How Pricing Is Identified for Certain Products

CMS is responsible for the accurate and appropriate calculation and implementation of Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) pricing.

Note: The beneficiary's permanent address on file with the Social Security Administration (SSA), rather than the location of the DMEPOS supplier, will determine the amount allowed by Medicare for a particular service.

Pricing methodologies include:

  • Fee Schedules - applies to the allowed amount for inexpensive or other routinely purchased (IRP) items, those items that require frequent and substantial servicing, other prosthetic and orthotic devices, capped rental items, oxygen and oxygen supplies, and parenteral and enteral nutrition (PEN). Fee schedule amounts are updated in January and July of each year.
  • Gap Filling - the fee schedule for items that have no historical pricing data on file is calculated based on fee schedule amounts for comparable equipment, fee schedule amounts of other DME MACs, supplier price lists, and manufacturers wholesale price.
  • Reasonable Charge - applies to the allowed amount for certain dialysis equipment and supplies. Reasonable charge amounts are updated annually.
  • Drug Pricing - applies to the allowed amount for drugs billable to the DME MAC. Most fees determined under drug pricing are subject to quarterly updates.

Please refer to the Pricing page on the Noridian Medicare website for more information.

Last Updated May 11 , 2022