Year: 2015

On December 29th, the Centers for Medicare and Medicaid Services (CMS) released the long anticipated final rule regarding Medicare prior authorization of certain DMEPOS, including most lower limb prostheses.  The final rule, which will be published in the December 30, 2015 Federal Register, will be implemented 60 days after it publication.

AOPA has reviewed the final rule, and offers the following preliminary thoughts and comments regarding the provisions of the final rule.

AOPA’s primary concern with prior authorization of prostheses is, and always has been, that it will critically delay timely access to the provision of prosthetic devices that are crucial to the rehabilitation needs of Medicare beneficiaries.  In the final rule, CMS acknowledged that proper access to medically necessary care is of the utmost importance, but indicated that it will use sub-regulatory processes to determine appropriate timelines for making prior authorization decisions.  These sub-regulatory processes are inherently arbitrary in that they do not allow for public input and or comment regarding their appropriateness.  AOPA remains concerned that prior authorization of any kind will only serve to hinder the delivery of medically necessary prosthetic care within reasonable timeframes.

Another concern that AOPA expressed in its comments on the proposed rule that was not sufficiently addressed in the final rule is that prior authorization does not equate to a guarantee of claim payment nor does it eliminate the exposure of the claim to additional audits.  While the final rule states that an affirmative prior authorization decision indicates that the required documentation for claim payment is present, it also reiterates that it is not an initial claim determination and the claim may ultimately be denied for technical reasons such as invalid proof of delivery documentation.

AOPA met with representatives from the Office of Management and Budget (OMB) in August while they were reviewing the proposed rule and registered concerns about the above issues.

The few seeming new wrinkles in the final rule is that implementation will not be immediate and universal, but there will be a Master List of 135 HCPCS codes eligible for inclusion in prior authorization.  It appears there will a phase-in process, meaning not all 135 codes will be subject to prior authorization immediately.  Rather, the final rule indicates that CMS will establish a subset of the master list that will determine which HCPCS codes require prior authorization as part of the initial implementation of the final rule.  While the master list includes lower limb prosthetic HCPCS codes that meet or exceed the $1,000 threshold, it remains to be seen which codes will be included in the initial list of codes that will be subject to prior authorization.

While the current list does not include any orthotic codes, AOPA remains concerned that future updates to the master list may include orthotic codes that meet the criteria for inclusion in prior authorization.

At first glance, the final rule does not recognize two key facts from Medicare’s own data:

1. There is not a problem of unnecessary utilization of lower limb prosthetics, and the -14% reduction in prosthetics payments over the 2010-13 period proves that;
2. Today, Medicare prosthetic patients are 35% LESS LIKELY to receive an advanced tech prosthetic device than they were just 5 years ago (2005-2009).

In addition, the final rule acknowledges AOPA’s concern regarding the need for a more timely response to prior authorization requests but elects to define these timeframes through sub regulatory processes that do not allow for public comment or input.

While AOPA will review the final rule more closely in the coming days, After its preliminary review,  AOPA believes that the final rule fails to address AOPA’s concerns regarding the implementation of a prior authorization program that:

1. Does not appear to constitute a guarantee of payment; and
2. Retains the payment threshold of $1,000 for inclusion in prior authorization
3. Does not assure that providers would not be subject to post-payment/RAC audits on the very same issue of medical necessity; and
4. Uses sub-regulatory processes to define appropriate timeframes for response to prior authorization requests; and
5. Exceeds its authority to initiate a limited pilot on prior authorization, done only in selected areas (as was done with power mobility devices) to a national policy impacting all amputee beneficiaries nationwide.

AOPA will provide additional analysis of the final rule as it becomes available. Read the final rule.

On November 23, 2015, the Centers for Medicare and Medicaid Services (CMS) released the 2016 Medicare DMEPOS fee schedule. As expected, Medicare fees for orthotic and prosthetic devices will be slightly lower in 2016 than they were in 2015.

The annual update to the Medicare O&P fee schedule is based on a combination of the increase in the Consumer Pricing Index for urban areas (CPI-U) from June to June of the previous year, and the annual Mutli-factor Productivity Adjustment. The CPI-U increased by a total of 0.1% from June 2014 to June 2015 and the 2016 Productivity Adjustment was calculated as -0.5%. The combination of these two factors will result in an overall decrease of 0.4% in the 2016 Medicare O&P fee schedule.

While a decrease in the fee schedule is not unprecedented, the 2016 decrease is the first one since 2011, when the Productivity Adjustment was first introduced as a result of the passage of the Patient Protection and Affordable Care Act (ACA) in 2010.

AOPA members are reminded that in addition to the 0.4% decrease in the 2016 O&P fee schedule, sequestration remains in effect for Medicare claims. Sequestration will result in a 2% reduction in Medicare reimbursement but as this reduction is not cumulative year over year, it should not be reflected in the net decrease in the 2016 fee schedule.

It has been remarkably quiet on the Recovery Audit Contractor (RAC) front for the last 18 months or so. As a result of the original RAC contracts coming to an end and new RAC contract proposals being submitted and reviewed, the number of additional documentation requests (ADRs) has been reduced significantly. CMS advised its original RAC contractors to essentially hold off on issuing new ADRs until new contracts were finalized and implemented. One of these new contracts would establish a single, national RAC contractor who would be responsible for RAC audits on all Medicare DMEPOS, Home Health, and Hospice claims. This contract was initially awarded to Connolly Healthcare who currently serves as the Jurisdiction C RAC contractor for all Medicare claims.  While the contract award was issued in December 2014, a subsequent protest of the award initially delayed its implementation and eventually led to a CMS decision to issue new bids for all of the RAC contracts, including the national contract for DMEPOS, Home Health, and Hospice claims.

On November 16, 2015, CMS announced that while new bids for RAC contracts are being accepted and reviewed, the existing four RACs may continue to perform RAC reviews and may begin to issue additional ADR requests.  This signals an effective end to the moratorium that was placed on new RAC activity in February of 2014.  While it may take a few weeks for the current RACs to put in place the resources to re-start full scale activities, there is no reason to expect that they will not do so as soon as possible.

While this announcement is not an encouraging development, RAC audits are not new to the O&P community and hopefully we have learned some lessons from previous experiences with RAC auditors.  When RAC audits began several years ago, O&P providers faced a new reality as far as what documentation was expected in order for claims to be paid and stay paid.  Hopefully this education has not been forgotten as a result of the slowdown in RAC audits and the impact of the RACs becoming more active will be significantly lower.

RAC audits for O&P providers are still limited to a maximum of 10 audits per Tax ID every 45 days.  AOPA encourages everyone to make sure you are aware of these limits and to challenge any requests that exceed the limits.  While nobody is happy to hear that the RACs are back in business, at least temporarily, the lessons of the past should make for a less stressful future. The CMS announcement regarding RAC audits may be found on the CMS website.