Recent Medicare Fraud in Florida and the Need for Restrictions on Billing for Orthotic and Prosthetic Care

To: Mark B. McClellan, MD, PhD
Administrator – Centers for Medicare & Medicaid Services
Department of Health and Human Services

From: Mark DeHarde – NAAOP President
Michael E. Hamontree – AOPA President
David F. Moretto, CP, FAAOP – AAOP President
William W. DeToro, CO, FAAOP – ABC President

Dear Dr. McClellan:

The aforementioned organizations wish to express our deep concern regarding the recent fraud in southern Florida involving the submission of claims for prosthetic care. We believe that the actions in Florida demonstrate the need for CMS to restrict payment for orthotics and prosthetics to qualified orthotists and prosthetists. Such a policy will help ensure that the fraud perpetrated in Florida does not occur again.

It is our understanding that 48 Medicare durable medical equipment (“DME”) suppliers acted in concert and billed Medicare for approximately 21,000 artificial limbs that were neither medically necessary nor provided to Medicare beneficiaries. Based on published reports of this incident, the direct cost to the government for this fraud was approximately $122 million.

After independent investigation of this incident, we have found that none of the 48 suppliers that billed for these prostheses are accredited by the American Board for Certification in Orthotics and Prosthetics (“ABC”), a nationally recognized credentialing authority for prosthetists and orthotists. To the best of our knowledge, none of these DME suppliers had a licensed prosthetist on staff, despite the fact that Florida requires licensure for prosthetists. Finally, none of these suppliers are members of the Florida Association of Orthotists and Prosthetists, the American Academy of Orthotists and Prosthetists, the American Orthotic and Prosthetic Association, or the National Association for the Advancement of Orthotics and Prosthetics. In other words, the fraud that recently occurred in Florida involving the submission of claims for prosthetic services was not committed by prosthetists (or prosthetic facilities) who are in the mainstream of organized, professional prosthetic care.

The federal government has long recognized an increased likelihood of abuse in the orthotics and prosthetics (“O&P”) field when unqualified suppliers provide such services. For example, in 1997 the HHS Office of Inspector General recommended that CMS “consider stricter standards for whom is allowed to bill for orthotics, such as requiring professional credentials for orthotic suppliers.”1 In Section 427 of the Benefits Improvement and Protection Act of 2000 (“BIPA”), Congress addressed the matter by providing that Medicare shall only pay for prosthetics and custom-fabricated orthotics if furnished by a “qualified practitioner.”2 We believe that the recent events in southern Florida should reinforce the government’s longstanding view that Medicare should not pay for O&P care provided by unqualified practitioners.

Our research has revealed that in the recent past, approximately 28,000 Medicare suppliers have indicated their intention in their Medicare supplier application form to submit claims for orthotic and prosthetic services. However, there are only approximately 1,320 O&P facilities accredited by the ABC. This discrepancy reflects the fact that a large number of suppliers are routinely billing Medicare for O&P services without any certification or accreditation (or other objective indication) to demonstrate that they are qualified to provide the full range of professional O&P services.

In the immediate future, CMS has two opportunities to address this concern. First, we understand that CMS expects to publish proposed regulations in November 2005 implementing the “qualified practitioner” and “qualified supplier” requirements of §427 of the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 (“BIPA”). BIPA §427 limits Medicare payment of prosthetic and certain types of orthotic care to the following providers:

‘(iii) QUALIFIED PRACTITIONER DEFINED- In this subparagraph, the term `qualified practitioner’ means a physician or other individual who–

‘(I) is a qualified physical therapist or a qualified occupational therapist;

‘(II) in the case of a State that provides for the licensing of orthotics and prosthetics, is licensed in orthotics or prosthetics by the State in which the item is supplied; or

‘(III) in the case of a State that does not provide for the licensing of orthotics and prosthetics, is specifically trained and educated to provide or manage the provision of prosthetics and custom-designed or -fabricated orthotics, and is certified by the American Board for Certification in Orthotics and Prosthetics, Inc. or by the Board for Orthotist/Prosthetist Certification, or is credentialed and approved by a program that the Secretary determines, in consultation with appropriate experts in orthotics and prosthetics, has training and education standards that are necessary to provide such prosthetics and orthotics.

‘(iv) QUALIFIED SUPPLIER DEFINED- In this subparagraph, the term ‘qualified supplier’ means any entity that is accredited by the American Board for Certification in Orthotics and Prosthetics, Inc. or by the Board for Orthotist/Prosthetist Certification, or accredited and approved by a program that the Secretary determines has accreditation and approval standards that are essentially equivalent to those of such Board.’.

If appropriate regulations implementing these statutory provisions were in effect today, the fraudulent activity that occurred in southern Florida may well have been prevented.

Second, we understand that CMS is in the process of implementing §302(a)(1) of the Medicare Modernization Act of 2003, which requires the Secretary to establish “quality standards” for orthotic and prosthetic providers. It is also our understanding that CMS is currently inclined to rely on independent accreditation of providers to satisfy this legislative mandate. Implementation of regulations interpreting these statutory sections offers CMS the opportunity to potentially eliminate a recurrence of the recent events in southern Florida by limiting Medicare reimbursement for comprehensive O&P services to certified orthotists and prosthetists and accredited O&P facilities. To this end, we encourage CMS to coordinate the regulatory teams developing these two different sets of regulations so that the final regulations will be substantively consistent.

We recognize and agree that CMS must avoid unnecessarily curtailing patient access to O&P care as it implements regulations for these statutory provisions. CMS, therefore, may want to consider a tiered credential that would permit “off-the-shelf” orthotics to be provided by individuals and facilities that achieve a lesser qualification standard, and more comprehensive orthotics and all prosthetics to be provided by those who achieve a higher credential, namely state licensure where applicable, or certification and/or accreditation by the ABC or BOC.

By limiting reimbursement for comprehensive O&P care to accredited O&P facilities or through state licensure, CMS will protect both beneficiaries and the Medicare program. CMS will protect beneficiaries because reliance on state licensure or ABC or BOC accreditation ensures that only practitioners with sufficient education, experience, and appropriate patient care facilities to ensure patient evaluation and follow-up will provide complex O&P care. CMS will protect the Medicare program because Medicare will only reimburse the full range of orthoses and prostheses when provided by an individual who has made a substantial commitment to the profession of orthotics and prosthetics, as reflected by the individual having completed the often rigorous education requirements of state licensure or the ABC or BOC certification processes. In contrast, the recent fraud in southern Florida demonstrates the problem with the current system—individuals can bill Medicare for comprehensive O&P care merely by securing a DMEPOS supplier number.

In conclusion, we hope that CMS recognizes the recent events in southern Florida for what they are—not a black mark on the O&P profession, but evidence of the need for CMS to work closely with existing O&P organizations in order to protect the Medicare program, the O&P field, and beneficiaries from the actions of unqualified suppliers.


