Massive Medicare Orthotics Fraud Scheme Bolsters O&P Legislative Effort

Calling it “one of the largest health care fraud schemes in U.S. history,” the Department of Justice recently indicted 24 defendants and suspended Medicare payment privileges for 130 durable medical equipment companies for fraudulently billing $1.7 billion in Medicare orthotics.  The indictments included CEO’s and others associated with five telemedicine companies, including three licensed medical professionals.  The investigation involved over 80 search warrants in 17 federal districts, with tentacles reaching internationally into the Philippines and throughout Latin America.

The joint investigation involved the DOJ, the HHS Office of Inspector General, the FBI, CMS’s Center for Program Integrity, and the Internal Revenue Service.  The alleged scheme involved the payment of illegal kickbacks and brides by DME companies in exchange for the referral of Medicare beneficiaries by medical professionals working with fraudulent telemedicine companies for back, shoulder, wrist and knee braces that were medically unnecessary, according to the DOJ statement.  The defendants allegedly paid doctors to prescribe these orthoses either without any patient interaction or with only a brief telephonic conversation with patients they had never met, which were then shipped to the patient directly.

This type of announcement potentially tarnishes the reputation of the field, but NAAOP and its Alliance partners have been warning CMS, Congress, MedPAC and anyone else who would listen of these types of arrangements for months.  We continue to press CMS to move forward with implementing BIPA Section 427 to link Medicare payments for custom O&P care to accreditation and licensure status.

In addition, the new version of the Medicare O&P Improvement Act, which will likely be called the Medicare O&P Patient-Centered Care Act upon introduction in the 116th Congress, is likely to directly prohibit the drop shipment of orthoses and prostheses to beneficiaries, with certain limited exceptions.  This proposal to prohibit the shipment of orthoses and prostheses is expected to save the government money, which could be used to offset the cost of the proposal to restore Congressional intent by limiting the range of off-the-shelf orthotics subject to competitive bidding.

NAAOP will continue to work with AOPA, which is taking the lead on this legislation, as well as its Alliance partners, to advance this legislation and implement BIPA 427 for the benefit of O&P patients and the providers who serve them.

  • Written by NAAOP

NAAOP’s 2019 Fellows Announced & CMS OTS Orthotic Competitive Bidding

NAAOP Fellows:  NAAOP’s Board of Directors is pleased to announce the selection of NAAOP’s Policy Fellows for 2019.  The selection committee interviewed multiple, highly qualified nominees and chose two fellows, doubling the size of the NAAOP Fellowship program since last year’s pilot of the program.  The fellows are:

Alicia Carver: Alicia is a born advocate with an enthusiasm for advancing O&P care to benefit people with limb loss and limb difference.  Alicia is a graduate of Ohio University with a bachelor’s degree in technical and applied studies.  She has experience with state-based advocacy and brings the insight of individuals who experience the challenge of accessing prosthetic care in more rural areas of the country.  Alicia has personal experience with both custom orthotics and lower extremity prostheses. (Read Full Bio)

Susannah Engdahl: Susannah is a Ph.D. candidate in biomedical engineering from the University of Michigan, with a major focus on prosthetic and orthotic research.  Susannah will be very helpful in promoting the importance of evidence-based O&P practice, research, the O&P registry, and other important public policy issues impacting people requiring orthotics and prosthetics.  She has personal experience with upper extremity prostheses. (Read Full Bio)

These fellows will experience a 10-week policy fellowship this coming summer based in Washington, DC, with NAAOP serving as the principal host and sponsor of the program.  Many individual NAAOP board members, company members, and O&P organizations have contributed to the fellowship, both financially and by hosting the fellows for learning experiences during the fellowship itself.  NAAOP is incredibly grateful to all of its sponsors.

NAAOP President, Becky Hast, stated, “Finding Susannah and Alicia, both highly qualified and enthusiastic candidates, for the NAAOP Fellowship’s second year has reinforced our commitment to assisting this next generation of patient advocates to realize their potential. Many supporting associations, companies and individuals in the O&P community believe as we do — preparing for the future is some of the most important work we do today.”

OTS Orthotics:  CMS has announced that it will proceed with Medicare competitive bidding of Off-the-Shelf (OTS) orthotics over the next year and a half, culminating in implementation in the year 2021.  This is the first time CMS has expanded competitive bidding to O&P, albeit to a limited number of HCPCS codes.  23 knee and back orthoses will be impacted by the program.  Although OTS orthotics is the only type of O&P care authorized by law to be competitively bid, CMS interpreted the term “off-the-shelf” very broadly, impacting more than just orthoses that require minimal self-adjustment.  This risks losing the clinical care associated with these codes.

