Michigan BCBS adds certification requirement to bill O&P

Blue Cross Blue Shield of Michigan recently announced their plan to reject DMEPOS claims submitted for orthotics and prosthetics if the submitting provider has not provided certifying documentation proving they are certified to provide orthotics and prosthetics. Providers will be required to bill with their appropriate provider ID #, connecting the complexity of the claim with the certification of the provider.

This language should sound familiar, because it is exactly what the orthotic and prosthetic profession has been banging on CMS’ door to implement on a federal level for nearly a decade. Way back in 2001, Congress passed the Benefits Improvement and Protection Act (BIPA), which included Section 427, requiring CMS to only reimburse licensed or otherwise qualified providers for custom orthotics and prosthetics. Unfortunately, CMS has chosen not to implement this important provision, leading to the reimbursement of thousands of providers that are not qualified to provide orthotic and prosthetic care.

The O&P profession over the past several years has worked with members of congress to create an additional piece of legislation, known as the Medicare O&P  Improvement Act, to again instruct CMS to implement BIPA Section 427 and only reimburse those qualified to provide O&P. This bill would also provide a link between the qualification of the provider and the complexity of care/device that is being provided to the patient.

Slowly, too slowly, payers are beginning to pick up the pieces of BIPA Section 427 because it is smart policy that would actually prevent fraudulent payments from being paid out to providers in the first place — novel concept! With the current audit system, perhaps it would behoove CMS to implement policies to prevent fraudulent claims from being paid in the first place, rather than spending hundreds of millions of dollars trying to track those payments down after the fact and punishing honest providers in process! Continue reading

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House Subcommittee to hold hearing on Medicare fraud policies, RAC audits key topic

House Ways and Means Health Subcommittee Chairman Kevin Brady (R-TX) announced yesterday that the Subcommittee on Health will hold a hearing on Medicare waste, fraud, and abuse, with a focus on the policies that address these problems.  Chairman Brady recently spoke at the AOPA Policy Forum in Washington DC and is very aware of the problems with the current RAC program and the plight of orthotists and prosthetists relating to RAC audits.

This hearing will allow the Subcommittee to hear directly from the U.S. Office of the Inspector General at the Department of Health and Human Services (OIG-HHS), the U.S. Government Accountability Office (GAO), and the Centers for Medicare and Medicaid Services’ Center for Program Integrity (CPI) about the different recommendations and approaches to curb abuses within Medicare.  

One section of the hearing will be denoted to RAC audits:

Recovery Audit Contractors (RACs) aim to reduce Medicare improper payments through the detection and collection of overpayments, the identification of underpayments, and the implementation of actions that will prevent future improper payments.  Many of these activities involve data-mining activities based on billing information.  Most of the data analysis is done after Medicare has made payment, but some work is now also being done before on a pre-payment basis.  The Affordable Care Act established RACs for Medicare Part C and Part D and for Medicaid. 

The Subcommittee will hear testimony from Gloria Jarmon, Deputy Inspector General for Audit Services at OIG-HHS; Kathleen King, Director, Health Care at GAO; and Dr. Shantanu Agrawal, Deputy Administrator Director of CPI.  The hearing will take place on Wednesday, April 30, 2014, in 1100 Longworth House Office Building, beginning at 2:00 P.M.

Click here for the full release from the House Committee on Ways and Means.

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CMS begins rollout of fingerprint analysis for new DMEPOS providers

CMS recently released guidance on the rollout of their new fingerprint background check requirement for certain DMEPOS providers. It has been more than three years since CMS released their final rule on developing a fingerprint background check process for new DMEPOS and home health suppliers that was created as part of the Affordable Care Act. 

The final rule created three groups of DMEPOS and home health suppliers and their potential risk level for fraud and abusive billing. The group classifications are “limited risk”, “moderate risk” and “high risk”.  At this point, this initiative is limited to those suppliers designated as “high risk” will be subject to the fingerprint background check.

According to the final rule, currently enrolled DMEPOS suppliers (which includes orthotists and prosthetists) who are subject to revalidation prior to 2015 will be classified as “moderate risk” and will not be subject to the fingerprint background check. However, newly enrolling DMEPOS suppliers  will be classified as “high risk”, meaning they will be subject the fingerprint analysis and background check.

Additionally, as you will see below, there are other ways a supplier can be moved into the “high risk” category that include CMS payment suspensions going back 10 years and several other similar distinctions that would require an existing O&P practitioner to be subject to the new fingerprint rules.

The “moderate” and “high” risk classification screening requirements and actions are listed below. Continue reading

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OTS Orthotics Defined… AGAIN!