  1. Medicare Orthotics (OEI-02-95-00380), HHS Office of Inspector General (October 1997), available at
  2. Benefits Improvement and Protection Act of 2000, Pub. L. No. 106-554, § 427, 114 Stat. 2763, 2763A-520 (2000).
  • Written by NAAOP

Upcoming Proposed Rules impacting O&P

The Department of Health and Human Services recently released it’s semi-annual regulatory agenda that details all of CMS’s pending regulatory activity and their anticipated dates for publication. Several CMS rules of great interest to O&P are anticipated in the coming months and years:

In September of 2005, the Centers for Medicare and Medicaid Services (CMS) is expected to release the proposed rule for Medicare Competitive Bidding, which encompasses all Durable Medical Equipment and “off-the-shelf” orthotics. NAAOP worked diligently to ensure the most favorable definition of “off-the-shelf” orthotics in the final Medicare Modernization Act of 2003, but its interpretation and application by CMS will remain unclear until this rule is published. When the rule comes out, NAAOP plans a detailed analysis of the rule’s impact on professional O&P care and will draft comments as appropriate.

In November of 2005, CMS will release a proposed rule that will attempt to settle what constitutes a “qualified provider” for O&P services under the Medicare program. The outcome of this rule will ultimately settle the Negotiated Rulemaking process.

In December of 2006, HHS will release a final rule on the application of “inherent reasonableness” authority to all non-physician Medicare Part B payments—including O&P services. This rule has the potential to allow HHS and CMS to reduce reimbursement without significant notice and comment.

NAAOP will be monitoring the Federal Register diligently for the publication of these rules in the coming months and alert NAAOP members as appropriate.

  • Written by NAAOP

2005 O&P Policy Forum

To: NAAOP Members

From: Mark DeHarde – NAAOP President

On behalf of NAAOP’s Board of Directors, I would like to encourage you to attend the 2005 O&P Policy Forum in Washington, D.C., on June 20-22. Our collective efforts at this event will help set the course for the O&P field now and for years to come. Register by Friday, May 20 to receive the discounted hotel room rate. A registration form is available as a downloadable pdf.

O&P Policy Forum attendees will meet with lawmakers on issues of fundamental importance to our profession and our patients. This event is intended to be a show of force from the entire O&P community advocating for the fair and proper treatment of O&P in any Medicare legislation passed in the next two years. At the O&P Policy Forum you will be able to discuss issues impacting your practice, such as:

  • Opposing additional attempts to extend the current three-year Medicare payment freeze.
  • Seeking reasonable alternatives to abusive and intrusive Medicare audits; and,
  • Eliminating orthotic services from the Skilled Nursing Facility Prospective Payment System (SNF PPS) so that patients can receive proper and timely orthotic services.

All O&P professionals must take an active interest in defending our field. Your involvement is needed now more than ever–take this opportunity to be an effective advocate for O&P.

Policy Forum events begin at 3 PM on June 20 and will conclude by 3 PM on June 22. Individuals planning to attend the Policy Forum should arrive in Washington, D.C., before 2 PM on June 20 and should schedule departing flights after 3 PM on June 22.

We look forward to seeing you in June. If you have registration questions, please call (571) 431-0876, ext. 201 (AOPA), or (800) 622-6740 (NAAOP).

Registration is only $150 per attendee. Visit to register or call AOPA at (571) 431-0876, ext. 201. Register by May 20 to receive the discounted hotel room rate.

  • Written by NAAOP

NAAOP Endorses Recent “O&P Education Summit”

The National Association for the Advancement of Orthotics and Prosthetics would like to announce its endorsement of the O&P Education Summit that was held April 8th & 9th. The importance of delivering high quality orthotic and prosthetic care is essential in today’s O&P clinical practices especially with the vast amount of new technology available.

The O&P practitioner of tomorrow will require a solid core of curriculum that includes new technology which if used wisely, will greatly enhance the quality of life of those who are and will be seeking professional O&P care.

NAAOP lends its support to the educational ideas and standards that will appropriately prepare future O&P practitioners.

  • Written by NAAOP

Medicaid to be Cut $10 Billion Over 5 years

To: National Association for the Advancement of Orthotics and Prosthetics

From: Peter W. Thomas, Emily Niederman

Re: Budget Update – Medicaid to be Cut $10 Billion Over 5 Years

Last week Congress approved a fiscal year (FY) 2006 budget resolution and, for the first time since 1997, included reconciliation instructions to several Committees with jurisdiction over mandatory programs.

The House narrowly approved the “conference report” by a vote of 214-211. The Senate approved the same measure by a vote of 52-47, with Senators DeWine (R-OH), Chaffee (R-RI) and Voinovich (R-OH) voting against it.

The $2.56 trillion budget puts a virtual freeze on discretionary spending and estimates mandatory spending to reach $1.669 trillion in the coming fiscal year. The reconciliation instructions direct authorizing Committees, such as the Senate Finance and the House Energy and Commerce Committees, to find savings of $35 billion from mandatory program spending over the next five years.

The Senate Finance Committee, which has jurisdiction over both Medicaid and Medicare, must find $10 billion in savings over the next five years while the Senate Health, Education, Labor and Pensions (HELP) Committee must cut $13.7 billion from other health-related programs as well as education, labor and training programs. The House Energy and Commerce Committee has been charged with finding almost $15 billion in savings from programs such as Medicaid, possibly Medicare, and telecom-related programs. The House Ways and Means Committee must find $1 billion in savings from programs such as Supplemental Security Income (SSI), TANF, Social Services Block Grants, the Earned Income Tax Credit and possibly Medicare. Finally, the House Education and Workforce Committee has been instructed to find $12.7 billion in savings from programs under its jurisdiction including vocational rehabilitation and education programs. The Committees targeted in reconciliation will spend the next several months developing policies to achieve these mandated savings with a Reconciliation Bill expected in September, 2005.

Throughout this budget process, heavy debate focused on cuts to the Medicaid program. While numbers between $14 and $20 billion were originally considered by the Budget Committees, the final reconciliation number directed at the Finance Committee only allows up to $10 billion in cuts.

Additionally, it appears a Medicaid commission or advisory committee will soon be formed, although details have not been announced. The Commission will be charged with recommending changes to the program in order to achieve the required savings. The Medicaid Commission is expected to deliver its final report in December 2006 with an interim report due to Congress in September, 2005. Therefore, major Medicaid cuts are not expected to be implemented until FY 2007.

