CMS Issues Final Rule on 2020 Medicare Payment Rules for DMEPOS


On October 31, 2019, the Centers for Medicare and Medicaid Services (CMS) released its annual final rule regarding changes to the 2020 Medicare payment rules for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS).  CMS issued a proposed rule in late July of this year and allowed any interested member of the public to provide written comments on the proposed rule until September 27, 2019.

AOPA reviewed the proposed rule and submitted comments on several proposed changes to Medicare DMEPOS payment policy for 2020.  AOPA’s concerns focused on proposed changes to the gap filling methodology that Medicare is statutorily required to use to establish Medicare fee schedules for new HCPCS codes, the proposed combination and expansion of the CMS “master list” of HCPCS codes subject to prior authorization, face to face visit requirements, and written orders prior to delivery (WOPD), and the authority of CMS to reduce Medicare fee schedules for products that have had price reductions through market competition within five years of creation of a new HCPCS code.

While CMS acknowledged all of the comments it received in response to the proposed rule, the only section of the proposed rule that it elected not to finalize was a provision that would use technology assessments, which would compare new DMEPOS technology to existing DMEPOS technology in order to help CMS establish Medicare fee schedules for new HCPCS codes.  CMS decided to consider this provision of the proposed rule in the future.  All other provisions of the proposed rule related to DMEPOS were finalized in the final rule despite significant concerns from the public expressed in response to the proposed rule.

The significant changes to DMEPOS payment policy for 2020 that were created by the final rule include:

  1. Changes to the CMS gap filling process that will allow CMS to use retail prices found online and in catalogs and comparative analysis of existing technology to new technology to establish baseline pricing that will then be deflated back to 1986 prices and re-inflated to current day prices. AOPA expressed concern that using pricing sources that did not account for clinical care in the delivery of O&P service would create an artificially low baseline that would be further reduced through the statutory gap filling process.
  2. Expansion of the CMS “master list” of HCPS codes subject to prior authorization, face to face visit requirements, and/or written orders prior to delivery. Currently 82 O&P HCPCS codes are potentially subject to Medicare prior authorization.  The final rule reduced the financial threshold for inclusion on the master list from an average reimbursement of $1,000 to an average reimbursement of $500.  This reduction in the reimbursement threshold expands the list of eligible O&P codes to 226 codes.  In addition, the final rule also exposes the 226 O&P codes to potential inclusion in Medicare requirements for face to face visits with prescribing practitioners and written orders prior to delivery, two requirements that were previously not applicable to O&P services.
  3. Expansion of CMS authority to reduce Medicare fee schedules when CMS determines that market competition has driven the price of new technologies down within 5 years of creation of a HCPCS code. AOPA’s comment on this provision of the proposed rule was that CMS already has the authority, through the inherent reasonableness process, to reduce Medicare fee schedules that are deemed to be excessively high or low.  CMS disagreed with AOPA’s comment on this provision and elected to finalize the expansion of its own authority in this regard.

AOPA is disappointed in CMS’ lack of response to the comments it received regarding the proposed rule.  In most instances, CMS simply stated that they disagreed with the submitted comments with minimal explanation as to why and indicated that it would finalize the proposed provision as written.

AOPA understands the importance of establishing and maintaining a positive relationship with CMS and its value in achieving AOPA’s mission of improving patient access to quality orthotic and prosthetic care through advocacy, research, and education.  AOPA continues to strive toward creating effective, two-way communication with CMS, its contractors, and its leadership.  Past successes include efforts to prevent the creation of an unreasonable, non-patient focused local coverage determination for lower limb prostheses, AOPA representation on the DME MAC Advisory Councils and successful challenges to inappropriate RAC audit activity.  AOPA will continue to press CMS for better transparency and greater stakeholder input in its policy making process and continue efforts to be the voice of the O&P profession on policy issues.

The complete final rule may be viewed here.