When CMS released the 2014 HCPCS update codes late last year, they also provided guidance on how they would define “off the shelf” orthotics, for the purpose of identifying what type of provider could provide certain noncustomized devices to beneficiaries. After debate, CMS recalled their original definitions of “off the shelf”, creating more confusion in the O&P profession.  Some of the codes listed in the off-the-shelf category are also parallel codes that can apply to custom fit versions of the same device.  The full updated 2014 DMEPOS fee schedule can be found here.  The new definitions from Medicare contractor CGS for what qualifies as off-the-shelf are below.

When providing these items suppliers must:

  • Provide the product that is specified by the ordering physician, i.e. (1) type of orthosis and (2) method of fitting (OTS or custom fitted)
  • Be sure that the medical record justifies the need for the type of product and method of fitting
  • Be sure only to use the code that accurately reflects both the type of orthosis and the appropriate level of fitting
  • Have detailed documentation that justifies the code selected for custom fitted versus OTS codes)

The following definitions will be used for correct coding of these items.

Off-the-shelf (OTS) orthotics are:

  • Items that are prefabricated
  • They may or may not be supplied as a kit that requires some assembly. Assembly of the item and/or installation of add-on components and/or the use of some basic materials in preparation of the item does not change classification from OTS to custom fitted
  • OTS items require minimal self-adjustment for fitting at the time of delivery for appropriate use and do not require expertise in trimming, bending, molding, assembling, or customizing to fit an individual
  • This fitting does not require expertise of a certified orthotist or an individual who has equivalent specialized training in the provision of orthoses to fit the item to the individual beneficiary

The term “minimal self-adjustment” is defined Continue reading

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Results of Jurisdiction D Lower Limb Prostheses Prepayment Probe

More results from prepayment reviews of lower limb prostheses in Jurisdiction D DMEMAC Medical Review Department below. Based on the continued high error rate (79%)  on claims asociated with L5987, Noridian will close this prepayment probe and open a wide spread targeted review of L5987.

Results of Widespread Prepayment Probe Review of Lower Limb Prostheses (HCPCS L5987) 

Jurisdiction D DME MAC Medical Review Department completed a widespread prepayment probe review of HCPCS codes L5987. This review was initiated based on results of Comprehensive Error Rate Testing (CERT) analysis and previous review results.

The L5987 review involved 99 claims, of which 81 were denied. Based on dollars, this resulted in an overall claim potential improper payment rate of 79%.

Primary Documentation Errors that Resulted in Denial of Claims

Documentation does not support the functional level billed on the claim.
A determination of the medical necessity for certain components/additions to the prosthesis is based on the beneficiary’s potential functional abilities. Potential functional ability is based on the reasonable expectations of the prosthetist, and treating physician, considering factors including, but not limited to: 1. The beneficiary’s past history (including prior prosthetic use if applicable); and 2. The beneficiary’s current condition including the status of the residual limb and the nature of other medical problems; and 3. The beneficiary’s desire to ambulate.

The records must document the beneficiary’s current functional capabilities and his/her expected functional potential, including an explanation for the difference, if that is the case. It is recognized, within the functional classification hierarchy, that bilateral amputees often cannot be strictly bound by functional level classifications.

Documentation does not support medical need for replacement.
Replacement of a prosthesis or prosthetic component is covered if the treating physician orders a replacement device or part because of any of the following: 1. A change in the physiological condition of the beneficiary; or 2. Irreparable wear of the device or a part of the device; or 3. The condition of the device, or part of the device, requires repairs and the cost of such repairs would be more than 60% of the cost of a replacement device, or of the part being replaced.

Documentation did not support the beneficiary will reach or maintain a defined functional state within a reasonable period of time.
A lower limb prosthesis is covered when the beneficiary:

1.     Will reach or maintain a defined functional state within a reasonable period of time; and

2.     Is motivated to ambulate.

Requested documentation was not received by the contractor within the allotted timeframe.
Suppliers have 45 days from the date of the Additional Documentation Request (ADR) letter to respond. Failure to respond within 45 days may result in partial or complete denial of the claim.

Suppliers are in violation of Supplier Standard #28 when, upon request, they fail to provide requested documentation to a Medicare contractor. Medicare regulations (42 C.F.R 424.516[f]) stipulate that a supplier is required to maintain documentation for seven years from the date of service and, upon the request of CMS or a Medicare contractor, provide access to that documentation. Therefore, the consequences of failure to provide records may not only be a claim denial but also referral to the NSC. The supplier standards can be found in 424 CFR Section 424.57(c).

