On November 23, 2015, the Centers for Medicare and Medicaid Services (CMS) released the 2016 Medicare DMEPOS fee schedule. As expected, Medicare fees for orthotic and prosthetic devices will be slightly lower in 2016 than they were in 2015.
The annual update to the Medicare O&P fee schedule is based on a combination of the increase in the Consumer Pricing Index for urban areas (CPI-U) from June to June of the previous year, and the annual Mutli-factor Productivity Adjustment. The CPI-U increased by a total of 0.1% from June 2014 to June 2015 and the 2016 Productivity Adjustment was calculated as -0.5%. The combination of these two factors will result in an overall decrease of 0.4% in the 2016 Medicare O&P fee schedule.
While a decrease in the fee schedule is not unprecedented, the 2016 decrease is the first one since 2011, when the Productivity Adjustment was first introduced as a result of the passage of the Patient Protection and Affordable Care Act (ACA) in 2010.
AOPA members are reminded that in addition to the 0.4% decrease in the 2016 O&P fee schedule, sequestration remains in effect for Medicare claims. Sequestration will result in a 2% reduction in Medicare reimbursement but as this reduction is not cumulative year over year, it should not be reflected in the net decrease in the 2016 fee schedule.