OIG Report on OTS Braces Released

What You Need to Know

Titled, Medicare Remains Vulnerable to Fraud, Waste, and Abuse Related to Off-the-Shelf Orthotic Braces, Which May Result in Improper Payments and Impact the Health of Enrollees, the latest OIG report focused on claims filed from 2018 through 2020. Over that time period, more than 90% of bracing claims were for OTS devices and those claims accounted for almost 70% of all Medicare orthotic brace payments.

The OIG's key findings included:

• Medicare paid $66.4M for potentially unallowable replacement OTS braces that did not meet Reasonable Useful Lifetime requirements.
• Medicare paid more than $1B for OTS braces ordered by providers who did not have treating relationships with Medicare beneficiaries (i.e., no Medicare claim from the provider for the beneficiary within the preceding 12 months).
• The majority of new suppliers operated in geographies known to have high levels of Medicare fraud. The OIG states that 92% of the $395M paid to these suppliers for OTS braces were ordered by providers without a treating relationship with Medicare beneficiaries.
• Medicare has not fully used its authority to re-price OTS brace fees to make them comparable to payments made by non-Medicare (e.g., commercial) health plans.
• Medicare paid for OTS braces marketed to beneficiaries by telemarketers using prohibited direct solicitation.
• Medicare has paid millions for fraudulently billed OTS braces during the time period analyzed.

 What this Means for You

We do not think that this OIG report is likely to have a profound effect on how OTS bracing claims get processed and paid in the immediate future. We base that conclusion on four factors, most of which relate to how old the data is that the OIG analyzed in its report and steps already taken by Medicare between 2020 and now.

First, CMS corrected a claims processing problem three years ago that addressed the OIG's finding that CMS was paying for OTS braces that failed to meet RUL requirements. The OIG therefore concluded that CMS had already implemented its recommendation.

Second, after the period analyzed by the OIG, Medicare implemented prior authorization of and required face-to-face visits for some OTS braces, which addresses - at least in part - the OIG's concerns about claim approvals in instances where there was no treating relationship between the provider and beneficiary.

Third, Medicare did re-price a large number of OTS braces as part of its Competitive Bidding Round 2021 program. While that program is now in a gap period, the prices established in Round 2021 remain in effect. Also, as we have previously written about, Medicare is expected to release a proposed rule sometime in the future addressing ways to further improve the Competitive Bidding program for OTS braces.

Fourth, CMS described an extensive educational program focused on preventing inappropriate telemarketing of OTS braces to beneficiaries. Based on that information and CMS's cooperation in the massive 2019 Operation Brace Yourself takedown of OTS bracing telemarketing mills, the OIG concluded that CMS had already implemented its recommendation.

We will, of course, continue to monitor claims-related trends that might indicate an uptick in scrutiny of OTS orthoses. We will update you with that information if and when it becomes available. To read the complete OIG Report, click here.