Recent Medicare Audits Bring Mixed Results

Audit checklist on a deskThe results of recent Medicare audits of O&P claims bring a mixed message of relative success in some areas and continued deficiency in other areas. While improvements are always encouraging, the continued high error rates, specifically those involving claims for spinal orthoses indicate that there is still work to be done in understanding what Medicare expects and requires in order to reimburse O&P providers for legitimate services to Medicare beneficiaries.

The good news is found in recent audits results published by Jurisdiction B regarding its longstanding pre-payment review of high error rate DMEPOS claims. In the 4th quarter of 2014, Jurisdiction B reviewed a total of 5,893 claims of which 3,327 were denied, resulting in a claim error rate of 56.46%. While this error rate is still unacceptably high, it does continue the positive trend that has developed over the last year which began with a 68% claim error rate in the 1st quarter of 2014. Continued diligence by providers in making sure all of the documentation required for Medicare payment is contained in the patient’s medical record should drive the claim error rate increasingly lower with the hope that it is ultimately low enough to discontinue the pre-payment review.

The not so good news is the continued high claim error rates for spinal orthoses reported by both Jurisdiction B and Jurisdiction D. Jurisdiction B recently reported 4th quarter 2014 results that indicated a 95.80% error rate on spinal orthosis claims and Jurisdiction D reported a 4th quarter 2014 error rate of 99% for spinal orthosis claims. These high error rates clearly show that providers either do not understand the documentation requirements necessary for Medicare payment for these services or that the documentation requirements are so unreasonable that it is virtually impossible for providers to gather the necessary documentation to support the medical need for the spinal orthoses they are providing.

AOPA’s Take on this issue is mixed, just like the audit results. The continued downward trend of denials for high error rate services in Jurisdiction B is certainly encouraging but the error rates for spinal orthoses that are almost at 100% continues to be a source of frustration and confusion. We simply cannot be that bad when it comes to documentation for spinal orthoses.

AOPA encourages its members to review the LCD and Policy Article governing Medicare coverage of spinal orthoses and make sure that all of the documentation requirements are being met. especially the relatively new requirements that state that providers who bill for custom fitted orthoses instead of off the shelf orthoses document the specific modifications that were required to properly fit the orthosis to the patient.

AOPA will continue to monitor audit results published by the DME MACs and will continue to fight for the fair treatment of O&P providers.

AOPA’s Take. Where you go…..When you need to know!!!

