2014 Coding Changes for Orthotics

2014 has ushered in many changes in the health care arena, including significant modifications to the Healthcare Common Procedure Coding System (HCPCS) for orthotics. It is helpful to revisit the chronology of events leading up to these changes to better understand how we arrived at this point.

Chronology of Events
 February 9th, 2012: The Centers for Medicare & Medicaid Services (CMS) issued initial guidance identifying specific HCPCS codes that are considered Off-the-Shelf (OTS) orthotics and provided a 60-day comment period. CMS received approximately 185 comments, including comments from DJO.

 August 13th, 2013: CMS issued a final list of OTS HCPCS codes, which included 24 new codes and descriptor changes for 63 codes. The majority of the changes centered on one critical element: codes were “split” into (1) OTS orthotics and (2) custom fitted products.

 December 12, 2013: CMS issued the 2014 DMEPOS Fee Schedule. The allowable amounts for the OTS codes were set at the same rates as the existing fees for the custom fitted codes, including a one (1) percent annual update.

 January 1, 2014: The new codes became effective.

CMS Definitions
OTS Orthotics: Require minimal self-adjustment for appropriate use and do not require expertise in trimming, bending, molding, assembling, or customizing to fit the beneficiary. Minimal self-adjustment is an adjustment that the beneficiary, caretaker for the beneficiary, or a supplier of the device can perform and that does not require the services of a certified orthotist or an individual who has specialized training.
Custom Fitted Orthotics: Require fitting by someone with specialized education, training, and experience in fitting and certification and/or licensing.

Why would CMS split orthotic codes?
A. Only OTS orthotics are subject to competitive bidding. Before CMS is able to initiate competitive bidding for orthotics, the agency needed to clearly delineate which HCPCS codes are subject to the Competitive Bidding program (see below for more information about Competitive Bidding.).

Why is the reimbursement the same for the OTS codes and the Custom Fitted codes?
A. Under the Medicare Competitive Bidding program, DMEPOS suppliers compete to become Medicare contract suppliers by submitting bids to furnish certain items in competitive bidding areas, and CMS awards contracts to enough suppliers to meet beneficiary demand for the bid items. The new, lower payment amounts resulting from the competition replace the Medicare DMEPOS fee schedule amounts for the bid items in these areas.  If CMS incorporates OTS orthotics in a future round of competitive bidding, the reimbursement rates will be adjusted downward for these codes. Revision of the existing DMEPOS fee schedule to reduce reimbursement for these codes is also possible in a process separate and apart from competitive bidding.

When will orthotics be part of the Competitive Bidding program?
A. The Medicare Modernization Act of 2003 (MMA) established the requirements for a Competitive Bidding Program for certain Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS). At that time, OTS orthotics were identified as subject to competitive bidding. CMS has already included many other items in the Competitive Bidding program; orthotics is one of the remaining categories to be incorporated.  CMS stated in December 2013 that it has not determined the schedule for seeking bids on OTS orthotics, but it will identify the specific OTS orthotic codes to be included in a competitive bidding program through program instructions or by other means. We are monitoring the situation closely.

Whom does CMS consider qualified to fit custom fitted orthotics?
A. As stated above, Custom Fitted orthotics must be fitted by a supplier with specialized education, training, and experience in fitting and certification and/or licensing. The supplier must also comply with the DMEPOS quality standards, including the standards for Custom Fitted Orthoses included in Appendix C of the standards. To date, CMS has not provided any further clarification to these requirements. However, CMS is proposing to release a long-awaited rule in May 2014 on the required qualifications for the fitting of custom fabricated orthotics. CMS has stated the following in respect to this rule:  Historically, there has been no Medicare requirement that a supplier of prosthetics and custom fabricated orthotics be certified or meet educational requirements other than what a state law may require. This proposed rule would provide a basis to improve the quality of orthotics and prosthetics furnished to Medicare beneficiaries by establishing minimum national supplier and practitioner qualifications and accreditation requirements for DMEPOS suppliers.

How will DJO be handling the split HCPCS codes?
A. We are currently analyzing the new OTS codes in relation to our products. We will be recoding our products to OTS codes where appropriate. When products are furnished using a custom fitted HCPCS code, the supplier is required to meet certain quality standards, including documented intake and assessment. We will be providing further guidance around these requirements once our coding analysis is complete.

For more information about OTS orthotics: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/DMEPOSFeeSched/OTS_Orthotics.html
For more information about competitive bidding: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/

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Categories: DME Information

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