The reduction in cuts from the original proposals as well as the formation of the Medicaid Commission can be greatly attributed to Senator Smith (R-OR), who successfully opposed Medicaid cuts in the Senate budget resolution, as well as the national organizations, such as NAAOP, that worked to educate Members on the importance of Medicaid services.
Nevertheless, $10 billion in cuts will likely prove harmful to Medicaid recipients, particularly those with disabilities who depend on so-called “optional” benefits such as rehabilitation services, home and community based supports and services, assistive devices, and prescription drugs to maintain their health and independence.

We will continue to keep you updated as policy proposals emerge that are likely to become law later this year, particularly those that impact NAAOP members and the clients they serve. Additionally, we will keep you informed as details of the Medicaid commission develop and, specifically, of opportunities to influence its recommendations to Congress.

  • Written by NAAOP

Legislative Update – FY 2006 Federal Budget Proposal; President Bush – (FY) 2006 Budget Proposal

To: National Association for the Advancement of Orthotics and Prosthetics

From: Peter Thomas, Dustin May, Emily Niederman

Date: February 17, 2005

Re: Legislative Update – (FY) 2006 Budget Proposal

On Monday, February 7, 2005, President Bush released his fiscal year (FY)
2006 Budget Proposal. The Administration’s $2.57 trillion budget includes
$840.3 billion for annually appropriated discretionary programs and the
remainder in entitlement spending including Social Security, Medicare and

The Budget Proposal represents a much more austere spending agenda in terms
of domestic programs than the President has recommended in the past and
holds discretionary spending nearly level for the next 5 year period. The
President’s budget suggests an increase in discretionary spending (2.1
percent) that is less than the rate of inflation and would require $137
billion in savings over 10 years from cuts to mandatory programs such as

While discretionary spending on domestic programs would be limited, defense
programs would see almost a five percent increase over FY 2005 levels for a
total of $419.3 billion. Homeland Security funding also would rise by
almost $1 billion to $32.2 billion under the President’s Budget.

Health and Human Services

Total discretionary spending for the Department of Health and Human Services
(HHS) under the President’s Budget would fall to $67.2 billion, a 1 percent
decrease from FY 2005.

The Centers for Medicare and Medicaid Services (CMS) would receive about
$545.5 billion with Medicaid consuming 35 percent of those dollars, Medicare
62 percent, and the State Children’s Health Insurance Program (SCHIP) one
percent. $142 billion would be committed toward new spending on
market-based health insurance initiatives (primarily through tax credits.)

The President proposes significant cuts to the Medicaid program in his FY
2006 Budget Proposal. Over 10 years federal spending on Medicaid would
decrease by a net $45 billion (gross $60 billion). According to the
President, savings should be found through the reduction of “waste, fraud
and abuse.” These initiatives include curbing the use of Intergovernmental
Transfers (IGT) and Upper Payment Limits (UPL)-that many states use to draw
down additional federal dollars-reducing the reimbursement of prescription
drugs through the Average Sales Price, “closing loopholes” on asset
transfers for long-term care eligibility and limiting the Targeted Case
Management reimbursement to a 50% matching rate rather than the FMAP rate in
each state.

Over 10 years, Medicaid and SCHIP spending on coverage initiatives will
increase by about $15 billion and include initiatives such as outreach
campaigns and demonstration projects under the President’s New Freedom

The New Freedom Initiative Demonstration Projects include “The Money Follows
the Person Rebalancing Demonstration” to cost $1.75 billion over five years.
Grants would pay for people with disabilities to move from institutional
care to at-home care. The federal government would continue to agree to pay
the state a 100% matching rate for the first year if the state agrees to pay
for home and community-based care every year thereafter at the regular
Medicaid matching rate.

The New Freedom Initiative Demonstration projects also include three
separate “Home & Community-Based Care Demonstration Projects” that would
encourage home and community-based services for children and adults with
disabilities. The “Respite for Caregivers of Disabled Adults” demonstration
would test whether respite care, or temporary care, reduces primary
caregiver ‘burn-out.’ This program would cost approximately $134 million
over five years. The “Respite Care for Caregivers of Children with a
Substantial Disability” demonstration would allow states to provide respite
care to caregivers of children with substantial disabilities in an effort to
examine costs and utilization. This program would cost $23 million over five
years. Finally, the “Community Alternative to Children’s Residential
Treatment Facilities” demonstration would allow a limited number of states
to establish HCBS for children in residential psychiatric treatment
facilities. There is no cost estimate for this program.

The President’s Budget also includes new market-based health insurance
coverage initiatives that would cost about $126 billion in funding over 10
years. These initiatives include $74 billion for health insurance tax
credits, $4 billion for grants to states to establish insurance purchasing
pools (Association Health Plans), $28.5 billion for tax incentives for
Health Savings Accounts (HSAs), and $19.2 billion for rebates to small
employers contributing to HSAs.

The President’s budget also incorporates language that encourages
flexibility for Governors in implementing their Medicaid programs in a
“budget neutral” manner. Many interest groups interpret this language to
mean that the President is supporting a cap on federal Medicaid spending as
the terms “flexibility” and “budget neutral” have historically been tied to
such proposals.

Other HHS Programs Impacting People with Disabilities

The Centers for Disease Control and Prevention (CDC) would receive $4.04
billion in FY 2006, down from the $4.5 billion appropriated in FY 2005.
Many CDC programs critical for people with disabilities, including the
Chronic Disease Prevention Program, Birth Defects/Developmental
Disabilities/Disability and Health, and the CDC Injury Control program, were
cut completely from the budget. Though this is clearly not a good precedent
for these programs in the upcoming appropriations cycle, we do expect
Congress to restore some or all of the funding for these programs in FY
The Agency for Healthcare Research and Quality (AHRQ) is slated to receive
level funding of $318.7 million in the FY 2006 budget. This amount is
almost $15.0 million above the Administration’s FY 2005 request and the
comparable funding level for FY 2004. Although the AHRQ funding level
increased in FY 2005, funding for project earmarked for the Medicare reform
bill has lowered the budgets for other AHRQ programs in general. The agency
was established in 1990 to promote improvements in clinical practice and
patient care outcomes, promote improvements in the financing, organization,
and delivery of health care services, and increase access to quality care.
AHRQ is also the federal agency charged to produce and disseminate
scientific and policy-relevant information about the cost, quality, access,
and medical effectiveness of health care.

Department of Education

Vocational Rehabilitation State Grants would receive a 3.1 percent increase
for a total of $2.7 billion in funding under the President’s Budget. These
grants fund vocational rehabilitation in each state. But included in the
fine print of the budget document is a proposal to restructure the VR
program, along with eight other Labor-related programs. The proposal seeks
to grant Governors the flexibility to pool funds under a number of
employment-related state grant programs, including vocational
rehabilitation. This is a major development that will receive great
scrutiny over the coming months.

