United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2002-05-22 monographic deposited born digital GA 1.13:GAO-02-330 https://www.govinfo.gov/app/details/GAOREPORTS-GAO-02-330 P0b002ee180383619 f:d02330 DGPO 2010-08-12 2011-03-24 GAOREPORTS-GAO-02-330 machine generated eng fdlp REPORT GAOREPORTS-GAO-02-330 GAO-02-330 Billing procedures Health insurance Health insurance cost control Health resources utilization Medical equipment Managed health care Health care costs Skilled nursing facilities HCFA Common Procedure Coding System Medicaid Program Medicare Program Other Written Product A03360

Medicare: Orthotics Ruling Has Implications for Beneficiary Access and Federal and State Costs (22-MAY-02, GAO-02-330). In the late 1980s and early 1990s, the Health Care Financing Administration (HCFA), now called the Centers for Medicare and Medicaid Services (CMS), became concerned that some suppliers were improperly billing Medicare for certain items that attach to wheelchairs and other equipment. These suppliers were billing such items using codes for orthotic devices, which include leg, arm, back, and neck braces that provide rigid or semi-rigid support to weak or deformed body parts or restrict or eliminate motion in a diseased or injured part of the body. However, other suppliers were billing devices that served essentially the same purpose using codes for durable medical equipment (DME), which is equipment--such as wheelchairs and crutches--that serves a medical purpose, can withstand repeated use, is not generally useful in the absence of an illness or injury, and is appropriate for use in the home. Whether an item is billed as an orthotic or DME device can affect whether such claims are paid. To clarify Medicare's payment policy on orthotics, HCFA issued a ruling stating that Medicare's long-standing policy was to consider items that attach to DME as DME and not orthotics. HCFA issued Ruling 96-1 to clarify the circumstances under which certain items would be classified as orthotics or as DME for Medicare part B payment purposes. A federal appellate court found that HFCA had followed appropriate procedures to issue the rule as an interpretation of Medicare policy, the interpretation in the ruling was wholly supportable, and the treating of seating systems as DME was consistent with congressional intent. HCFA's ruling that attached bracing devices were in the DME benefits category and could no longer be billed as orthotics affects beneficiaries residing in Medicare-certified skilled nursing facilities and other institutions primarily engaged in providing skilled nursing care (SNF). Because Medicare part B does not cover DME in SNFs and other institutions primarily engaged in providing skilled nursing care, claims for such items are no longer paid for residents in nursing homes. This ruling affects residents of all nursing homes, not just SNFs. If HCFA's ruling were rescinded and Medicare's policy changed so that attached bracing devices were classified as orthotics, how much Medicare and Medicaid spend if for orthotics would increase is uncertain. The increase in Medicare spending would depend on how extensively attached bracing devices would be provided to nursing home residents following the ruling's recission. There are a number of program integrity implications should the ruling be rescinded. The distinction between DME and orthotics would become less clear, which could lead to inappropriate billing. Therefore, if the ruling were rescinded, additional controls, such as closely monitoring billing and reviewing medical justification for customized items prior to payment, would be vital to help curb potentially inappropriate billing. https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-02-330/html/GAOREPORTS-GAO-02-330.htm GAO-02-330 https://www.govinfo.gov/app/details/GAOREPORTS-GAO-02-330 Other Written Product GAO-02-330; Medicare: Orthotics Ruling Has Implications for Beneficiary Access and Federal and State Costs; Billing procedures Health insurance Health insurance cost control Health resources utilization Medical equipment Managed health care Health care costs Skilled nursing facilities HCFA Common Procedure Coding System Medicaid Program Medicare Program Title 42 Section 1396r 42 U.S.C. 1396r Volume 79 Page 286 79 Stat. 286 Volume 81 Page 821 81 Stat. 821 Volume 98 Page 494 98 Stat. 494 Volume 101 Page 1330 101 Stat. 1330 Volume 104 Page 1388 104 Stat. 1388 Volume 113 Page 1501 113 Stat. 1501 Volume 114 Page 2763 114 Stat. 2763 Public Law 89-97 Public Law 90-248 Public Law 98-369 Public Law 100-203 Public Law 101-508 Public Law 106-113 Public Law 106-554