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2016 Medicare DMEPOS Fee Schedule Released

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.

RAC Contractors Have Been Authorized to Re-Start Audit Activity

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.

2016 HCPCS Codes Released

The Centers for Medicare and Medicaid Services (CMS) has released the new HCPCS codes for 2016. There were no L-codes added or deleted for 2016. There were two minor verbiage changes for codes L1902 and L1904, which describe pre-fabricated and custom fabricated ankle gauntlet style devices respectively. Below is a breakdown of the code descriptor changes which will be effective for claims with a date of service on or after January 1, 2016.
Code Descriptor Changes
Two L-codes had their official descriptors changed.
Code
New Descriptor
Old Descriptor
L1902
Ankle orthosis, ankle gauntlet or similar, with or without joints, prefabricated, off-the-shelf
AFO, ankle gauntlet, prefabricated, off-the-shelf
L1904
Ankle orthosis, ankle gauntlet or similar, with or without joints, custom fabricated
Ankle orthosis, ankle gauntlet, custom fabricated

Data, Hard Work, and Unified O&P/Amputee Community Response Yield PARTIAL WIN on Troublesome, Draft LCD for Lower Limb Prosthetics

The White House just announced that CMS “will not finalize” the July 16, 2015 Draft LCD. That may be clarified further when comparable announcement text from both CMS and from the DME MACs are released and can be analyzed.  The White House report appears to confirm the information that AOPA shared at the recent San Antonio National Assembly that O&P could be confident that the July 16 proposed LCD for Lower Limb Prosthetics would not be enacted in anything close to its proposed form.

Unfortunately, there are aspects of this document which raise concerns.  The announcement on the CMS website reports that CMS is going to convene “…a multi-disciplinary Lower Limb Prostheses Interagency Workgroup in 2016…the Workgroup will be comprised of clinicians, researchers, policy specialists, and patient advocates from different federal agencies.”

A “working group” that would include both government officials as well as stakeholders from the public would have been more promising.  The immediate concern is that this is NOT a rescission of the Draft LCD.  Some might see this as following a too frequent government step of “kicking the can down the road.”  AOPA, the O&P Alliance, the Amputee Coalition and others had made clear that complete rescission was necessary because the draft was so completely out-of-touch with patient needs AND because there was no scientific data in the medical literature to support the draft. But the medical literature actually supports the present LCD—not a revision and tightening of requirements for beneficiaries to secure a prosthesis.

We recognize and believe it is a positive step that the draft LCD will not be implemented at this time.  However, we continue to believe that the draft LCD should be rescinded by the Medicare Contractors and that CMS should provide patient and provider stakeholders with a meaningful role in the development of future coverage policies for lower limb prostheses.

There is a principle “if it ain’t broke, don’t fix it.”  Prosthetic spend for Medicare has declined for each of the past 4 years, by a total of 14% since the 2010 high.  Looks like even though they are shelving the LCD, they want to convene a special committee, presumably to craft either a new, or revised LCD.

The foundation and structure within the current LCD is sound but there is an opportunity to improve upon it; there remains a need to establish recognition of the prosthetist’s notes when considering medical necessity. That issue and similar additional requirements to care require continuing efforts to improve beneficiary access.

So, the announcement is a partial win—it means that we will not see the July 16, 2015 draft LCD enacted in its current form. AOPA urges caution in that beyond a White House email, we will need to take the time to examine carefully what the CMS announcement means, to assess any longer term issues/threats, beyond what appears, the near-term assurance that Medicare amputees will not see the kind of immediate degradation in the quality of prosthetic care that the draft LCD would have enforced on them, at least not in the near-term.

AOPA’s leadership and regulatory specialists will review ALL government and contractor communications as they arise, and provide a further analysis once that in-depth review is complete.

The report at this juncture would not be complete without acknowledging with appreciation the hard work of amputees and their O&P providers who supported AOPA, the O&P Alliance and the Amputee Coalition in the all-out effort to stop this LCD from reverting amputees to a 1970’s standard of care.

Read the White House statement.