CMS Makes Sizable CPI-U Rate Adjustments for DME

The 6.4% to 9.1% increases are much larger than typical CPI-U modifications and should help providers contend with costs. However, advocates say more needs to be done.

• By David Kopf
• Dec 01, 2022

CMS has published its 2023 Medicare fee schedule adjustments for DMEPOS, and suppliers can expect to see rates increase by between 6.4 percent and 9.1 percent.

The adjustments are based on the consumer price index for all urban consumers (CPI-U) from the Bureau of Labor Statistics, but whether items are part of competitive bidding also impacts their rates:

• Reimbursement for competitive bidding program items in former competitive bidding areas (CBAs) will increase by 6.4 percent.
• Bidding items in non-CBA will see a 9.1 percent increase.
• Non-bid items will see an 8.7 increase.

For comparison, typical CPI-U increases for DMEPOS items range from 1 percent to 3 percent. Last year, since inflation was higher, the CPI-U adjustment was 5 percent in former CBAs and 5.4 percent outside of CBAs.

The new reimbursement increase is welcome, but industry advocates say it doesn’t go far enough.

“These increases will help DME suppliers who have been dealing with rising product and operational costs over the last two years, but more comprehensive adjustments are needed,” said Tom Ryan, president and CEO of the American Association for Homecare. “Thanks to the cancellation of one bidding round and the decision not to implement results of the most recent round, DME rates remain disconnected to the market realities suppliers face. That has to change, and it has to change now.”

“… The gains do not necessarily reflect and diminish the considerable operational cost increases that HME providers have seen throughout the COVID-19 pandemic, the product surcharges, and the continuing challenges of the supply chain issues,” said Mark Higley, vice president of Regulatory Affairs for VGM Government Relations. “Nevertheless, in conjunction with the possibility of securing blended rates for providers both in former CBAs and non-bid, non-rural area suppliers, and potentially delaying the 4 percent 2023 Medicare reductions, we see some cautious optimism in the provider community.”   

To help further fix rates so that they give HME providers sufficient relief, industry groups have been asking that providers contact their lawmakers’ offices and urge them to support adding key provisions to year-end budget legislation:

• Including language from H.R. 6641, which was introduced into the House by Reps. Markwayne Mullin (R-Okla.) and Paul Tonko (D-N.Y.), and provides a 90/10 blended Medicare reimbursement rate for DME for suppliers in former competitive bidding areas (CBAs).
• Extending the CARES Act’s 75/25 blended rate for Medicare reimbursement for DME suppliers in non-competitive bid areas beyond the end of the current COVID-19 PHE.
• Calling on Congress to waive looming a sizable 4 percent PAYGO-driven Medicare rate cut for 2023.

“I encourage HME suppliers to continue to reach out to their representatives in both the House and Senate and ask them to include these provisions in end-of-year budget legislation,” Ryan said.