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Medicare DME Reimbursement to Increase in 2017

Good news!

On January 1, 2017, the amount Medicare pays for diabetic shoes, Moore Balance Brace and Arizona custom AFOs will increase.

While the amount reimbursed may vary slightly by state, the National Fee Schedule is as follows:

Depth Shoes (A5500), pair                                                            $141.56

Prefabricated, Heat Molded Inserts (A5512), pair                         $57.74

Custom Molded Inserts (A5513), pair                                            $86.18

Depth Shoes w/ 3 pr. Prefab, Heat Molded Inserts                       $314.78

Depth Shoes w/ 3 pr. Custom Molded Inserts                               $400.10

Custom Molded Shoes w/ offset heels and rocker bottoms          $564.26

Arizona AFO, Standard (L1940, L2330, L2820), each  – Ceiling $1171.79      Floor  $874.33

Moore Balance Brace (L1940, L2330, L2820), pair       – Ceiling $2343.58    Floor  $1748.66

For a complete listing of updated DME allowables, including prefabricated and custom ankle foot orthoses, go to:

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/DMEPOS-Fee-Schedule-Items/DME17-A.html?DLPage=1&DLEntries=10&DLSort=2&DLSortDir=descending

Medicare DME Reimbursement for 2016

On October 1, 2016, the Medicare fee schedule for diabetic shoes, Moore Balance Brace and Arizona custom AFOs was revised .

While the amount reimbursed by each DME MAC may vary slightly, the National Fee Schedule allowables are as follows:,

Depth Shoes (A5500) $140.58
Prefabricated, Heat Molded Inserts (A5512) $57.34
Custom Molded Inserts (A5513) $85.58
Depth Shoes w/ 3 pr. Prefab, Heat Molded Inserts $312.60
Depth Shoes w/ 3 pr. Custom Molded Inserts $397.32
Custom Molded Shoes w/ offset heels and rocker bottoms $628.96
Arizona AFO, Standard (L1940, L2330, L2820) $1,157.69
Moore Balance Brace (L1940, L2330, L2820) $1,157.69
For a complete listing of updated DME prices, including prefabricated and custom ankle foot orthoses, go to:

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/DMEPOS-Fee-Schedule-Items/DME16-D.html?DLPage=1&DLEntries=10&DLSort=2&DLSortDir=descending

New Billing Codes for Plantar Fascia Night Splints, Pneumatic and Non-pneumatic Walking Casts

Medicare now differentiates between off-the-shelf and custom fitted type prefabricated AFOs including pneumatic and non-pneumatic walkers and plantar fascia night splints.

Traditionally used codes reflect the custom fitted version and the allowable amounts for both are currently the same.  For devices traditionally billed using L4360, L4386 and L4396, new codes reflecting the off-the-shelf definition most likely apply.

Click below to read entire article:

NEW BILLING CODES FOR PLANTAR FASCIA NIGHT SPLINTS, 150127

Increased Medicare DME Reimbursement for 2015

Good news!! On January 1, 2015, the Medicare fee schedule for diabetic shoes, Moore Balance Brace and Arizona custom AFOs increased. While the amount reimbursed by each DME MAC may vary slightly, the National Fee Schedule allowables are as follows:

Depth Shoes (A5500) $141.14
Prefabricated, Heat Molded Inserts (A5512) $57.58
Custom Molded Inserts (A5513) $85.92

Depth Shoes w/ 3 pr. Prefab, Heat Molded Inserts $313.88
Depth Shoes w/ 3 pr. Custom Molded Inserts $398.90
Custom Molded Shoes w/ Custom Molded Inserts $586.42

Arizona AFO, Standard (L1940, L2330, L2820) $1162.23
Moore Balance Brace (L1940, L2330, L2820) $1162.23

For a complete listing of updated DME prices, including prefabricated and custom ankle foot orthoses, go to:
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/DMEPOS-Fee-Schedule.html.

Effect of Sequestration on DME

Questions and AnswersQuestion: Does the 2% payment reduction under sequestration apply to the payment rates reflected in Medicare fee-for-service fee schedules or does it only apply to the final payment amounts?

