Reimbursement Issues

Medicare Medical Policy Revisions (12/17/2012)

Lower Limb Prostheses

There are no changes to policy at this time. View this policy

Spinal Orthoses: TLSO and LSO

Effective for claims with a date of service on or after January 1, 2013 for an item described by code L0621 (SO, flexible, provides pelvic-sacral support, reduces motion about the sacroiliac joint, includes straps, closures, may include pendulous abdomen design, prefabricated, includes fitting and adjustment), the claim must include the CG modifier to be considered for payment. The CG modifier should only be applied if the item you are providing is constructed primarily of non-elastic materials (e.g. cotton, nylon, canvas) or contains a rigid posterior panel.   View this policy

Ankle-Foot/Knee-Ankle-Foot-Orthosis

Effective for claims with a date of service on or after January 1, 2013 any AFO described by codes L1900, L1910-L1990 must meet the following criteria:

  • Extend well above the ankle 
  • Must be fastened around the lower leg, above the ankle
  • Trim lines should terminate approximately 2-4 cm distal to the apex of the head of the fibula
Also, just a reminder, for any custom fabricated AFO or KAFO to be considered medically necessary, there must be detailed documentation in the treating physician’s records to support the medical necessity of the custom fabricated items. This information will be corroborated by the documentation in your records, and all information must be available upon request.  View this policy.

Knee Orthosis

There are no changes to policy at this time. View this policy

External Breast Prostheses

There are no changes to policy at this time. View this policy

Diabetic Shoes/Inserts

There are no changes to policy at this time. View this policy

Orthopedic Shoes/Inserts

There are no changes to policy at this time. View this policy


Medicare Audits & Reviews

Durable Medical Equipment Medicare Administrative Contractor (DME MAC) Audits

Here is a quick look at some of the items currently under pre-payment review in each of the four DME MAC Jurisdictions.

Jurisdiction A (NHIC, Corp.)

Lower Limb Prostheses HCPCS codes billed with a K3 functional level modifier and components/additions provided. Click here to view the announcement. The initial results of the prepayment audit indicated an overall claim denial rate of 90.9% and resulted in continued audit activity on a prepayment basis. Currently the overall denial rate is 74.2%. While these results reflect a significantly lower denial rate than the original report, the updated denial rate of 74.2% supports the continuation of the widespread prepayment review. Click here for the results of the audit.

Jurisdiction B ( National Government Services)

Jurisdiction C (CGS)

No pre-payment audits have been officially listed by CGS.

Jurisdiction D (Noridian)

  • On July 10, 2012 Noridian began prepayment audits on the following three AFO codes: L4360, L1960 and L1970. Click here to view the audit notification. The results of these audits have recently been released, and each code had a high error or claim denial rate. For the L1960, the probe reviewed 100 claims and 69 were denied, an error rate of 68%.  For the L1970 the probe reviewed 100 claims and 80 were denied, an error rate of 80%.  For the L4360 the probe reviewed 101 claims and 97 were denied, an error rate of 97%.  .As a result of these high error rates Noridian will now begin a widespread review of claims for codes L4360, L1960 and L1970. Here are the full results of the prepayment review probe. 
  • On July 10, 2012 Noridian began a prepayment for external breast prosthesis and the code L8030. Click here to view the audit notification.
  • On August 10, 2012 Noridian began a prepayment audit on the following two lower limb prosthetic codes L5673 and L5301. Click here to view the audit notification.
  • On July 10, 2012 Noridian began a prepayment review on claims for LSOs described by codes L0631 and L0637. Click here to view the audit notification. The results of these audits have recently been released, and each code had a high error or claim denial rate. For the L0631, the probe reviewed 101 claims and 96 were denied, an error rate of 96%.  For the L0637 the probe reviewed 100 claims and 80 were denied, an error rate of 80%.  As a result of these high error rates Noridian will now begin a widespread review of claims for codes L0631 and L0637. Here are the full results of the prepayment review probe.
  • Noridian is also conducting an ongoing prepayment review for diabetic shoes and inserts. The recent results of these audits found an error rate of 94%. Click here to view the current audit results.

Recovery Audit Contractor (RAC) Audits

RACs as part of their contracts are required to publish the areas of vulnerability or the issues they are or intend to audit. Below are links to view the issues each RAC is auditing at this time, and it may be a wise idea to review other RAC jurisdictions and not just yours.

Current RAC Collection Data

Click here to view the most recent figures on the amount of money being recouped/returned by the RACs and the top issues per jurisdiction.

Current RAC Appeals Data

Click here to view the most recent data on the amount of RAC audit recoupments being appealed and how many RAC audit recoupments are being overturned.

Medicare Fee Schedule Updates (12/17/2012)

2013 DMEPOS Fee Schedule

The Centers for Medicare and Medicaid Services (CMS) has announced that the 2013 Medicare fee schedule for orthotic and prosthetic services will be increased by 0.8 percent. This increase is effective for claims with a date of service on or after January 1, 2013. 

The annual Medicare fee schedule increase is legislatively tied to the percentage increase in the consumer price index for all urban consumers (CPI-U) for the 12-month period ending with June of the previous year. This percentage, which was 1.7 percent in June 2012, is then reduced by an annual productivity adjustment, which for 2013 was calculated to be 0.9 percent, resulting in a net positive fee schedule increase of 0.8 percent.

The official 2012 Medicare DMEPOS fee schedule may be accessed by clicking here.

2013 Reimbursement Rates for Labor Codes

CMS has released the 2013 reimbursement rates for L4205 and L7520, which represent 15 minute segments of orthotic and prosthetic labor respectively. These codes are not subject to the productivity adjustment and will be increased by the full 1.7 percent CPI-U based adjustment. Click here to view the labor rates per state.