Going Forward
Based on high error rate, Noridian will close this probe review and begin a widespread targeted review on HCPCS code L5987.

Education Resources
It is important for suppliers to be familiar with the documentation requirements and utilization parameters as outlined in the Lower Limb Prosthesis Local Coverage Determination (LCD) L11453 and Policy Article A25367.

Noridian provides educational offerings by scheduling supplier workshops, training opportunities, and presentations. Educational training and events are located at https://www.noridianmedicare.com/dme/train/.

Information about probe/error validation reviews may be found in CMS Publication 100-8, Program Integrity Manual (PIM), Chapter 3 located at http://www.cms.gov/manuals/downloads/pim83c03.pdf.

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CMS to Temporarily Halt RAC Audits to Transition to New Contracts

After receiving pressure from more than 111 individual members of congress about the over aggressive nature of CMS’ RAC audit program, CMS announced earlier this week that they will temporarily halt new RAC audit requests to allow existing contracts with audit contractors to expire. In stark contrast to a release from earlier this year, in which CMS announced they planned to extend the current contracts through the implementation of the new contracts. So, this is quite a policy change in just a few weeks as pressure has been ratcheted up on CMS from congress.

CMS anticipates new contracts with RAC’s to be completed in the next few months. February 21 is the final day RAC’s can send a post payment ADR. February 28, 2014 will be the final day current RAC’s can send a prepayment Additional Document Request (ADR) request to a provider. Unfortunately, once the new RAC contracts are signed, the new audit contractors will have the ability to go back and review claims submitted throughout the hiatus time period. Current RACs will be allowed to finish work on existing audits that have already been initiated.

In their release, CMS announced that they are reviewing Additional Document Request (ADR) timeframes for review, a potential limit on ADR requests and facilitating better communications between the RACs, MACs and providers.  CMS has also agreed with an OIG recommendation that RACs performance evaluation must include the amount of claims that are identified and eventually overturned at a higher level of appeal.

CMS has taken much criticism for their RAC program in recent months, from more than 111 members of congress, interest groups representing Medicare providers of all sizes and types, media organizations and many more. The drumbeat started earlier this year with the release of a memorandum authored by Chief Administrative Law Judge Nancy Griswold detailing a more than 460,000 appealed claims backlog and a suspension of assigning new ALJ hearing dates for the next two years. OPGA responded to Chief ALJ Griswold outlining potential remedies to the backlog and also passed the memo onto several key members of congress.

OPGA also recently attended a forum put together by the Office of Medicare Hearings and Appeals, where representatives from CMS were repeatedly peppered with questions relating to the backlog, suspension of hearing dates and a myriad of problems with the first two levels of appeal. Administrative Law Judges are required to issue a decision within 90 days of receiving the appeal. However, with the incredible acceleration of the number of audits (and subsequent appeals), this process is now averaging nearly three years to complete.

The most appalling point here is that CMS can still begin recouping the dollars associated with the appealed claim 30 days after the provider chooses to accelerate their appeal to the ALJ. So, independent providers are forced to deal with the cash flow pressures and other headaches to navigate a broken system.

Now is the time to keep the pressure on CMS and your member of congress to ensure our voice is heard loud and clear throughout the time CMS is awarding the new RAC contracts. Accountability and transparency are badly needed in the RAC program and we must continue to voice our frustrations to ensure we are represented in any changes that are made. 

NAAOP also points to additional changes that are being made to new contracts for auditors. From NAAOP:

1) Recovery Auditor’s will be required to wait 30 days to allow for a discussion before sending the claim to the MAC for adjustment. Providers will not have to choose between initiating a discussion and an appeal.

2) Recovery Auditor’s will be required to confirm with provider receipt of a discussion request within three days.

3) Recovery Auditors will be required to wait until the second level of appeal is exhausted before they receive their contingency fee.

4) CMS will establish new and revised ADR limits that will be diversified across different claim types (e.g., inpatient, outpatient).

5) CMS will require Recovery Auditors to adjust the ADR limits in accordance with a provider’s denial rate. Providers with low denial rates will have lower ADR limits while providers with high denial rates will have higher ADR limits.

Contact OPGA with your stories and ideas to improve the Medicare appeals system.

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ALJ Forum Light on Relief, Stakeholders Voice Frustrations

The Office of Medicare Hearings and Appeals held a forum today in Washington DC on the recently disclosed 460k Administrative Law Judge (ALJ) appealed claims backlog. Chief ALJ Nancy Griswold headlined a day long event which featured updates from OMHA staff on potential remedies to the backlog and also presentations from CMS on the makeup of the current audit system and how they are interpreting the recently disclosed backlog that is affecting thousands of independent orthotic and prosthetic providers across the country.

