NAAOP September Government Relations Update

National Regulation/Quality and Qualifications

NAAOP, both individually and in partnership with other O&P organizations, has consistently sought to separate legislative and regulatory treatment of professional O&P care from the provision of durable medical equipment. These efforts have been largely successful through the years, witnessed by more favorable treatment for O&P in the area of Medicare fee schedule freezes and competitive bidding. These victories have been accomplished through years of persistence. In fact, there are now laws on the books that were written to protect Medicare beneficiaries from receiving substandard care from individuals who are not qualified to provide professional O&P care to Medicare beneficiaries. This battle was won because NAAOP and its allies in the O&P field finally convinced legislators that the provision of O&P care is complex, clinical, and critical for Medicare patients with orthopedic conditions and disabilities.

CMS regulators are now interpreting these laws as they relate to the establishment of quality standards and accreditation requirements. This matter deserves your attention because you and your patients will suffer if non-qualified suppliers are permitted to provide care to patients, and bill the Medicare program for it. It is again necessary to use the arguments that convinced legislators to press the case with regulators interpreting the statutes. To do this, the O&P profession must put a human face on the issue of quality standards and the adverse consequences of O&P patients receiving care from individuals not qualified to provide professional care.

You may have the evidence needed to advocate for your patients and your profession. You can help! Please provide NAAOP with specific examples of the effect of non-qualified individuals providing O&P care. When providing these examples, please provide as much evidence as possible, giving facts, including timeframes, disclosing only what you know, and do not include information that would identify a particular patient. If you have questions, please call NAAOP at 800-622-6740 or e-mail us at We want to hear from you.

O&P is a relatively small profession and in order to compete in the larger healthcare arena we must continue to present a factual and compelling account of the threats facing O&P patients and professional O&P care.

Please share this information with a colleague.

Coverage and Reimbursement

DRA 9-Day Payment Hold

This message is for all providers and physicians who bill Medicare contractors for their services.

A brief hold will be placed on Medicare payments for all claims during the last 9 days of the Federal fiscal year (Sept 22 through Sept 30, 2006). These payment delays are mandated by section 5203 of the Deficit Reduction Act of 2006. No interest will be accrued and no late penalties will be paid to an entity or individual by reason of this one-time hold on payments. All claims held during this time will be paid on October 2, 2006.

Please note, however, that contractors handling large volumes of paper checks may have some difficulty putting all checks in the mail in a single day. Consequently, delivery of checks to providers may take a few extra days.

This policy only applies to claims subject to payment. It does not apply to full denials, no-pay claims and other non-claim payments such as periodic interim payments, home heath request for anticipated payments and cost report settlements.

Please note that payments will not be staggered and no advance payments will be allowed during this 9-day hold.

Please refer to:

MLN Matters article #MM5047; Change Request #5047; Transmittal# R944CP

or refer your questions to your FI/RHHI or Carrier

Thank you for your support.


Mark DeHarde
George W. Breece
Executive Director
Peter W. Thomas
General Counsel
  • Written by NAAOP

NAAOP August Government Relations Update

National Legislation and Regulation/Quality and Qualifications

CMS Issues Scaled Back Quality Standards: A Double-Edge Sword

The month of August finally brought the publication by CMS of the final quality standards and accreditation requirements on DMEPOS suppliers, enacted as part of the Medicare Modernization Act of 2003. All DMEPOS suppliers will eventually be required to become accredited and demonstrate compliance with the quality standards, but the first suppliers to be exposed to these requirements will be those suppliers who participate in competitive bidding in ten yet-to-be selected U.S. cities.

As detailed and lengthy as the proposed quality standards were (100 pages) when issued in the Fall of 2005, the final quality standards are general and far less onerous (14 pages). While this is good news for O&P providers in terms of not needing to demonstrate compliance with a raft of new Medicare requirements, it is clearly a double-edge sword. Because the O&P field long ago embraced accreditation of facilities and certification of practitioners while the DME field did not, the final quality standards may prove to actually “lower the bar” of quality O&P care over the long term.

In addition to the MMA requirements, the Beneficiary Improvement and Protection Act of 2001 (BIPA) established qualification standards for suppliers of certain orthotic and prosthetic services and devices. While the quality standards and accreditation requirements have been issued by CMS this month, the BIPA regulations have still not been released.

NAAOP strongly supports the imposition of strong accreditation requirements on DMEPOS suppliers, the establishment of effective quality standards to ensure that Medicare beneficiaries receive high quality orthotic and prosthetic care, and qualification standards on suppliers to ensure that Medicare only reimburses orthotic and prosthetic suppliers who possess the requisite education, training, and experience to provide high quality care.

NAAOP, along with the other organizations that comprise the Orthotic & Prosthetic Alliance, is concerned that if CMS only requires that an accrediting agency ensure that a DMEPOS supplier meets the very general and basic quality standards published by CMS, multiple agencies will design bare-bones accreditation programs for suppliers who wish to have access to the O&P billing codes (i.e., L-codes). This could have the effect of enabling a significant number of suppliers who have limited or no knowledge of comprehensive orthotic and prosthetic care to be able to bill Medicare for these services and devices. This, in turn, could lessen the quality of orthotic and prosthetic care and permit far greater numbers than currently exist to provide such services with only minimal education, training, and experience in the specialized field of orthotics and prosthetics.

This, of course, is exactly the opposite result of what was intended by Congress when it passed the MMA and BIPA laws. While it is too early to tell whether this will be the inevitable result, it is possible that the quality standards as written will actually increase utilization of the Medicare L-codes by suppliers who have little of no education and training in comprehensive O&P patient care.

It is for this reason that NAAOP is actively engaged on this issue, along with its O&P Alliance partners, to ensure that Congress’ intent in passing these two laws is implemented correctly by CMS.

NAAOP will continue to keep you informed of developments through our monthly updates and whenever developments dictate that we communicate with our members and the broader O&P field.

Thank you for your Support of our Mission

As a NAAOP member, you are working hard to improve the lives of patients who use orthotic and prosthetic services. In thanks, we would like to reaffirm our commitment to always putting the patient first. We are able to put the patient first only because you support this mission. NAAOP’s mission has always been member driven and people have always come before profits. NAAOP’s voice is respected, trusted, and effective because of this fact. As your leadership, it is an honor and privilege to represent O&P professionals who promote this position and we want to assure you that our commitment to the patient will not waiver.

NAAOP will be exhibiting at the 2006 AOPA National Assembly in Hollywood Florida, September 26 – September 30. We would like to take this opportunity to invite you and your colleagues to visit our booth # 011, which will be located outside the main exhibit hall with the non-profit organizations. It is very important that NAAOP continues to grow and we need your help to accomplish this. The power of your endorsement was demonstrated at the Academy show this past March.

As you know, almost 100% of your membership dollars go to a patient-focused education and advocacy agenda. This is unique in our profession. Our story on video illustrates NAAOP’s unique role and defines our purpose. Ours is a history of dedicated professionals banding together to ensure that individuals who use orthotic and prosthetic services receive the professional care they deserve.

It is important to NAAOP’s future that all those involved in O&P patient care are aware of the important role they can play in this mission. Please share this message and NAAOP’s video with a colleague. Also, please come by our booth and bring a colleague. Invite them to join usin advocating for better evidence, better education of practitioners, greater and better technology for the O&P consumer, and greater access to care.

