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Linda Collins Blogger

OA Knee Bracing: Reimbursement

Posted by Linda Collins | July 12, 2016

Our first post provides information about the correct codes and modifiers to use when billing OA Braces. The second post details the specific documentation required to support the various medical coverage policies. Following the guidelines for coding and coverage should logically mean you will be paid for the product, right? In this final post in the three-part series on OA Bracing, we discuss reimbursement challenges.

Charged vs Paid

It is important to start with a basic understanding of the charged, allowed and paid amounts. When you submit a claim, typically on the HCFA 1500, you provide the HCPCS code describing the product and the charge amount. This dollar amount is what you have established as the standard fee for the brace.

During processing of the claim, the insurance will determine how much money to allow for the brace. The vast majority of private insurance companies use the Medicare fee schedule as the baseline for reimbursement. They may establish their fee schedule as a percent discount off the Medicare fee schedule. The contract between the provider and the insurance company outlines the fee schedule. Review your contracts for fee schedule information to determine what percentage of the Medicare fee scheduled is allowable by product. In the absence of a contract, the insurance company will use some established baseline amount for reimbursement.

The difference between what is charged and what is allowed is the contractual write off.

The patient's financial responsibility is subtracted from the allowed amount. This may be the patient's copay or deductible. The provider receives payment of the balance. Here is an example where the patient has a 20% co-insurance:

  • Charged $1,200 (provider's standard billed charges)
  • Allowed $1,007 (the payer's fee schedule)
  • Contractual Write off $193.00 (difference between charged and allowed)
  • Patient Responsibility $201.40 (percent defined by patient's benefit plan)
  • Paid $805.60

You collect $201.40 from the patient and $805.60 from the insurance company for a total payment of $1,007 for the brace.

A new kind of patient responsibility

High deductible health insurance plans are increasing. Along with a higher financial responsibility, the patient may also have access to a Flexible Spending Account (FSA) or Health Spending Account (HSA.) In this case, the patient has pre-tax dollars set aside into a special spending account for healthcare costs. These monies can cover copays, deductibles or other uncovered expenses. In the example listed above, the patient could use the spending account to pay the $201.40 to the brace provider.

What does this mean for you?

First, know the Medicare fee schedule for your area. This is the baseline fee schedule for almost all insurance payments. If you have not already, you can download the Medicare fee schedule at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/DMEPOS-Fee-Schedule.html.

Össur is providing a list of our products, HCPCS codes and Medicare allowable amounts by state as well. You may access this download under the "Reimbursement Resources" tab.

Second, check your insurance contracts to verify the established fee schedules. Be aware that many private insurance companies will not list the entire fee schedule in the contract. You may have to contact the insurance company's representative to get specific information about the allowed amounts for the product you provide. Also be aware, insurance companies my contractually change the fee schedule with little notification.

Third, ask your patient about the availability of an FSA or HSA. Remind your patient that an OA Brace is a medical device that may be paid with funds from the spending account.

Finally, take advantage of the OA Brace Reimbursement Guide by Össur. This guide covers all the steps involved in coding, coverage and reimbursement of an OA Brace. The guide is available from your Össur representative and you can download it under the "Reimbursement Resources" tab on this page.

Össur R&R

The Source for O&P Reimbursement & Regulatory News & Analysis

If you have any questions for Össur’s Reimbursement Team or about Össur’s Reimbursement Services, please contact us at reimbursement411@ossur.com