While OMHA identified several opportunities and new ideas to improve the efficiency of the Medicare appeals system, none of their proposals will provide immediate relief, or even near term relief. I’m left wondering how many independent orthotic and prosthetic providers across the country will be forced to close their doors while OMHA attempts to pick up the pieces of a broken appeals system that is ravaging Medicare providers of all sizes.

In front of a packed auditorium that included representatives from virtually all health care related provider groups and attorneys in Washington DC, leaders of the OMHA and Judge Griswold began the day by distancing the Administrative Law Judge system from CMS, stating emphatically, “I want to make clear, OMHA is functionally and organizationally separate from CMS. We do not make policy. We do not adjudicate CMS policy.” This set the tone for the morning presentations featuring an update on the backlog and what OMHA is trying to do to work their way through it.

After that important caveat, Judge Griswold provided an update relating to the statistics she outlined in her July 2013 memorandum. As of January 24, 2014, in addition to the estimated delay for an ALJ hearing assignment is now 28 months, a delay of 18-22 weeks is likely prior to the OMHA acknowledgement of a request for a hearing. Specifically speaking to the delay, OMHA average processing time has increased from 94days in FY09 to 329 days in FY14. To do a little math, that is atleast three years until providers will be paid.

Judge Griswold went on to identify some of the reasons for the dramatic increase in ALJ appeals receipts. 1. Expansion of all post payment programs across Parts A, B and DMEPOS (specifically the increase in RAC audits). 2. More active state medicaid agencies impacting the dual eligible (medicare and medicaid eligible) workload. 3. The overall increase in medicare beneficiaries. Judge Griswold closed by saying she shares concerns on processing time and looks forward to working together to find greater efficiency.

The most interesting part of the program was the Q&A. The Q&A was dominated by Medicare providers and their allied organizations repeatedly questioning the efficacy and legitimacy of the current appeals system, specifically the first two levels of appeal, which are governed by the DMEMAC’s and the QIC’s (Qualified independent contractors). The QIC’s were repeatedly referenced in discussing the increased focus on clerical rather than clinical errors in appealed claims. The discussion focused so heavily on the focus of the first two levels of appeal that Judge Griswold specifically said “I hear you loud and clear on the issue of fixing clerical errors or questions at the lower level of appeal. I have now made a note, checked it and starred it.” CMS representative then stated that there is a mechanism in place to allow the first two levels of appeal to “reopen” the case if there is a technical issue involved. However, as was the opinion of many in the room, this option is not being allowed to take place. Too often providers hear, “just appeal to ALJ and it will get overturned” — this is not how the system is supposed to function!

Our members, small providers across the country are hurting. If the current appeals system is not reformed soon, many communities will lose local medical providers, including orthotists and prosthetists. Local, independent and accredited orthotists and prosthetists are the backbone of Medicare’s provision of artificial limbs to beneficiaries across the country. However, since they are independent small businesses, they simply cannot withstand the demands and cash flow pressures the current appeals system creates.

This brings us to the next main line of attack during the Q&A — the recoupment policies of the governing the appeals process. Created under the assumption that recoupments would only be made at maximum 60 days prior to an ALJ ruling (ALJ’s are supposed to issue ruling in 90 days), but with the current backlog, providers are now being recouped for nearly three years before they receive adjudication on their appeal. If the ALJ’s have the ability to alter their timeline for assigning hearing dates under the current rules, why doesn’t CMS alter the timeline for recoupments? Between sessions I discussed this issue with one of the CMS representatives present at the forum and she advised that altering the recoupment timeline may be under CMS current regulatory authority but that she was unaware of any discussions on the topic to date. I plan to follow up and see if we can work to facilitate these discussions moving forward.

Following Judge Griswold was Jason Green, OMHA’s director of program evaluation and policy. Mr Green cited several possible ways to quickly deal with the current backlog and additional efforts OMHA is taking to create a more efficient process. 1. Appellants can group large number of cases into one appeal, mostly for large organizations like hospitals who sometimes have 1000’s of pending requests. 2. OMHA has created a national toll free number for appellants to check the status of their appealed cases. 3. Appellants should be sure case files from lower levels are transmitted to ALJ processing and should not include new evidence that was already included in lower levels of appeal. 4. Fast tracking appeals generated by Medicare beneficiaries. 5. Creation of a anonymous, random appellant climate survey. 6. Creation of statistical sampling program and mediation of appeals by attorneys.