Assistive Technology state grants were funded at $15 million under the
President’s Budget Proposal. This is 50 percent less than Congress
appropriated for this program in FY 2005. Under this program, grants are
made to States to establish or expand alternative financing programs to
increase access to assistive technology for people with disabilities. The
Assistive Technology Act was reauthorized by the 108th Congress and excluded
the sunset provision in the original bill, granting this law a permanent

The National Institute on Disability and Rehabilitation Research (NIDRR) was
level funded under the President’s FY 2006 budget at $108 million. NIDRR is
charged with supporting a coordinated program of rehabilitation research and
related activities.

The President’s budget zero-funded the Projects with Industry program,
although the Bush budget has proposed similar treatment to this program in
prior years and Congress has level-funded the PWI program in each of the
last two years.

Separate funding for Supported Employment State Grants was eliminated under
the FY 2006 President’s Budget Proposal. The President proposed to
eliminate funding in his FY 2005 Budget Proposal as well; however, Congress
funded this program at $37 million in FY 2005. Similar to “Projects with
Industry,” VR funds have been used to continue to fund these programs. The
Supported Employment program assists persons who may be considered too
severely disabled to benefit from vocational rehabilitation services by
providing the ongoing support need to eventually obtain competitive
employment. Short-term vocational rehabilitation services are augmented
with extended services provided by State and local organizations. Federal
funds are distributed on the basis of population.


The FY 2006 budget is one of the most austere budget proposals to come from
any Administration in many years. It is difficult to imagine a sector of
the population that is more adversely impacted by the cuts and spending
limits placed on a wide swath of programs than that of the disability
community. It will be an extremely challenging year for those who rely on
disability-related programs to simply to tread water.

  • Written by NAAOP

NAAOP Update

The 109th Congress kicked off its first session of 2005 on January 4 in what
is likely to be a contentious and partisan year. As a result of the
election, the Senate Republicans gained 4 seats to achieve a 55-44-1
majority; the House of Representatives also added 3 Republican seats and now
stands at 232-201-1, with one vacancy. Featuring prominently this year will
be a major budget fight over the fiscal future of Medicare and Medicaid.
The battle over Medicare competitive bidding will heat up in 2005 with new
meetings of the Program Advisory and Oversight Committee. Meanwhile, the
Medicare Payment Advisory Commission (MedPAC) is in the midst of announcing
Medicare payment and program recommendations, among them a long awaited
study on direct access to physical therapy services. O&P professionals
should prepare for a busy year in Congress.

Competitive Bidding DME and “Off the Shelf” Orthotics

The Program Advisory and Oversight Committee (PAOC) for competitive bidding
of Durable Medical Equipment, some orthotics, and supplies held a meeting on
December 7-8, 2004, and will meet again on February 28-March 2, 2005. There
appears to be consideration of inclusion of some spinal and lower limb
orthoses, in competitive bidding. However, no specific codes were outlined
nor was there consideration of how broad the scope of “off-the-shelf
orthotics” should be set. Clearly there are many unanswered questions that
remain to be answered with respect to how professional orthotic care will be
impacted by the implementation process. Among topics for discussion at the
next meeting are the methodology for setting payments, the bid solicitation
process, small supplier issues and data collection, accreditation
organizations, supplier standards, criteria for evaluating suppliers, and
financial standards.

Budget Showdown on Medicare and Medicaid Cuts

Amidst growing concerns among many in Congress over a rising deficit and a
looming fiscal crisis, a major battle over Medicare and Medicaid funding is
likely to ensue. Though at the time of this writing President Bush has not
yet released his Fiscal Year 2006 budget proposal to Congress, it is widely
anticipated that a Medicaid reform package and recommendations for cuts to
Medicare will be included. Republican leaders on Capitol Hill appear to be
achieving consensus to cut roughly $20 billion for Medicaid and $80 billion
for Medicare over the next 10 years.

MedPAC Study on Physical Therapist “Direct Access” Casts Doubt on Viability
of Proposal

The Medicare Payment Advisory Commission (MedPAC) released a highly
anticipated report on December 31, 2004, that casts into doubt the
possibility that Congress could authorize Medicare beneficiaries’ access to
physical therapists without first having to obtain a prescription from a
physician. This report, ultimately, is good news for the O&P field.
Because the physical therapists have made progress in the states in
expanding their scope of practice to include O&P services, the elimination
of the physician referral requirement at the federal level may have had the
effect of permitting PTs to self-prescribe and then provide O&P care. This
could have conceivably cut out O&P providers from treating large numbers of
Medicare and other patients. The MedPAC report was a significant blow to
the PTs’ strategy and, in this respect, represents a significant victory for
the O&P field.

Written by Peter W. Thomas, Esq., NAAOP General Counsel and Dustin W.C. May,
Legislative Director, Powers, Pyles, Sutter & Verville, P.C., January 24, 2005

  • Written by NAAOP

NAAOP Government Relations Update – Lame Duck Congress

Congress returns November 16, 2004 to finish up the term’s business, including nine spending bills that fund the federal agencies and programs and reform of the nation’s intelligence system. There are many more pending bills, such as reauthorization of the Individuals with Disabilities Education Act (IDEA), which will likely remain unfinished heading into the 109th Congress.

Meanwhile, the Centers for Medicare and Medicaid Services (CMS) continue to prepare for implementation of the new Medicare law. Of particular interest to NAAOP members is the agency’s development of the competitive bidding program for durable medical equipment, orthotics, prosthetics and supplies (DMEPOS).

Competitive Bidding-The Program Advisory and Oversight Committee (PAOC) for competitive bidding of Durable Medical Equipment had its first meeting on October 6, 2004. The committee has been charged with advising CMS on the development of the competitive bidding program, as mandated by the Medicare Modernization Act of 2003. NAAOP attended the day-long meeting that primarily focused on implementation procedures. Little was mentioned in terms of orthotics and prosthetics specifically. NAAOP will continue to work with other organizations to education Congress, CMS, and the PAOC on the definition of “off-the-shelf orthotics” and the effect competitive bidding will have on the orthotists and orthotic consumers.

Appropriations-The focus of the upcoming “lame-duck” Congressional session following the election will be passage of the final nine spending bills, leaving important pieces of health-related legislation for the 109th Congress. The remaining appropriations bills are anticipated to be consolidated into an “omnibus” bill that will incorporate a final compromise between House and Senate leaders. The bill will fund the federal government through the remainder of the 2005 fiscal year. Among those bills to be reconciled is the Labor, Health and Human Services, and Education Appropriations bill, which funds many rehabilitation and health programs key to NAAOP’s priorities. Overall, most rehabilitation programs received level funding this year, as they have in the past, mostly because of across-the-board spending freezes attributed to growing spending on the war in Iraq. There is at least some chance that Congress will be unable to reach an agreement on new spending levels and simply extend FY 2004 spending levels to FY 2005 through a “Continuing Resolution.”

