AOPA Files Suit Against CMS


May 13, 2013

American Orthotic & Prosthetic Association Files Lawsuit Against Medicare Arising from Unfair Medicare RAC/Pre-payment Audits, Where No Fraud Exists, and Challenges Unlawful Changes to Medicare Standard for Care of Medicare Amputees

Today, the American Orthotic and Prosthetic Association (AOPA) filed suit against HHS/Medicare in the Federal District Court for the District of Columbia, seeking relief from the unfair and unauthorized actions of the Center for Medicare and Medicaid Services, primarily via actions of its RAC auditors and DME MACs relating to physician documentation requirements.

AOPA President, Thomas F. Kirk stated, “Today, AOPA has stated emphatically that we will not stand by when government acts inappropriately to threaten either the quality of care we provide to our patients or the economic viability of the small businesses and providers that comprise the orthotics and prosthetics profession.”

AOPA’s suit arises with respect to Medicare actions that began in August 2011 the HHS Office of Inspector General released a flawed, and in some respects amateurish, report alleging fraud in the O&P field where there essentially was none. The report: (1) misunderstood that patients don’t go to their physician when their prosthesis is not working properly; (2) misunderstood that it is not unusual that most Medicare amputees may not see the ‘referring physician’ who first prescribed their prosthetic care because that physician is commonly the surgeon who amputated their limb; (3) created extensive confusion about whether bi-lateral amputees should have both prostheses on a single claim or two separate claims; (4) leapt to conclusions of fraud because claims costs had increased with a fixed number of Medicare amputee beneficiaries while failing to recognize that Iraq-Afghanistan had prompted a quantum leap in technology (and a related incremental increase in unit cost) which together with CMS-approved O&P fee schedule increases (after years of ‘freeze’) had indeed driven per capita increases; and (5) failed to track as required by BIPA 427 whether or not care providers were, or were not, qualified providers under federal law. But the worst thing this flawed OIG report did was trigger an adverse change in the quality of patient care for Medicare beneficiaries.

Someone at Medicare should have known better. CMS leadership or its DME MAC contractors should have pointed out the flaws in this OIG report and pushed back. But no one did. In fact, without any process for the stakeholder input that is guaranteed by federal law, CMS also in August 2011, through the actions of its DME MAC contractors, dramatically revised the standards by which a prosthetic claim would be judged for reimbursement approval. This was done by simply circulating unilaterally a “Dear Physician” letter. We believe that in doing so Medicare violated the law, specifically the federal Administrative Procedure Act and the Medicare Act. Then CMS contractors/auditors proceeded to apply this ill-conceived new standard retroactively to claw back money on claims which no one asserts involved any fraud, but which originated years before CMS contractors devised the new “standard.”

AOPA has recounted efforts O&P has over the past 20 months to try to explain and persuade CMS that its actions on this matter are unfair, contrary to the statutes and detrimental to the care provided to Medicare beneficiaries. The introduction of the new ‘standard’ and audits were done in the name of saving Medicare dollars against the backdrop of the Affordable Care Act’s promise to extract $750 billion over ten years from Medicare providers. RAC auditors’ independence is fundamentally compromised by the fact that they are paid a commission based on a percentage of the claims dollars they claw back. Last month, thirty-five members of the U.S. House recently signed a letter to the Secretary of HHS seeking relief for O&P and our Medicare patients. AOPA’s lawsuit maintains that the OIG/CMS action has changed the standard of care, often forcing practitioners to choose between meeting the patient’s immediate need for a prosthesis by providing a less sophisticated device, rather than endure long delays in care triggered by the paper chase with physicians. The truth is that CMS wants physicians to provide more documentation, but isn’t willing to pay them any more. According to AOPA Executive Director, Thomas F. Fise, “(M)any patient care facilities have closed or been sold as a result of these Medicare-induced financial pressures, and you have said if we can’t find a way to get this problem fixed, the entire field is at grave risk. Under these dire circumstances, AOPA, having exhausted all other prospects for relief, has little choice but to place this matter, and the future of our profession as well as the quality of care delivered to Medicare amputee beneficiaries, in the hands of the courts.”

Review the complaint AOPA has filed.

Review the chronology of AOPA actions related to RAC, other audits, and pre-payment reviews.

Read the letter to members from the AOPA board, Learn how you can support the lawsuit and save the future of O&P.

Review the list of litigation fund supporters here.