accordance with section 1834(a)(1)(H) of the Act, the fee schedule amounts for these codes were adjusted in CY 2013 so that they are equal to the SPAs for mail order DTS established in implementing the national mail order CBP. The National Mail Order Recompete CBP for mail order diabetic supplies was effective July 1, 2016 to December 31, 2018. As of January 1, 2022, payment for non-mail order diabetic supplies at the National Mail Order Recompete SPAs will continue in accordance with section 1834(a)(1)(H) of the Act and these rates will remain in effect until new SPA rates are established under the national mail order program. Effective January 1, 2022, the fee schedule amounts for mail order DTS (with KL modifier) are adjusted using the methodology for areas that were formerly CBAs during periods when there is a temporary lapse in the CBP. The National Mail-Order Recompete DTS SPAs of December 31, 2018 are increased by the projected percentage change in the CPI-U for the 12-month period on the date after the contract periods ended.
Also updated for 2022 is the payment amount for maintenance and servicing for certain oxygen equipment. The 2022 maintenance and servicing fee is adjusted by the 5.1 percent MFP-adjusted covered item update factor to yield a CY 2022 maintenance and servicing fee of $76.90 for oxygen concentrators and transfilling equipment.

Questions? Please contact Mark Higley, Vice-President of Regulatory Affairs, at mark.higley@vgm.com or 319.504.9515.

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