Mark DeHarde
George W. Breece
Executive Director
Peter W. Thomas
General Counsel
  • Written by NAAOP

Comments on Proposed Rule CMS-1270-P; Competitive Acquisition of Certain DMEPOS Under the Medicare Program With Accompanying Addendum

To: Mark McClellan, M.D., Ph.D.
Centers for Medicare and Medicaid Services
Department of Health and Human Services

Attention: CMS-1270-P
Mail Stop C4-26-05
7500 Security Boulevard
Baltimore, Maryland 21244-1850

Re: Comments on Proposed Rule CMS-1270-P; Competitive Acquisition of Certain DMEPOS Under the Medicare Program

Dear Dr. McClellan:

Thank you for the opportunity to comment on the proposed regulations governing the competitive acquisition of certain durable medical equipment, prosthetics, orthotics and supplies (“DMEPOS”) as well as the implementation of quality standards in this important area. We are writing on behalf of the Orthotic and Prosthetic Alliance (“the O&P Alliance”), a recently formed coalition of the four primary organizations representing the field of orthotics and prosthetics (“O&P”). The four organizations include the American Academy of Orthotists and Prosthetists (AAOP), the American Board for Certification in Orthotics and Prosthetics (ABC), the American Orthotic & Prosthetic Association (AOPA), and the National Association for the Advancement of Orthotics and Prosthetics (NAAOP). Together, the O&P Alliance represents the scientific, research, professional, business, and quality improvement aspects of the orthotic and prosthetic field.

As discussed below, the O&P Alliance believes that off-the-shelf (“OTS”) orthoses should be exempt from the competitive bidding program since the minimal program savings to be gained by competitive bidding of such services will be offset by the significant administrative burden. However, the O&P Alliance supports the proposed use of quality standards and mandatory accreditation for the provision of all DMEPOS to ensure that Medicare beneficiaries receive the highest quality care possible from the most highly qualified suppliers. It is through this mechanism that we believe CMS will achieve both higher quality and lesser expenditures for OTS orthoses. Also attached is an addendum with additional comments related to competitive bidding that are not specific to orthotics and prosthetics.

I. Quality Standards

The O&P Alliance strongly supports the establishment of quality standards and mandatory accreditation for all suppliers of orthotic and prosthetic services and devices. Medicare beneficiaries are entitled to receive quality orthotic and prosthetic care from a supplier with the O&P qualifications to provide such care, regardless of the type of supplier that furnishes the services. For this reason, no supplier should be exempt from Medicare’s quality standards and accreditation requirements. To do so would contravene the statutory language of the Medicare Modernization Act, potentially put patients at risk of poor quality care, and subject the Medicare program to the threats (e.g., fraud and abuse, overutilization, poor patient care) that the quality standards requirement was intended to address.

The O&P Alliance believes strongly that the level of complexity and sophistication of the orthotic or prosthetic service being provided to the patient should directly correlate to the quality standards and accreditation requirements. For instance, a supplier that is qualified to provide off-the-shelf orthoses may be completely unqualified to provide the full range of comprehensive orthotic care. This is largely a result of significant changes in recent years in the provision of low-level orthotics, which are now routinely provided in non-traditional supplier settings (i.e., not in orthotic patient care clinics and facilities). The accreditation requirements and quality standards that are yet to be published by CMS must recognize this distinction if the intent of the statute is to be realized.

The O&P Alliance, therefore, requests CMS to require organizations that accredit orthotic and prosthetic suppliers to adopt varying levels of credentials that comport with the complexity and clinical expertise required to provide the wide scope of orthotic and prosthetic care. We have previously submitted to CMS documents stating our collective view that there are four basic levels of orthotic care and the qualifications of suppliers that provide these services and devices must comport with the varying levels. These levels are as follows:

  1. Off-the-Shelf Orthotics: A prefabricated device sized and/or modified for interim, evaluative or short term use by the patient in accordance with a prescription and which does not require clinical judgment and alteration for appropriate use.
  2. Custom Fitted Device (Low): A prefabricated device sized and/or modified for use by the patient in accordance with a prescription and which requires substantial clinical judgment (involving medium Patient Assessment and Formulation of the Treatment Plan and Follow Up Treatment Plan skills) and substantive alteration (involving low Technical Implementation skills) for appropriate use.
  3. Custom Fitted Device (High): A prefabricated device sized and/or modified for use by the patient in accordance with a prescription and which requires substantial clinical judgment (involving high Patient Assessment and Formulation of the Treatment Plan and Follow Up Treatment Plan skills) and substantive alteration (involving medium Technical Implementation skills) for appropriate use.
  4. Custom Fabricated Device: A device fabricated to comprehensive measurements and/or a mold or patient model for use by a patient in accordance with a prescription and which requires clinical and technical judgment in its design, fabrication and fitting.

It is important to note that the term “prefabricated” is not synonymous with the term “off-the-shelf.” There are many orthoses that begin as prefabricated devices or prefabricated portions of devices that require high levels of clinical judgment and technical skills to properly design and fit an appropriate permanent orthosis. The levels suggested above explicitly recognize this distinction.

In the proposed rule, CMS explicitly requests public comment on the issue of identifying which HCPCS L-Codes will be considered to represent “off-the-shelf” orthotics, thereby subjecting those orthoses to competitive bidding. With virtually hundreds of L-codes in the HCPCS system, this is a task that requires an intimate understanding of the L-Code system and the practice of orthotics. Led by AOPA’s Coding Committee, the O&P Alliance has already undertaken this formidable task and submitted to CMS on two previous occasions a comprehensive list of L-Codes that are divided into the four categories listed above. We request that CMS strongly consider these recommendations as they are the product of many hours of analysis and discussion by experts in the O&P field.

The fact that CMS has not yet published the final quality standards or the accreditation requirements for DMEPOS has made commenting further on this aspect of the proposed rule very difficult. There are significant unknown factors at this point that will be critical to an efficient system of quality standards and accreditation in the DMEPOS benefit. In our view, CMS’s main challenge with the O&P benefit is to strike the proper balance between setting the bar too low (and permitting unqualified suppliers to provide comprehensive O&P services to Medicare beneficiaries) and setting the bar too high (and compromising access to orthotic and prosthetic care, particularly in difficult-to-serve areas of the country).

Because of the importance of these issues, the O&P Alliance requests that CMS publish the accreditation requirements on DMEPOS suppliers as a proposed rule, thereby permitting the public to analyze and comment before final implementation. We believe that mandatory accreditation and quality standards, if properly designed and implemented, are the preferred method of achieving both program savings and higher quality in the Medicare OTS orthotic benefit, rather than a competitive bidding model.

II. Exempt Off-the-Shelf Orthotics from Competitive Bidding Based on Low Potential for Savings (Criteria for Item Selection)

When Congress enacted the Medicare Modernization Act of 2003 (MMA), Pub. Law 108-173, lawmakers granted CMS the authority to exempt certain items from a Medicare competitive bidding program that were not likely to result in significant savings. See Section 1847(a)(3)(B) of the Social Security Act. In CMS’ discussion of this issue in the Notice of Proposed Rulemaking (NPRM), the agency proposes to “exempt items outright or on an area by area basis using area-specific utilization data.” See 71 Fed. Reg. 25,670.

We urge CMS to exempt outright all OTS orthotics from the Medicare competitive bidding program on the basis that inclusion of OTS orthotics in a competitive bidding program will not produce significant savings to the Medicare program.

Medicare’s own data from the competitive bidding demonstration project in San Antonio, Texas strongly supports this conclusion. The Research Triangle Institute’s (RTI) Final Evaluation Report “Evaluation of Medicare’s Competitive Bidding Demonstration for DMEPOS” issued in November 2003 concluded,

“We believe that the product category of general orthotics is not as well-suited for competitive bidding as oxygen equipment and supplies, hospital beds and accessories, wheelchairs and accessories and nebulizer drugs. We reach this conclusion primarily on the basis of the relatively low potential for savings in the product category. We estimated that allowed charges on the demonstration items would have totaled only about $200,000 per year in San Antonio in the absence of the demonstration. At this level, even if competitive bidding reduced prices by 20 percent, the change in allowed charges would be relatively small. General orthotics had the fewest bidders of all the product categories included in the demonstration in San Antonio with only 14 suppliers submitting bids; 8 suppliers were selected as demonstration providers.” (page 253)

The actual data from the competitive bidding demonstration related to certain orthotics provides compelling support for our position. For the 23-month period (Feb. 1, 2001 – Dec. 31, 2002) during which competitive bidding for certain orthotics was tested in San Antonio, the Medicare program saved a total of $89,462, or less than $45,000 per year (page 92 of RTI’s Final Report). Moreover, since the conclusion of the San Antonio demonstration project in 2002, all orthotic and prosthetic services, including OTS orthotics, have been subject to a Medicare payment freeze as mandated by the MMA, effectively reducing reimbursement rates for Medicare OTS orthotics by 7.9 percent as compared to inflation.

