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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.

You can read the full release from CMS here: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched

Please contact Craig Douglas (craig.douglas@vgm.com) or Ronda Buhrmester (ronda.buhrmester@vgm.com) with any questions you have regarding this release.

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