We calculate DME fee schedules for the following DME payment classes.

Note: The fee schedule amounts for surgical dressings and the fee schedule amounts for DME items that aren’t adjusted based on competitive bidding information are calculated on a statewide basis and are limited by national ceilings and floors. For those items that are limited by national ceilings and floors, the fee schedule ceiling is equal to the median or mid-point of the statewide fee schedule amounts and the fee schedule floor is equal to 85% of the median of the statewide fee schedule amounts.

Inexpensive & Other Routinely Purchased Items

In accordance with the statute, the statewide fee schedule amounts for these items are calculated using the average statewide payment for the purchase or rental, respectively, of the item for the 12-month period ending on June 30, 1987 (“base year”), increased by annual covered item update factors.

Inexpensive and other routinely purchased items have a purchase price of $150 or less; were routinely purchased (75% of the time or more) under the rent/purchase program in effect prior to 1989; or are accessories used in conjunction with nebulizers, aspirators, continuous positive airway pressure devices, respiratory assist devices; or are speech generating devices or accessories needed to use a speech generating device. 

Payment for inexpensive and other routinely purchased items is addressed in section 1834(a)(2) of the Act. If covered, these items can be purchased new or used and can be rented; however, total payments cannot exceed the purchase new fee schedule amount for the item.

Frequently Serviced Items

In accordance with the statute, the statewide fee schedule amounts for these items are calculated using the average statewide payment for the rental of the item for the 12-month period ending on June 30, 1987 (“base year”), increased by annual covered item update factors.

Frequently serviced items require frequent and substantial servicing to avoid risk to the patient’s health. Examples of such items are provided in section 1834(a)(3)(A) of the Act.

Frequently serviced items are addressed in section 1834(a)(3) of the Act. If covered, these items can be rented as long as the item is medically necessary. The monthly rental fee schedule amounts include payment for all necessary supplies and accessories necessary for the effective use of the DME as well as all necessary maintenance and servicing of the DME.

Oxygen & Oxygen Equipment

In accordance with the statute, monthly payment amounts are calculated for oxygen and oxygen equipment using the total payments for the item during the 12-month period ending with December 1986 (“base year”), divided by the total number of months for all beneficiaries receiving the item in the state during the base year period, increased by annual covered item update factors.

Oxygen and oxygen equipment are addressed in section 1834(a)(5) of the Act. Medicare payment is made on a monthly rental basis. One bundled monthly payment amount is made for all covered stationary equipment, stationary and portable contents, and all accessories used in conjunction with the oxygen equipment. The monthly payment is reduced by 50% for patients with an oxygen flow rate of less than one liter per minute. The monthly payment is increased by 50% for patients with a high oxygen flow rate of greater than 4 liters per minute. A portable oxygen equipment add-on payment is made for Medicare beneficiaries who require portable oxygen. However, if the beneficiary qualifies for both the high flow rate adjustment and the portable oxygen equipment add-on payment, the higher of the two payments is made, but not both. A higher portable equipment add-on payment is made for portable liquid oxygen equipment, portable oxygen concentrators, and transfilling equipment than the add-on payment for portable gaseous oxygen equipment.

Medicare payment for oxygen equipment may not continue beyond 36 months of continuous use. After the 36-month rental cap, Medicare will continue to make monthly rental payments for oxygen contents. In addition, payment for in-home maintenance and servicing of supplier-owned oxygen concentrators and transfilling equipment may be made every 6 months, beginning 6 months after the 36-month rental cap, for any period of medical need for the remainder of the reasonable useful lifetime of the equipment.

Other Covered Items (Other than DME)

In accordance with the statute, the statewide fee schedule amounts for these items are calculated using the average statewide payment for the purchase of the item for the 12-month period ending on June 30, 1987 (“base year”), increased by annual covered item update factors.

Other covered items, other than DME, are supplies that are necessary for the effective use of DME. These items are addressed in section 1834(a)(6) of the Act. Medicare payment is made for the purchase of these supplies, if covered.

Capped Rental Items

In accordance with the statute, the statewide fee schedule amounts for these items are calculated using the average statewide payment for the purchase of the item for the 6-month period ending on December 31, 1986 (“base year”), increased by annual covered item update factors.

Capped rental items are items of DME that don’t fall under any of the other DME payment classes.

Capped rental items are addressed in section 1834(a)(7) of the Act. In general, Medicare pays for the rental of these items, when covered, for a period of continuous use not to exceed 13 months, at which point the beneficiary takes over ownership of the equipment. Complex rehabilitative power wheelchairs can be purchased in the first month of use.

For capped rental items other than power wheelchairs, the fee schedule amount is calculated based on 10% of the base year purchase price increased by the covered item update. This is the fee schedule amount for months 1 thru 3. Beginning with the fourth month, the fee schedule amount is calculated based on 7.5% of the base year purchase price (or 75% of the fee schedule amount paid in the first 3 rental months) increased by the covered item update.