Answer: Payment adjustments required under sequestration are applied to all claims after determining the Medicare payment including application of the current fee schedule, coinsurance, any applicable deductible, and any applicable Medicare Secondary Payment adjustments. All fee schedules, Pricers, etc., are unchanged by sequestration; it’s only the final payment amount that is reduced.

Question: How is the 2% payment reduction under sequestration identified on the electronic remittance advice (ERA) and the standard paper remittance (SPR)?

Answer: Claim adjustment reason code (CARC) 223 is used to report the sequestration reduction on the ERA and SPR.

Continue Reading…

Mandatory Payment Reductions in the Medicare Fee-for-Service (FFS) Program – “Sequestration” (201303-02)

Spending-Cuts-ShutterstockThe Budget Control Act of 2011 requires, among other things, mandatory across-the-board reductions in Federal spending, also known as sequestration.  The American Taxpayer Relief Act of 2012 postponed sequestration for 2 months.  As required by law, President Obama issued a sequestration order on March 1, 2013.  The Administration continues to urge Congress to take prompt action to address the current budget uncertainty and the economic hardships imposed by sequestration.

This listserv message is directed at the Medicare FFS program (i.e., Part A and Part B).  In general, Medicare FFS claims with dates-of-service or dates-of-discharge on or after April 1, 2013, will incur a 2 percent reduction in Medicare payment.  Claims for durable medical equipment (DME), prosthetics, orthotics, and supplies, including claims under the DME Competitive Bidding Program, will be reduced by 2 percent based upon whether the date-of-service, or the start date for rental equipment or multi-day supplies, is on or after April 1, 2013.

The claims payment adjustment shall be applied to all claims after determining coinsurance, any applicable deductible, and any applicable Medicare Secondary Payment adjustments.

Though beneficiary payments for deductibles and coinsurance are not subject to the 2 percent payment reduction, Medicare’s payment to beneficiaries for unassigned claims is subject to the 2 percent reduction.  The Centers for Medicare & Medicaid Services encourages Medicare physicians, practitioners, and suppliers who bill claims on an unassigned basis to discuss with beneficiaries the impact of sequestration on Medicare’s reimbursement.

Questions about reimbursement should be directed to your Medicare claims administration contractor.  As indicated above, we are hopeful that Congress will take action to eliminate the mandatory payment reductions.

Results of Widespread Prepayment Probe Review of Ankle-Foot/Knee-Ankle-Foot Orthosis (HCPCS L4360, L1970 and L1960)

Review Results

Jurisdiction D DME MAC Medical Review Department completed a widespread prepayment probe review of HCPCS codes L4360, L1970 and L1960. This review was initiated based on CERT analysis.

The L4360 review involved 101 claims of which 97 were denied. This resulted in an overall error rate of 97%.

The L1970 review involved 100 claims of which 80 were denied. This resulted in an overall error rate of 79%.

The L1960 review involved 100 claims of which 69 were denied. This resulted in an overall error rate of 68%.

Primary documentation errors that resulted in denial of claims

• 21% of L4360 claims received a denial as basic coverage criteria not met.

• 21% of L1970 claims received a denial as basic coverage criteria not met.

• 30% of L1960 claims received a denial as basic coverage criteria not met.

Medical records are insufficient to support basic coverage criteria.

BASIC COVERAGE CRITERIA: Ankle-foot orthoses are covered for ambulatory beneficiaries with weakness or deformity of the foot and ankle, who require stabilization for medical reasons, and have the potential to benefit functionally.

•  21% of L1970 claims received a denial as criteria 1,2,3,4 or 5 not met.

•  32% of L1960 claims received a denial as criteria 1,2,3,4 or 5 not met.

1 of the 5 following criteria were not met:

•  The beneficiary could not be fit with a prefabricated AFO; or

•  The condition necessitating the orthosis is expected to be permanent or of longstanding duration (more than 6 months); or,

•  There is a need to control the knee, ankle or foot in more than one plane; or

•  The beneficiary has a documented neurological, circulatory or orthopedic status that requires custom fabricating over a model to prevent tissue injury; or,

• The beneficiary has a healing fracture which lacks normal anatomic integrity or anthropometric proportions.