NAAOP is working with its O&P Alliance partners to address our concerns with CMS and is expected to soon introduce legislation to serve as an alternative to competitive bidding of OTS orthotics, among other O&P priorities.

  • Written by NAAOP

O&P Profession Prepares New Legislation to Protect Patients

As the 116th Congress gets off to a slow start, the President’s plans for health care policy will begin to emerge over the coming weeks.  First, the President will deliver his delayed State of the Union address which will include goals involving HIV/AIDS and perhaps other health care priorities.  Next, we will see the President’s FY 2020 federal budget proposals which will be released late due to the impact of the federal shutdown.  Once these proposals are made public, NAAOP will report on their potential impact on access to O&P care.

In the meantime, NAAOP is working with AOPA and members of the O&P Alliance on the path forward on off-the-shelf (OTS) orthotics and other priorities in the Medicare O&P Improvement Act.  Last year witnessed the enactment of the provision recognizing the value of the O&P practitioners’ clinical notes as part of the patient’s medical record for determining medical necessity.  This was a significant victory with many positive implications.

Extensive efforts were also expended to pass a provision redefining and limiting the scope of OTS orthotics subject to possible competitive bidding in the future, but this legislation did not make it across the finish line before the 115th Congress adjourned.  Late in the session, the Congressional Budget Office surprised everyone by claiming that the cost of the bill would have to be offset by a 35% reimbursement cut to over 50 orthotic codes, which was a non-starter.  The bill was actually pulled from House floor consideration hours before it was scheduled for a vote.

We are now in the process of working collectively to plot a legislative strategy for the 116th Congress.  We intend to reframe the O&P Medicare Improvement Act to focus on patient protection.  We intend to streamline the bill, focus on those provisions that developed traction in the previous Congress, and eliminate the most complex aspects of last year’s bill.  We are also discussing new provisions that will recast the bill in a manner that we hope will engender positive attention from Congress and the Administration.

This is particularly important now that CMS has announced its intention to subject 24 knee and back orthoses to competitive bidding in the next round of that program.  NAAOP and the O&P Alliance believes that 22 out of the 24 codes at issue are custom fit orthoses, not off-the-shelf, and are, therefore, pushing back hard against this proposal.

NAAOP will continue working with its O&P allies to advance policies that benefit patients and the providers who serve them.

  • Written by NAAOP

An Open Letter To The Orthotic and Prosthetic Field On Sexual Misconduct, Harassment, and Discrimination In The Workplace

The undersigned organizations stand united in condemning sexual misconduct, harassment, and discrimination in all forms. Sexual misconduct includes abuse and assault. These behaviors are illegal and have no place in the orthotic and prosthetic (O&P) community.

Please consider this letter our clear message to the entire field that we support a zero tolerance policy for sexual misconduct, harassment, and discrimination based on sex (including sexual orientation and gender identity), race, color, national origin, religion, age, and disability, as well as retaliation for the reporting of such conduct.

Sexual misconduct, harassment, and discrimination of any kind can be reported to one’s employer or supervisor, law enforcement authorities, state employment discrimination authorities, state O&P licensure boards, and/or the Equal Employment Opportunity Commission (EEOC). ABC, BOC and NCOPE all have processes in place to address ethical violations by certified individuals, accredited facilities or residents. Certified/licensed professionals witnessing such behavior also have an obligation to report it to the appropriate credentialing organization.

Those affected by sexual misconduct, harassment, and discrimination should know that all reports of such conduct will be taken seriously, investigated, and addressed in alignment with the processes of each of the undersigned organizations. All parties will be treated with dignity and respect and afforded due process.  There are numerous public and private agencies that serve as confidential resources to offer support and answer questions.

Each of the undersigned organizations has resolved to review and, if necessary, refine its policies on sexual misconduct, harassment, and discrimination in the workplace. We resolve to enhance education, training, and compliance with such policies, and impose appropriate sanctions and disciplinary action where allegations have been substantiated, within the scope of each organization’s authority.

We encourage every O&P clinic, business, or academic or research program to take similar steps to proactively address these important issues with respect to compliance plans, policy manuals, and where otherwise appropriate.


