On August 27, 2018, the Department of Veterans Affairs, Office of Inspector General, issues a report #16-01913-223, entitled, “Use of Not Otherwise Classified Codes for Prosthetic Limb Components.” The findings and recommendations in the report are disturbing and, unfortunately, reflect a lack of understanding of coding and pricing of new prosthetic technologies. The report was triggered by two anonymous employees who challenged the process for assigning reimbursement levels for new technologies under the prosthetic benefit.
The report concludes that the VA overpaid “contract” prosthetists by $7.7 million between 2014 and 2017 because the VA permitted these prosthetists to use “not otherwise classified” or “NOC” HCPCS codes when submitting invoices for new prosthetic technologies to the VA for reimbursement. The report alleges that this allowed the VA, particularly specific individuals within the VA, to overpay contract prosthetists for prosthetic technologies that the Centers for Medicare and Medicaid Services reimburses at much lower levels. The report also asserts a lack of sufficient processes, internals approvals, and appropriate oversight for the assignment of these codes and reimbursement values.
The report is seriously flawed in that veterans in need of these new technologies would not have been able to access these innovative components if the VA reimbursed at levels established under existing HCPCS codes. Veterans simply would not have had access to these new technologies. Prosthetists would not have provided them to veterans because prosthetists would have taken significant losses in the course of doing so. The new technologies at issue would have been downgraded to more established, HCPCS-coded components instead. It is disingenuous for the VA to routinely tout to Congress and the public how it is at the cutting edge of providing advanced prosthetic technology to veterans and then refuse to compensate prosthetists appropriately to design, fit, and fabricate those technologies into a functional limb.
NAAOP will continue discussing this disturbing report with its O&P Alliance partners and will respond to the VA and the House and Senate VA Committees in the near future. We hope to work with the VA to ensure continued access to new prosthetic and orthotic technologies in the future, despite this most recent VA report.