20% of L4360 claims received a denial as no proof of delivery submitted.

7% of L1960 claims received a denial as no proof of delivery submitted.

No proof of delivery submitted.

Proof of delivery (POD) is a Supplier Standard and DMEPOS suppliers are required to maintain POD documentation in their files. For medical review purposes, POD serves to assist in determining correct coding and billing information for claims submitted for Medicare reimbursement. Regardless of the method of delivery, the contractor must be able to determine from delivery documentation that the supplier properly coded the item(s) submitted for Medicare reimbursement and that the item(s) are intended for, and received by, a specific Medicare beneficiary.

• 42% of L4360 claims received a denial as no written or verbal order received.

• 7% of L1970 claims received a denial as no written or verbal order received.

• 5% of L1960 claims received a denial as no written or verbal order received.

No written or verbal order received.

All items billed to Medicare require a prescription. An order for each new or full replacement item billed must be signed and dated by the treating physician, kept on file by the supplier, and made available upon request.

Equipment and supplies may be delivered upon receipt of a dispensing order except for those items that require a written order prior to delivery. A dispensing order may be verbal or written. The supplier must keep a record of the dispensing order on file. It must contain:

• Description of the item

• Beneficiary’s name

• Prescribing Physician’s name

• Date of the order and the start date, if the start date is different from the date of the order

• Physician signature (if a written order) or supplier signature (if verbal order)

 

For items that are provided based on a dispensing order, the supplier must obtain a detailed written order before submitting a claim. Detailed written order (DWO) is required before billing. Someone other than the ordering physician may produce the DWO. However, the ordering physician must review the content and sign and date the document. It must contain:

• Beneficiary’s name

• Physician’s name

• Date of the order and start date, if start date different than date of order

• Detailed description of the item(s)

• Physician signature and signature date

Going Forward

Based on high error rate, Noridian Administration Services will close this probe review and begin a widespread targeted review on HCPCS codes L4360, L1970 and L1960.

To review entire article please click here

Medicare Covering Orthotics?

Question:
I heard through the grapevine that Medicare has started to cover orthotics.

Is this true or rumor?

If they are covering does anyone know what diagnosis, and whether the coverage is for L3020?

Answer:
Foot orthotics (L3xxxx) are not covered, and likely will never be for the vast majority of Medicare patients.

The only circumstance where foot orthotics (L3xxxx) are covered under Medicare is when a patient has a leg brace attached to the shoe and that shoe (billed and covered by Medicare) is an integral part of that brace. Only the supplier who provides the shoe and the brace can provide and bill for the foot orthotic.

Not meeting that requirement, yet still billing L3xxxx with a “KX” modifier indicating that you DID meet the very strict requirements may be construed as potentially fraudulent billing.

Implications of the New Medicare AFO Reimbursement Policy and Suggestions How to Appropriately Bill Prefabricated and Custom Fabricated Devices

New Medicare reimbursement policy requires prefabricated and custom AFOs coded as L1900 and between L1910 and L1990 to extend to 4 cm below the fibular head. Established policy also requires L1906 devices to have effective PDAC verification.

http://www.cms.gov/medicare-coverage-database/details/article-details…

Some commonly used AFOs are unaffected by this change, some AFOs should be coded differently, some AFOs are being developed to comply with the new changes and some AFOs no longer qualify for reimbursement.

The following is a review of commonly used prefabricated and custom AFOs with suggestions how to appropriately code in light of these recent changes.