In light of this data and because CMS determined through its proposed scoring methodology that San Antonio is one of the ten largest MSAs with the highest potential for DMEPOS savings (see 71 Fed. Reg. 25,666), we believe that other MSAs would likely yield even less savings than the original San Antonio demonstration.

Additionally, Section 1847(a)(1)(B)(ii) of the Social Security Act provides CMS the authority to phase-in competitive bidding “first among the highest cost and highest volume of items or those items that the Secretary determines have the largest savings potential.” Once again, OTS orthotics do not meet the underlying conditions of the statute. OTS orthotics are not high-cost or high-volume items nor do OTS orthotics have the largest potential for savings based on the San Antonio demonstration.

Rather, we believe that CMS’ focus on the OTS benefit should be aimed at designing, implementing and enforcing effective quality standards and mandatory accreditation requirements to help:

  1. improve the quality of orthotic and prosthetic services delivered to Medicare beneficiaries;
  2. ensure that orthotic and prosthetic suppliers are qualified to provide the level of orthotic and prosthetic care required by the individual patient;
  3. validate that services provided to beneficiaries are medically necessary;
  4. ensure that orthotic and prosthetic services are not miscoded;
  5. reduce unnecessary program expenditures for orthotics and prosthetics; and
  6. reduce opportunities for fraud and abuse in the program.

Again, we believe strongly that implementation and enforcement of effective quality standards and mandatory accreditation requirements is a far better course for CMS to take than competitive bidding of OTS orthotics. Whether or not CMS decides to ultimately include OTS orthotics in competitive bidding programs, we recommend a number of changes to the proposed competitive bidding regulations as detailed below and in the attached Addendum, which lists our more general concerns with the design of the competitive bidding program proposed by CMS.

III. Definition of Minimal Self-Adjustment (Criteria for Item Selection)

We recommend amending the proposed definition of “minimal self-adjustment” that is referenced in the preamble of the proposed rule. The Medicare Modernization Act defines OTS orthotics as:

“[o]rthotics described in section 1861(s)(9) for which payment would otherwise be made under section 1834(h) which require minimal self-adjustment for appropriate use and do not require expertise in trimming, bending, molding, assembling, or customizing to fit to the individual.” MMA, Pub. L. No. 108-173, § 302(b), codified at 42 U.S.C. § 1395w-3(a)(2)(C).

The statute does not define what is meant by “minimal self-adjustment” other than this statutory language. The definitions section of the proposed regulation (Section 414.402) is consistent with the statute with regard to the definition of “off-the-shelf orthotics.”

However, the preamble to the proposed regulation states that “[w]e are proposing that minimal self-adjustment would mean adjustments that the beneficiary, caretaker for the beneficiary, orsupplier of the device can perform without the assistance of a certified orthotist (that is, an individual certified by either the American Board for Certification in Orthotics and Prosthetics, Inc. or the Board for Orthotist/Prosthetist Certification).” [Emphasis added]. Accordingly, pursuant to this definition, OTS orthotics would include orthotics that require adjustments by a supplier (albeit not a certified orthotist).

We believe that the definition of OTS orthotics that appears in the definitions section of the proposed rule should not be modified by the preamble language. The definition of OTS orthotics should not include items that require the services of a supplier. CMS’s proposed definition of “minimal self-adjustment” conflicts with the plain-meaning of the statute. The term “self” in “self-adjustment” clearly indicates that the definition of “OTS orthotics” are intended to be orthotics which can be properly adjusted by the beneficiary, without assistance from a supplier. If an orthosis requires the assistance of a supplier, then it cannot be self-adjusted.

Accordingly, we request that CMS clarify that “minimal self-adjustment” means adjustments that the beneficiary or caretaker of the beneficiary can perform – it does not mean adjustments that require the involvement of a supplier. In addition, the definition of OTS orthotics must be established in the context of all levels of orthotic care, as described above.

On a related issue, we applaud CMS for recognizing in the preamble the ABC and BOC as the primary accrediting organizations in the field of orthotics and prosthetics. The field of orthotics and prosthetics is separate and distinct from durable medical equipment and supplies. The accrediting agencies that CMS determines are appropriate for suppliers of orthotics and prosthetics should reflect this distinction. Because of this distinction and the impact that the selected accrediting agencies will have on the quality of O&P care for Medicare beneficiaries, we recommend that CMS incorporate references to ABC and BOC in the regulations themselves, rather than relying on the preamble to establish this important distinction.

IV. New Gap-Filling Methodology

The preamble to the proposed rule discusses the use of three factors in its new method of determining fees for new items and services: (1) functional assessment; (2) price comparison analysis; and (3) medical benefit assessment. See 71 Fed. Reg. 25,687, to be codified at 42 C.F.R. § 414.210(g). Our comments and recommendations on these issues are as follows:


    • Functional assessment— This assessment should only be used to ensure that “like is being compared to like” in determining a fee schedule amount. Any other use of a functional assessment is not appropriate, since it would enter the realm of medical necessity judgments.


    • Price comparison analysis— This comparison is reasonable if an appropriate range of items are reviewed. However, in the past, we have found that CMS has used a very limited list of items, oftentimes comparing orthoses and prostheses to items and services that are not furnished by certified orthotists and prosthetists, to set HCPCS code fee schedule amounts. Most recently, this has occurred in setting fee schedule amounts for a number of orthoses.This is unreasonable and results in fee schedule amounts that may be accurate for devices often furnished by DME suppliers, but not for the services of certified orthotists and prosthetists. This type of fee setting tends to either force Medicare patients to use inexpensive, arguably inappropriate devices when a more appropriate device is both available and appropriate to treat the individual’s condition.


    • Medical Benefit Assessment— We strongly protest the use of medical benefit assessment in relation to fee determinations. Certainly, a determination of medical necessity is required before any device can be paid by the Medicare program, however, this decision must be made separately from the calculation of fee schedule amounts.The medical benefit of a device is a coverage decision, not a fee determination. It is inappropriate to use the setting of fee schedule amounts as a backdoor method of determining coverage, which has its own protocols, either through the National Coverage Determination process or through the determination of medical necessity by the PSC medical directors at the Local Coverage Determination level. Historically, coverage, coding and reimbursement have been separate and distinct activities and it must remain so for the system to make fair and equitable judgments regarding new technologies.


Finally, the O&P Alliance requests that CMS clarify in the final regulations the statement included in the gap-filling discussion that states, “We can use the technology assessment process at any time to adjust prices on or after January 1, 2007 that were previously established using the gap-filling methodology if it is determined that those pricing methods resulted in payments amounts that do not reflect the cost of furnishing the item.” 71 Fed. Reg. 25,688. We request clarification as to whether this statement is referring to the Medicare inherent reasonableness methodology of altering fee schedule amounts, or to some other process?

If you have any questions regarding the above comments or our more general comments on competitive bidding reflected in the attached Addendum, please feel free to contact our Washington counsel, Peter W. Thomas, at (202) 466-6550.


