Decoding CMS Referral Data

In early October, the Centers for Medicare & Medicaid Services (CMS) released new data which provides a wealth of information related to durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) provided to Medicare beneficiaries via referrals from physicians and other health care professionals. The 2013 data set is called, “The Referring Provider Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Public Use File” and is part of CMS’s Medicare Provider Utilization and Payment Data set. The new data includes information on 385,915 referring providers, more than 100 million claims and $11 billion in Medicare allowed payments for calendar year 2013. The data is posted on the CMS website at cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/medicare-provider-charge-data/dme.html.

The data set identifies individual providers who referred DMEPOS items and services using their National Provider Identifier (NPI). For each referring provider and DMEPOS service, the data set has the total number of services that were furnished by DMEPOS suppliers, the supplier’s average charge, the average Medicare payment and the average Medicare allowed amount, which is the sum of Medicare’s payment and any deductible or coinsurance owed by the beneficiary. The total amount spent by Medicare in 2013 was $8.8 billion (that number includes prosthetics, orthotics and supplies). In total, the data includes 1,854 items and 386,000 doctors or other medical professionals. Note that the data only includes information on Medicare fee-for-service beneficiaries; it does not include Medicare managed care. Note, also, that the 2013 data covers the time period in which the nine Round 1 competitive bid areas were in effect, and for half of the year the 91 Round 2 bid areas were in effect.

The spending and utilization data are aggregated to the following: (1) the NPI for the referring provider; (2) the Healthcare Common Procedure Coding System (HCPCS) code of the product or service provided by the DMEPOS supplier; and (3) the supplier rental indicator (value of either ‘Y’ or ‘N’) derived from DMEPOS supplier claims. There can be multiple records for a given referring NPI based on the number of distinct HCPCS codes that are billed by the DMEPOS supplier. There also can be multiple records for the same HCPCS code in cases where both rental and purchase of a product have been referred by the NPI. Data has been aggregated based on the supplier rental indicator because separate fee schedules apply for rental versus purchase of products.

It is worth taking some time to explore this data. The data includes all DMEPOS items, and of that DME accounted for 80 percent of all claims and 62 percent of the total Medicare allowed amount for DMEPOS services. Prosthetic and orthotic devices accounted for 10 percent of claims but 20 percent of the total allowed amount, while drugs and nutritional products accounted for 9 percent of claims and 18 percent of allowed amounts.

Not surprisingly, Medicare spent the most money on rentals of oxygen concentrators, referred by more than 210,000 providers at an average price of $120, costing Medicare more than $1 billion. Other top expenditure items: hospital bed rentals at $116 million and power wheelchair rentals at $98 million.

Internal medicine and family practice are the largest referring specialties with more than 80,000 unique providers in each specialty prescribing DMEPOS products. These providers refer an average of 36 and 38 DMEPOS products, respectively, and make referrals to a higher number of DMEPOS suppliers than most other common specialties. On the other hand, cardiology and urology specialists referred fewer unique products and have fewer unique suppliers. The data shows that allowed amounts for referred DMEPOS products vary among these specialty types, from a low of $12,000 for physician assistants to a high of $156,000 for pulmonary disease specialists.

The data also shows how the referring of DMEPOS products varies across provider specialties. Internal medicine and pulmonary disease physicians refer a higher percentage of DME products than other specialties, while provider specialties such as urology and podiatry refer a higher percentage of prosthetics and orthotic devices. For both internal medicine and pulmonary disease, oxygen concentrators were the top referred service, accounting for approximately 25 percent of each specialty’s total Medicare allowed amount. For urology, urinary catheters accounted for 40 percent of the total Medicare allowed amount for DMEPOS services.

The DMEPOS data can be used for geographic comparisons of costs and utilization of DMEPOS services/products, and when combined with data on the number of beneficiaries enrolled in Medicare Part B coverage, per capita averages can be calculated. Nationally, the per capita allowed amount for all DMEPOS was $343.70 per enrolled beneficiary. States with the highest allowed amount rates were in the South and Midwest, and states with the lowest rates were in the West and Northeast.