IDEA Reauthorization-Congress has appointed Senate and House Conferees to reconcile the two versions of the reauthorization of the Individuals with Disabilities Education Act (IDEA). IDEA guarantees all children with disabilities access to a free and appropriate public education. Though the bill is not expected to be enacted this Congress, House and Senate negotiators are expected to work through the election and lame duck session to finalize a compromise bill that can be quickly reintroduced next year and enacted. The current authorization expires on June 30, 2005.

“Tech” Act-Despite relatively few bills being enacted this late in an election year, Congress did manage to make progress on the reauthorization of the Assistive Technology Act. A final bill passed both the House and Senate early in October, and now awaits the President’s signature. The Assistive Technology Act funds state-administered programs that provide funding and other assistance to people with disabilities in need of assistive technologies, devices, and related services.

  • Written by NAAOP

“Qualified Provider” DMERC Transmittal

The Centers for Medicare and Medicaid Services (“CMS”) recently announced new rules concerning “Payment to Providers/Suppliers Qualified to Bill Medicare for Prosthetics and Certain Custom-Fabricated Orthotics”. This transmittal, known as “Transmittal 329,” which will be effective on July 1, 2005, instructs Durable Medical Equipment Regional Carriers (“DMERCs”) to deny claims for prosthetics and certain custom-fabricated orthotics unless provided by a “qualified practitioner.” The transmittal also defines which individual codes they have included in the category of “Prosthetics and Certain Custom-Fabricated Orthotics”. Though it does not define specifically what constitutes a qualified practitioner, it does require that O&P practitioners be “certified,” whether billing independently or through a “medical supply company with a certified orthotist/prosthetist.”


Transmittal 329 is the latest effort by CMS to implement Section 423 of the Benefits Improvement and Protection Act of 2000 (“BIPA”). BIPA Section 423 requires CMS to define the term “qualified provider” in the context of orthotic and prosthetic services reimbursable by Medicare. As a result, CMS engaged members from the O&P community along with physical and occupational therapists to enter into a “Negotiated Rulemaking” process that would settle the issue of qualified provider as required under BIPA in addition to a large number of other issues that arose from the BIPA statute. The Negotiated Rulemaking process, however, failed to settle on a definition and parties did not reach consensus on significant issues. The Medicare Modernization Act of 2003 (“MMA”), Section 302(a), also requires CMS to define qualified practitioner, though not in as unequivocal a manner as BIPA.

Transmittal 329 specifies that unless a supplier has self-identified under one of the following categories during supplier enrollment and/or reenrollment, claims for certain O&P services will be denied:

  • Medical Supply Company with Certified Orthotist – Specialty code 51
  • Medical Supply Company with Certified Prosthetist – Specialty code 52
  • Medical Supply Company with Certified Orthotic and Prosthetist – Specialty code 53
  • Certified Orthotist – Specialty code 55
  • Certified Prosthetist – Specialty code 56
  • Certified Orthotist and Prosthetist – Specialty code 57

Aside from these categories and accompanying specialty codes, the transmittal does not define “qualified practitioner” in any explicit manner or by referencing BOC or ABC certification. Practitioners wishing to bill for prosthetics and/or custom-fabricated orthotics must re-enroll as Medicare suppliers before July 1, 2005, if their existing NSC applications did not designate their O&P certification.


Currently, DMERCs process and pay claims for prosthetics and custom orthotics without regard to the specialty that a supplier self-reports on the supplier number application form. On July 1, 2005, such O&P claims submitted by practitioners not specifying one of the above-mentioned specialties will be denied. In this respect, the key disagreement that arose in the Negotiated Rulemaking Committee between the O&P field and the therapy organizations has been largely resolved in the O&P field’s favor. CMS has essentially recognized the validity of the O&P community’s argument that ABC or BOC certification should be required in order to bill Medicare for O&P services, other than the portion of orthotics that is considered “off-the-shelf”. In addition, although additional analysis is required, the list of O&P codes that will require certification appears to be relatively expansive, which again cuts in favor of the O&P field.

The link to the announcement with the list of covered codes is:

November 18, 2004

  • Written by NAAOP

Comments to Proposed LCD for Knee Orthoses

Prefabricated Knee Orthoses:

Codes L1800 – L1832, L1836, L1843, L1845, L1847, and L1850 describe prefabricated orthoses (see definition of prefabricated in Policy Article).

Codes L1831, L1836 and L1847 are covered for patients with flexion contractures of the knee (ICD-9 diagnosis code 718.46) with extension on passive range of motion testing of at least 10 degrees (i.e., a nonfixed contracture).

If a L1831, L1836 or L1847 is provided but the criterion above is not met, the orthosis will be denied as not medically necessary.

Response: We do not believe that it is appropriate to assign specific diagnoses to particular L-codes. Rather, we believe that it is appropriate for the physician to determine whether a particular orthosis is medically necessary. We recognize that the purpose of local coverage determinations is to provide guidance in determining when Medicare benefits are medically necessary. However, limiting orthoses to particular diagnosis codes unduly limits the professional discretion of physicians to decide when a particular orthosis is medically necessary. Furthermore, it fails to recognize that prescribing and furnishing orthoses often involves highly individualized determinations that cannot be reasonably encompassed in a local coverage determination.

Additionally, we believe that the above policy is not supported by current clinical standards. For example, the orthoses described by the above codes are routinely used to treat conditions that do not satisfy the above criteria, such as post-operative positioning, and post-injury support. Furthermore, the orthoses described by these codes do not include the features that are required to effectively treat contractures, e.g., dynamic extension/flexion assist.

Finally, this proposed coverage policy ignores the existence of extension contractures (i.e., a contracture of a joint that limits functional range-of-motion towards flexion), which are seen after some traumatic injuries and surgical interventions. A common clinical example of this is in Total Knee Arthroplasty, where both flexion and extension contractures can be present, along with quadriceps weakness.

There is no proven clinical benefit to the inflatable air bladder incorporated into the design of code L1847; therefore, payment will be based on the allowance for the least costly medically appropriate alternative, code L1831.

Response: First, we disagree with the statement that inflatable air bladders do not provide a clinical benefit. Air bladders are commonly used to restrict displacement of the patella and also to increase the medial and lateral stability of the knee during activities of daily living. Further illustration of these benefits can be viewed

Additionally, L1831 is not a “medically appropriate alternative” to L1847. L1847 incorporates free motion knee joints, while L1831 incorporates locking knee joints. The devices described by these codes are not comparable.

Code L1843 is covered for ambulatory patients who require valgus or varus bracing to alleviate pressure on the medial or lateral compartment of the knee. Code L1843 is covered for the following indications only:

  1. Moderate to severe unicompartmental osteoarthritis (ICD-9 diagnosis codes 715.09, 715.16, 715.26, 715.36, 715.89, 715.96)
  2. Meniscal cartilage derangement (717.0 – 717.5)
  3. Knee ligamentous disruption (717.81 – 717.9)
  4. Failed total knee arthroplasty (996.4, 996.66, 996.77, V43.65)
  5. Aseptic necrosis of tibia/fibula (733.49)
  6. Tibial plateau fracture (733.16, 733.93, 823.00, 823.02, 823.10, 823.12).