L1902, “AFO ankle gauntlet, prefabricated”
Unaffected by the new policy.
Not required to have PDAC verification nor need extend as high as to near the fibular head.
The 2013 fee schedule ranges, depending on the state, from $69.69 to $92.92.
Examples, recommended by the manufacturers and by SafeStep to be billed as such include:

Ossur Gameday, Exoform
Aircast A60
Bledsoe Axiom
Darco Web, Sport, Pro
Medspec ASO
SafeStep DME Multiligamentous Sport
Swede-O Ankle-Lok, Step Smart


L1906, “AFO multiligamentous ankle, prefabricated”

Since 7/1/2012, have been required to have, active PDAC verification, “a hinged ankle and a rigid stirrup and foot plate which provides functional tracking of the ankle with hind-foot and mid-foot stability during ambulation.”.
The 2013 fee schedule ranges, depending on the state, from $104.99 to $241.94.
Examples of such devices with active PDAC verification include:

Darco Body Armor Vario
Medspec EVO Hinge
Swede-O Arch Lok, Atom, Dorsi-Assist
United Surgical Trailblazer Hinged Ankle

DPMs are advised to consult the PDAC website, www.dmepdac.com to ensure that PDAC verification is present and active. There are products that could has design features to qualify as L1906 but have not had PDAC revalidation, as required, subsequent to last year’s Policy change. Products which have not received coding verification from the PDAC must be billed using code A9270, “non-covered item or service”. The above list is as of 1/13/2013 and is subject to change. For a complete list of L1906 devices with effective L1906 verification click:
https://www.dmepdac.com/dmecsapp/do/product search


L1907, “AFO supramalleolar, with straps”

Custom fabricated and not required to extend as high as required by the Policy Article.
PDAC verification not required.
The 2013 fee schedule for such devices ranges, depending on the state, from $512.77 to $564.06.


L1930, “AFO plastic or other material, prefabricated”

Required to extend as high as specified by the Policy Article.
PDAC verification not required.
The 2013 fee schedule for such devices ranges, depending on the state, from $170.94 to $326.70.
Examples recommended by the manufacturers and by SafeStep to be billed as such include:

FLA Orthopedics Foot Drop Splint
Ossur AFO Light


L1951, “AFO, spiral plastic or other material, prefabricated”

Required to extend as high as specified by the Policy Article.
PDAC verification not required.
The 2013 fee schedule for such devices ranges, depending on the state, from $765.34 to $841.84.
Examples recommended by the manufacturers and by SafeStep to be billed as such include:

Eurointernational             Perosupport (formerly Peromax)


L1971, “AFO with ankle joint, prefabricated”

Required to extend as high as near to the fibular head.  If not, no longer qualify as Medicare reimbursable. Some, like the Swede-O SureStep, though still listed on the PDAC website as L1971, because they do not meet the height requirement, should no longer be billed as such. Some like the Ossur Rebound and the Donjoy Velocity, while lacking PDAC verification, had been recommended by the manufacturer and by SafeStep, prior to January 1, 2013, to be billed as L1971. They should no longer be billed as such. Manufacturers are submitting these devices to PDAC to determine their qualification for L1906 verification. If so, and only then, would they qualify for Medicare reimbursement as such.


L2340, “pre-tibial shell, molded to patient model”

According to the January 2013 Policy Article, “Must extend to between the tibial tuberosity and to within 3 inches of the medial malleolus”.
As a custom item, it “involves substantial work such as cutting, bending, molding, sewing, etc. It involves more than trimming, bending, or making other modifications to a substantially prefabricated item”.
PDAC verification not required.
The 2013 fee schedule ranges, depending on the state, ranges from $390.10 to $582.88


L4350, “ankle control orthosis, stirrup style, rigid”

Not required to extend as high as the knee.
PDAC verification is not required. Unaffected by the recent Policy Article.
The 2013 fee schedule ranges, depending on the state, from $78.04 to $147.33.
Examples recommended by the manufacturers and by SafeStep to be billed as such include:

Ossur Formfit, Airform Universal
Aircast Airlift PTTD, Airsport, Air Stirrup
SafeStep DME Air Stirrup, Foam Stirrup
Swede-O Versi-Splint


L4361, “AFO walking boot type, varus / valgus correction (CROW)”

Not required to extend as high as the knee.
PDAC verification is not required. Defined by LCD revision of 1/1/2011.
The 2013 fee schedule ranges, depending on the state, from $1400.89 to $1931.59.