Mark DeHarde
National Association for the Advancement of Orthotics and Prosthetics
Walter L. Racette, CPO
American Orthotic & Prosthetic Association
Paul E. Prusakowski, CPO, FAAOP
American Academy of Orthotists and Prosthetists
Jeffrey J. Yakovich, CO
American Board for Certification in Orthotics and Prosthetics




Additional Comments of the O&P Alliance to the Proposed Rule Regarding Competitive Acquisition of DMEPOS; CMS-1270-P

The following comments are offered by the O&P Alliance on CMS’s Proposed Rule for Competitive Acquisition of Durable Medical Equipment, Orthotics, Prosthetics, and Supplies. These comments relate to the general concerns of the O&P community with respect to Medicare competitive bidding of DMEPOS and not with the more specific concerned of the orthotic and prosthetic field outlined in our primary comments.

I. Opportunity for Participation by Small Suppliers/Opportunity for Networks

Section 1847(b)(6)(D) of the Act states that “[i]n developing procedures relating to bids and the awarding of contracts under this section, the Secretary shall take appropriate steps to ensure that small suppliers of items and services have an opportunity to be considered for participation in the program under this section.” We believe that the proposed competitive bidding system strongly favors large providers with the ability to cover large service areas, provide all of the products in various categories, and use economies of scale to underbid smaller suppliers. The final regulations must include further measures to ensure that small suppliers have the opportunity to meaningfully participate in serving the needs of Medicare beneficiaries in competitive bidding areas.
The O&P Alliance recommends that CMS require a minimum percentage of small suppliers in each competitive bidding area (“CBA”). For example, CMS could establish a rule that required in each CBA at least fifty percent of the suppliers who receive a contract to be small suppliers (the definition of small supplier may be based on either FTEs or annual revenue). CMS may employ a number of means to ensure that CBAs include minimum percentages of small suppliers, such as: (1) creating CBAs that are reasonably sized in order to allow small suppliers to participate (since small suppliers often will be unable to furnish services to a large CBA); (2) allowing small suppliers to bid for “carve out” areas of CBAs; or (3) awarding contracts to the small suppliers with the lowest bids that exceed the pivotal bid (until the minimum percentage threshold is met). We believe that requiring CMS to contract with a minimum percentage of small suppliers is necessary to effectuate Congress’s unequivocal mandate that small suppliers are included within the competitive bidding program.
Furthermore, we do not believe that the proposal for suppliers to form supplier networks serves as a meaningful method to ensure participation by small suppliers. We question whether any such network is permissible under federal antitrust laws. While antitrust laws permit provider networks, such networks are based on the so-called “messenger model” and do not permit suppliers to reach a mutual consensus on pricing.
In contrast, CMS’s proposed model requires suppliers who are marketplace competitors to agree on proposed prices for all items within a competitive bidding product category. If CMS believes that its proposed network model is permissible under federal antitrust laws, we request that the agency publish any internal legal analyses supporting this position. Furthermore, if CMS believes that its supplier network option is permissible under the antitrust principle of “implied repeal” (in which there is an irreconcilable conflict between a federal regulatory scheme and antitrust laws), then we request that CMS clarify this in the final regulation. See, e.g., National Gerimedical Hospital and Gerontology Center v. Blue Cross of Kansas, 452 U.S. 278, 101 S. Ct. 2415 (1981). Otherwise, we believe that the proposed network model does not pose a viable solution for ensuring that small suppliers can participate in the competitive bidding program because of the risk that such a network violates federal antitrust law.

II. Beneficiary Access to Non-contract Suppliers

The proposed rule generally does not permit beneficiaries to access non-contract suppliers within a CBA (as grandfathering is not available to O&P). While we recognize that CMS has adopted this policy to ensure program cost savings, we believe it is imperative for CMS to permit beneficiaries to obtain services from a non-contract supplier. This is necessary for quality assurance purposes and to ensure that beneficiaries continue to have access to unique or particularly high-quality services from longstanding Medicare suppliers. As discussed below, this can be done in a fashion that ensures that Medicare receives its full program savings and which provides incentives for suppliers to seek contract-supplier status.

We recommend that CMS permit beneficiary’s to access non-contract suppliers if:

  1. the beneficiary pays 20% of the competitive bidding amount for the item;
  2. the beneficiary also pays the difference between the competitive bidding amount and the lesser of the Medicare fee schedule or the supplier’s usual charge;
  3. the supplier provides, and the beneficiary signs, a notice indicating the lower payment rate available at a contract supplier.

This methodology ensures that the Medicare program obtains its program savings (since the program would only pay 80% of the competitive bidding amount, as it would had the beneficiary received services from a contract supplier). It provides a strong incentive to the beneficiary to use contract suppliers (since the beneficiary will have clear notice that the coinsurance payment rate will be lower at such suppliers). It preserves beneficiary choice, without unduly penalizing beneficiaries for using non-contract suppliers. Finally, it provides an incentive to suppliers to submit bids (because, due to increased coinsurance amounts, it can be expected that beneficiaries would mostly utilize contract suppliers).
The following example illustrates how Medicare and the beneficiary would pay for non-contract services in a CBA. Supplier A is a non-contract supplier who charges $120 for an item. The Medicare fee schedule amount is $100, and the competitive bidding payment for the item is $80. If the beneficiary chooses to go to Supplier A, Medicare will pay the supplier 80% of the competitive bidding amount, or $64. The beneficiary will be responsible for 20% of the competitive bidding amount ($16), plus the difference between the competitive bidding payment amount and the lesser of the fee schedule payment or supplier charge ($20). Supplier A also must provide a notice to the beneficiary that the beneficiary’s coinsurance at a contract supplier would be $16 rather than $36.

Accordingly, in this example Medicare pays the same amount as if the beneficiary went to a contract supplier ($64), the noncontract supplier receives its usual payment amount ($64 from Medicare, and $36 from the beneficiary), and the beneficiary retains a choice of suppliers. There remains a strong incentive for the beneficiary to use a contract supplier (since the beneficiary would have paid $16 rather than $36). An added benefit of this methodology for Medicare is that it provides an additional incentive for suppliers to offer lower bids (since a contract supplier can only expect to gain significant additional market share if the difference between the competitive bidding amount and the fee schedule amount provides sufficient incentive to beneficiaries). The O&P Alliance views this as the ultimate quality assurance mechanism, as beneficiaries would be able to “vote with their feet” and access the provider of choice if the contract supplier or suppliers were not meeting their needs.

III. Geographic Access to Suppliers

The proposed rule does not include any provision to ensure adequate geographic distribution of suppliers within a CBA in order to maintain access for beneficiaries. For example, CBAs potentially may be as large as an entire MSA (possibly even including some adjacent counties), and under the proposed selection process, all contract suppliers may be located in one portion of the CBA. This will make it difficult for beneficiaries to obtain medically necessary services (especially in large urban areas where beneficiaries may have limited means of transportation).

The O&P Alliance recommends that CMS ensure adequate geographic access to contract suppliers by creating relatively small CBAs (with multiple CBAs in each chosen MSA). Doing so ensures that beneficiaries will not be forced to travel across large cities in order to obtain Medicare services.

IV. Use of Median Bid

CMS has proposed to pay contract suppliers the median of the winning bids. This means that, for any given HCPCS code subject to competitive bidding, half of the contract suppliers in a CBA will be paid less than their bid amount. We believe that this policy significantly discourages suppliers from participating in the competitive bidding program. It is our view that quality suppliers may be unlikely to become contract suppliers if they will be reimbursed at less than their proposed bid amount. Furthermore, this system may lead to a high level of supplier attrition in the competitive bidding program. Suppliers who drop out of the program will not be easily replaced since the potential replacements are suppliers who will be paid the same amount but who submitted even higher bids.
We recognize that CMS believes that the median bid methodology is necessary to ensure program savings. However, we believe that this methodology is a fundamental flaw in the competitive bidding program. We believe that the program will be placed in jeopardy due to lack of supplier participation under this model, or will lead to a substantial deterioration in quality due to this attempt to maximize program savings.
We recommend that CMS use the highest selected bid. While CMS states in the preamble to the proposed rule that it disfavors this approach, we request that the agency reconsider. The use of the highest bid provides an equitable result (because it ensures that no supplier is required to accept less than the supplier’s bid amount). It will ensure sufficient supplier participation in the program (because suppliers are more likely to bid and remain in the program if they are paid at least their bid amount). Finally, it is a valid representation of the market payment rate (the process will still weed out disproportionately high prices because composite bids above the pivotal bid will not be selected).