Response: Limiting the use of L1843 to the above criteria will preclude patient access to medically necessary care. There are a number of other diagnoses, including certain congenital and acquired musculoskeletal deformities and anomalies, for which it is clinically appropriate to use a knee orthosis with varus/valgus control.

Codes L1830, L1832, L1845, and L1850 are covered if either of the following criteria are met:

  1. The patient has had recent surgical intervention on the ligaments of the knee requiring range of motion limitations; or,
  2. The patient is ambulatory and has knee instability due to ligament insufficiency/deficiency or reconstruction.

If code L1830, L1832, L1843, L1845, or L1850 is provided but the patient does not meet the criteria for coverage, the orthosis will be denied as not medically necessary.

Response: While the above diagnoses are certainly reasonable circumstances that require fitting of orthoses described by L1830, L1832, L1845 and L1850, such orthoses may also be reasonable for other diagnoses, such as fractures, status post knee replacement with associated loosening of prosthesis or pain, cartilage or meniscal damage, skin grafting, soft tissue or connective tissue shortening, vascular repair, knee hyperextension, other general surgery or trauma. Accordingly, the above policy will improperly restrict the furnishing of medically necessary care.

Also, we believe that the above limitation is inconsistent with other guidance. Specifically, the Knee Orthosis – DRAFT Policy Article states that “L1850 describes a prefabricated orthosis…used to prevent hyperextension of the knee joint in ambulatory patients.” This statement demonstrates that the use of L1850 is significantly broader than only cases requiring range of motion limitations after surgery and instability due to ligament insufficiency/deficiency or reconstruction.

The following listing indicates the correct coding of base prefabricated orthosis codes and orthosis addition codes. Certain L-coded additions are considered included in the allowance for the base code (see below and accompanying Knee Orthoses Policy Article). All other L-coded additions not listed below as included with a specific base orthotic code are denied as not medically necessary.

Base Code Add-On Code(s) Included
L1800 None
L1810 L2385, L2390, L2425, L2435, L2750, L2755
L1815 L2795, L2800, L2810
L1820 L2385, L2390, L2425, L2435, L2750, L2755, L2795, L2800, L2810
L1825 L2795, L2800, L2810
L1830 None
L1831 L2385, L2390, L2425, L2435, L2750, L2755, L2795, L2800, L2810, L2820, L2830, Kxxx1
L1832 L2385, L2390, L2425, L2435, L2750, L2755, L2795, L2800, L2810, L2820, L2830, Kxxx1
L1836 L2820, L2830, Kxxx1
L1843 L2275, L2385, L2390, L2425, L2435, L2750, L2755, L2795, L2800, L2810, L2820, L2830, Kxxx1
L1845 L2275, L2385, L2390, L2425, L2435, L2750, L2755, L2795, L2800, L2810, L2820, L2830, Kxxx1
L1847 L2385, L2390, L2425, L2435, L2750, L2755, L2795, L2800, L2810, L2820, L2830, Kxxx1
L1850 L2275, L2385, L2390, L2425, L2435, L2750, L2755, L2795, L2800, L2810, L2820, L2830, Kxxx1

Response: We believe that this limitation is contrary to the basic structure of the add-on system of L-coding. This is essentially a redefinition of the base codes to include a host of features that may or may not be present in an orthosis that fits the actual legal description. Additionally, no mention is made regarding adjustment to the fee schedule to allow for the new “standard features.” Even if the fee schedule were adjusted upwards to assure beneficiary access to these orthoses, CMS would then overpay when those features were not part of the physicians order. This demonstrates the illogic and impracticability of this significant departure from historical administration of the L code system.

It is understandable that current technological advancements may give some the impression that all knee orthoses, under a given code, include certain “standard features” that are extraneously defined by add-on codes. However, this is not accurate and distorts the true acquisition cost of the orthosis. For example RCAI makes a postoperative knee (Model 77POP) that should be coded with L1832 according to the SADMERC’s July 2004 orthotics and prosthetics product classification list. Yet eight of the eleven L codes (L2435, L2750, L2755, L2795, L2800, L2810, L2820, & L2830) considered to be “included” under this policy are not found on this particular brace.

When a practitioner determines the brand or type of brace for a patient, “standard features” for any given brace are considered. The practitioner selects, modifies or designs an orthosis in light of its features to suit a particular patient’s needs. Simply because a given manufacturer determines to set one price for a brace with certain features and include those features as standard is no reason to assume that all orthoses described by the base codes have the same number of features.

In addition, some of the “included” addition codes are defined in such a way as to be disqualified from use on pre-fabricated braces. This would, for instance, include L2820, which is described as: “addition to lower extremity orthosis, soft interface for molded plastic, below knee section” (emphasis added). Similarly, L2830: “addition to lower extremity orthosis, soft interface for molded plastic, above knee section” (emphasis added). These codes were never intended to be included in the description of the base code and, by CMS’s own language, they are precluded from use in the very braces which they would now be considered as “standard equipment.”

The knee joint types that this provision limits are those that are generally used in custom fabricated orthoses. These additions are not included in the base codes. They are “usually inappropriate” to add to a prefabricated knee orthosis, but they are not included.

An addition code describes a feature that is needed for a given patient’s particular needs as noted on a detailed physicians order. It has relevance, therefore, on a per patient basis. Each addition code should be reviewed individually and added by the prescribing physician who has evaluated the patient based on its merits in meeting a particular patient’s case needs.

For instance, L2999 should never be assumed as included in the base code since it is by nature not defined by an existing code. It is thus precluded from being part of the base code. In regard to miscellaneous codes, we would like to note CMS’s published policy:

National codes also include “miscellaneous/not otherwise classified” codes. These codes are used when a supplier is submitting a bill for an item or service and there is no existing national code that adequately describes the item or service being billed. The importance of miscellaneous codes is that they allow suppliers to begin billing immediately for a service or item as soon as it is allowed to be marketed by the Food and Drug Administration (FDA) even though there is no distinct code that describes the service or item. A miscellaneous code can be used during the period of time a request for a new code is being considered under the HCPCS review process. The use of miscellaneous codes also helps us to avoid the inefficiency of assigning distinct codes for items or services that are rarely furnished or for which we expect to receive few claims.

Because of miscellaneous codes, the absence of a specific code for a distinct category of products does not affect a supplier’s ability to submit claims to private or public insurers. Claims with miscellaneous codes are manually reviewed, the item or service being billed must be clearly described, and pricing information must be provided along with documentation to explain why the item or service is needed by the beneficiary.

