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David McGill Blogger

OIG Report Examines Medicare Payments for Prosthetics and Custom Orthotics

Posted by David McGill | October 12, 2012

Today, the OIG published a new report.The key findings:

  1. BIPA: Medicare has failed to create regulations implementing the “qualified provider” requirement of the Benefits Improvement and Protection Act (BIPA) of 2000. BIPA prohibits Medicare from paying for prosthetics or custom orthotics unless those items are furnished by a “qualified practitioner” and fabricated by a “qualified practitioner” or “qualified supplier”. Medicare was supposed to implement regulations enforcing this requirement by December 21, 2002. It hasn’t. So the OIG’s conclusion in this regard isn’t a surprise – it’s a statement of the obvious.

  2. Qualified Suppliers: More important, OIG concluded that despite the fact that Medicare has failed to implement the BIPA qualified supplier requirements, the vast majority of claims paid by Medicare – 97% - were in fact still paid to qualified suppliers. Stated another way, based upon the sampling conducted by OIG, unqualified suppliers do not make up a statistically-significant percentage of approved Medicare claims.

  3. Delivery Documentation: Finally, OIG noted that 11.6% (weighted average) of the sampled claims failed to have adequate documentation regarding delivery of the supplied item. 8.3% of those claims lacked the patient’s signature, and 3.3% lacked any documentation to support delivery. The lack of adequate documentation was much more pronounced in custom orthotics (17.2% of sampled claims) than prosthetics (4%). When OIG looked more closely at these numbers, focusing particularly on custom orthotics, it noted that 40.1% of those claims without adequate documentation were submitted by doctors, PT’s, OT’s, DPM’s, and orthopedic surgeons. In contrast, individual orthotists accounted for only .2% of those clams.

What Does This Mean?

First, the data suggest that certified/licensed orthotists do an excellent job of complying with Medicare’s requirements regarding the required documentation for delivery.

Second, OIG’s sampling – it looked at over 1100 claims – reveals that almost all of them involved “qualified practitioners”. This is significant because we expect that OIG will now conclude that any fraud/abuse data – both in the past and going forward – involves qualified practitioners, which includes ABC and BOC-certified practitioners and those licensed in those states with licensure laws. In other words, OIG may not be receptive to the argument that most fraud and abuse is the result of unqualified practitioners.

Third, OIG recommended that Medicare implement the “qualified practitioner” requirement in BIPA 2000. Medicare has agreed with that recommendation. If that happens, Medicare should be in a position to prevent payment of the estimated 3% of prosthetic/custom orthotics claims currently being made to unqualified practitioners.

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