2021 DME Fee Schedule Updates

The Centers for Medicare & Medicaid Services (CMS) released the 2021 Durable Medical Equipment (DME) fee schedule on February 2, 2021. The updates affect the payment rates for thousands of DME items, impact how providers bill, and introduce several policy changes aimed at improving costeffectiveness and compliance.

Key Highlights

• Overall Rate Adjustments: The average physician fee schedule (PFS) conversion factor for DME increased by 0.7%, bringing the average reimbursement for many items slightly higher than 2020.
• New HCPCS Codes: Twentythree new codes were added, covering emerging technologies such as homebased respiratory monitors and advanced woundcare dressings.
• Deleted or Merged Codes: Twelve codes were removed or consolidated to eliminate duplication and better align with current clinical practice.
• Bundling Changes: Several items previously billed separately are now bundled with equipment categories, reducing the need for multiple line items.
• Geographic Adjustment: The Geographic Practice Cost Index (GPCI) was updated for 37 metropolitan areas to reflect changes in labor and capital costs.

Major Policy Changes

1. Revised Medicare Advantage (MA) DME Reimbursement

For MA plans, CMS introduced a payment methodology that mirrors the feeforservice (FFS) schedule but allows plans to apply a cap on total DME spending per beneficiary. This is intended to curb excessive utilization while preserving access to needed equipment.

2. Minimum Equipment Requirements

Starting July 1, 2021, Medicare will enforce stricter documentation for items classified as minimum equipment. Providers must submit evidence that the equipment is medically necessary and not merely a convenience item.

3. TelehealthLinked DME

CMS recognized the growing role of remote patient monitoring. Certain telehealthcompatible devices (e.g., Bluetooth pulse oximeters) are eligible for separate reimbursement when billed with a qualifying telehealth service.

Impact on Providers

Understanding the 2021 updates is crucial for DME suppliers, hospice agencies, and outpatient clinics. Below is a practical checklist to ensure compliance and maximize reimbursement.

Checklist

1. Update your billing software with the new HCPCS codes and delete the retired ones.
2. Review the revised GPCI values for your service area and adjust charge masters accordingly.
3. Confirm that all bundled items are coded correctly to avoid duplicate payments.
4. Document medical necessity for minimum equipment using the updated CMS guidelines.
5. If you provide telehealthlinked devices, attach the appropriate modifier (e.g., GT) and include the telehealth service code on the same claim.

Sample Billing Scenarios

Scenario A Standard Wheelchair

Before 2021: HCPCSE1234, fee$400 (GPCI1.00).
After 2021: Same code, fee$404 (0.7% increase) with updated GPCI1.02 for the providers location.

Scenario B New Home Respiratory Monitor

New codeE5678 introduced in 2021; fee$120. Because the device is bundled with the associated oxygen supply, the claim must include both codes on a single line with a modifier indicating bundling (e.g., 59).

Scenario C TelehealthEnabled Glucose Meter

HCPCSE9101 (telehealthcompatible) billed with modifierGT and the telehealth E/M code99213. The DME fee remains $45, but the claim is eligible for an additional payment factor when the telehealth service is reimbursed.

Resources & Further Reading

• CMS DME Fee Schedule Official Site
• 2021 DME Fee Schedule PDF
• American DME Association Coding Updates

The information presented here reflects the CMS final rule as published in February 2021. Providers should consult the official CMS releases and any subsequent updates for the most current guidance.