In conclusion, we believe that furnishing orthoses often involves unique, individualized circumstances. We do not believe that Medicare can be reasonably certain that the above table anticipates the unique clinical circumstances surrounding every patient who will require an orthosis and features described by add-on codes.

Custom Fabricated Knee Orthoses:

Codes L1834, L1840, L1844, L1846 and L1855 – L1880 describe custom fabricated orthoses (also see Custom fabricated definition in Policy Article).
A custom fabricated orthosis is covered when there is a documented physical characteristic which requires the use of a custom fabricated orthosis in lieu of a prefabricated orthosis. Examples of situations which meet the criterion for a custom fabricated orthosis include, but are not limited to:

  1. Deformity of the leg or knee that precludes fitting with a prefabricated orthosis.
  2. Disproportionate size of thigh and calf.
  3. Minimal muscle mass upon which to suspend an orthosis.

Response: In addition to the above situations, we believe that custom fabrication should be allowed whenever it is expected that the orthosis will be needed for longer than six months. This should be explicitly recognized in Medicare policy. Prefabricated knee joints are usually made from relatively inexpensive materials that cannot reasonably be expected to withstand daily use for more than six months. Such a change is especially necessary in light of Medicare’s policy to deny replacement of an orthosis within its useful lifetime if it is worn out. Accordingly the above policy will give many beneficiaries no other option but to wear worn out orthoses.

Although these are examples of potential situations where a custom fabricated orthosis may be appropriate, suppliers must consider prefabricated alternatives such as pediatric knee orthoses in patients with small limbs, straps with additional length for large limbs, etc.

Response: We do not believe that it is appropriate for Medicare policy to require suppliers to consider alternatives to prescribed medical treatment. Such decisions rest with the physician, and Medicare should not place them with suppliers, nor hold suppliers accountable for such decisions.
Furthermore, manufactures routinely publish the size ranges of their products, e.g., DonJoy “Fource Point” extra small is sized to fit a thigh circumference, six inches above mid-patella, of 33-39 cm. Fitting of prefabricated knee orthoses require contouring of the knee joints to accommodate the shapes of the medial and lateral aspects of the knee, and manufactures generally will not accept returned items that have been altered. Finally, the proposed policy does not recognize the increased time or overhead required to “consider” alternative treatment.

If the medical necessity for a custom fabricated orthosis is not met, but the criteria for a prefabricated orthosis is met, payment will be based on the allowance for the least costly medically appropriate alternative, a prefabricated orthosis.

Written orders for custom fabricated orthoses must specifically state “Custom Fabricated” or specify a brand name and model that is only available as a custom fabricated product. If a claim for a custom fabricated orthoses is not supported by a written order specifying custom fabricated, payment will be based on the allowance for the least costly medically appropriate alternative, a prefabricated orthosis.

For code L1844 only, in addition to meeting the general criterion for a custom fabricated orthosis stated above, the patient must also meet the coverage criteria outlined for the prefabricated unloader brace L1843. If the patient does not meet the criteria above for a custom fabricated knee orthosis, payment will be based on the allowance for the least costly medically appropriate alternative, a prefabricated orthosis (code L1843).

For code L1846 only, in addition to meeting the general criterion for a custom fabricated orthosis stated above, the patient must also meet the coverage criteria outlined for the prefabricated brace L1845. If the patient does not meet the criteria above for a custom fabricated knee orthosis, payment will be based on the allowance for the least costly medically appropriate alternative, a prefabricated orthosis (code L1845).

Custom fabricated orthoses described by codes L1834, L1840, L1844, L1846 and L1855 – L1880 are not medically necessary in the treatment of knee contractures. If a custom fabricated knee orthosis is used in the treatment of a contracture, payment will be based on the allowance for the least costly medically appropriate alternative, a prefabricated orthosis (code L1831).

Response: Knee contractures should be subject to the same coverage criteria as all other conditions that require orthoses. If a patient meets all coverage criteria for knee contracture management, and also has conditions that make it medically necessary to use a custom brace, as stated elsewhere in this policy (e.g., “deformity of the leg or knee that precludes fitting with a prefabricated orthosis” or “disproportionate size of thigh or calf”), then a custom device for knee contractures should also be covered. Furthermore, many patients receive bracing for stability during sitting, standing and ambulation also have concomitant “contractures” that must be accommodated and treated to maintain their health status. This policy can be construed to preclude fitting such patients with a medically necessary custom orthosis. For example, this policy will have an adverse impact on stroke patients and geriatric patients that lose ambulatory status, since they have much greater rates of morbidity and mortality from, among other things, developing fixed contractures.
Codes such as L1846, L1855, L1870, L1880 are routinely used to custom fabricate a knee orthosis to treat knee contractures. The custom fabrication of an orthosis to manage a patient’s contracted joints should be the option of the healthcare team. The proposed ban on a valid treatment option will limit patient access to medically necessary care. The “least costly” orthosis should not replace the clinically appropriate one.

Custom fabricated L-coded orthoses are covered only if they are made by, or under the direct (i.e., on-site) supervision of an ABC (American Board for Certification in Prosthetics and Orthotics) certified orthotist, a BOC (Board for Orthotist Certification) certified orthotist, a registered occupational therapist or a licensed physical therapist. Claims for custom fabricated orthoses not made by, or under the direct supervision of, a qualified provider listed in this paragraph will be denied as not medically necessary.

Response: The proposed policy states that a device would be covered only if made (fabricated) by an ABC or BOC orthotist, or an OT or PT. Most OT’s and PT’s have no fabrication facilities, and certain ABC and BOC orthotists use central fabrication facilities for the actual making or fabrication of the devices. The two occurrences of “made” should be changed to “fitted and/or provided.” Accordingly, the policy would then read. “Custom fabricated L-coded orthoses are covered only if they are fitted and/or provided by…” and “Claims for a custom fabricated orthosis not fitted and/or provided by…”

The following listing indicates the correct coding of base custom fabricated orthosis codes and orthosis addition codes. Certain L-coded additions are considered included in the allowance for the base code (see accompanying Knee Orthoses Policy Article). All other L-coded additions not listed below as allowed for a specific base custom fabricated orthotic are denied as not medically necessary.