The program went on to identify several attempts to modernize and better facilitate electronic management of OMHA appeals. The short term plan includes creating a secure website to allow appellants the ability to file ALJ appeals online, view appeals assignment and status information. The dramatic increase in appeals requests has created a bottleneck of paper requests which are onerous to enter into database and often confusing, which is another cause for the severe backlog. Later stages of this internal plan include 100% electronic filing and allow an authenticated user interface for repeat users to check the status of all pending Level 2 and 3 appeals.

The O&P profession was well represented at the forum with staff representatives from several independent O&P practices, as well as OPGA and AOPA in attendance. The key issue now that the forum has passed is follow up. Independent O&P’s must continue to raise the profile of the audit issue. 111 members of congress recently sent a letter to HHS Secretary Sebellius demanding RAC reform. O&P must be included in these discussions. The only way to do that is to get involved. Contact OPGA and let us help you work through the process of contacting your elected officials; we have the contact information, background materials, sample letters, talking points; virtually everything you need to get involved. Contact Ryan Ball at ryan.ball@vgm.com for more information.

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OPGA to Attend Medicare Audits Hearings & Appeals Forum, Seeks Stories

The recent memorandum sent to Medicare appellant from Chief Administrative Law Judge Nancy Griswold detailing the incredible appeals backlog, and subsequent decision to suspend assigning dates for new ALJ hearings for the next 24 months, has created a fervor of activity and shined a bright light on the shortcomings of current Medicare audit programs.

Many Republicans and Democrats in congress are hearing from virtually every type of Medicare provider, including physicians, physical therapists, durable medical equipment suppliers, complex rehab providers, pharmacists, orthotists and prosthetists and, of course, hospitals. The American Hospital Association has been very active in promoting the audit impact on their membership. Orthotic and Prosthetic Group of America has sent a letter in response to Judge Griswold and has reached out to several senators and members of congress in recent weeks to ensure the fact that CMS is denying Medicare providers due process by not maintaining an adequate and timely appeals process is brought to their attention. The American Orthotic and Prosthetic Association also recently contacted CMS on the issue on behalf of their members and manufacturers.  

The recent memo from Judge Griswold also provided information about an Office of Medicare Hearing and Appeals Forum (OMHA)to discuss potential remedies to the nearly half a million claim appeals backlog. OPGA Government Relations has registered for the event and plans to attend.

OPGA is working to bring stories from independent orthotic and prosthetic practices about the incredibly negative impact Medicare audits are having on your business; also how audits have created delays and changes in care for beneficiaries. If you have a story you would like delivered to OMHA staff at the forum, please email ryan.ball@vgm.com

OPGA will provide updates on the content of the forum as soon as they are available, so stay tuned to the Government Effects Blog for more information.

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Group Representing RAC’s Blasts ALJ Delays, Seeks Reform

Add the Medicare contractors lobby to the growing chorus of stakeholders calling for reforms to the current Medicare appeals process, specifically the recently announced delays to Administrative Law Judge (ALJ) level appeals. The American Coalition for Healthcare Claims Integrity (ACHCI), which represents Medicare contractors, including Recovery Audit Contractors (RAC), called for sweeping changes to the current appeals process, but offered few specific policy proposals.

In a letter to Congressman Sam Graves (R-MO), who is the primary sponsor of HR 1250, The Medicare Audit Improvement Act, targeted to hospital audit concerns, ACHCI discussed their concerns with the current appeals system. Citing the ALJ backlog and suspension of assigning hearing dates, ACHCI says the ALJ system is in dire need of reform, claiming the delays are undermining the audit process and audit contractors, while subverting Medicare policy. 

Many Medicare providers impacted by audits, including independent orthotists and prosthetists, would argue just the opposite. The RAC auditors are undermining the audit process and subverting Medicare policy by abusing their considerable power to identify and recoup potential overpayments by focusing on clerical, rather than clinical errors. Continue reading

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Chief ALJ Details 460k Appeals Backlog, Suspension of Hearings

A recently obtained memorandum from the Office of Medicare Hearings and Appeals (OMHA) Chief Administrative Law Judge Nancy Griswold to Medicare providers awaiting multiple Administrative Law Judge appeal hearings details the exponential growth in appeals to Medicare audits. The letter provides the most up-to-date appeals data that has been released by The Centers for Medicare and Medicaid Services (CMS) to date and includes some particularly damning statistics and statements about the appeals system.

Judge Griswold  states that from 2010-2013, OMHA’s claims workload grew by 184%. In just two years, the backlog of appealed claims has risen from 92,000 to 460,000, causing OMHA to suspend the assignment of hearing dates effective July 15, 2013. Continue reading

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