On February 26, 2014, CMS published an Advance Notice of Proposed Rulemaking related to proposed changes to the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) Medicare reimbursement methodologies.  CMS seeks public comments on two significant areas of potential modifications, including (1) development of a methodology to adjust DMEPOS fee schedule amounts or other payment amounts in non-competitive product and service categories based on DMEPOS competitive bidding payment information, and (2) changes to the payment methodologies and rules for DMEPOS and enteral nutrition furnished under competitive bidding programs such as a possible phase-in of bundled payments.  Comments on all issues must be received by CMS no later than 5:00 p.m. on March 28, 2014.

CMS specifically seeks public feedback on the following questions, among others:

With respect to potential changes to the non-competitive bid payment structure –

• Do the costs of furnishing various DMEPOS items and services vary based on the geographic area or market size in the areas which they are furnished?
• How should any future adjustments or payment methodology treat payment amounts for items that have not been included in all competitive bidding programs (for example, items such as transcutaneous electrical nerve stimulation (TENs) devices that have only been phased into the nine Round 1 areas thus far)?
• Should competitive bidding programs be established in all areas of the country for a few high volume items in order to gather information regarding the costs of furnishing DMEPOS items, in general, in different areas of the county (i.e., both rural and urban areas)?
• What additional factors should be considered and why?

With respect to potential changes to the competitive-bid payment structure and requirements –

• Are lump sum purchases and capped rental payment rules for DME and enteral nutrition still needed given that monthly payment amounts can be established under competitive bidding programs for furnishing everything the beneficiary needs each month related to the covered DME item or enteral nutrition?
• Are there reasons why beneficiaries need to own expensive DME or enteral nutrition equipment rather than use such equipment as needed on a continuous monthly basis?
• Would there be any negative impacts associated with continuous bundled monthly payments for enteral nutrients, supplies, and equipment or for certain DME?
• If payment on a capped rental, rent to own basis, or lump sum purchase basis is maintained for certain items under the competitive bidding program, should a requirement be added to the regulations specifying that the supplier that transfers title to the equipment to the beneficiary is responsible for all maintenance and servicing of the beneficiary-owned equipment for the remainder of the equipment’s reasonable useful lifetime with no additional payment for these services?

For more background regarding CMS’s historical payment methodologies related to DMEPOS in both the non-competitive bid and competitive bid environments, and to learn more about the Advance Notice of Proposed Rulemaking, click here.

Reporter, Juliet M. McBride, Houston, +1 713 276 7448, jmcbride@kslaw.com.