V. Use of Rebates

The O&P Alliance opposes CMS’s proposal to allow contract suppliers to offer rebates to Medicare beneficiaries. First, we believe that such rebates constitute illegal “kickbacks” under federal fraud and abuse laws. While the proposed rule states that the collection of coinsurance and the provision of rebates must be separate transactions, in practice we expect that collection of coinsurance and the use of rebates will be reduced to a single transaction. Furthermore, while the proposed rule prohibits advertising of rebates, word-of-mouth advertising is inevitable.

Accordingly, the rebate system will become nothing more than the routine waiver or reduction of coinsurance. The Office of Inspector General has made clear on numerous occasions that such a practice represents an impermissible kickback, potentially interfering with clinical judgment and leading to overutilization. See, e.g., 59 Fed. Reg. 31,157 (Dec. 19, 1994). The routine waiver or reduction of coinsurance is illegal in traditional fee-for-service Medicare, and we believe the same should be true for Part B competitive bidding.
Second, the proposed rebate system will lead to a decrease in professionalism and quality of care. Suppliers of DMEPOS should be expected to provide high quality professional care. Patients should choose suppliers (and physicians should refer to suppliers) based on a supplier’s record of providing quality medical services. Medicare certainly would not expect a beneficiary to choose a physician based on whether a coinsurance rebate is available. The use of rebates leads to patients instead choosing suppliers based solely on the availability of discounts, rather than quality of care. This could lead to decreased patient outcomes.
We do not see any merit to the proposed use of rebates. Accordingly, we request that CMS withdraw this proposal.

VI. Miscellaneous Provisions

In addition to the above mentioned provisions, the O&P Alliance makes the following recommendations:

  • Authority to Adjust Payments in Other Areas (414.408) — CMS should not use the competitive bidding program to adjust payment rates outside of competitive bidding areas — such a payment adjustment does not take into account a variety of factors (e.g., differences in wage indexes, differences among suppliers, the inability of small suppliers to provide services based on bids of large, more streamlined suppliers).
  • Furnishing Items to Beneficiaries Whose Permanent Residence is Outside a CBA (§ 414.408) — A beneficiary from outside of the CBA should not be required to use a contract supplier. This requirement will lead to beneficiary confusion when traveling. This provision should be eliminated or should only apply to beneficiaries who have resided in the CBA for three or more months.
  • Requirement to Obtain Competitively Bid Items from a Contract Supplier (§ 414.408) — We do not believe it is appropriate to set the payment for suppliers outside of a beneficiary’s CBA at the competitive bidding amount for that CBA. The suppliers outside of the CBA will not have agreed to participate in the competitive bidding program, and may be unable to offer services at the competitive bidding amount (due to differences in wage indexes or an inability to match the price of a potentially much larger supplier). We recommend that Medicare pay the supplier its normal Medicare payment amount (e.g., lesser of fee schedule or charge). The beneficiary will have an incentive to obtain DMEPOS from the competitive bidding area because of lower coinsurance amounts.
  • Conditions for Awarding Contracts (§ 414.414) — We recommend a grace period of at least six months for suppliers to obtain accreditation.
  • Composite Bids (§ 414.414) — We recommend that the composite bid should be weighted by utilization rather than payment amount, since this will result in a more accurate composite bid (otherwise “big ticket” items that are rarely purchased can be underbid to artificially deflate the overall composite bid).
  • Terms of Contracts (§ 414.422) — A contract supplier should not be required to furnish services to a Medicare beneficiary. The supplier may be operating beyond capacity and unable to reasonably service the beneficiary. The supplier may not believe that the requested orthosis is appropriate for the patient, despite the physician order. In fact, the regulation does not even require a physician order; it simply states that the supplier must respond to beneficiary “requests.” Since there will be more than one supplier per CBA, there is no need to prohibit suppliers from turning away beneficiaries.
  • Information Collection from the Supplier (Misc.) — The O&P Alliance requests that CMS clarify what is meant by “information on product integrity,” “information on business integrity,” and “customer service protocol.” Orthotic clinics are more like physicians offices than retail environments and, therefore, “customer service” is not accurate terminology.
  • Beneficiary Education (Misc.) — The proposed rule’s preamble states that “[w]e believe that it is important for beneficiaries to learn about the benefits of the Medicare DMEPOS Competitive Bidding Program, such as lower out-of-pocket expenses and increased quality of products ….” 71 Fed. Reg. 25,684. We disagree with this statement. It is unproven that competitive bidding will increase the quality of products. In fact, the O&P Alliance believes that a system based on the lowest bidder has the potential to impact quality in a very detrimental way. CMS should be vigilant in monitoring quality as the competitive bidding system is implemented and not assume before this system is underway that quality will be improved.
  • Written by NAAOP

NAAOP July Government Relations Update

National Legislation/Regulation

Recent weeks have witnessed significant legislative and regulatory activity at the federal level that impacts orthotics and prosthetics. First and foremost, NAAOP, along with our O&P Alliance partners, AAOP, AOPA and ABC, submitted extensive comments to CMS on the proposed competitive bidding regulations for DMEPOS. Although the competitive bidding program only applies to “off-the-shelf” orthotics (not to custom orthoses or prostheses), CMS has not yet defined this term.

The regulations have serious implications for the entire O&P field. The main reason for this is the interplay between competitive bidding and a separate requirement that all DMEPOS suppliers must meet quality standards in the future in order to bill Medicare Part B for O&P services. CMS has stated that it intends to require accreditation of all DMEPOS suppliers as a quality indicator. But the details of those requirements have not yet been released. NAAOP is working in concert with the O&P Alliance to ensure that CMS preserves access to quality orthotic and prosthetic care as it regulates this important area.

On legislative developments, the House Appropriations Committee passed its Labor-Health and Human Services (HHS)-Education spending bill in early June, but a controversial amendment on raising the federal minimum wage has prevented the leadership from bringing the bill to the House floor. The Senate Appropriation Labor-HHS-Education Subcommittee is expected to mark-up its spending bill July 19th, and the entire Appropriations Committee is expected to take up the bill on July 20th. Because of the pressure on the budget this year, it is unclear at this time whether funding for orthotic and prosthetic awareness, education and research will be negatively impacted.

Both the House and Senate are working under an overall $873 billion discretionary spending cap. After shifting funding from other programs, the House’s Labor-HHS-Education spending bill would allocate slightly less than $142 billion to discretionary programs under these departments. This represents only a 0.6% increase over FY 2006 and $4.1 billion more than President Bush requested. Last month, the Senate Appropriations Committee announced its FY 2007 outline and determined that they would shift approximately $11.4 billion in defense and foreign aid spending to other programs, including an additional $5 billion more than President Bush’s request to Labor, HHS, and Education programs. (Labor-HHS-Education would receive approximately $142.8 billion in FY 2007.) While this is an important increase over the Administration recommendations, the funding level would still only represent a 1.1 percent increase from FY 2006 and $2 billion less than FY 2005 levels after adjusting for inflation.

In Medicare developments, there has been speculation that a major Medicare and Medicaid bill will likely move forward next year. Congress feels it must address several issues including physician payments, pay-for-performance, Medicare Part D drug coverage, outpatient rehabilitation therapy caps, and technical corrections to the Medicare/Medicaid bill that was signed into law this past February.