L4386, “Walking boot, non-pneumatic”

Not required to extend as high as the knee.
PDAC verification is not required.
Unaffected by the recent Policy Article.
The 2013 fee schedule for such devices ranges, depending on the state, from $144.49 to $158.95.


L4396, “static or dynamic AFO including soft interface, adjustable for fit, for positioning, minimal ambulation, prefabricated”

(Plantar fascia night splints)
Must as of 1/1/10 have adjustability. Many dorsal night splints commonly billed using this code lack “adjustably for fit” and so do not qualify for Medicare reimbursement. This item is an exception in that while others AFOs need be for ambulation, L4396 needs not when used for treatment of plantar fasciitis (728.71) or as part of a treatment plan for plantar flexion contracture of 10 degrees or greater (718.47).
The 2013 fee schedule ranges, depending on the state, from $150.37 to $183.51.


Arizona-type AFO

PDAC verification and an Advisory Article remain in place for Arizona AFO type custom gauntlets and as such, the Medicare DME MAC AFO redefinition for billing such devices DOES NOT require them to reach the new height requirement. According to PDAC:

If you are supplying an Arizona Style Ankle Gauntlet, then the PDAC coding article applies and the device can be delivered as an Arizona Style Gauntlet. The confusion takes place in the nomenclature and descriptor of the ankle gauntlets. These ankle gauntlets are listed in many coding materials as: AFO Ankle Gauntlet, giving way to many thinking these are AFO’s when they are truly ankle gauntlets. The classification and listing language are merely for reference and not indicative of their true functional purpose: the ankle joint complex.

The manufactures have read into the definition and not fully understood that an AFO is well defined and should be followed when supplying one of these orthotic devices. The PDAC advisory article: Ankle-Foot Orthoses – Arizona-Type – Correct coding – Revised<https://www.dmepdac.com/resources/articles/2011/11_15_11.html>, applies when delivering an Arizona type AFO.

Should you need any further assistance please call the PDAC Contact Center at 877-735-1326. Hours of operation are Monday through Friday, 8:30 a.m. to 4 p.m. CT.

PDAC
www.dmepdac.com<http://www.dmepdac.com/> 

According to the PDAC Advisory Article, Arizona Short and Arizona Tall, or similar custom fabricated braces (including the Moore Balance Brace), only the following codes should be used:
L1940 Ankle foot orthosis, plastic or other material, custom fabricated
L2330 Addition to lower extremity, lacer or Velcro closure, molded to patient model, for custom fabricated orthosis only
L2820 Addition to lower extremity orthosis, soft interface for molded plastic below knee section
The 2013 fee schedule ranges, depending on the state, from $850.37 to $1389.58.

For the Arizona Extended and the Arizona Unweighting or similar custom fabricated braces, only the following codes should be used:
L1960 Ankle foot orthosis, posterior solid ankle, plastic, custom-fabricated
L2330 Addition to lower extremity, lacer molded to patient model, for custom fabricated orthosis only
L2820 Addition to lower extremity orthosis, soft interface for molded plastic below knee section
The 2013 fee schedule ranges, depending on the state, from $902.52 to $1484.25.


Thermoplastic hinged articulated AFO

Devices that meet the description as L1970, “AFO, plastic with ankle joint, custom fabricated” are as of 1/1/13, according to the new AFO Policy Article, required extend to within 4 cm of the fibular head. When they include a soft interface, code L2820 can also be billed.
AFO manufacturers, including Arizona AFO have old and are developing new, models that qualify for reimbursement.  Compliance requires that higher devices be casted for up to the knee.

Examples of these devices will be shown at the SAM and NY Clinical Conferences.
The 2013 fee schedule for such devices ranges, depending on the state, from $621.03 to $929.37.
APMA, the American Orthotics and Prosthetics Association and others continue in their efforts lower the new AFO height requirement to a scientifically justified level as well as to allow the Arizona AFO-type Policy Article provide qualification for reimbursement.