American Board for Certification in Orthotics, Prosthetics, and Pedorthics (ABC)

Board of Certification/Accreditation (BOC)

National Association for the Advancement of Orthotics and Prosthetics (NAAOP)

American Orthotic & Prosthetic Association (AOPA)

American Academy of Orthotists and Prosthetists (AAOP)

National Commission on Orthotic and Prosthetic Education (NCOPE)

Harassment Advocacy Work Group


Download an offline PDF copy of the open letter

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NAAOP Announces 2019 Fellowship on Public Policy and Advocacy

NAAOP Announces 2019 Fellowship on Public Policy and Advocacy

ATTENTION ALL O&P CONSUMERS:  The National Association for the Advancement of Orthotics and Prosthetics (NAAOP) is soliciting applications for its annual health policy/advocacy fellowship. NAAOP is a national nonprofit association advocating for consumers/patients requiring orthotic and prosthetic care, as well as the providers who serve them.  The NAAOP Fellowship is a paid, 10-week summer program based in Washington, D.C.  The fellow will learn about orthotic and prosthetic (O&P) policy, advocacy, and how NAAOP and other O&P organizations function on behalf of the O&P community and within the broader rehabilitation and disability policy and advocacy environment at the federal and state level.  The fellowship also includes exposure to O&P clinical and business settings, and state-based public policy and advocacy, at no cost to the fellow.

Two fellows will be selected for the summer of 2019 through a competitive process using the application on the website.  The deadline to electronically submit this application is January 31, 2019 by 12:00 Midnight, Eastern Time.  Finalists will be interviewed via videoconference and two will be selected, assuming high quality candidates are identified.  If the finalists selected cannot accept the fellowship for any reason, the next highest ranked fellow will be offered the position.

Selection CriteriaAll applicants must:

  • Personally use a custom fabricated orthosis or prosthesis;
  • Have an interest in public/health policy and advocacy;
  • Demonstrate an interest in advancing O&P care;
  • Have excellent writing, speaking, and analytical skills (see application for additional factors).

NAAOP fellows each receive a stipend of $500 per week for a ten-week period, although the fellow will have paid time-off during Independence Day week.  NAAOP will provide the fellows with an office, phone, and computer in its offices at NAAOP’s counsel, the Powers Law Firm, 1501 M Street, NW, Suite 700, Washington, DC 20005.  NAAOP will assist the fellows in exploring inexpensive summer housing options with area colleges for those with no other housing options.  The NAAOP fellows will be responsible for their own housing costs but NAAOP housing subsidies may be available if necessary.

The NAAOP fellows will shadow NAAOP’s General Counsel, Peter W. Thomas, who will assign and oversee the fellows’ health policy and advocacy work.  That work will focus on O&P policy but also include exposure to the broader rehabilitation and disability policy environment.  Other O&P organizations will host the fellows for a day of activities.  The fellows will also be exposed to policy and advocacy speakers, attendance at Congressional hearings, participation in coalition and “think tank” meetings/presentations throughout Washington, and meetings with organizations in the broader rehabilitation and disability field.

Application Deadline:  12:00 Midnight, Eastern Time, Thursday, January 31, 2019

Fellowship Selection Announcement:  March 6, 2019

Fellowship Term:  10-weeks (May 27th to August 2, 2019).

Download 2019 Fellowship Application

  • Written by NAAOP

Update on VA Choice of Practitioner

On October 17, 2018, the Prosthetic and Sensory Aids Service (“PSAS”) briefed the Federal Advisory Committee on Prosthetics and Special Disabilities on the status of the proposed rule, 82 Fed. Reg. 48,018 (the “Proposed Rule”), which would grant the Department of Veterans Affairs (“VA”) the sole authority to determine whether a VA orthotist/prosthetist or a private, VA-contracted orthotist/prosthetist will furnish orthotic and prosthetic (“O&P”) care to an eligible veteran.  In December 2017, the VA received over 300 comments from the public, including from NAAOP and the O&P Alliance, on the Proposed Rule.  The Proposed Rule largely remained dormant since the closing of the public comment period, and it was unclear whether the VA intended to finalize the Proposed Rule in its current form, modify its proposals, or rescind the Proposed Rule all together.

Approximately one year after the publication of the Proposed Rule, the PSAS revealed in its briefing that the VA is proceeding with rulemaking and carefully considering the public comments.  The PSAS suggested that the VA could take up to a year (or perhaps even longer) to finalize the rule, although it remains unclear what form the final rule will take and whether the VA will address our concerns on veteran choice of practitioner.  One potential reason for this extended timeframe is that the VA is simultaneously in the process of promulgating regulations under the recently-enacted MISSION Act, which allows veterans to gain access to non-VA, community providers for primary care and related services.  Once the Proposed Rule on prosthetics is finalized, the PSAS indicated that it would update existing handbooks and policies to ensure consistency with the final rule.