But there is also significant pressure on Congress to fix the scheduled cut to the Medicare physician fee schedule by the first of the new year. Unless Congress acts this year, physicians’ fees will be cut by approximately 4.5 percent on January 1, 2007. This means that if Congress is going to accommodate the physicians, they will need to find “offsets” to pay for this legislative fix. The O&P fee schedule, which has been frozen for three years and is expected to receive a CPI increase at the beginning of next year, may be at risk under this scenario, as would the Medicare fees that all providers are paid under both Medicare Part A and B, including hospital fees, skilled nursing facility fees, home health, DME and others.

The November elections could have an important impact on Medicare and Medicaid legislation, both in December of this year and next year as well. However, either way, such legislation could be viewed as both a threat and an opportunity to accomplish goals related to quality standards, competitive bidding, and other O&P priorities.

Quality and Qualifications/Partnerships and Coalitions

The American Board for Certification in Orthotics and Prosthetics, Inc., (ABC) recently announced the proposed integration of the Board for Certification in Pedorthics, Inc., (BCP) into ABC. Accredited pedorthic facilities will join ABC’s comprehensive O&P and mastectomy accredited facilities.

NAAOP and ABC have a strong history of partnering to ensure high quality patient standards. This proposed integration of BCP into ABC furthers this common goal. From a government relations advocacy perspective, it broadens the professional O&P patient care community to include pedorthic professionals in one unified credentialing body further ensuring that pedorthic patients are protected by the highest quality standards and qualifications as are currently being defined by federal regulators. 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 providers, prosthetic providers, and pedorthic footwear providers. CMS is currently inclined to rely on independent accreditation of providers to satisfy this legislative mandate.

NAAOP’s advocacy efforts are dedicated to all those in our profession who provide complex O&P care with sufficient education and experience as well as appropriate care facilities to ensure that patients’ needs are met. NAAOP membership has always been open to all ABC credentialed individuals, and if the proposed integration goes through, NAAOP would welcome and invite all ABC certified pedorthists to consider joining NAAOP.

Coverage and Reimbursement/Quality and Qualifications

The Centers for Medicare & Medicaid Services, (CMS) is in the process of converting from Legacy Identifiers to National Provider Identifiers, (NPI) for use in standard health care transactions. This change specified by the Health Insurance Portablity and Accountability Act of 1996 (HIPAA) should improve accuracy and processing time of medical claims. Additionally, the NPI requirement is consistent with efforts to ensure that payments only be made to those providers and suppliers who meet quality standards. Health care providers have until May 2007 to obtain their NPI, however, Medicare fee-for-service has been accepting the NPI since January 2006. For more information visit National Provider Identifier Standard at the CMS website.

Thank you for your support.

Mark DeHarde
George W. Breece
Executive Director
Peter W. Thomas
General Counsel
  • Written by NAAOP

Re: Comments to the Proposed DPW-Pennsylvania Durable Medical Equipment Request for Proposal

To: Estelle B. Richman, Secretary
Department of Public Welfare
c/o Suzanne Love, Project Manager
Harrisburg State Hospital

CherryWood Building
Harrisburg, PA 17105

Dear Ms. Richman:

On behalf of the National Association for the Advancement of Orthotics and Prosthetics (NAAOP), I am writing to urge you to consider exemption of orthotic and prosthetic (O&P) items and services under the proposed request for proposal (RFP). NAAOP is a national non-profit association representing the collective interests of certain specialized clinicians who are engaged in the provision of quality O&P healthcare. Specifically, NAAOP represents highly trained and educated clinicians who carefully evaluate both limb loss and limb or trunk dysfunction for the purpose of providing appropriate, custom-designed orthoses (orthopedic braces) and prostheses (artificial limbs). These clinical services often mean the difference between functional independence and long-term disability for people with amputations, musculoskeletal conditions, neurological disorders, stroke, and large numbers of congenital and acquired physically disabling conditions.

NAAOP is concerned that the selective contracting of O&P services would greatly limit patient access to highly trained orthotists and prosthetists who currently provide quality, customized O&P care. Since most orthotics and virtually all prosthetic services are customized to individual patients and require highly specialized knowledge to assure patient rehabilitation and health, competitive bidding of such services will be virtually impossible. On a national level, the Medicare program has implemented a durable medical equipment (DME) competitive bidding program that specifically exempts most orthotics and all prosthetic services. We would like to focus our comments on several specific issues relating to competitive bidding and its impact on patients and providers of O&P services.

Simply put, price cannot be the sole determining factor in awarding a competitive bidding contract. O&P is ultimately a service-based industry that relies upon highly specialized and trained providers who undergo years of rigorous training. Competitive bidding will force some providers to drop many of their patients, sacrificing the quality and range of choices for beneficiaries all in the name of a low bid. Inevitably, low-ball bidders will provide substandard care. Furthermore, competitive bidding may actually cost Pennsylvania more than the current system due to increased patient visits, replacements necessitated by substandard products/poor patient training, or ill-fitting orthoses. Competitive bidding that involves professional services will foster a “race to the bottom,” not a race for the best outcome.

Competitive bidding, as defined in the state’s proposal, is ultimately about choice. NAAOP believes that choice incorporates multiple factors: choice of provider, choice of product, and choice based on price. The Pennsylvania proposal determines that price should be the sole factor for choosing appropriate O&P providers for patients. With this determination, long-standing relationships between beneficiaries and familiar providers who know patients’ special needs and which product serves patients best are lost. There will be interruptions in service and access to a wide range of O&P products will be limited. Providers who submit the lowest bids will inevitably chose the cheapest materials and quickest methods to fit their patients. Patient choice is the ultimate arbiter of quality O&P care since beneficiaries will ultimately chose the providers who provide the most cost-effective and quality care.

Thank you for considering our comments as Pennsylvania moves forward with its competitive bidding efforts. If we can provide further assistance or technical advice concerning this or other proposals, please do not hesitate to contact our General Counsel, Peter W. Thomas, at 202-466-6550 or

Peter W. Thomas

  • Written by NAAOP

Important Message from Mark DeHarde: Monthly Member Updates and Periodic Alerts

NAAOP’s success in the public policy arena has been a result both of leadership that puts patient care interests in the forefront and also its willingness to partner with sister organizations to effect public policy that is clearly in the interest of the O&P patient. As volunteer president of NAAOP, it is my honor to be associated with individuals who have lead the field in this challenging area of government relations. As we go forward, I think it is important to review the milestones in NAAOP’s history of O&P healthcare legislation and regulation.

NAAOP’s Milestones

NAAOP’s focus has always been the patient. Since its inception in 1987, NAAOP’s efforts to advance the interests of the O&P patient in Washington have been lead by a consumer advocate, Peter W. Thomas. Peter’s first role with NAAOP was as Consumer Vice-President. NAAOP’s first successful initiative was to advocate for research dollars for O&P. This resulted in the National Center for Rehabilitation Research at the National Institutes of Health. Peter Thomas was an original member of the National Advisory Council for the NCMMR of the NIH. O&P research is a principal focus of the center.

Another milestone that put orthotics and prosthetics on a national forum was Peter Thomas’s role as Chairman of the Subcommittee of The Patient Bill of Rights. Over NAAOP’s 20-year history, NAAOP and its volunteer leadership has raised awareness of O&P, has monitored the policies being promoted in Washington, the bills that are introduced, rules that are proposed and the impact of all these issues on O&P patients and providers who serve them. You, our members, have been critical to the success of the associations to date. Because of your commitment, O&P patients have had ongoing representation in Washington.

New Challenges

As NAAOP’s efforts evolve to meet new challenges, strategies have become more defensive than offensive, collaborative ties with sister organizations more critical, as we, a relatively small field in healthcare, compete for representation in the larger healthcare arena. NAAOP has a long history of cooperative work with sister organizations on consensus views. Recently, that aspect of NAAOP’s efforts became more formalized in the creation of the O&P Alliance, a cooperative effort of the Academy, ABC, AOPA, and NAAOP that formed in January. The individual chosen by the four groups to lead the O&P Alliance is NAAOP’s Principal Lobbyist and General Counsel, Peter W. Thomas. NAAOP is proud to be a member of the newly formed O&P Alliance.

