Reimbursement for Orthotic and Prosthetic (O&P) services from Medicare has become an ever-increasing challenge for both the professional caregiver and the recipient of the services. It behooves all of us to learn as much as possible about the factors affecting reimbursement, so that we may know how to comply with systems requirements and get the medically necessary services paid for. I have the privilege of serving as the Chairman of the Hanger Coding Committee and as a member of the AOPA Coding Committee, chaired by Mr. David Schultz, CPO, of ACTRA Rehabilitation Associates of Brookfield, Wisconsin. The primary purpose of our respective committees is to help educate professional practitioners in the proper understanding and use of the L-Codes and help promote the highest degree of professional and ethical billing practices within the profession.
L-Codes: What are they?
The “L-Code” system is the current method of billing Medicare for O&P services. Before 1970, each Medicare carrier had a different billing system for these services, which was ineffective due to an inability to share data and information. Names of devices and terminology varied in each geographic region, making efforts to promote consistency in billing and professional training impossible.
In 1979, the L-Code system was applied in the South Carolina Blue Cross/Blue Shield Plan. The pilot was successful and adopted as a requirement for all Medicare carriers to ensure standardization of coding and nomenclature. This system is comprised of two categories, prosthetic and orthotic. This is a unique medical billing “add-on” system, in which a base code identifies, and descriptive language explains, the basic approach taken. Various add-on codes describing multiple options in feet, knees, ankles, and other technology combines with the base code to fully describe the total services the patient is receiving and what is covered by Medicare.
This basic system still exists today, and although it is unique in Medicare, it often causes secondary problems. A large number of private payer sources have adopted the Medicare billing format to avoid reinventing their own system. Since the rest of the medical field (physicians and allied health providers) predominantly provide a service, it has been easier to develop broad codes to describe a range of services.
Orthotics and Prosthetics, however, is an arm of the allied health profession that delivers both service and product. Because the product aspect is so broad and varied, Medicare chose to develop a billing model that initially identifies all of the individual parts and procedures. This requires authorizing a large number of codes to recognize the ever-expanding wave of technology influencing the profession. This billing model, to the uneducated payer source, looks very much like “unbundling.” A common complaint is that too many codes apply to O&P - more than any other medical profession. The Health Care Financing Administration (HCFA) is not enthusiastic about continuing to grant more codes to recognize the revolution in technology and procedures that this profession has experienced.
I believe it fair to say that the O&P field has seen more advancement and improvement in the last 20 years than in the previous 200 years, with a substantial percentage occurring in the last 10 years. In the end, we comprise an insignificant part of the total health care bill that Medicare is responsible for managing.
With the billing and coding model devised for us, Medicare has shown signs of indifference in their relationship with the organized field, i.e., we are far more trouble than is worth their time to address properly. This makes your role more important and critical than ever before. It is important that we have the ability to secure quality care and a billing model that can be revised with our help and participation so that professional caregivers can deliver competent care in a manner that reduces the current growing fear that Medicare will prosecute them or close their practices. While I understand the value of preempting fraudulent practices, the current system is rapidly becoming so complex and the codes so ambiguous in their wording that competent, ethical practitioners are hard pressed to know whether or not their coding puts them at serious risk.
Medicare is now establishing a Fraud and Abuse Unit in each of the four Durable Medical Equipment Regional Carrier (DMERC) areas. It is granting them the ability to keep a percentage of their findings. There is still, however, a real element of danger for O&P practices, largely due to the “built in” ambiguity in the codes and the lack of a simplified coding and billing model.
HCFA
Updates to the system are reviewed by a threefold committee composed of the Health Care Financing Administration (HCFA), the Blue Cross/Blue Shield Association, and the Health Insurance Association of America with the American Orthotics & Prosthetics Association (AOPA) acting as a technical advisory group. New procedures or technologies slated to receive HFCA coding must be reviewed by this group.
One of the primary forces that affects HCFA's philosophy is its role in preventing Medicare fraud and abuse. The HFCA not only administers reimbursement methodologies to all medical providers but also puts in place the necessary safeguards to protect against fraudulent and abusive billing practices by medical product and service providers. HCFA has experienced fraudulent and abusive billing in all areas of health care, although the violators are small in number, with the vast majority of professional medical providers maintaining high standards of practice. Unfortunately, the few always make it harder for the majority.
The result of these abusive activities is that HCFA will institute tighter and more restrictive access to services with greater documentation necessary. Often HCFA has unintentionally hurt O&P while trying to institute a restrictive change to a totally different sector of medical services. An example of this is the continued treatment of O&P services as if they are Durable Medical Equipment (DME). This became so problematic during the late 80s that the profession had to pursue legislative separation from DME in the Omnibus Budget Reconciliation Act (OBRA) of 1990. Even with the legislative separation, the effective result is that as you get down to the administrative and operational end of the system, the lines of separation seem to have disappeared and to this day we have to comply with regulations intended for DME.
The latest example of this is the “five year” rule developed for capped rental of DME. It says, essentially, that all products have a five-year usable life and cannot be replaced before the end of the five-year period. A secondary clarifying interpretation from HCFA acknowledged that this was not intended for O&P and that medical necessity factors would form the primary basis for an O&P decision. The problem is that regional claims processors continue to deny O&P claims based on the “five year” rule even when proper medical necessity documentation is provided.
Although our profession has learned how to live with these problems, unnecessary costs have been added to the provision of services due to increased staff time required to resubmit claims. There are many other examples of these types of problems that affect your care and they are not entirely the fault of HCFA. It will take a cooperative effort on both sides to work through these problems, and solutions can be found if we are allowed to participate in the process. If we ultimately find that we cannot participate constructively in the solution to these problems, then you, as the end user, will need to play a much more active role in the protection of a system that allows you adequate access to O&P products and services delivered by trained, competent, and qualified professionals.
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