NAAOP will continue to monitor the status of the Proposed Rule and advocate against eliminating veterans’ long-standing right to select the orthotist and prosthetist who best serves their specific needs, whether the orthotist or prosthetist is a VA employee or has a VA contract.

In addition to the discussion on the Proposed Rule, the PSAS clarified that the threshold reimbursement amount for “prosthetics” under the VA is being raised from $3,500 to $10,000 per claim.  This means that prosthetics (which is a term that is defined broadly under the VA program) with reimbursement levels up to $10,000 may be purchased directly by VA prosthetic staff from non-VA providers, without going through the formal VA procurement process, which typically is a longer and more complex process.  This will likely have a positive impact on many orthoses purchased by the VA from private orthotists with VA contracts.  It will likely have less of an impact on limb prostheses as these are typically greater than $10,000 in reimbursement level.

Lastly, the PSAS confirmed that “urgent” or “emergent” prosthetic items (e.g., splints, crutches, slings, or soft collars) are being covered under the MISSION Act’s Patient Centered Community Care contracts, while non-urgent and non-emergent items (i.e., the vast majority of custom orthotics and prosthetics) will continue to be provided by PSAS under the existing reimbursement system.  NAAOP will continue to keep you informed as developments occur.

  • Written by NAAOP

NAAOP Fellowship and Pre-Midterm Election Update

NAAOP Fellowship Program:  The NAAOP board of directions recently met in Vancouver to discuss this past summer’s pilot test of the NAAOP Fellowship program.  Nicole Ver Kuilen proved to be an exceptional Inaugural Fellow—see the September issue of O&P Edge to read about her Washington education.  The board unanimously agreed to continue the fellowship program in 2019 and, if fundraising is successful, expand to two NAAOP fellows next summer.  Stay tuned for more formal announcements in the future and please keep your patients in mind for recommendations to this program.  O&P consumers are the most compelling advocates.

Pre-Midterm Election Update:  The House is already in recess and the Senate is not far behind.  Both parties recognize the importance of the coming midterm elections and how the outcome will drive the agenda for the next two years.  Before adjourning, the House and Senate were able to agree on a number of major appropriations bills that will fund the federal government through the end of fiscal year 2019 which ends on September 30th, a year from now.  They also agreed to a continuing resolution to fund several federal agencies temporarily, through December 7th, where Congress will have to revisit longer term spending levels.  The Department of Health and Human Services received a full year budget including:

  • National Center for Medical Rehabilitation Research (NCMRR): The NIH received another $2 billion increase in funding, bringing the overall budget to $39 billion.  This was the third $2 billion increase in three years.  These increased funds trickle down to the NCMRR, which recently announced the funding of a $5 million grant over five years for a prosthetics registry.  This is an exciting development that will require substantial participation and investment by the O&P community and should yield, over time, excellent data on which to base coverage policies, outcomes research, and treatment recommendations.  NCMRR was established in 1990 and NAAOP played a major role in its creation, our first legislative achievement!

It is difficult to forecast whether the “lame-duck” session of Congress after the election will be productive based on the uncertainty of which party will control the House and Senate.  Political pollsters believe the House is more likely to turn than the Senate.  If this occurs, Congress will likely push most of its remaining business off until the new Congress is seated in January.  If the House and Senate remain in Republican hands, there is a real chance for passage of several bills, including a number of bills that impact the health care area.  This may provide a legislative vehicle to attach legislation to clarify Congressional intent by redefining off-the-shelf orthotics.  This redefinition would reinstate the true meaning of the words “minimal self-adjustment” and require CMS to pare back the broad list of orthotic HCPCS codes that may be exposed to competitive bidding in the future.

  • Written by NAAOP

VA Issues Report on Access to New Prosthetic Technologies

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.

  • Written by NAAOP

NAAOP Fellowship Farewell and VA Update

NAAOP Says Goodbye to Inaugural Fellow

August 7th was Nicole Ver Kuilen’s last day as NAAOP’s inaugural summer fellow, and we could not have asked for a better experience for the launch of our fellowship program. Over the past 10 weeks, Nicole shadowed Peter Thomas, NAAOP General Counsel, throughout Washington, traveled around the country meeting with various O&P clinics and professional organizations, and was immersed in state government activities. From her 20 Hill visits with the VGM Group on Capitol Hill, to meeting Democratic Minority Leader Nancy Pelosi and Senator Tammy Duckworth (D-IL), bilateral amputee and cosponsor of the Medicare O&P Improvements Act of 2017 (S.1191), Nicole says her highlight reel is full of once-in-a-lifetime experiences. NAAOP would like to thank the organizations that hosted Nicole – Stokosa Prosthetic Clinic, Children’s Healthcare of Atlanta, Hanger, Inc., Orthotic Prosthetic Group of America, and the Amputee Coalition – for the opportunity to expand her learning across the country. We would also like to thank each organization in the O&P Alliance for hosting Nicole, and to our generous NAAOP donors who helped fulfill our vision for this fellowship. In Nicole’s words:

“I would like to thank NAAOP, all of the hosting organizations, and the incredible donors who made this experience possible. They’ve added another highly engaged and well trained advocate to the O&P field, and I’m ready to help as a soldier in the consumer movement, a policy advocate, and as a future leader.”

