Bureau of Labor and Statistics Releases CPI-U Update

On July 15, 2016, the Bureau of Labor and Statistics (BLS) released its latest update on the Consumer Pricing Index for Urban Areas (CPI-U).  From June 2015 through June 2016 the CPI-U increased by 1.0%.  This figure is relevant to O&P providers because it is used as the base for determining the adjustment for the 2017 Medicare DMEPOS fee schedule.  While the CPI-U increased by 1.0%, the Affordable Care Act, beginning in 2011, introduced a second factor that is used to determine the annual DMEPOS fee schedule, the Multi-Factor Productivity (MFP) Adjustment.  The MFP is not expected to be released until later in the year, usually in November.

The combination of the CPI-U increase or decrease and the MPF adjustment determines the annual update to the Medicare DMEPOS fee schedule.  What this means is that the CPI-U of 1.0% minus the yet to be determined MPF adjustment will result in the update to the DMEPOS fee schedule that will be implemented for Medicare claims with a date of service on or after January 1, 2017.  The MPF adjustment was -1.2% in 2011, 0.9% in 2012, 0.8% in 2013, 0.6% in 2014, and 0.5% in 2015.  While the MPF adjustment has been trending downward, there is no guarantee that it will continue to do so in 2016.

AOPA will monitor the BLS website for news regarding the MPF adjustment and will notify AOPA members as soon as it is released.

Questions regarding this issue may be directed to Joe McTernan at jmcternan@aopanet.org or Devon Bernard at dbernard@aopanet.org.