Frequently Asked Questions

The Centers for Medicare & Medicaid Services cannot delay implementation of the statute. Congress took specific action to move the effective date up to January 1, 2018, and we are unable to amend the effective date.

The limit on FFP is the total aggregate amount for all relevant DME subject to the limit described in Section 1903(i)(27) of the Act.

The guidance document references 42 CFR 414.202. The regulation defines “durable medical equipment” as equipment, furnished by a supplier or a home health agency that meets the following conditions:

• Can withstand repeated use
• Effective with respect to items classified as DME after January 1, 2012, has an expected life of at least three years
• Is primarily and customarily used to serve a medical purpose
• Generally is not useful to an individual in the absence of an illness or injury
• Is appropriate for use in the home

Medicare payment amounts for durable medical equipment (DME) are available through CMS.gov (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/DMEPOS-Fee-Schedule.html) and through DMECompetitiveBid.com, which is the Medicare website for the competitive bidding program. States may access the appropriate information through these resources, or upon request through MedicaidDME@cms.hhs.gov.

State Medicaid Director Letter #17-004 addressed this area by stating: “Reductions necessary to implement CMS federal Medicaid payment requirements (e.g., federal upper payment limits and financial participation limits), but only in circumstances under which the state is not exercising discretion as to how the requirement is implemented in rates. For example, if the federal statute or regulation imposes an aggregate upper payment limit that requires the state to reduce provider payments, the state should consider the impact of the payment reduction on access.” In addition, the long-standing policy of the Medicaid program has been that Medicare rates are sufficient to ensure access.

We acknowledge that there are differences between the Medicare and Medicaid populations, but nothing in the policy guidance or statute compels states to reduce the items that states provide to people with disabilities under the state plan. As noted above, the statute does not expressly compel states to reduce the payment rates for DME. The statute limits the amount of money that the federal government will pay (i.e., FFP) for the relevant DME in the aggregate as compared with the relevant DME provided in the Medicare program. States retain the flexibility to make payments at rates that best serve the needs of their Medicaid beneficiaries.

As we explained in the January 4, 2018 letter, only those items provided in the Medicaid program on a fee-for-service (FFS) basis are to be included in the aggregate expenditure calculation. DME reimbursed under a Medicaid managed care arrangement or a Medicaid competitive bidding contract are not subject to the FFP limitation. If a state is 90% managed care the state would only have to show compliance or a demonstration with the 10% of FFS utilization and expenditures for the relevant DME items.

So long as the MCOs are not paid on a fee-for-service (FFS) basis, MCOs are not covered under this statute or subject to the limit on FFP. Only the relevant DME items provided in FFS are included in this limit.

Only those items provided in the Medicaid program on a fee-for-service basis are to be included in the aggregate expenditure calculation. DME reimbursed under a Medicaid managed care arrangement or a Medicaid competitive bidding contract are not subject to the federal financial participation limitation.

If the HCBS waiver includes FFS payments for DME, the state’s expenditures for DME would be subject to the limit.