Key takeaways
- Medicare pays for most DME from a fee schedule published by CMS by HCPCS code and area, not from your billed charge.
- Medicare generally pays 80% of the lesser of your charge and the fee schedule amount; the patient owes the rest after the deductible.
- In areas with competitive bidding, payment can follow the bid-based amounts, and adjusted fee schedule amounts apply elsewhere for some items.
- Each state sets its own Medicaid DME fee schedule, so amounts differ by state and program.
What the DMEPOS fee schedule is
The DMEPOS fee schedule lists the amounts Medicare allows for durable medical equipment, prosthetics, orthotics and supplies. CMS publishes it as downloadable files organised by HCPCS code, modifier and state or area. It is the starting point for what you will be paid, so every supplier should know where to find it and how to read it.
How Medicare pays from it
| Topic | What to know |
|---|---|
| Basis of payment | The lesser of your submitted charge and the fee schedule amount for the item |
| Medicare share | Generally 80% of that amount, after the patient’s Part B deductible |
| Patient share | The remaining 20% coinsurance, billed to the patient or a secondary payer |
| Charge amount | Bill at or above the fee schedule so you are not capped below the allowed amount |
| Updates | CMS refreshes the files regularly, with annual adjustments, so use the file for your date of service |
Exact amounts depend on the item, the date of service and the area, so always read them from the current CMS file instead of relying on an old copy.
How rentals are paid
For capped rental items, the monthly rental amount is a percentage of the purchase fee. In the usual pattern the first three months are paid at a higher percentage and the later months at a lower one, until the rental cap is reached. Oxygen equipment has its own payment rules. Because the amount changes by month, a rental tracker that shows the right month and modifier is part of getting paid correctly.
Competitive bidding and adjusted amounts
Medicare’s competitive bidding program can set payment amounts from supplier bids in selected areas for selected product categories. Outside those areas, CMS can adjust fee schedule amounts for some items using information from bidding. Check which category and area apply to each item, because the amount you are paid can differ from the base fee schedule.
Medicaid DME fee schedules
Medicaid is run by each state, and each state publishes its own DME fee schedule. Amounts, covered items and rules for authorization differ, so a rate that works in one state can be a loss in another. Some states reference Medicare amounts, and some use their own methods. If you serve patients in several states, keep a rate table for each.
Using the fee schedule to find underpayments
- Pull the allowed amount for each code, modifier and area on your top-volume items.
- Compare each remittance with the expected amount, line by line.
- Flag payments that fall short and check the modifier, units and date of service first.
- Appeal or correct the claim when the difference is real.
- Check your charge master so charges are never below the allowed amount.
This review is slow by hand. Our DME billing services include payment posting and variance checks so underpayments are caught, not written off.
DME fee schedule FAQ
Who sets the Medicare DME fee schedule?
CMS publishes the DMEPOS fee schedule files. The amounts follow the rules in federal law and regulation, and the files are updated regularly.
Where do I find the Medicare DME fee schedule?
On the CMS website, in the DMEPOS fee schedule section, where the files can be downloaded by period. Use the file for your date of service.
How much does Medicare pay for DME?
Generally 80% of the lesser of your charge and the fee schedule amount, after the patient’s Part B deductible. The patient owes the rest.
Is the Medicaid DME fee schedule the same as Medicare?
No. Each state sets its own Medicaid DME fee schedule, so amounts and rules differ by state.
How do I find DME underpayments?
Compare each payment with the fee schedule amount for that code, modifier and area, and check modifiers, units and dates for any shortfall.