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CMS raises Medicare reimbursement rates for certain equipment in rural areas

The U.S. Centers for Medicare & Medicaid Services, or CMS, increased the reimbursement rates for certain durable medical equipment and enteral nutrition used by Medicare beneficiaries in rural areas and remote territories such as Alaska and Hawaii.

While enteral nutrition refers to the use of tubes for feeding, durable medical equipment, or DME, includes equipment prescribed by a doctor for use in a home such as blood sugar monitors, crutches, hospital beds and oxygen equipment.

The rates will cover all the U.S. rural and noncontiguous areas that are not covered by CMS' competitive bidding program, or CBP, under which suppliers bid against one another to provide medical equipment to Medicare patients.

Medicare is an age-based, federal health insurance program that guarantees coverage for individuals aged 65 and over — and some younger people with disabilities.

In January 2017, the CMS reduced DME fee schedule rates for areas not covered by CBP by as much as 50% when compared to the prevailing rates in those areas at the time.

The adjusted rates posed significant financial challenges for suppliers, including many small businesses, resulting in a continuous decline in the number of suppliers in certain of those areas, CMS said in a statement.

The new rates, which will be implemented from June 1 through the year-end, reinstitute the earlier 50/50 blended rates that use a mix of competitive bid and traditional fee schedule rates.

Under the new rule, Medicare rates for continuous positive airway pressure devices, used by patients having breathing problems and made by companies such as ResMed Inc., will increase by about 71% from $40.07 to the previous 50/50 blend rate of $68.40 in the non-CBP areas, Cowen analysts wrote in a note to clients.

Other DME manufacturers that may be affected by the new rates include Smith & Nephew PLC, Baxter International Inc., Invacare Corp., Inogen Inc., Fisher & Paykel Healthcare Corp. Ltd, Philips Respironics GK and Apex Medical Corp., Cowen analysts added.

CMS had submitted the interim rule for review to the Office of Management and Budget in August 2017.