Overview:

• Title: Update to Pub. 100-04 Medicare Claims Processing Manual, Chapter 23, Section 60.3 Gap-filling DMEPOS Fees
• Transmittal Number: 12645
• Date: May 16, 2024
• Change Request Number: 13617
• Effective Date: June 17, 2024
• Implementation Date: June 17, 2024

Summary:

This transmittal updates the Medicare Claims Processing Manual to include new update factors for gap-filling purposes.

Key Changes:

• Revised Section: Chapter 23, Section 60.3 (Gap-filling DMEPOS Fees)
• Gap-filling Purpose: Used to establish fee schedule amounts for new DMEPOS items or services without a fee schedule pricing history.

Manual Instructions:

• Fee Schedule Establishment:
  • New HCPCS codes without a fee schedule history use comparable items for fee schedule amounts.
  • Interim local fee schedule amounts prior to February 28, 2022, are considered for continuity.
  • For miscellaneous items, fee schedule amounts are established by DME MACs or A/B MACs.
  • Attributes for comparison include physical, mechanical, electrical, function and intended use, and additional features.

Pricing Data and Deflation Factors:

• Deflation Factors: Adjust current pricing to approximate base year prices.
• Update Factors: Applied annually, based on various mandated percentages.

Funding:

• Medicare Administrative Contractors (MACs): Advised that this constitutes technical direction under existing contracts.

Provider Education:

• Medicare Learning Network® (MLN): CMS will develop and release national provider education content shortly after issuing the CR.

Details:

1. Background:
   • Gap-filling establishes fee schedules for new DMEPOS items without a pricing history.
   • Uses comparable existing items for pricing.
2. Policy Updates:
   • Reflects current CMS policy.
   • Includes update factors for pricing adjustments.
3. Gap-Filling Methodology:
   • Comparable Items: Attributes considered include physical (e.g., size, weight), mechanical (e.g., durability), electrical (e.g., power source), and functional use.
   • Alternative Sources: Supplier or commercial price lists may be used if no comparable items exist.
4. Deflation Factors:
   • Provided for various years and categories.
   • Adjusts pricing to base year levels before applying annual update factors.
5. Annual Update Factors:
   • Provided for years from 1989 to 2024.
   • Vary based on equipment categories (e.g., DME, prosthetics).

Example Update Factors:

• 2023: 8.7% across various categories
• 2024: 2.6% across various categories

This update ensures that new DMEPOS items are priced appropriately, maintaining consistency with historical pricing and adjusting for inflation or deflation as needed.