THE OTS Saga Continues

OTS headacheAOPA has closely followed the issue surrounding what orthotic devices are considered to be “off the shelf” items that may be subject to Medicare competitive bidding as it has unfolded over the last several years. What began as a very small subset of HCPCS codes that represented truly off the shelf (OTS) orthotic devices that could reasonably be adjusted by the patient themselves, as stated in the law, and without any expertise from certified, trained professionals, has been repeatedly expanded through regulation and policies that are not consistent with the statute, to where we now have a set of more than 50 codes that CMS considers off the shelf, i.e., if they can be adjusted by the patient, caregiver for the patient, or by the provider of the device.
A significant development in this continuing expansion of what was considered OTS orthoses occurred when the DME MACs published revised medical policy that further defined the qualifications necessary to fit and provide custom fitted orthoses to Medicare beneficiaries. The medical policy was expanded to include the following definition of the term “substantial modification” as it relates to the provision of custom fitted orthoses.
Substantial modification is defined as changes made to achieve an individualized fit of the item that requires the expertise of a certified orthotist or an individual who has equivalent specialized training in the provision of orthotics such as a physician, treating practitioner, an occupational therapist, or physical therapist in compliance with all applicable Federal and State licensure and regulatory requirements. A certified orthotist is defined as an individual who is certified by the American Board for Certification in Orthotics and Prosthetics, Inc., or by the Board for Orthotist/Prosthetist Certification.
This definition fails to recognize the scope of practice of certified orthotic fitters, whether certified by ABC or BOC, and their role in the provision of custom fitted orthoses, very typically working under the supervision of a certified orthotist. In addition, the definition that was published by the DME MACs was extracted essentially verbatim from a definition that was included in a CMS proposed rule (which when CMS published it in July, 2014 was intended to cover OTS, End-Stage Renal Disease and a range of other topics) in a DME MAC announcement before the open public comment period had concluded. Subsequently, CMS elected not to include anything relating to OTS orthotics in the final rule on several other topics that CMS ultimately published.
Despite repeated communications from AOPA and others challenging the authority of the DME MACs to memorialize this definition in policy before the proposed rule was finalized, and despite the fact that CMS chose not to include the proposed definition of “substantial modification” in its final rule, a CMS Frequently Asked Questions document that was updated on February 18, 2015, indicates that the policy guidance regarding who may provide custom fitted orthoses to Medicare beneficiaries remains in effect as the “DME MACs have discretion to define what constitutes custom fitting for accurate coding and payment of claims.”
AOPA’s Take on this issue is that this is yet another example of CMS’ inability or convenient refusal to exercise appropriate control over the actions of its contractors. The DME MACs have repeatedly established policy without regard to the Administrative Procedures Act requirement for due process through the issuance of proposed rules with appropriate opportunity for public comment and input followed by the issuance of a final rule. When AOPA has challenged the DME MACs or CMS regarding the lack of due process, the response has always been that the contractors are acting within the right to establish local policy to govern Medicare coverage of specific items and or services. AOPA believes that that a contractor hired by the government cannot have authorities greater than the Congress has delegated and articulated for the agency that hires the contractor. In this case, if CMS initiates a rulemaking to establish what constitutes an OTS orthotic device, and who may and may deliver custom fitted orthotics, the requirement that Congress imposed on CMS, namely that such rules may only be finalized after providing the opportunity for stakeholder input, cannot be circumvented by CMS claiming that these rules do not apply if the action or rules are advanced by a contractor CMS hires. AOPA will continue to challenge this policy specifically, and more generally instances of policy overreach by contractors acting under CMS’s authority at every opportunity.
AOPA’s Take. Where you go….when you need to know!

DME MACs Clarify Proof of Delivery Requirements

On February 12, 2015, the DME MACs released a joint article that discussed the proper format for proof of delivery documentation to support Medicare claims. The joint publication indicated that medical reviewers have consistently seen a list of HCPCS codes and their descriptors used on proof of delivery documentation, especially for orthotic and prosthetic claims.

According to the DME MACs, this practice is not acceptable for proof of delivery purposes as it does not allow the medical reviewer to make a determination of what was billed and if it was coded correctly. The joint DME MAC publication provides the following recommendation for maintaining proper proof of delivery documentation:

“The preferred method is use of a brand name and model number, brand name and serial number or manufacturer name and part number to identify the product. If this type of information is not available for the product, suppliers may use a detailed narrative description of the item; however, it must contain sufficient descriptive information to allow a proper coding determination. This “narrative description” of the item is not the HCPCS code narrative.”

AOPA’s Take on this issue is that this is yet another hurdle to reimbursement for providers who are providing medically necessary O&P care to Medicare beneficiaries. The documentation of HCPCS codes and their complete descriptors has been acceptable for proof of delivery purposes for many years. The sudden change in policy appears to be inconsistent with what is in the Program Integrity Manual and other CMS policy documents. AOPA will be communicating its concern regarding this policy change with the DME MACs and CMS,

AOPA’s Take. Where you go….When you need to know!

Super Bowl Inspiration

Super-Bowl-2015As I sat with my family this past Sunday and got ready to watch the Super Bowl with the rest of the world, I had no idea that my favorite highlight would have nothing to do with the game.

Like most viewers, I was excited to watch the action on the field but also looking forward to the creative and always entertaining commercials that receive so much hype leading up to the big game. With advertisers literally spending millions of dollars for 30 seconds of airtime, the most creative minds in the world are tasked with capturing the hearts of the audience for that one brief, shining moment.

This year, two different advertisers chose to use the inspiring stories of amputees as the backdrop for their Super Bowl ads. Microsoft featured young Braylon O’Neill in its ad for advanced analytic technology and Toyota featured Amy Purdy, a double amputee who gained fame on Dancing with the Stars, to showcase it’s newly remodeled Camry sedan.

