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Durable Medical Equipment Reimbursement: CARES Act Impact to Rates

Tuesday, August 18, 2020

Earlier this year, the Centers for Medicare and Medicaid (CMS) posted revised durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) rates following the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. As the Defense Health Agency (DHA) uses CMS fee schedules to calculate TRICARE reimbursement rates, we recognize providers have questions about the CARES Act impact to TRICARE reimbursement. We offer the following answers to frequently asked questions.

When was TRICARE’s most recent DMEPOS fee schedule implemented? Did it take into account the revised CMS rates? Following Interim Final Rule CMS-5531-IFC, TRICARE implemented CMS’ fee schedule on May 18, 2020. The special April DMEPOS rate update posted by DHA at www.health.mil incorporated CMS’ revised rates. 

Why was there a lag between CMS’ March 6, 2020 effective date and TRICARE’s May 18 implementation date? Will any claims be automatically reprocessed? Providers can expect a delay from when CMS issues reimbursement changes and whether TRICARE follows suit. Claims will not be automatically reprocessed; however, you may submit a claim review request for claims that may qualify for a rate adjustment. 

How is the maximum allowable amount, also referred to as the CHAMPUS Maximum Allowable Amount (CMAC), determined for DMEPOS? The CMAC is the maximum amount TRICARE will cover for nationally established fees for professional services. For DMEPOS, the CMAC is limited to the lower of the billed charge, the negotiated rate (network providers) or the DMEPOS fee schedule amount. Network providers must accept the CMAC for DMEPOS services they render to TRICARE beneficiaries. 

How often does DHA regularly post DMEPOS rate updates, and how quickly must TRICARE contractors implement rate changes? The Defense Health Agency posts DMEPOS rates quarterly (January, April, July, and October) at https://health.mil/Military-Health-Topics/Business-Support/Rates-and-Reimbursement. Per the TRICARE Reimbursement Manual (Chapter 1, Section 11, paragraph 4.15.1), contractors must replace existing pricing with the updated pricing information within 10 calendar days of publication on the internet. HNFS implemented the July quarterly update on June 30, 2020.

For up-to-date information on COVID-19, visit www.cdc.gov/COVID19. Find additional provider resources specific to TRICARE on our COVID-19 resources page.