OIG Announces reviews on OTS orthotic devices

As part of the Office of the Inspector General’s (OIG) ongoing work plan efforts, off-the-shelf (OTS) orthotic devices were added to the active work plan items list last week. The OIG announced that, since 2014, claims for three OTS orthotic devices (L0648, L0650, and L1833) have grown by 97 percent and allowed charges have grown by 116 percent, reaching $349 million in 2016. Per the OIG website:

The Social Security Act states that no payment may be made under Medicare Part B for any expenses incurred for items that “are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.” A Medicare Administrative Contractor (MAC) has identified improper payment rates as high as 79 percent for L0648, 88 percent for L0650, and 91 percent for L1833 within its jurisdiction. A top concern of the MAC is a lack of documentation of medical necessity in patients’ medical records. We will examine factors associated with questionable billing for the three orthotic devices, and describe the billing trends for these devices from 2014 – 2016. Specifically, we will evaluate the extent to which Medicare beneficiaries are being supplied these orthotic devices without an encounter with the referring physician within 12 months prior to their orthotic claim and will analyze billing trends on a nation-wide scale.

What you need to know:

The van Halem Group has seen increases in orthotics audits from the ZPICs and UPICs. These audits are both prepayment and postpayment audits, both of which add additional burdens to your daily workload. Additionally, the DME MACs have continued targeted audits of suppliers providing orthotic devices.

The OIG specified that they will be evaluating “the extent to which Medicare beneficiaries are being supplied these orthotic devices without an encounter with the referring physician within 12 months prior to their orthotic claim”. Although the LCDs do not specifically require this encounter, it is a best practice to reach out to the beneficiary’s physician to request supporting documentation prior to dispensing the products. This will ensure that coverage criteria is met.

The van Halem Group can help!

The van Halem Group offers proactive and reactive services to assist you. If you receive an audit request from the ZPIC/UPIC, DME MAC, or RAC, our clinical team will review the claim file and respond to the audit on your behalf. If denied, we will work with you to obtain addendums and appeal the denial.

To ensure your documentation meets coverage requirements prior to billing, let our clinical staff conduct a  prescreen review.  Our clinicians will review your documentation and provide you with an “approved” or “denied” status, along with recommendations for your referral source. Get your documentation right before you bill the claim to Medicare, and rest easy knowing you are protected should those claims be audited in the future.

Contact us for more information!