When it comes to Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS), managing reimbursement and pricing according to Medicare’s regulations can be a complex and time-consuming process. Providers are required to adhere to Medicare's Fee Schedules, which dictate the reimbursement rates for a wide variety of medical equipment and supplies. NikoHealth simplifies this process by offering robust price options that automatically calculate Medicare’s DMEPOS Fee Schedules. This feature streamlines pricing workflows, reduces human error, and ensures that the correct reimbursement rates are applied every time. Let’s take a closer look at how NikoHealth enables providers to set up and leverage price options to automatically calculate Medicare DMEPOS fee schedules.
Understanding Medicare DMEPOS Fee Schedules
The Medicare DMEPOS Fee Schedule sets the reimbursement rates for medical equipment, prosthetics, orthotics, and supplies provided to Medicare beneficiaries. These rates are updated annually by Medicare and can vary based on factors like:
Geographic Location: Rates differ by Local Pricing Areas (LPAs), reflecting the regional costs of providing DMEPOS.
Type of Equipment: Different codes (HCPCS codes) correspond to different types of equipment, each with its own reimbursement rate.
Payment Methodology: Depending on whether the equipment is purchased or rented, Medicare may apply different reimbursement structures.
Manually calculating and applying these rates can be tedious, especially when they vary by region and equipment type. Automating this process ensures that the right rate is always applied without the risk of error. In Nikohealth, when the "Use Medicare Fee Schedule Allowable" option is enabled for a price option, the system will not only apply the allowable Medicare reimbursement rates based on the current Medicare Fee Schedule, but it will also take into account several specific conditions for calculating the appropriate rates. These conditions include factors such as former Competitive Bidding Area (CBA) status, rural vs. non-rural areas, capped rental items, and the KJ modifier.
Setting Up Price Options to Automate Medicare Rates
NikoHealth allows providers to easily configure Price Options to automatically calculate the correct Medicare DMEPOS Fee Schedule for different equipment and services. Here’s how this feature works:
Step 1: Define Pricing Models
In NikoHealth, price options are first set up to align with the various HCPCS codes that correspond to the DMEPOS items you provide. This can include everything from wheelchairs and oxygen equipment to prosthetics and orthotics.
For each HCPCS code, you can define whether the item will be billed as a rental or purchase. This distinction is crucial since Medicare has different reimbursement rates for rented versus purchased equipment.
Step 2: Enable Medicare Fee Schedule Automation
NikoHealth integrates with Medicare’s DMEPOS Fee Schedule data, allowing you to automatically populate the order and invoice with the most current reimbursement rates.
In Nikohealth, the feature to automate the calculation of Medicare Durable Medical Equipment rates can be enabled by checking the box marked "Use Medicare Fee Schedule Allowable" on the price option. When this box is selected, the system will automatically apply the allowable Medicare reimbursement rates for DME items based on the current Medicare Fee Schedule.
For capped rental items, the reimbursement rate is determined based on a fixed percentage of the average allowed purchase price. This applies to items that are rented for a period of 4 to 13 months:
For each of the remaining months, after the initial rental period, the monthly rental reimbursement is limited to 7.5% of the average allowed purchase price for the item.
The KJ modifier is associated with specific types of rental situations and might adjust the way reimbursement is calculated for certain DME items, particularly those that are rented rather than purchased. If the KJ modifier is present, the system will take this into account in the calculation of the reimbursement rates, adjusting them according to Medicare’s guidelines for such items.
