Sunday, May 19, 2024

Annual inflation and Medicare fee schedule

Darya Shahrokhi

Hi all O&P professionals,
I did a little research about the inflation rate and Medicare reimbursement rate(s) and found it interesting enough to share with you all:

1- I picked some more common codes for comparison: (L) 1932, 1832, 1843, 2036, 0631, 5100, 5200, (A) 5500 & 5513
2- I was able to go back to 2013 on the Noridian D website, to check the rates in CA. I checked rates for the April of the years.
3- All codes increased/decreased at the same percentage.
4- I used this website for the annual inflation rate:

Every year we had annual inflation at some rate.
On 2014 & 2015 the Medicare fee(s) increased more than inflation.
On 2016, Medicare fee(s) was negative (-0.4%) although the inflation was 2.1%
On 2019 the Medicare fee(s) increased at the same rate as annual inflation, 2.3%
On 2021 and so far, the annual inflation was/is 5% while Medicare increased reimbursement just by 0.2%! For example for L1932 and in 2020 and in CA, we were reimbursed $872.55 and in 2021 we are reimbursed $874.30
Last but not the least: Medicare increased the fees by 7.5% from 2013 to 2021, which means that if, for example, we were getting paid $1000 for an item in 2013, after 8 years we are getting paid $1075 in 2021.

I created two charts. They are the same, just different view. By having quick look we can see that other than 2014 & 2015, every year the annual inflation rate was much higher than what Medicare rates increased.
Since most of the health plans use Medicare Fee schedule and pay us percentage of it, we can see that every year the O&P professionals are getting paid less, while everything goes up: rent, raw material, utilities, wages & …

What can we do to have our fee schedule raises at least by annual inflation rate?
Is this the reason that some companies dispense low-quality items?
Is this the reason that some companies dispense an item and bill health plan different/higher-reimbursement code?

Charts are attached and I hope everybody can see them.

Have a great rest of the weekend.
Darya Shahrokhi, CPO, FAAOP


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