410-122-0186 Payment Methodology (1) Effective October 1, 2024, the Division utilizes a payment methodology for covered durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) that is generally based on the 2024 Medicare fee schedule. (a) The Division fee schedule amount is 80 percent of 2024 Medicare Fee Schedule for items covered by Medicare and the Division using a state-wide average of the rural and urban Medicare rates except for: (A) Complex Rehabilitation items and services other than power wheelchairs, fee schedule amounts are 88 percent of 2024 Medicare Fee Schedule (See Table 122-0186-1 for list of Complex Rehabilitation codes subject to this pricing); and (B) Rental rates for Group 1 power wheelchairs (K0813-K0816) and Group 2 power wheelchairs with no added power option (K0820-K0829) fee schedule amounts are 55 percent of 2024 Medicare Fee Schedule; and (C) Group 2 power wheelchairs (K0835-K0843) and Group 3 power wheelchairs (K0848-K0864) fee schedule amounts are 58.7 percent of 2024 Medicare Fee Schedule; and (D) Unlisted procedures (e.g. E1399, K0108, A9999) are based upon 75 percent of Manufacturer’s Suggested Retail Price (MSRP). If MSRP is not available, the amount is based upon acquisition cost plus 20 percent . (b) For new codes added by the Center for Medicare and Medicaid Services (CMS) after October 1, 2024; payment shall be based on the most current Medicare fee schedule and shall follow the same payment methodology as stated in section (1)(a)(A-D) of this rule. For new codes that do not appear on the current Medicare fee schedule, rates shall be based on the actuarial calculations used for rate setting for the CCO rate for the service and shall be published as a single state-wide rate; (c) DMEPOS rates are published on the Fee-For-Service (FFS) Medical-Dental Fee Schedule. These schedules, along with their effective dates, are posted on the OHP FFS Fee Schedule web page. (d) The Division shall reimburse any manually priced codes and any new codes that require manual pricing using the methodology as stated in section (10)(b-c)(11) of this rule. (2) DMEPOS providers are required to use the Healthcare Common Procedure Coding System (HCPCS) to identify billing codes for DMEPOS items or services. DMEPOS providers shall use the product classification list on the Medicare Pricing, Data Analysis and Coding (PDAC) contractor website on the date of service for coding verification. An official product review coding decision from an organization such as PDAC is not necessary. (3) DMEPOS providers are required to use the HCPCS to identify miscellaneous billing codes for items or services. DMEPOS providers shall use the product classification list on the Medicare PDAC contractor website on the date of service for coding verification. An official product review coding decision from an organization such as PDAC is not necessary. (4) DMEPOS providers are required to use specific miscellaneous HCPCS code to identify an item or service when directed in accordance with Division 122 rules (e.g. standing frames, bath equipment, adaptive car seats). (5) DMEPOS providers are required to determine whether there is an existing national HCPCS code that adequately describes the DMEPOS before using a miscellaneous or not otherwise classified HCPCS code to bill an item or service. When a HCPCS code exists, the provider shall use that code to bill the item or service; (a) In the absence of an existing HCPCS code that describes a given product, DMEPOS providers shall use a miscellaneous or not otherwise classified HCPCS code (e.g. E1399, K0108, A9999) that best represents the item or service; (b) DMEPOS providers billing separately for a service or component that is included in another HCPCS code shall use miscellaneous HCPCS code A9900 to bill the item or supply. DMEPOS providers must not “unbundle” services so that a provider payment is higher than the amount allowed by this rule; (6) Information about the PDAC and the PDAC’s product classification list can be found at http://www.dmepdac.com. (7) Prior authorization (PA) is required for all miscellaneous and not otherwise classified HCPCS codes (e.g. E1399, K0108, A9999, A9900) when the billed charge is greater than $150 per each unit. The DMEPOS provider shall submit the following documentation: (a) A copy of the items from subsections (10)(b) and (c) that will be used to bill; (b) Name of the manufacturer, description of the item, including product name or model name and number, and serial number when applicable; (c) An explanation of why the item or service is needed by the beneficiary; (d) A picture of the item upon request by the Division. (8) All miscellaneous and not otherwise classified HCPCS codes (e.g. E1399, K0108, A9999, A9900) with a billed charge of $150 or less per each unit do not require PA; however, are subject to service limitations of the Division’s rules; and (a) The payment amount shall not exceed 75 percent of MSRP; and (b) The DMEPOS provider must retain documentation of the quote, invoice, or bill to allow the Division to verify through audit procedures. (9) The Division may at any time before or after payment review items that exceed the maximum allowable on a case-by-case basis and may ask the DMEPOS provider to submit the following documentation for reimbursement: (a) Documentation which supports that the client meets all of the coverage criteria for the less costly alternative; and, (b) A comprehensive evaluation by a licensed clinician (who is not an employee of or otherwise paid by a provider) that clearly explains why the less costly alternative is not sufficient to meet the client’s medical needs, and; (c) The expected hours of usage per day, and; (d) The expected outcome or change in the client’s condition. (10) The Division shall reimburse for the lowest level of service that meets medical appropriateness. (See OAR 410-120-1280 Billing; and 410-120-1340 Payment). Reimbursement is calculated using the lesser of the following: (a) The Division fee schedule amount, using the above methodology in subsections (1) (a) and (b); or (b) Seventy-five (75) percent of MSRP, verifiable with quote from the manufacturer that clearly states the amount indicated is MSRP; or (c) The billed charge submitted. (11) When MSRP is not available, the Division shall use the DMEPOS provider’s acquisition cost plus 20 percent, verifiable with a quote from the provider that clearly states the amount indicated is acquisition cost, in place of the MSRP in section (10)(b) of this rule. (12) For rented equipment, the equipment is considered paid for and owned by the client when the Division fee schedule allowable is met or the actual charge from the provider is met, whichever is lowest. The DMEPOS provider must transfer title of the equipment to the client. [ED. NOTE: To view attachments referenced in rule text, click here to view rule.] Statutory/Other Authority: ORS 413.042 & 414.065 Statutes/Other Implemented: ORS 414.065 History: DMAP 68-2025, amend filed 09/11/2025, effective 09/15/2025 DMAP 36-2025, temporary amend filed 03/31/2025, effective 03/31/2025 through 09/26/2025 DMAP 1-2024, minor correction filed 01/04/2024, effective 01/04/2024 DMAP 101-2023, amend filed 12/29/2023, effective 01/01/2024 DMAP 3-2016, f. & cert. ef. 2-3-16 DMAP 44-2014, f. & cert. ef. 7-11-14 DMAP 2-2014(Temp), f. 1-15-14, cert. ef. 2-1-14 thru 7-31-14 DMAP 57-2012, f. & cert. ef 12-27-12 DMAP 31-2012(Temp), f. 6-29-12, cert. ef. 7-1-12 thru 12-27-12 DMAP 42-2011, f. 12-21-11, cert. ef. 1-1-12 DMAP 22-2011(Temp), f. 7-29-11, cert. ef. 8-1-11 thru 1-25-12 DMAP 15-2009, f. 6-12-09, cert. ef. 7-1-09 DMAP 17-2008, f. 6-13-08, cert. ef. 7-1-08 DMAP 12-2007, f. 6-29-07, cert. ef. 7-1-07 OMAP 47-2006, f. 12-15-06, cert. ef. 1-1-07 OMAP 44-2005, f. 9-9-05, cert. ef. 10-1-05 OMAP 44-2004, f. & cert. ef. 7-1-04