CMS Pub. 100-04, ch. 20, § 20

B3-5017, PM B-01-54, 2002 PEN Fee Schedule

Section1834 of the Act requires the use of fee schedules under Medicare Part B for

reimbursement of durable medical equipment (DME) and for prosthetic and orthotic

devices, beginning January 1 1989. Payment is limited to the lower of the actual charge

for the equipment or the fee established.

Beginning with fee schedule year 1991, CMS calculates the updates for the fee schedules

and national limitation amounts and provides the A/B MACs (A), (B), (HHH), and DME

MACs with the revised payment amounts. The CMS calculates most fee schedule

amounts and provides them to the A/B MACs (A), (B), and (HHH), and DME MACs.

However, for some services CMS asks A/B MACs (B) to calculate local fee amounts and

to provide them to CMS to include in calculation of national amounts. These vary from

update to update, and CMS issues special related instructions to A/B MACs (B) when

appropriate.

Parenteral and enteral nutrition services paid on and after January 1, 2002 are paid on a

fee schedule. This fee schedule also is furnished by CMS. Prior to 2002, payment

amounts for PEN were determined under reasonable charge rules, including the

application of the lowest charge level (LCL) restrictions.

The CMS furnishes fee schedule updates (DMEPOS, PEN, etc.) at least 30 days prior to

the scheduled implementation. A/B MACs (A), and (HHH) use the fee schedules to pay

for covered items, within their claims processing jurisdictions, supplied by hospitals,

home health agencies, and other providers. A/B MACs (A) and (HHH) consult with

DME MACs and, where appropriate with A/B MACs (B), on filling gaps in fee

schedules.

The CMS furnishes the fee amounts annually, or as updated if special updates should

occur during the year, to A/B MACs (A), (B), (HHH), and DME MACs and the Railroad

Retirement Board (RRB), Specialty MAC (SMAC), and to other interested parties

(including the Pricing, Data Analysis and Coding Contractor (PDAC), RRB, Indian

Health Service, and United Mine Workers).