Summary of Proposed Rule 1780-P; DME Reimbursement Rates and Medicare Coverage for Lymphedema Related Compression Items

Published in Government Relations on July 10, 2023

On July 10, 2023, CMS published a proposed rule in the Federal Register which contained information regarding a few DME-related topics, including:

  • Reimbursement rates for DME providers, 
  • Adding coverage of compression garments for lymphedema to the Medicare benefit, 
  • Refill requirements for recurring DME orders/supplies
  • Medicare supplier enrollment requirements

Information regarding the proposed changes to those four topics is summarized below. You can view the entire proposed rule, CMS-1780-P, here. There will be an open comment period, and comments are due no later than 5 p.m. ET on August 29, 2023.

1. Reimbursement Rates for DMEPOS Providers

Regarding reimbursement rates for DMEPOS providers, this newest proposed rule reiterates a lot of what we already know, which is the following:

  • For providers serving Medicare beneficiaries in rural and non-contiguous areas (Alaska and Hawaii, less the Honolulu CBA), reimbursement will remain at the 50/50 blended rates. 
  • For providers serving Medicare beneficiaries in areas considered to be non-rural, non-CBA, reimbursement will remain at the 75/25 blended rates until December 31, 2023. These blended rates have been in place since March of 2020 and were initially created through the CARES Act. Beginning January 1, 2024, reimbursement rates for these areas will revert back to rates similar to what was in place in January of 2020. While those rates will be lower than the 75/25 blended rates in place now, they won’t revert back to January 1, 2020 rates because of the CPI-U increases that have been granted since 2020. Those CPI-U increases will still be factored in, so the 2024 rates will land between the January 1, 2020 rates and the current 75/25 blended rates.
  • For providers serving Medicare beneficiaries in competitive bid areas (CBAs), rates will remain where they have been and will continue to be adjusted for inflation as needed (CPI-U).

All of the above reimbursement info could still be subject to change. There are at least two pieces of legislation that could impact reimbursement for DME providers into 2024 and perhaps beyond. Those two pieces of legislation are:

  • H.R. 6641, a bill that was ultimately not passed in the 117th Congress, but could have language reintroduced, would create a 90/10 blended rate that would be applied in the 130 CBAs for a two-year period, providing those areas with some increased reimbursement that they did not receive through any of the previous legislation such as the CARES Act.
  • S. 1294, which would extend the 75/25 blended rates for providers serving beneficiaries in the non-rural, non-CBAs for an additional 12 months, or through December 31, 2024.

2. Adding Coverage of Compression Garments for Lymphedema to the Medicare Benefit

Up to this point, the Medicare program has not offered coverage of compression garments for patients diagnosed with lymphedema. Through the passage of the Lymphedema Treatment Act (LTA), coverage for those items will now be offered by Medicare. The proposed rule further outlines what that coverage will look like, and below are the main highlights of that new coverage:

  • Coverage for lymphedema-related products (compression garments, etc.) is slated to begin on January 1, 2024 
  • Coverage will be available for both standard and custom compression products
  • Language has been added that could lead to the inclusion of lymphedema products in future iterations of the competitive bidding program
  • Specifies that accreditation, quality standards, and enrollment criteria will be mandatory for all suppliers of compression therapy items
  • Fitting, training, and adjustment services will be included in the reimbursement rate for the product itself (though they did consider having a separate reimbursement rate for the initial fitting and are seeking additional comments around that)
  • Creation of some new/additional codes (certain compression products used for lymphedema can also be used as surgical dressing for venous stasis ulcers, and they would like separate coding to differentiate between the two applications and possibly different codes for daytime vs. nighttime garments)
  • Proposed reimbursement rates: The proposed rule contains a chart (around page 282 of 392) that outlines the reimbursement for the various compression garment HCPCS codes
  • Proposed quantity limitations: two daytime garment sets, replaceable every six months; one nighttime garment set, replaceable on an annual basis (seeking comments around this specifically)

3. DME Refills

This proposed rule seeks to bolster governing language around the topic of refills/recurring supply orders. It seeks to require DME suppliers to document that a Medicare beneficiary was contacted and that the beneficiary confirmed the need (the patient is still using the item for which supplies are required, and does need additional supplies) for a refill within the 30-day period (rather than 14 days) leading up to the end of the current supply (replaces the previous “pending exhaustion” phrase). It also seeks to codify the requirement that delivery/DOS of DMEPOS items be no sooner than 10 calendar days prior to the expected end of the current supply. They are asking for comments to be used for future rulemaking regarding ways to balance the burden on both Medicare beneficiaries and suppliers with the potential risks/burdens of not requiring suppliers to verify the beneficiary’s actual need for recurring supplies before providing them to patients with long-term or permanent conditions.

4. Provider and Supplier Enrollment Requirements

The proposed rule contains a few new provisions around Medicare provider enrollment requirements, which include:

  • “New” supplier shall mean any of the following:
    • A newly-enrolled Medicare provider or supplier. (This includes providers that must enroll as new providers in accordance with the change in majority ownership provisions in § 424.550(b).
    • A certified provider or certified supplier undergoing a change of ownership consistent with the principles of 42 CFR 489.18
    • A provider or supplier (including an HHA or hospice) undergoing a 100 percent chance of ownership via a change of information request
  • the effective date of the PPEO’s commencement is the date on which the new provider or supplier submits its first claim
  • a provider may request a retroactive termination date, but only if no Medicare beneficiary received services from the facility on or after the requested termination date
  • moving new and new owner requests for hospice agencies into the high categorical risk level (DME providers are already at the high-risk level, hospice agencies were previously deemed “moderate” risk)

Again, the comment period for this proposed rule will remain open until 5 p.m. ET on August 29, 2023. Instructions regarding comment submission can be found within the proposed rule (CMS-1780-P). We encourage you to review the proposed rule and submit comments where warranted.

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