AOPA’s take on these commercials is that while they were only 30 seconds long, the motivation of both Braylon and Amy to live life to the fullest despite the physical challenges they face shone through and sent an amazing message of inspiration and hope. I sat on the couch and beamed with pride knowing that I work for an industry that does so much for people, often because it is simply the right thing to do.

As folks get frustrated with continued scrutiny and audits by federal and private payers, it is easy to forget why most of you are in the business of O&P. You desire to help people with physical challenges return to a normal life. First and foremost, it is about the patients you serve. That is why I am so proud of what I do and the people I work for.

AOPA’s Take. Where You Go……When You Need to Know!

HHS Sets Goals and Timeline for Medicare Payments Based on Quality Rather Than Quantity

quality over quantity 2On January 26, 2015, Health and Human Services (HHS) Secretary Sylvia M. Burwell, announced that measurable goals and a timeline have been established to transition Medicare payments to a system focused on the quality of healthcare received as opposed to the quantity of healthcare received. The announcement followed a meeting that involved more than two dozen healthcare industry leaders representing consumers, insurers, and providers who provided input on what actions HHS can take to facilitate a move to quality based Medicare reimbursement.

Secretary Burwell announced that HHS has set goals of using alternative payment models such as Accountable Care Organizations (ACOs) and bundled payment systems to tie 30 percent of traditional (fee for service) Medicare payments to the quality of care delivered by the end of 2016 and tie 50 percent of Medicare payments to the quality of care delivered by the end of 2018. In addition, Secretary Burwell announced the goal of tying 85 percent of Medicare payments to quality or value by 2016 and 90 percent by 2018 through initiatives like the Hospital Value Based Purchasing and the Hospital Readmissions Reduction programs.

In addition to the goals and timeline that were set for Medicare payments, Secretary Burwell announced the creation of the Health Care Payment Learning and Action Network which will work with private payers, consumer groups, employers, providers, and state Medicaid programs to encourage the expansion of the idea of value based payments outside of the Medicare program. Value-Based purchasing is the latest iteration of provider risk-sharing with payers (Medicare and commercial), as well as so-called “pay-for-performance” and patient-focused outcomes. For the past couple of years AOPA has “Alternative Payment Models” established as one of our six AOPA Survival Imperatives to advance planning and efforts in these areas, as well as a related initiative of Prosthetics 2020, to anticipate and respond to demands for evidence-based findings on prosthetic care.

AOPA’s Take on this announcement is that there is a valuable opportunity to show the proven positive impact that quality O&P care has on the overall health of Medicare patients. Through its strategic partnership with the research firm Dobson DaVanzo, LLC, AOPA now has data that shows that the provision of lower limb prostheses and orthoses in general, actually saves money for the Medicare program through a reduction in overall healthcare expenditures for patients who receive O&P care. This data along with AOPA’s efforts to get the word out there through creation of the Mobility Saves website, positions AOPA at the forefront of the discussion regarding how the provision of quality O&P care by properly trained and educated clinicians benefits both the Medicare patient community as well as program itself.

For more information on the valuable compendium of data on the cost effectiveness available only to AOPA members, please click on the following link and provide your AOPA username and password.

To visit the Mobility Saves website, please click on the following link.

AOPA’s Take. Where you go….when you need to know!

The Impact of Sequestration on Your Business

Sequestration_0Sequestration was never supposed to happen. It was written into law as a mandatory, across the board reduction in federal spending so distasteful to both democrats and republicans that it would be never allowed to occur. Think back to when you were a child and your mother threatened to punish you for a month if you didn’t eat your dinner. The punishment was so extreme that it made it worth it to choke down those last few bites of mashed potatoes. Lawmakers believed the same thing about sequestration right up until neither side blinked and sequestration became reality in March of 2013.

Lawmakers have somewhat come to their senses in that many of the spending cuts implemented with sequestration have been reversed through subsequent legislation, especially those related to defense spending and veteran’s benefits. Sequestration remains in full effect for Medicare payments however and was recently extended through 2024 when Congress passed legislation that reversed potential cuts to veteran pension benefits.