Nicole has written a first-hand account of the lessons learned as the inaugural fellow, which will be published in the O&P Edge’s September issue. You can also find a photo gallery highlighting Nicole’s experience at

The NAAOP Board Fellowship Committee will meet in Vancouver to discuss the success of the program and look for ways to improve upon and expand on this initial pilot. We look forward to sharing our vision with you for the year to come.

House VA Health Subcommittee Holds “Roundtable” Discussion

Peter Thomas and Nicole Ver Kuilen participated in a Roundtable held by the Veterans’ Affairs Subcommittee on Health to discuss the VA’s proposed rule, which limits amputee veterans’ ability to choose their O&P practitioner. Both Chairman Neal Dunn, M.D., (R-FL) and Ranking Member Julia Brownley (D-CA) expressed concern that the proposed rule would upend the long-standing practice of veteran choice and reduce access to care by substantially redefining medical necessity. The Veteran Service Organizations (VSOs) in attendance agreed with these remarks and were aligned with the position of NAAOP to preserve veteran choice and ensure access to quality care. The VA responded that they valued the partnerships in the room and were willing to alter the language in the final rule.  Peter Thomas also discussed the Injured and Amputee Veterans Bill of Rights (H.R.2322), which received a hearing by the VA Subcommittee on Health earlier this spring. We hope to move forward as expeditiously as possible on that bill and we keep you informed as developments occur.

  • Written by NAAOP

Special Alert: Major Developments in O&P Policy

Over the past two weeks, a number of major, long-awaited developments in O&P policy have occurred. NAAOP and its Alliance partners have been diligently working on these measures over the past few years and we are excited to share an update on the progress that has been made.

  • Issuance of CMS Interagency Workgroup’s Consensus Document: After publishing a DME MACs Draft Local Coverage Determination (LCD) for Lower Limb Prostheses in 2015 that caused enormous public comment and concern, CMS placed that document on hold and formed an Interagency Workgroup in February 2016 to further explore the issues. Last week, CMS published the results of the Workgroup’s efforts. The Workgroup has recommended CMS to take the following immediate actions:
  • Instruct the DME MACs to remove the 2015 Draft LCD and continue coverage for lower limb prostheses under the current LCD, with no changes.
  • Support the establishment of an interagency federal research group in order to create a guidance document to promote industry research standards in the field of lower limb prostheses.
  • Consider creating a National Coverage Determination (NCD) to evaluate the use of microprocessor knees (MPK) for individuals using their prostheses as a limited community ambulator (K2 functional level).

The removal of the draft LCD is a major victory for the O&P community. However, there are still significant areas of concern in the Consensus Document that could be improved. These include:

  • The recommendation that CMS move toward pre-authorization of lower limb prostheses, a process led by the DME MACs.
  • The characterization of prosthetists as “consultants” to the physician for purposes of determining functional level.
  • The conclusion that current literature does not support improved functional health outcomes of power assist ankles and vacuum systems. Nonetheless, these devices may be covered if justified in the pre-authorization request.

Note: On June 21st, the DME MACs announced the retirement of the Draft LCD on Lower Limb Prostheses. This Draft LCD is finally dead.

  • Release of the MEDPAC Report on Orthotics: The Medicare Payment Advisory Commission (MEDPAC) report, filed with Congress last week, includes a substantial section on orthotics and recommends implementation of competitive bidding for off the shelf (OTS) orthotics. However, the report largely focused on abuses of this benefit by non-orthotist providers and even suggested that orthotists, like physicians, should be able to provide OTS orthotics without having a Medicare competitive bidding contract. Importantly, the report did not recommend expansion of competitive bidding to all orthotics and prosthetics, a policy that had been considered prior to NAAOP and its Alliance partners meeting with MEDPAC staff.
  • VA Report by OIG: Over the next few weeks, we expect to see a report from the Office of Inspector General (OIG) of the Department of Veterans Affairs (VA) that may impact coding and coverage of orthotics and prosthetics. We will share this with you when we learn more.
  • Written by NAAOP