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

CONNECT for Health Act Gains Bipartisan Momentum to Expand Telehealth Access thumbnail CONNECT for Health Act Gains Bipartisan Momentum to Expand Telehealth Access On April 2, 2025, a bipartisan group of 60 senators reintroduced the CONNECT for Health Act, legislation that would expand patient access to telehealth services through Medicare while removing barriers to adoption. The bill would also make permanent the COVID-19 telehealth flexibilities currently set to expire Sept. 30. The lead sponsors of the bill are Sens. Brian Schatz (D-HI), Roger Wicker (R-MS), Mark Warner (D-VA), Cindy Hyde-Smith (R-MS), Peter Welch (D-VT), and John Barrasso (R-WY). [Vlog] Important Updates Regarding NIPPV NCD thumbnail [Vlog] Important Updates Regarding NIPPV NCD Watch below an important update from Ronda Burhmester, Sr. Director Payer Relations & Reimbursement, VGM & Associates, regarding non-invasive pressure ventilation. Make Your Voice Heard On The Competitive Bidding Program thumbnail Make Your Voice Heard On The Competitive Bidding Program “If the Competitive Bidding Program goes forward, it will be devastating—not just for providers like me but, most importantly, for the patients we serve,” said Jonathan Temple, owner of OxyMed LLC. You Got The Contract! …Now What?! Part 2: Contract Maintenance thumbnail You Got The Contract! …Now What?! Part 2: Contract Maintenance In our last article, we discussed the key provisions to be sure you know about your contract. It is critical to understand these provisions to help comply with the contract terms, fulfill your obligations as your business changes, and understand the payer's obligations and your rights under the contract. In this article we discuss some best practices for managing your contracts once you get them. Industry Uncertainty And Advocacy Needs – What You Can Do NOW thumbnail Industry Uncertainty And Advocacy Needs – What You Can Do NOW The proposed rule introduces broad structural changes without full clarity on implementation timelines or enforcement. Industry groups like VGM, AAHomecare, and CQRC are urging stakeholders to engage in advocacy to shape final rules. To prepare for the sweeping changes in the 2025 CMS Proposed Rule for DMEPOS, companies should take a multi-pronged strategic approach. Here is a breakdown of key preparation strategies: Alabama Durable Medical Equipment Association (ADMEA) Seeks New Executive Director thumbnail Alabama Durable Medical Equipment Association (ADMEA) Seeks New Executive Director The Alabama Durable Medical Equipment Association (ADMEA) is now accepting applications for the role of Executive Director. This is an exciting leadership opportunity for an individual with a passion for healthcare, industry advocacy, and association management. 2025 CMS Proposed Rule Challenges and To-Dos thumbnail 2025 CMS Proposed Rule Challenges and To-Dos The 2025 CMS Proposed Rule for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) introduces several significant changes that present both operational and financial challenges for DME companies. You Got the Contract! …NOW WHAT?! A Short Series thumbnail You Got the Contract! …NOW WHAT?! A Short Series Congratulations! You FINALLY got the contract you've been working so hard on all these months. Now that you have it, what are the critical next steps you need to take to maintain and implement the contract and generate ROI? Welcome to the first of a short series of articles to help you accomplish just that.