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Major Medicare and VA Developments Impact O&P Care

As the Trump Administration continues to grapple with the rising number of COVID-19 cases across the nation, the Centers for Medicare and Medicaid Services (“CMS”) and the Veterans Health Administration (“VHA”) recently announced policy developments that impact the provision and reimbursement of orthotic and prosthetic care.

CMS Moves Forward with Prior Authorization for Six Lower Limb Prosthetic Codes

On July 1, 2020, CMS announced that it will require prior authorization for six lower limb prosthetic Healthcare Common Procedure Coding System (“HCPCS”) codes (L5856, L5857, L5858, L5973, L5980, and L5987) with dates of service on or after September 1, 2020, in four states—Texas, Pennsylvania, Michigan, and California.  CMS will then expand prior authorization nationwide beginning on December 1, 2020.  Prior to the COVID-19 public health emergency, CMS stated that the six lower limb prosthetic HCPCS codes would be subject to prior authorization as a Medicare condition of payment in these same four states beginning May 11, 2020, and nationwide beginning October 8, 2020.

In addition, on June 26, 2020, the Durable Medical Equipment Medicare Administrative Contractors (“DME MACs”) and the Pricing, Data Analysis, and Coding Contractor (“PDAC”) published a joint announcement and a revised Lower Limb Prostheses Local Coverage Article announcing that claims will not be paid for these six prosthetic codes with dates of service on or after January 1, 2021 unless the particular prosthetic component has undergone code verification by the PDAC and approval to bill a specific prosthetic L-code has been published on the appropriate Product Classification List.

NAAOP believes the circumstances that prompted CMS to delay prior authorization still exist and, in fact, have gotten worse.  NAAOP does not believe it is an appropriate time to impose new documentation requirements on health care providers and is taking steps to convey its position to CMS.

CMS to Resume Medicare Fee-for-Service Audits

On July 1, 2020, CMS also announced that medical review activities—including pre-payment audits conducted under the Targeted Probe and Educate program and post-payment audits—will resume beginning on August 3, 2020.  CMS previously suspended most Medicare Fee-for-Service medical reviews in light of the COVID-19 public health emergency.  CMS notes that providers selected for review should discuss with their DME MAC any COVID-19-related hardships they are experiencing that could affect audit response timeliness.

VHA Publishes Directive Regarding the Use of Not Otherwise Classified (“NOC”) Codes

On June 24, 2020, VHA released VHA Directive 1045 establishing the policy and responsibilities for developing and utilizing appropriate coding, market analyses, and contract guidance for prosthetic limbs and/or custom orthoses.  Among other things, VHA Directive 1045 confirms that the Department of Veterans Affairs (“VA”) may assign codes (i.e., miscellaneous “not otherwise classified” codes) to prosthetic limbs and custom orthoses, although the directive lacks details regarding the VA’s coding process.  NAAOP suspects that VHA published this directive in response to the Department of Veterans Affairs Office of Inspector General’s report entitled, “Veterans Health Administration: Use of Not Otherwise Classified Codes for Prosthetic Limb Components.”  A key conclusion of the directive is that the VA retains independent authority to code new technologies when CMS has not yet assigned—or does not intend to assign—a billing code.  This is a very positive development that NAAOP will pursue in the future.

NAAOP will continue to keep our members informed as regulatory developments continue.  Please consult our website for more information.

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