Frequently Asked Questions are used to provide additional information and/or statutory guidance not found in State Medicaid Director Letters, State Health Official Letters, or CMCS Informational Bulletins. The different sets of FAQs as originally released can be accessed below.Frequently Asked Questions are used to provide additional information and/or statutory guidance not found in State Medicaid Director Letters, State Health Official Letters, or CMCS Informational Bulletins. The different sets of FAQs as originally released can be accessed below.
Frequently Asked Questions
How will the Centers for Medicare & Medicaid Services (CMS) disseminate the list of Healthcare Common Procedure Coding System (HCPCS) codes subject to the federal financial participation (FFP) limit each year?
Annually, CMS will request a list of covered durable medical equipment HCPCS codes from the Medicare Pricing, Data Analysis and Coding Contractor. Once the list is received, CMS will distribute the list through the CMS Regional Office Associate Regional Administrator.
States have raised concerns around the federal financial participation (FFP) limit demonstration due date because they may not have received all durable medical equipment (DME) claims from providers at the point demonstrations are due. How may a state ensure compliance with the FFP limit without allowing for a claims run-out period.
To address claims run-out and ensure compliance with the FFP limit, we recommend states with these concerns conduct interim FFP limit demonstrations for DME no later than three months after the end of the calendar year for the previous calendar year (that is, January 1-December 31). The interim DME FFP limit demonstration will be due by March 31 of each calendar year and will contain data for the period of January 1 to December 31 of the preceding year. The final demonstration would be due one year later on March 31 and include all claims received during the run-out period dates of service within the interim demonstration period. The interim demonstration process should provide states with an understanding of potential violations of the FFP to make any necessary budgeting and rate changes. This method is being used to allow provide for a reasonable claims run out period as allowed under 42 CFR 424.44, which states that claims must be filed no later than one calendar year after the date of service.
When is the federal financial participation (FFP) limit demonstration due? And for what period of time? Why is the Centers for Medicare & Medicaid Services using calendar year for this demonstration?
Federal financial participation (FFP) limit demonstrations for durable medical equipment (DME) will be due 3 months after the end of the calendar year for the previous calendar year (i.e., January 1-December 31). The first DME FFP limit demonstration will be due by March 31, 2019 and will contain data for the period of January 1, 2018 to December 31, 2018. This reporting period was selected to coincide with the effective date of the statute (January 1, 2018).
Can you clarify that for each Healthcare Common Procedure Coding System code, a state should use the state-specific rate, which is adjusted by Medicare based on state specific geographic adjustors, and not the floor rate, which is Medicare's national rate for each specific code?
The statute does not compel states to set their payment rates for durable medical equipment (DME) at specific Medicare rates for each specific item. Instead, the statute applies a limit on available federal financial participation (FFP) for state aggregate expenditures. States have the flexibility to set their own rates for DME in the Medicaid program. If a state decides to set their Medicaid payment rates at or below Medicare rates in the state plan, the state should be specific about the fee schedule the state will use and be prepared to demonstrate that their rates do not exceed the amount Medicare would have paid in the aggregate, in order to avoid the annual FFP limit demonstration of aggregate expenditures. For the demonstration, the Centers for Medicare & Medicaid Services (CMS) will be using state-specific Medicare payment rates. With this limit of available FFP for the aggregate amount of DME, CMS will use either the Medicare rates specific to an area of the state for the services rendered in those areas, or the lowest of a state’s Medicare rates for comparison to the aggregate limit of FFP.
Are state's allowed to use state-only funds to pay the difference on a durable medical equipment (DME) item where a state may need to pay more for a particular item that would otherwise be allowed under the Medicare program?
States are free to establish higher rates for particular items of DME if they determine that higher rates are needed under the Medicaid state plans. If, however, the aggregate expenditures would exceed the Medicare rates in the aggregate, federal financial participation (FFP) would be limited. States that determine that payments above Medicare aggregate totals are necessary may use state-funds to obtain particular items of DME. The statute specifically describes an aggregate limit on state expenditures only for purposes of paying FFP. Therefore, a state may pay more than the Medicare rate for a particular item of DME, and as long as the aggregate amount for all DME is not exceeded, no FFP is at risk. Even if the aggregate amount is exceeded, there is only a limit on FFP, and there is no limit on the use of state funds used on DME items.
Can the implementation of the statute be delayed to coincide with state fiscal years (e.g., July, 2018), to allow states time to process changes concerning the statute requirements such as Tribal presentation, Medial Advisory Boards, Board of Directors and a reasonable timeframe to notify providers of rate changes?
The Centers for Medicare & Medicaid Services cannot delay implementation of the statute. Congress took specific action to move the effective date up to January 1, 2018, and we are unable to amend the effective date.
Is the aggregate durable medical equipment (DME) limit on federal financial participation (FFP) per category of DME or an aggregate in total?
The limit on FFP is the total aggregate amount for all relevant DME subject to the limit described in Section 1903(i)(27) of the Act.
What is the Medicare definition of durable medical equipment (DME) used in the State Medicaid Director Letter?
The guidance document references 42 CFR 414.202. The regulation defines “durable medical equipment” as equipment, furnished by a supplier or a home health agency that meets the following conditions:
- Can withstand repeated use
- Effective with respect to items classified as DME after January 1, 2012, has an expected life of at least three years
- Is primarily and customarily used to serve a medical purpose
- Generally is not useful to an individual in the absence of an illness or injury
- Is appropriate for use in the home
Will the Centers for Medicare & Medicaid Services (CMS) send the Medicare rates to the states each year for their regions?
Medicare payment amounts for durable medical equipment (DME) are available through CMS.gov (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/DMEPOS-Fee-Schedule.html) and through DMECompetitiveBid.com, which is the Medicare website for the competitive bidding program. States may access the appropriate information through these resources, or upon request through MedicaidDME@cms.hhs.gov.
If a state needs to reduce durable medical equipment (DME) rates as a result of this requirement, is the state required to complete an Access Monitoring Review Plan as described in 42 CFR 447.203 and 447.204, which is required for state plan amendments that propose to reduce payments to Medicaid providers?
State Medicaid Director Letter #17-004 addressed this area by stating: “Reductions necessary to implement CMS federal Medicaid payment requirements (e.g., federal upper payment limits and financial participation limits), but only in circumstances under which the state is not exercising discretion as to how the requirement is implemented in rates. For example, if the federal statute or regulation imposes an aggregate upper payment limit that requires the state to reduce provider payments, the state should consider the impact of the payment reduction on access.” In addition, the long-standing policy of the Medicaid program has been that Medicare rates are sufficient to ensure access.