CMS Releases New Fee Schedule with Increased Oxygen Rates Effective April 1, 2021

Published in Government Relations on March 17, 2021

Effective for claims with dates of service on or after April 1, 2021, the fee schedule amounts for HCPCS codes E0424, E0431, E0433, E0434, E0439, E0441, E0442, E0443, E0444, E0447, E1390, E1391, E1392, E1405, E1406, and K0738 are adjusted to remove a percentage reduction that was put in place to meet the budget neutrality requirement previously mandated by section 1834(a)(9)(D)(ii) of the Social Security Act. These new rates are not retroactive; they will only be effective for dates of service on or after April 1, 2021. These adjustments result in an increase in Medicare fee schedule amounts ranging from:
  • $6.72 to $8.19 in former competitive bidding areas
  • $5.17 to $5.43 in other non-rural areas
  • $4.41 to $6.82 in noncontiguous and rural area
Providers can access the new CMS fee schedule(s) for rural, non-rural, and Competitive Bid Areas (CBAs) here: https://www.cms.gov/medicaremedicare-fee-service-paymentdmeposfeescheddmepos-fee-schedule/dme21-b
The Oxygen Budget Neutrality issue dates back to 2017, when CMS incorrectly applied a budget neutral “offset” to fee schedules for oxygen concentrators. This led to an improper reduction in reimbursement for several oxygen-related HCPCS codes, and forced reimbursement rates in some areas below the average regional competitive bidding Single Payment Amounts (SPA). The Consolidated Appropriations Act of 2021 (Public Law 116-260), which was signed into law on December 27, 2020, corrected this action for DME suppliers. Section 121 of this Act eliminates the budget neutrality requirement set forth in section 1834(a)(9)(D)(ii) of the Social Security Act for separate classes and national limited monthly payment rates established for any item of oxygen and oxygen equipment. 
Please contact Craig Douglas (craig.douglas@vgm.com) or Ronda Buhrmester (ronda.buhrmester@vgm.com) with any questions you have regarding this release.

TAGS

  1. billing & reimbursement
  2. cms
  3. vgm government

From Our Experts

CMS Issues FAQ On DMEPOS Competitive Bidding Program thumbnail CMS Issues FAQ On DMEPOS Competitive Bidding Program The Centers for Medicare and Medicaid Services (CMS) has issued a DMEPOS CBP Frequently Asked Questions (FAQ) providing clarification on several points of the next round. Medicare Advantage Plans Are in Flux: What Providers Should Know thumbnail Medicare Advantage Plans Are in Flux: What Providers Should Know As reported by HME News WASHINGTON – Medicare Advantage (MA) plans will face new restrictions in 2026 that could force insurers to rethink their business models, according to payer relations experts. While these changes don't directly impact home medical equipment (HME) providers today, they could influence future plan design and reimbursement strategies. BOC Reinstated As Approved Accrediting Organization thumbnail BOC Reinstated As Approved Accrediting Organization As reported by HME News: Court grants company's motion for temporary restraining order against CMS OWINGS Mills, MD.—The Board of Certification/Accreditation (BOC) has been reinstated as an approved accrediting organization (AO) in all but four states, the company has announced. Click here to read the full article from HME News. The federal court has granted a temporary restraining order (“TRO”) in favor of BOC…thereby restoring BOC as an accrediting organization in all states except N DMEPOS Bills Gaining Momentum thumbnail DMEPOS Bills Gaining Momentum Fresh off a great House Energy & Commerce Health Sub-Committee hearing, now is the perfect time to reach out to your representative(s) and ask them to support the DMEPOS Relief Act, H.R. 2005; Choices for Increased Mobility Act of 2025, H.R. 1703; and the Supplemental Oxygen Access Reform Act of 2025, H.R. 2902. CMS Changes Competitive Bid Program Impacting Contracts and Bid Submission Requirements for Financial Documentation – What Providers Need to Know thumbnail CMS Changes Competitive Bid Program Impacting Contracts and Bid Submission Requirements for Financial Documentation – What Providers Need to Know The Centers for Medicare and Medicaid Services' (CMS) changes to the DMEPOS Competitive Bid Program as outlined in CMS-1828-F will reshape how suppliers prepare bids, qualify for contracts, and manage operational readiness. For DME suppliers, understanding both the changes to the contract awards and the bid submission is essential to understanding and preparing for the next bidding cycle. Meet The Candidates: VGM Hosts Rep. Randy Feenstra, Iowa Gubernatorial Candidate thumbnail Meet The Candidates: VGM Hosts Rep. Randy Feenstra, Iowa Gubernatorial Candidate Waterloo, Iowa – On Monday, VGM Group welcomed employees and local guests for another installment of its Meet The Candidates series. The featured guest was Rep. Randy Feenstra, current Congressman for Iowa's 4th District and a strong supporter of DMEPOS legislation. Energy & Commerce Health Subcommittee to Hold Hearing on Medicare Payment Policy Legislation – Thursday, Jan. 8 thumbnail Energy & Commerce Health Subcommittee to Hold Hearing on Medicare Payment Policy Legislation – Thursday, Jan. 8 The House Energy & Commerce Committee's Subcommittee on Health will hold a hearing titled “Legislative Proposals to Support Patient Access to Medicare Services” on Thursday, Jan. 8, at 10:15 a.m. (ET). CMS Releases CPI-U Adjustments for DMEPOS In 2026 And Fee Schedule Q1 thumbnail CMS Releases CPI-U Adjustments for DMEPOS In 2026 And Fee Schedule Q1 The Centers for Medicare & Medicaid Services (CMS) released the annual inflation factor to be applied to DMEPOS items effective January 1, 2026, with an implementation date of January 5, 2026. The breakdown of the adjustment is dependent upon whether the serviced items are included in the competitive bidding program (CBP) or are in formerly competitive bid areas (CBAs) such as rural and non-rural.