Base Code Add-On Code(s) Allowed
L1834 Kxxx1, L2275, L2300, L2310, L2755, L2760, L2768, L2795, L2800, L2810, L2820, L2830, L2999
L1840 Kxxx1, L2385, L2435, L2760, L2770, L2785, L2810, L2820, L2830, L2999
L1844 Kxxx1, L2385, L2390, L2395, L2405, L2415, L2425, L2430, L2435, L2492, L2755, L2768, L2785, L2795, L2810, L2820, L2830, L2999
L1846 Kxxx1, L2300, L2385, L2390, L2395, L2405, L2415, L2435, L2492, L2795, L2768, L2785, L2810, L2820, L2830, L2999
L1855 Kxxx1, L2275, L2300, L2385, L2390, L2395, L2397, L2405, L2415, L2425, L2430, L2435, L2492, L2755, L2760, L2768, L2795, L2820, L2785, L2800, L2810, L2820, L2830, L2999
L1858 Kxxx1, L2275, L2397, L2405, L2415, L2425, L2492, L2755, L2785, L2795, L2810, L2820, L2830, L2999
L1860 Kxxx1, L2820, L2830
L1870 Kxxx1, L2300, L2310, L2385, L2390, L2395, L2397, L2405, L2415, L2425, L2430, L2435, L2492, L2760, L2768, L2785, L2795, L2800, L2810, L2820, L2830, L2999
L1880 Kxxx1, L2300, L2310, L2385, L2390, L2395, L2397, L2405, L2415, L2425, L2430, L2435, L2492, L2755, L2760, L2768, L2785, L2795, L2800, L2810, L2820, L2830, L2999

Response: As discussed above with respect to the table for prefabricated orthoses, we believe that the restrictions set forth in the above table are contrary to the very nature of the L code add-on system and represent a significant departure from the historical administration of the L code system. While we appreciate this attempt to provide coding guidance to providers and suppliers, the practical result will be to restrict a health care practitioner’s ability to practice sound medical care.


L-coded additions to knee orthoses (L2275 – L2830, Kxxx1) will be denied as not medically necessary if either the base orthosis is not medically necessary or the specific addition is not medically necessary.

Claims for add-on code L2755 (Addition to lower extremity orthosis, high strength, lightweight material, all hybrid lamination/prepreg composite, per segment) are covered for patients in whom either criterion 1 or 2 are met:

  1. Work environment requires a brace designed for high impact/high stress activities; or,
  2. Patient weight is greater than 250 lbs. If criterion 1 or 2 is not met, claims for code L2755 will be denied as not medically necessary.

If criterion 1 or 2 is not met, claims for code L2755 will be denied as not medically necessary.

Response: Most manufactures design components and bars (stainless steel, aircraft aluminum and composites) to ISO standards. These standards require particular materials to be used in order to provide patient safety. Most orthoses are designed for patients up to 100 kilograms or 220 pounds in order to meet the strength required by ISO manufacturing design specifications and the patient’s height, weight and activity level. Therefore, prescribing physicians, in consultation with their orthotists, select joints and materials to assure safe functional use of the complete knee orthoses by the patient. This selection must pay particular attention to the activity level and height of the patient, as longer length bars and thigh and cuff sections create longer levers with higher stress on plastic thigh and calf sections, bars and component locks. A restriction of 250 pounds is excessive for most component locks, bar stocks, and plastics that are used in typical thigh and calf sections and is arbitrary and unsafe to Medicare beneficiaries. Furthermore, it is the supplier who will be held liable for patient injuries that result from this unsafe medical policy.

Additionally, L2755 is appropriate in situations requiring rigid rotational control. Accordingly, the above-mentioned policy should be amended to reflect the Medicare beneficiary’s need for support during their activities of daily living, not just during work or if they are overweight. Finally, the code’s definition includes the term “lightweight,” which often is inappropriate for high impact/high stress environments or for individuals over 250 pounds.

Coverage of a removable interface (Kxxx1) is limited to a maximum of two (2) per year beginning one (1) year after the date of service for initial issuance of the orthosis. Additional interfaces will be denied as not medically necessary.

ICD-9 Codes that Support Medical Necessity

The presence of an ICD-9 code listed in this section is not sufficient by itself to assure coverage. Refer to the section on “Indications and Limitations of Coverage and/or Medical Necessity” for other coverage criteria and payment information.

For HCPCS codes L1831, L1836 and L1847:
For HCPCS codes L1843 and L1844:
717.0 – 717.5
717.81 – 717.9

Response: It is inappropriate to delineate the diagnoses that qualify a Medicare beneficiary to certain medical care. The listing appears incomplete because it does not recognize other acquired or congenital deformities or anomalies of the lower extremities. This narrow definition of medical necessity removes a health care practitioner’s ability to select appropriate care in certain instances.

Section 1833(e) of the Social Security Act precludes payment to any provider of services unless “there has been furnished such information as may be necessary in order to determine the amounts due such provider” (42 U.S.C. section 1395l(e)). It is expected that the patient’s medical records will reflect the need for the care provided. The patient’s medical records include the physician’s office records, hospital records, nursing home records, home health agency records, records from other healthcare professionals and test reports. This documentation must be available to the DMERC upon request.

An order for all items must be signed and dated by the treating physician, kept on file by the supplier, and made available to the DMERC upon request. Items billed to the DMERC before a signed and dated order has been received by the supplier must be submitted with an EY modifier added to each affected HCPCS code.
Orders must be sufficiently detailed including all options or additional features that will be separately billed. If the item is a custom fabricated orthosis, this must be specifically stated on the order.
The ICD-9 code that justifies the need for the item must be included on the claim.

Suppliers must add a KX modifier to knee orthoses codes only if all of the coverage criteria in the “Indications and Limitations of Coverage and or Medical Necessity” section of this policy have been met and evidence of such is retained in the supplier’s files and available to the DMERC upon request. If the requirements for the KX modifier are not met, the supplier may submit additional documentation with the claim to justify coverage, but the KX modifier must not be used.

Response: The requirements surrounding the KX modifier to retain such medical necessity evidence in the supplier’s record is heavy handed and unnecessary. Requiring the supplier to contact and request the appropriate records from the physician, hospital, therapist, nursing home, home health agency, or any other health care provider/supplier (and to obtain test results) simply to have them in the supplier’s record is excessive and unnecessary requirements. It should be recognized that the Medicare beneficiary’s medical record also includes the information obtained in the records of the supplier, maintained in the normal course of business.

For custom fabricated orthoses (L1834, L1840, L1844, L1846, L1855-L1880), there must be detailed documentation in the orthotist’s records to support the medical necessity of custom fabricated rather than a prefabricated orthosis. This information does not have to be routinely sent in with the claim, but must be available to the DMERC upon request.
When billing L2999, the following information should accompany the claim: manufacturer’s name; product name; justification of patient’s medical necessity for the item. In addition, if the item is custom fabricated, a complete and clear description of the item, including what makes this item unique, and a breakdown of charges (material and labor used in fabrication) must be included with the claim.

An order is not necessary for the repair of an orthosis; however, claims for code L4210 must be accompanied by a description of the part that is being repaired or replaced. This information should be entered into the narrative field on an electronic claim or attached to a paper claim.
Refer to the Supplier Manual for more information on documentation requirements

  • Written by NAAOP