For power wheelchairs, the fee schedule amount is calculated based on 15% of the base year purchase price increased by the covered item update. This is the fee schedule amount for months 1 thru 3. Beginning with the fourth month, the fee schedule amount is calculated based on 6% of the base year purchase price (or 40% of the fee schedule amount paid in the first three rental months) increased by the covered item update. The purchase fee schedule amount for complex rehabilitative power wheelchairs is equal to the rental fee schedule amount for month 1 divided by 0.15.

Certain Customized Items

Fee schedule amounts aren’t calculated for customized DME. Customized DME is defined at 42 CFR 414.224, and this definition applies to all DME, including wheelchairs. In the case of wheelchairs, the definition at section 414.224 supersedes the definition written into section 1834(a)(4) of the Act in accordance section 4152(c)(4)(B) of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101-508).

Customized items are addressed in section 1834(a)(4) of the Act. If covered, Medicare payment is made in a lump-sum amount for the purchase of the item; this payment amount is based on the DME Medicare Administrative Contractor (MAC), Part A MAC, or Part B MAC’s individual consideration for that item.

In accordance with the statute, the statewide fee schedule amounts for these items are calculated using the average statewide payment for the purchase of the item for the 12-month period ending on June 30, 1987 (“base year”), increased by annual covered item update factors.

Regional fee schedule amounts are established for use in paying claims for the purchase of prosthetic devices, prosthetics and orthotics (see section 1834(h) of the Act). The regional fee schedule amounts are equal to the weighted average of the statewide fee schedule amounts in each CMS region.

Fee schedule amounts for the purchase of new ostomy, tracheostomy, and urological supplies are calculated using the same methodology as the fee schedule amounts for the purchase of new inexpensive or routinely purchased items of DME (see “DME Fee Schedule Payment Methodology” above). As a result, these items are not subject to regional fee schedules. Instead, a fee schedule ceiling and floor, based on the median and 85% of the median, respectively, of the local fee schedule amounts are calculated for each item. The fee schedule amounts for these items are updated by the ostomy, tracheostomy, and urological supplies covered item updates.

National Ceiling and Floor Limits for prosthetic devices, prosthetics and orthotics: Note that the regional fee schedule amounts are limited by a ceiling (120% of the average of the regional statewide fees) and a floor (90% of the average of the regional statewide fees).

In accordance with regulations at 42 CFR 414.104(b), nationwide fee schedule amounts for these items are calculated using the lower of the nationwide payment amount for the item for 1995 or the nationwide amount that would have been used in determining payment for the item for 2002 had the fee schedule amounts not been implemented, increased by annual covered item update factors.

Section 1842(s) of the Act addresses fee schedules for PEN.  The fee schedule amounts for most items of enteral nutrition are statewide amounts adjusted based on information from CBPs.

In accordance with the statute, the statewide fee schedule amounts for these items are calculated using the average statewide payment for the purchase of the item in calendar year 1992 (“base year”), increased by annual covered item update factors.

In accordance with the statute, the statewide fee schedule amounts for these items are calculated using the average statewide payment for the purchase of the item for the 12-month period ending on June 30, 1987 (“base year”), increased by annual covered item update factors. 

Regional fee schedule amounts are established for use in paying claims for the purchase of prosthetic devices, prosthetics and orthotics (see section 1834(h) of the Act). The regional fee schedule amounts are equal to the weighted average of the statewide fee schedule amounts in each CMS region.

Section 1833(a)(1)(GG) of the Act sets Medicare payment for lymphedema compression treatment items equal to 80% of the lesser of the supplier’s charge for the item or the payment amount.

Per 42 CFR 414.1650, where Medicaid state plan payment amounts are available for a lymphedema compression treatment item, the Medicare national payment amount for the item is established using 120% of the average of Medicaid payment amounts. Where Medicaid state plan payment amounts are not available for an item, the Medicare national payment amount for the item is established using the average of internet retail prices and payment amounts established by TRICARE insurance program. If TRICARE payment amounts are not available for the item, the Medicare national payment amount for the item is established using average internet retail prices.

The initial codes for lymphedema compression treatment items and associated Medicare payment amounts were determined through CMS-1780-F (88 FR 77676) in 2023 to establish payment amounts effective January 1, 2024. Payment amounts for roughly 1/3 of the initial set of lymphedema compression treatment items was established based on 120% of Medicaid state plan payment amounts, while the remaining items were largely based on average internet retail prices.

The national payment amounts for lymphedema compression treatment items are increased on an annual basis beginning on January 1 of the year subsequent to the year in which the payment amounts are initially established based on the percent change in the Consumer Price Index for all Urban Consumers (CPI-U) for the 12-month period ending with June of the previous year.