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David McGill Blogger

2014 Fee Schedule Update - Things Come Into Focus

Posted by David McGill | December 19, 2013

Medicare has released the HCPCS Fee Schedule for 2014. Here are the 3 things you need to know, followed by important analysis.

  1. Overall, the fee schedule gives suppliers a 1% increase over 2013 amounts.
  2. Medicare set fees for the 23 new orthotic codes that end with the words "off the shelf" at rates identical to their "custom-fit" counterparts. (See our December 9 post explaining the creation of OTS and "custom-fit" codes.)
  3. Medicare also set an allowable for L5969, the "power assist" code created for iWalk's BiOM prosthetic ankle-foot. Depending on which state you live in, values for the code range between $13,380.84 and $14,179.50.

What does this mean for you?

Three things to remember - one general, two relating to orthotics.

First, the new fee schedule and codes go into effect January 1, 2014. That means everything "goes live" in less than 2 weeks.

Second, the fact that Medicare has gone to the trouble of creating certain OTS/custom-fit code pairs but set reimbursement for those pairs at the same amount raises many questions. While any forecasting on the subject is purely speculative, our best guess at the present time given the available information is that CMS will look to reset the payment amounts for the OTS codes in the near future, most likely by including them in the next round of competitive bidding. (Medicare has not disclosed when the next round will begin, or what products it will include.)

Third, with the OTS/custom-fit codes "going live" on January 1, it will be critical for you to specifically document the customization you perform on any device described by one of the 23 "custom-fit" codes. We think it likely that the MACs and Recovery Auditors will start scrutinizing those claims in 2014.

In the past, we have seen some suppliers, when confronted with the threat of audits or prepayment claim reviews, adopt short-term strategies that seem like solutions but that really have devastating long-term effects on their business and the broader industry. We can foresee some suppliers deciding to always bill the OTS version of a paired code because (a) as of today, you get paid the same amount for the OTS code as the custom-fit one, (b) it requires less detailed documentation, and (c) it may provide some short-term relief from audits/prepayment claim reviews.

Do not adopt this strategy.

If you deliver a device that's OTS, bill the OTS code. If you deliver that same device but have custom fit it to the patient, document appropriately and then bill the custom-fit code. The shortcut you take today could result in you walking very quickly off the edge of a cliff.

To download the 2014 fee schedule, click here.

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