Regular Monthly Updates and Periodic Alerts

As a NAAOP member, you will continue to receive regular government relations updates. Going forward, you will receive a NAAOP monthly update and periodic alerts as needed on both NAAOP’s efforts and NAAOP’s work with the O&P Alliance. NAAOP’s over-riding goal has and will continue to be to promote public policy that is in the interest of O&P patients. We will be there to make sure that the profession prospers because the patient is our focus. We are your voice for professional O&P patient care.

Mark DeHarde
President, NAAOP

  • Written by NAAOP

Senate Defeats Bill that could have Nullified State Prosthetic Parity Laws, Future for Legislation Uncertain

On Thursday, May 11, 2006, the Senate blocked legislation by a 55-43 vote that would have allowed health insurance plans to bypass all state insurance mandates, including prosthetic parity laws. The bill, S. 1955, the Health Insurance Market Modernization and Affordability Act, would allow small business to pool insurance risk across state lines also known as Association Health Plans (AHPs) and, skirt current state insurance laws and regulations.

State laws currently in place to establish parity between prosthetics and other rehabilitation care would be rendered useless, as would all state insurance laws, since the new plans would be federally regulated. Reducing health care costs for small businesses through AHPs has been one of the Bush Administration priorities, as mentioned in his most recent State of the Union Speech. This legislation was the centerpiece of the United States Senate Health Week in which Senate leaders brought multiple health-related bills to the floor, including two other bills on medical malpractice reform.

Under the Enzi bill, insurers would be permitted to sell plans to businesses and trade associations across state lines in a new class of group health insurance under federal regulations. Purportedly, the bill would allow lower-cost insurance options for small businesses and associations of individual citizens, such as national membership organizations, so that they could get group insurance rates. Critics of the bill stated that the bill would raise premiums for some purchasers since plans would begin charging more for groups with sicker enrollees, a violation of many state insurance laws. Additionally, because the legislation would allow health insurers to offer plans exempt from state mandates to any entity, not just AHPs, many fear that access to comprehensive care would be compromised for the general population.

For orthotic and prosthetic coverage, the situation is similar. All health insurers could create basic option and enhanced option health plans. Basic option plans would only need to meet a minimum set of federal standards.
Such a basic option would leave insurers with the option to exclude coverage of orthotic and prosthetic services. Health insurers offering the basic option would also have to offer an enhanced option based on the set of benefits from one of the five most populous states: California, Florida, Illinois, New York and Texas. Because not all five of the most populous states require coverage of orthotic or prosthetic services, an insurer could choose to forego coverage of orthotic and prosthetic care in the enhanced option as well.

Furthermore, the Senate bill could increase the number of underinsured individuals. Beneficiaries may have greater access to insurance overall, but would not be protected by state benefit mandates for medically necessary services, such as orthotic and prosthetic care. With respect to other insurers, insurance sponsors would be free to create plans that offer a low premium in exchange for minimal benefits.

NAAOP took an active role within the disability community and in the Orthotic and Prosthetic Alliance by sending two major letters to Congress expressing their opposition to the legislation. The first letter from the Alliance, a group representing the major O&P associations: AAOP, ABC, AOPA, and NAAOP, outlined specific concerns with the legislation and how it would impact all enrollees overall, as well as those with orthotics and prosthetics. With the support of NAAOP, the Consortium for Citizens with Disabilities also sent a letter outlining many of the same concerns, but from a disability organization perspective.

The political future of the legislation is not promising. Health care observers dubbed this week as the best chance yet for Association Health Plan legislation to pass. But even a potential compromise bill that would have preserved some state coverage mandates failed on account of opposition from the small business community. Though there is support in the House of Representatives for a similar bill, it would likely be stymied by the same forces that derailed the Senate bill. The likelihood of the legislation being enacted this year is slim, but the debate is not over as Democratic and Republican leaders continue to seek a compromise. NAAOP will continue to monitor and report as necessary.


Your Voice for Professional O&P Patient Care

Founded in 1987, the National Association for the Advancement of Orthotics and Prosthetics, NAAOP, exists because of the need for a strong presence in O&P healthcare legislation and regulation. Through this presence, we advocate for the millions of people with amputations, limb differences, and orthopedic impairments, as well as the providers who serve their O&P needs.
NAAOP is a strong voice that represents all constituents in the comprehensive O&P patient care process. We represent the individual clinicians, fitters, technicians, clinician owners, and select manufacturers (those dedicated to advanced O&P technologies and outcomes) for the benefit of the patients they collectively serve.

  • Written by NAAOP

The Alliance’s Oppostion to Senate Bill 1055: The Health Insurance Market Modernization and Affordability Act

To: United States Senate

Washington, D.C.

Attn: Health LA

Re: Opposition to S. 1955: The Health Insurance Market Modernization and Affordability Act

Dear Senator:

The Orthotic and Prosthetic Alliance, a coalition of the four primary organizations engaged in the provision of quality orthotic and prosthetic care (orthopedic braces and artificial limbs), favors legislative solutions to increase access to affordable health care coverage, especially for small businesses. We strongly believe, however, that S. 1955, the “Health Insurance Market Modernization and Affordability Act,” is not an approach that will achieve this goal. To the contrary, we believe that S.1955 will lead to a net loss of coverage of medically necessary orthotic and prosthetic services and higher premiums for quality health care insurance.

There is little debate about the medical value of orthoses and prostheses. For example, diabetes, obesity and the effects of aging are becoming major drivers of orthotic and prosthetic services—which offer the best hope of continuing future quality of life. Nevertheless, because orthoses and prostheses are often relatively expensive and only serve a comparatively small percentage of the population, many insurers choose to minimize costs by excluding coverage for this benefit. Furthermore, when purchasing insurance, individuals rarely anticipate the possibility of a lost limb and may easily forsake such a coverage benefit in exchange for slightly lower premiums. When unfortunate circumstances do occur and an individual loses the function of a limb, it may be too late to obtain affordable insurance coverage that covers the orthotic and prosthetic care they need.

A number of states already have recognized the importance of this care and have enacted legislation requiring coverage of these needed services, particularly prosthetic services. Such legislation ensures access to medically necessary prosthetic care among the privately insured population. It also ensures that consumers are not unduly penalized for failing to anticipate the possibility of a lost limb. Furthermore, when states require coverage of prosthetics, the costs of such services are distributed across the largest possible population, equating to very modest increases in cost to those with private insurance.

S. 1955 would reverse the progress that has been made in many states with respect to coverage of prosthetics and would lead to decreased access to such medically necessary services. Small Business Health Plans would be entirely exempt from any state laws mandating orthotic and/or prosthetic benefits. Accordingly, an insured individual in such a plan risks extremely high out-of-pocket costs should the individual lose the function of a limb and require orthotic or prosthetic care.

Similarly, under S. 1955, all health insurers would be free to create ‘basic option’ and ‘enhanced option’ health plans. The basic option plan would only need to meet a minimum set of federal standards; it would not need to satisfy any state benefit requirement. Potentially, such a basic option may exclude coverage of orthotic and prosthetic services. Health insurers that offer such a basic option would also have to offer an ‘enhanced option’ that is based on the set of benefits from one of the five most populous states. Because not all five of the most populous states require coverage of orthotic or prosthetic services, an insurer could choose to forego coverage of orthotic and prosthetic care in the enhanced option as well.

The enactment of S. 1955 could increase the number of ‘underinsured’ individuals in this country. Employees of small businesses may have greater access to insurance overall, but would not be afforded the protections of state law with respect to whether such insurance would cover vital and medically necessary services, such as orthotic and prosthetic care. With respect to other insurers, insurance sponsors would be free to create plans that offer a low premium in exchange for minimal benefits.

