CMS happens to announce in the year 2019 about Medicare fee schedule rates for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). The 2019 update factor is 2.3%, although other pricing policies are applied in specific circumstances.
The DMEPOS and PEN fee schedule files contain the Healthcare Common Procedure Coding System (HCPCS) codes that are subject to the adjusted fee schedule amounts under Section 1834(a)(1)(F) as well as codes that are not subject to the fee schedule Competitive Bidding Program adjustments.
For CY 2019, the following Fee Schedule Adjustment Methodologies apply and fee schedule amounts are based on the area in which the items and services are furnished.
Fee Schedule Amounts for Areas within the Contiguous United States
To determine the adjusted fee schedule amounts, the average of Single Payment Amounts from CBPs located in eight different regions of the contiguous United States are used to adjust the fee schedule amounts for the states located in each of the eight regions.
These Regional SPAs or RSPAs are also subject to a national ceiling 110 percent of the average of the RSPAs for all contiguous states plus the District of Columbia) and a national floor (90% of the average of the RSPAs for all contiguous states plus the District of Columbia).
This methodology applies to enteral nutrition and most competitively bid DME items furnished in the contiguous United States, that is, those included in more than 10 Competitive Bidding Areas (CBAs). Fees schedule amounts for competitively bid DME items included in 10 or fewer CBAs
Fee Schedule Amounts for Areas outside the Contiguous United States
Fee schedule amounts for items furnished in areas outside the contiguous United States (noncontiguous areas, such as Alaska, Guam, Hawaii) are based on a blend of 50 % of the adjusted fee schedule amount and 50 percent of the unadjusted fee schedule amounts updated by the covered item updates specified in Sections 1834(a)(14) and 1842(s)(B) of the Act.
Areas outside the contiguous United States receive adjusted fee schedule amounts so that they are equal to the higher of the average of SPAs for CBAs in areas outside the contiguous United States (currently only applicable to Honolulu, Hawaii) or the national ceiling amounts described above and calculated based on SPAs for areas within the contiguous United States.
For the January 1, 2020 fee schedule update, the adjusted fee schedule amounts in non-bid areas will receive a CPI-U update per Section 414.210(g) due to the adjustments being based on SPAs
2019 Fee Schedule Update Factor of 2.3 Percent
For CY 2019, an update factor of 2.3 percent is applied to certain DMEPOS fee schedule amounts. Fee schedule amounts that are adjusted using information from CBPs are not to be subject to the annual DMEPOS covered item update.
In accordance with the statutory Sections 1834(a)(14) of the Act, certain DMEPOS fee schedule amounts are updated for 2019 by the percentage increase in the CPI- U for the 12-month period ending June 30, 2018, adjusted by the change in the economy-wide productivity equal to the 10-year moving average of changes in annual economy-wide private nonfarm business Multifactor Productivity (MFP).
The MFP adjustment is 0.6 percent and the CPI-U percentage increase is 2.9 percent. Thus, the 2.9 percent increase in the CPI-U is reduced by the 0.6 percentage increase in the MFP resulting in a net increase of 2.3 percent for the update factor.
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