Reimbursement Issues


2018 Medicare Fee Schedule Update

The Centers for Medicare and Medicaid Services (CMS) has released the 2017 Medicare DMEPOS fee schedule which will be effective for Medicare claims with a date of service on or after January 1, 2018.  The 2018 Medicare fee schedule for orthotic and prosthetic services will be increased by 1.1% over 2017 rates. The 1.1% increase is a net reflection of the 1.6% increase in the Consumer Pricing Index for Urban Areas (CPI-U) from June 2016 through June 2017, combined with the annual Multi-Factor Productivity Adjustment (MFP) of -0.5%.

Unfortunately, the 2% sequestration based reduction to all Medicare payments remains in effect (currently through 2025) meaning that Medicare fee for service payments will continue to be reduced by 2% due to sequestration.  While sequestration continues to impact Medicare reimbursement, it is not cumulative.  You will still receive 1.1% more for a service you provide in 2018 then you did in 2017 since the 2% sequestration reduction would be applied to both claims.

Download the 2017 Medicare DMEPOS fee schedule from the CMS website.

Miscellaneous HCPCS Codes Require Additional Information for Payment

Items billed with any HCPCS code with a narrative description that indicates miscellaneous, NOC, unlisted, or non-specified, that is billed to the DME MAC must also include the following information:

  • Description of the item or service
  • Manufacturer name
  • Product name and number
  • Supplier Price List (PL) amount
  • HCPCS code of related item (if applicable)

Miscellaneous HCPCS codes billed without this information will be denied for incomplete and invalid information and will need to be resubmitted with the missing information included.Miscellaneous coded products that have a specific HCPCS code must not be billed with a miscellaneous HCPCS code for that item. Inappropriate billing of miscellaneous HCPCS codes can result in a claim return/reject or denial of the HCPCS code for invalid coding.

Medicare Medical Policy Revisions

Lower Limb Prostheses
There are no changes to policy at this time. View this policy

Spinal Orthoses: TLSO and LSO
There are no changes to policy at this time. View this policy

Ankle-Foot/Knee-Ankle-Foot-Orthosis
There are no changes to policy at this time. 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 & Other Information

Durable Medical Equipment Medicare Administrative Contractor (DME MAC) Audits: Target, Probe and Educate (TPE)

Here is a quick look at some of the results for items currently under TPE review in each of the four DME MAC Jurisdictions.

Jurisdiction A and D (Noridian)

  • AFO/KAFO:  For codes L1970, L4360 and L4361 the improper payment rate was 44%.
  • KO: For codes L1832, L1833, L1843 and L1851he improper payment rate was 83%
  • LSO/TLSO:For codes  L0648 and L0650 the improper payment rate was 49%
  • Therapeutic Shoes: For code A5000 the improper payment rate was 63%

Jurisdiction B (CGS)

  • AFO/KAFO: No results posted at this time
  • KO: No results posted at this time
  • LSO/TLSO: No results posted at this time
  • Therapeutic Shoes: No results posted at this time

Jurisdiction C (CGS)

  • AFO/KAFO: No results posted at this time
  • KO: No results posted at this time
  • LSO/TLSO: No results posted at this time
  • Therapeutic Shoes: No results posted at this time

Jurisdiction D (Noridian)

  • AFO/KAFO:  For codes L4360, L4361, L4386 and L4387 the improper payment rate was 40%.
  • KO: For codes  L1810, L1812, L1832, L1833, L1843, L1845 and L1852 the improper payment rate was 73%
  • LSO/TLSO:For codes  L0625, L0626, L0627, L0630, L0631, L0637, L0641, L0642, L0643, L0648 and L0650 the improper payment rate was 42%
  • Therapeutic Shoes: For code A5000 the improper payment rate was 25%

DME MACs Issue New Dear Physician Letter

The DME MACs have just released a “Dear Physician” letter for knee orthoses that is designed to educate referral sources about what documentation must exist in their medical records in order to support your claim for a knee orthosis. AOPA has reviewed the Dear Physician letter and believes it is consistent with existing LCD and Policy requirements for Medicare coverage of knee orthoses.  View the Physician letter