The direct result of sequestration in the Medicare program is a 2% reduction in all Medicare reimbursements to providers. This means that once the Medicare payment for a claim is calculated, it is reduced by 2%. For example, if a Medicare allowable is calculated at $100 and the Medicare payment after the 20% patient coinsurance is $80, the actual Medicare payment to the provider will be $78.40. It is important to note that sequestration reductions do not apply to patient coinsurance and deductibles which may continue to be collected from patients at their full value. In addition, it is important to note that sequestration reductions are not applied to the Medicare fee schedule but to the actual reimbursement sent to the provider. This is important because it means that the 2% sequestration reduction is not cumulative year after year. The Medicare O&P fee schedule continues to be updated annually based on the increase in the Consumer Pricing Index for Urban areas (CPI-U) and the annual productivity adjustment.

AOPA’s take on sequestration is that, for the moment, it is an unfortunate reality. In order for sequestration to end, Congress will have to pass new legislation that reverses the sequestration provisions that went into effect in 2013. While that is not likely given the current environment on Capitol Hill, AOPA continues to work with members of Congress and our industry partners to find a solution to the challenges of sequestration.

While nobody likes to have their Medicare payments reduced, at least sequestration reductions are a known entity for which adjustments can be made. AOPA will continue to fight for fair treatment of O&P providers and the valuable services they provide.

AOPA’s Take. Where you go…..when you need to know!

National O&P RAC Contract on Hold…….For Now

Stop signLess than two weeks ago, AOPA’s Take announced the award of the contract to serve as the single, national RAC auditor for all Medicare DMEPOS, home health, and hospice claims to Connolly Healthcare, LLC. On January 6, 2015 a formal award protest was filed with the Government Accountability Office (GAO) by Performant Recovery, who currently serves as the Jurisdiction A RAC auditor. The GAO has added Performant’s protest to its official docket and estimates that a ruling will be made by April 6, 2015.

The protest of the award of government contracts is not an unusual occurrence and actually happens quite regularly. The immediate result of the protest filing is that Connolly Healthcare, LLC will not be permitted to begin work as the national RAC auditor for DMEPOS, home health, and hospice claims until the Performant Recovery protest has been resolved. While the protest is being resolved, the existing four regional RAC auditors will be permitted to continue to perform RAC audits on DMEPOS, home health and hospice claims.

AOPA’s take on this development is that the protest filed by Performant Recovery does not represent a delay in RAC audits, but rather a shift in who is performing them. As mentioned above, the existing four RAC auditors, including both Connolly Healthcare, LLC and Performant Recovery have been authorized to continue to perform RAC audits on DMEPOS, home health and hospice claims until the protest is resolved. The protest will delay many of the improvements to the RAC audit program that were scheduled to be implemented with the award of the national RAC contract to Connolly Healthcare.  Unfortunately, these improvements will now be delayed until the protest is resolved by the GAO.

AOPA will continue to monitor this situation closely and report any updates as they occur.

AOPA’s Take. Where you go……….when you need to know!

The State of the O&P Union

State of the unionLast night, the President of the United States stood before Congress and presented his annual State of the Union address. Whichever side of the aisle you find yourself on, this annual tradition is an important one. It is one of the few opportunities for the President to address Congress directly regarding issues and challenges that the nation currently faces as well as those that may be coming in the future.

I cannot think of a better time to take a closer look at the state of the O&P union. O&P is facing a very challenging and uncertain future. The reimbursement climate is challenging to say the least as O&P providers deal with increasing audits from multiple directions including DME MAC pre-payment and post-payment reviews, renewed RAC efforts by a national DMEPOS, home health, and hospice RAC contractor, unreasonable delays in Medicare claim appeals (especially at the ALJ level), and the possibility of the implementation of competitive bidding for off the shelf orthoses. At the same time, there is encouragement, as evidenced by the enthusiasm and energy that was recently on display at the AOPA Leadership Conference, held in Palm Beach, Florida from January 9-11, 2015. This conference, in which over 150 O&P industry leaders participated, resulted in the valuable exchange of thoughts and ideas to ensure the future survival and success of the O&P industry.