The final and sole responsibility for correct coding, within established laws, rules and standards of practice, rests upon the party submitting the claim.

Your comments are welcome and appreciated. Updates relating to this and other coding, billing and compliance issues will be posted on the SafeStep blog, www.safestepblog.net.

Josh White, DPM, CPed

IRS Issues Final Rule on Medical Device Tax

The Internal Revenue Service (IRS) has issued its final rule on the medical device tax. The Patient Protection and Affordable Care Act of 2012 (PPACA or “Obamacare”) included a provision that imposes a 2.3% excise tax on the sale of certain medical devices. There has been a lot of concern about the applicability of the tax to devices that are dispensed by pedorthists. This article described the circuitous route that essentially exempts pedorthic devices from the tax during this phase of the regulatory process.

By way of background, in February of this year, the IRS published a Notice of Proposed Rulemaking (RIN 1545-BJ44) relative to the applicability and implementation of the medical device excise tax. The excise tax primarily impacts manufacturers, importers and producers of taxable medical devices.

Generally, a “taxable medical device” is defined as an “…instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part or accessory, that is recognized in the official National Formulary, or the United States Pharmacopeia, or any supplement to them; intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease; or intended to affect the structure or any function of the body, and that does not achieve its primary intended purpose through chemical action within or on the body and that is not dependent upon being metabolized for the achievement of its primary purposes.”

In general, taxable medical devices do not include eyeglasses, contact lenses, hearing aids, and any other device that is generally purchased by the general public at retail for individual use (the “retail exemption” of the regulation).

A device will be considered covered under the retail exemption as being of a type generally purchased by the public at retail for individual use if it is regularly available for purchase and use by individual consumers who are not medical professionals, and if the design of the device demonstrates that it is not primarily intended for use in a medical institution or office or by a medical professional. The fact that a device requires a prescription is not a factor in the determination of whether or not the device falls under the retail exemption.

Factors relevant to determining if a device falls under the retail exemption include:

1. Consumers who are not medical professionals can purchase the device through retail businesses that also sell items other than medical devices, such as drug stores, supermarkets, and similar vendors;

2. Consumers who are not medical professionals can use the device safely and effectively for its intended medical purpose with minimal or no training from a medical professional;

3. The device is classified by the U.S. Food and Drug Administration (FDA) under Physical Medical Devices.

Factors relevant to determining if a device does not fall under the retail exemption include:

1. The device generally must be implanted, inserted, operated, or otherwise administered by a medical professional;

2. The cost to acquire, maintain and/or use the device requires a large initial investment and/or ongoing expenditure that is not affordable for the average consumer;

3. The device is a Class III device under the FDA system of classification;

4. The device is classified by the FDA under certain categories such as Clinical Chemistry and Clinical Toxicology Devices; Immunology and Microbiology Devices; Cardiovascular Devices; Ophthalmic Devices; Orthopedic Devices; Radiology Devices, etc.

5. The devices qualifies as DMEPOS, and supplies for which payment is available exclusively on a rental basis under Medicare Part B payment rules, and is an “item requiring frequent and substantial servicing”.

PPACA “safe harbor” provisions consider certain devices to be of a type generally purchased by the general public at retail for individual use to include – specific to pedorthics – “…and Subpart D of 42 CFR 414 [Durable Medical Equipment and Prosthetic and Orthotic Devices], for which payment is available on a purchase basis under Medical Part B payment rules, and are: [1] ‘Prosthetic and orthotic devices,’ as defined in 42 CFR 414.202, that do not require implantation or insertion by a medical professional;…[3] “Customized items” as described in 42 CFR 414.224; [4] “Therapeutic shoes,” as described in 42 CFR 414.228(c); or [5] Supplies necessary or the effective use of DME, as described in section 110.3 of chapter 15 of the Medicare Benefit Policy Manual (Centers for Medicare and Medicaid Studies Publication 100-02).”

The bottom line is that, as in the initial Notice of Proposed Rulemaking in February, the final rule on the medical device excise tax does not impact the modalities provided by pedorthists to their patients or the suppliers to their pedorthic customers.