Such minimal plans would be most attractive to the healthiest portion of the population, leading to higher premiums for everyone else. With respect to prosthetic services, this means that healthy individuals—who remain at risk of losing a limb due to an accident or disease—will find themselves without coverage should the need for a prosthesis arise. The less healthy and older population will be forced to pay higher premiums, leading to quality health care coverage becoming increasingly unaffordable to those who need it the most. Individuals who already use prostheses in conducting their daily activities of living may find themselves unable to continue to afford a plan that sufficiently covers such a benefit.

We urge you to oppose S. 1955. Opposing this legislation will ensure that states may continue to protect vulnerable portions of the population, such as individuals in need of orthotic and prosthetic care and will ensure that quality health care coverage does not become even more unaffordable due to the offering of low-price, low-quality health insurance.

Thank you for your consideration of our concerns. If you have any questions, please feel free to contact me on behalf of the O&P Alliance at
(202) 349-4261 or at

Peter W. Thomas
Counsel for the O&P Alliance

  • Written by NAAOP

DME MAC Transition’s Impact on O&P Providers

The following is an update on the DME MAC transition. Cigna filed a formal protest of the award of the Region C and Region D contracts. This triggered an automatic stay of the transition of these regions from DMERC to DME MAC. CMS overrode this stay (in order to proceed with the transition), but a court granted Cigna a temporary restraining order that reinstated the stay until the GAO renders a decision on Cigna’s appeal. A GAO decision is due by May 4th.

As a result of this stay, the transition is proceeding on schedule for July 1st for Regions A and B, but no transition for Regions C and D will occur at that time. Additionally, the other four contracts that were awarded to Palmetto GBA (the Medicare Electronic Data Interchange System (MEDIS) contract, the Data Center contract, a new National Supplier Clearinghouse (NSC) contract, and the Data Analysis and Coding contract) will not be implemented on July 1st. Instead, Palmetto will continue under its current SADMERC (which would have been replaced by the Data Analysis and Coding) and NSC contracts. Because the MEDIS contract has been stayed, O&P providers will continue to send their claims to their respective DMERCs/DME MACs, rather than to a centralized MEDIS.

For O&P providers, this means that providers in Region A will experience a change of contractor on July 1st, going from HealthNow to the National Heritage Insurance Company (NHIC). Region A providers will continue to submit electronic claims to HealthNow (these claims will be forwarded to NHIC), but will need to establish an electronic connection with NHIC for purposes of receiving remittance advices (we recommend testing this connection prior to July 1st). As of July 1st, paper claims will be submitted to NHIC rather than HealthNow.

Providers in Maryland and D.C. will go from Region B to Region A. Accordingly, as of July 1st, these providers will need to start sending paper claims to NHIC. They also should establish an electronic connection to NHIC for purposes of receiving remittance advices. With respect to electronic claims, providers in Maryland and D.C. may submit their claims to either AdminaStar or HealthNow; either way the claims will be forwarded to NHIC.

Providers in Kentucky will change from Region C to Region B. Accordingly, as of July 1st, these providers will need to start sending paper claims to AdminaStar. They also should establish an electronic connection to AdminaStar for purposes of receiving remittance advices. With respect to electronic claims, providers in Kentucky may submit their claims to either Palmetto GBA or AdminaStar; either way the claims will be forwarded to AdminaStar.

Additionally, the transition of the Program Safeguard Contractors (PSCs) will go into effect on July 1st. This will mean a change in the entities conducting provider audits. Part of the PSC transition has already occurred, with the PSCs taking over local coverage determinations as of March 1st.

Other than the above changes, O&P providers should not notice a significant impact on July 1st. With the exception of Kentucky, Maryland, and D.C., Region B operations will remain unchanged. Likewise, because of the stay, there will be no changes to providers in Regions C and D. CMS is currently expecting that the remainder of the transition (e.g., the DME MAC transition for Regions C and D, and the specialty contracts such as MEDIS) will occur on October 1st.

  • Written by NAAOP

NAAOP’s Position on Key Issues Facing our Field

Dear O&P Professional:

The National Association for the Advancement of Orthotics and Prosthetics, NAAOP, exists because O&P patients do not always receive the care they deserve because of various government policies. Since 1987, NAAOP has shaped positive results in Healthcare legislation and regulation through strong government advocacy and education of policymakers. NAAOP serves the field by representing and partnering with only those providers of orthotic and prosthetic services who truly believe that the patient must come first. NAAOP’s message is consistent and straightforward because it is driven by the O&P patient’s well being. NAAOP is delivering the following messages to lawmakers and regulators:

Patient need must drive all policy.

Payment must be linked to patient need, individual professional competency, and facility accreditation.

NAAOP lends support to those issues that are consistent with the overriding goal of optimal patient wellness. To this end, as the volunteer president of NAAOP, I would like to clarify NAAOP’s position on some key issues facing our field and state how we are addressing them and in conjunction with whom.

Issue #1 – Federal O&P Regulation

NAAOP supports the progress made thus far on the CMS regulations for establishing quality through accreditation under the Medicare Modernization Act of 2003. We advocate for limiting Medicare reimbursements for comprehensive O&P services to certified orthotists and prosthetists and accredited O&P facilities. We believe that, if appropriate regulations implementing the statutory provisions are constructed and enforced, then higher quality care will be the result and wasteful and abusive activity will be deterred if not eliminated.

Issue #2 – O&P State Licensure

NAAOP supports state licensure because it protects the O&P patient by demonstrating that only practitioners with sufficient education, experience, and appropriate patient care facilities can provide complex O&P patient care. It also gives the O&P consumer legal recourse for substandard care. Medicare currently requires licensure as a condition for participation in the Medicare program for states that have licensure, but this may be modified in pending regulations.

Issue #3 – O&P Parity

NAAOP supports orthotic and prosthetic state parity legislation because it assures that amputees have access to comprehensive prosthetic care and will receive appropriate prosthetic treatment over their lifetime as to help ensure a high quality of life and full function. NAAOP strongly supports prosthetic parity as well as supporting the same concept for comprehensive orthotic care. NAAOP supports parity even in states without licensure. We do this because the vast majority, 99%, of comprehensive O&P care is provided by ABC certifies. All 9 licensed states use ABC’s examination. But most importantly, we support parity because patients are being denied access to prosthetists and the professional prosthetic care they need NOW in order to return to full function in their daily lives and in their communities. NAAOP will always seek to put the amputee’s health in the forefront and weigh all support tactics carefully to advance the state of orthotics and prosthetics wherever we can.

NAAOP addresses these issues as an advocate for the millions of individuals with amputations, limb differences and orthopedic impairments. We believe that what is good for the patient is ultimately good for the O&P profession. Since 1987, NAAOP has been lead by a consumer advocate, Peter Thomas, who has been a voice for O&P in Washington and who has taken our message to the public policy decision makers, not only as NAAOP’s General Counsel, but also as a bilateral amputee since age 10. NAAOP agenda is defined by O&P professionals who provide their professional perspective. This valuable insight illustrates what works and what is in the best interest of the O&P patient. O&P professionals, like yourself, sharing their experience have and will continue to strengthen our advocacy voice. I strongly encourage you to review the history of NAAOP’s results on behalf of our field by viewing the government relations updates and archives on NAAOP’s website, This history demonstrates NAAOP’s vigilance for our field and is also a valuable resource. NAAOP invites all O&P professionals to make a difference for their patients and practices by providing NAAOP with your feedback and support. You can do so by e-mailing us at

NAAOP’s mission is to be a strong, unifying advocate in our field. We have a long history of partnering with sister organizations to effect public policy that is clearly in the interest of the O&P patient and is now embodied in the Orthotic & Prosthetic Alliance. I am honored to be associated with NAAOP and its volunteer leadership and also our sister organizations who are of like mind.

Mark DeHarde
President, NAAOP

  • Written by NAAOP