AOPA’s Take on the state of the O&P union is one of cautious enthusiasm. While the challenges that O&P providers are facing are greater than ever, the enthusiasm and vision that was on display at the AOPA Leadership Conference set the stage for the future success of the O&P industry.  AOPA looks forward to seeing the fruit that will grow from the seeds that were planted during this tremendous event.

AOPA’s Take…..Where you go when you need to know!

Marilyn Tavenner Resigns as CMS Administrator


This morning, in an e-mail to her staff, Marilyn Tavenner announced her resignation as Administrator of the Centers for Medicare and Medicaid Services (CMS), effective at the end of February 2015. Administrator Tavenner, who was confirmed by the Senate by a vote of 91-7 in May 2013 served as Acting Administrator for several years before her permanent appointment.

In a separate e-mail also sent this morning, Department of Health and Human Services Secretary Sylvia Matthews Burwell announced that Andrew Slavitt, Principal Deputy Administrator will serve as the Acting Administrator once Administrator Tavenner leaves CMS in February.

AOPA’s Take on this development is that while this resignation is certainly a significant event, it is not expected to bring fundamental change to CMS or how it operates in the near future.  The tenure of Administrator Tavenner has been dominated by the worst period of excessive regulation of Medicare and Medicaid providers, including the implementation of over aggressive audit practices against O&P providers by both the DME MACs and Recovery Audit Contractors (RACs).  In addition, the problems surrounding the initial roll out of the website resulted in an immediate shift in CMS’ focus to address and correct these problems which were highly visible to the public.  This shift made it virtually impossible to address the need for fundamental change in other areas such as audit reform and fair treatment of O&P providers.  While Administrator Tavenner was always willing to listen to AOPA, she often was unable to deliver on specific commitments she made, especially those regarding the long awaited implementation of the qualified provider requirements outlined in section 427 of the Benefits Improvement and Protection Act of 2000 (BIPA).  AOPA will make every effort to engage Acting Administrator Slavitt to continue this dialogue.  Recognizing the complexity and sheer size of a government agency as large as CMS however, it is unlikely that a significant shift in CMS policies or actions will occur as a result of Administrator Tavenner’s resignation.

High level resignations are not uncommon during the latter stages of a President’s second term so it cannot be said that Administrator Tavenner’s announcement this morning is a surprise; rather it is a development that will cause AOPA to adjust its communication strategy with CMS to make sure that issues imprtant to O&P remain in the discussion.

AOPA’s Take………Where you go when you need to know!

Feeling the Effects of OTS


There is a new and alarming trend in Medicare audits. Recent reports from the Jurisdiction B and Jurisdiction D DME MACs indicate that they are actively auditing claims involving orthoses that can be delivered as either custom fitted or OTS and the results are not encouraging.

Jurisdiction D recently reported a 100% error rate on its prepayment review of claims for knee orthoses described by L1832, L1833, and L1843 and Jurisdiction B reported a prepayment error rate of 96% on claims for a broad range spinal orthoses. In both of these reports, lack of a detailed description of the modifications necessary at the time of fitting the orthosis to the beneficiary was listed as one of the reasons for claim denials. While the DME MAC LCDs and Policy Articles were revised to incorporate language requiring documentation to support the need of a custom fitted orthosis over an OTS orthosis in January of 2014, these recent reports signal the first instances where the DME MACs are actually denying claims based on this criteria.

AOPA’s take on these reports is one of trepidation. O&P providers must be aware of the need to document the specific modifications to the orthosis that are required when providing a custom fitted orthosis. In addition, the referring physician must also document the medical need for a custom fitted orthosis rather than an OTS orthosis. These documentation requirements create yet another hurdle in the attempt to provide medically necessary services to Medicare beneficiaries, one that is now being used as yet another reason for the DME MACs to deny claims.

AOPA continues its dialogue with the DME MACs and CMS surrounding all of the issues the introduction of the split code set in 2014 created. These audits represent yet another argument in AOPA’s efforts to ensure fair treatment of O&P providers.

AOPA’s Take……..Where you go when you need to know!