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CBRs for Spinal Orthoses (CBR201803): What Do You Need to Know?

CBR201803(April 12, 2018): The Centers for Medicare & Medicaid Services (CMS) utilizes a variety of private contractors to process Medicare claims and conduct both administrative and program integrity audits of claims submitted by healthcare providers and suppliers.  At the present time, CMS has contracted with eGlobalTech (eGT) to analyze data and prepare “Comparative Billing Reports (CBRs) of various services and claims billed to the Medicare program. eGT works directly with another CMS contractor, Palmetto GBA (Palmetto), to conduct the statistical work that is necessary to complete the CBR process. The latest report to be issued by eGT is CBR201803.

I.  eGT is Currently Distributing CBRs to Spinal Orthoses Suppliers:

The most recent CBR review initiated by eGT has been focused on Spinal Orthoses Suppliers. On April 2, 2018, eGlobalTech sent out letters to affected suppliers around the country advising them of the initiation of CBR201803: Spinal Orthoses Suppliers. This CBR is focused on orthotic suppliers that have billed the Medicare Part B program for both off-the-shelf and custom-fitted prefabricated spinal orthoses (commonly referred to as “braces”[1]) in claims with dates of service from October 1, 2016 to September 30, 2017.[2]  CBR201803 focuses on the following Healthcare Common Procedure Coding System (HCPCS) codes:

Prefabricated Custom-Fitted Spinal Orthoses.[3]

L0627: Lumbar orthosis, sagittal control, with rigid anterior and posterior panels

L0631: Lumbar-sacral orthosis, sagittal control, with rigid anterior and posterior panels

L0637: Lumbar-sacral orthosis, sagittal-coronal, with rigid anterior and posterior panels

Prefabricated Off-the-Shelf-Fitted Spinal Orthoses.[4]

L0642: Lumbar orthosis, sagittal control, with rigid anterior and posterior panels

L0648: Lumbar-sacral orthosis, sagittal control, with rigid anterior and posterior panels

L0650: Lumbar-sacral orthosis, sagittal-coronal, with rigid anterior and posterior panels

 II.  The Improper Billing of Medicare Claims for Spinal Orthoses Has Been a Long-Standing Problem for CMS:

The initiation of CBR201803 is merely the government’s most recent attempt to address long-standing problems that have repeatedly been identified in connection with the coverage, coding and billing of spinal orthoses by authorized Medicare suppliers.  As eGT has noted on its website (and in correspondence with affected suppliers), Lumbar-Sacral Orthoses have been on the government’s Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMSPOS) list of “Top 20 Service Types with Highest Improper Payments” as far back as 2013. In fact, as set out in the most recent assessment of improper billing data by the Department of Health and Human Services (HHS), entitled “2017 Medicare Fee-for-Service Supplemental Improper Payment Data,” the estimated improper error rate for Lumbar-Sacral Orthoses was 52.5%. The magnitude of this problem is easily seen when compared with the overall improper payment rate for ALL Medicare claims which has been estimated at 9.5%.  Finally, it is worth noting that the HHS Office of Inspector General (OIG) identified concerns with the billing of orthotic braces in both its 2016 and 2017 Work Plans.[5]

III.  How Were Spinal Orthoses Suppliers Categorized this Review?

At last count, more than 6,000 qualified DME suppliers billed Medicare Part B for spinal orthoses under one of the six HCPCS codes outlined above.  In an effort to define peer groups for general comparison purposes, DMEPOS suppliers and physicians / non-physicians were assigned to a specialty peer group, based on their assigned Medicare Specialty Code and whether or not the provider / supplier was likely to have orthotist training The following categories were used by eGT:

 Peer Group#1:  DMEPOS Supplier Not Likely to Have Orthotist Training 
Medicare Specialty CodeMedicare Provider / Supplier Type Description
A6Medical Supply Co. with Respiratory Therapist
B1Oxygen Supplier
54Medical Supply Co. — Other
58Medical Supply Co. with Registered Pharmacist
63Portable X-Ray Supplier
87All Other Suppliers
 Peer Group#2:  DMEPOS Supplier Likely to Have Orthotist Training 
Medicare Specialty CodeMedicare Provider / Supplier Type Description
B3Medical Supply Co. with Pedorthic Personnel
51Medical Supply Co. with Certified[6] Orthotic Personnel
52Medical Supply Co. with Certified Prosthetic Personnel
53Medical Supply Co. with Prosthetic / Orthotic Personnel
 Peer Group#3:  Physician / Non-Physician Not Likely to Have Orthotist Training 
Medicare Specialty CodeMedicare Provider / Supplier Type Description
A0Hospital
A5Pharmacy
01General Practice
02General Surgery
04Otolaryngology
05Anesthesiology
08Family Practice
11Internal Medicine
16Obstetrics / Gynecology
19Oral Surgery (Dentists Only) (LLP)
30Diagnostic Radiology Head
40Hand Surgery
41Optometry (LLP)
48Podiatry (LLP)
66Rheumatology
84Preventative Medicine
93Emergency Medicine
94Interventional Radiology
99Unknown Physician Specialty
 Peer Group#4:  Physician / Non-Physician Likely to Have Orthotist Training 
Medicare Specialty CodeMedicare Provider / Supplier Type Description
B2Pedorthic Personnel
12Osteopathic Manipulative
13Neurology
14Neurosurgery
20Orthopedic Surgery
23Sports Medicine
25Physical Medicine and Rehabilitation
35Chiropractic (LLP)
55Individual Orthotic Personnel
56Individual Prosthetic Personnel
57Individual Prosthetic / Orthotic Personnel
65Physical Therapist in Private Practice
67Occupational Therapist in Private Practice
70Single or Multispecialty Clinic or Group Practice
72Pain Management

CBR contractors (eGT and Palmetto) then calculated statistics for each of the separate peer groups.  As the categories reflect, the CBR contractors separated suppliers from providers and then further stratified the two primary groups by whether or not they were “likely” to have orthotist training.  While the CBR contractors expressly recognized that an individual may be specially trained to custom fit beneficiaries with a medically necessary orthosis, for the purposes of this review, they still ultimately categorized both suppliers and providers by Medicare specialty code based on the contractors’ assessment of whether a specific specialty was likely to have specialized orthotist training.[7] Unfortunately, there are likely a number of instances where eGT’s presumption of whether a supplier has orthotist training may be just plain wrong.

IV.  Why Was My DME Company Included in this Review?

A Comparison of Your Billing Percentages for Each of the Six HCPCS Categories of Spinal Orthoses.  As a first step, the CBR contractors compared each supplier’s billing patterns, by HCPCS code, with those of other suppliers in their peer specialty group.  To the extent that a supplier’s utilization ratios were aberrant when compared to the ratios of their peers, the supplier was more likely to be sent a CBR.

The Percentage of Allowed Services Defined as Custom-Fitted.  Another primary assessment conducted by the CBR contractors is whether the percentage of spinal orthoses submitted for payment by a supplier was billed as a “custom fitted” brace.  The percentage of custom-fitted braces billed by a specific supplier was compared to the percentage billed to their DME MAC contractor by other suppliers in their respective peer specialty group.  Each supplier’s percentage of custom-fitted brace billings were also compared to the national average.  If a specific supplier’s percentage was deemed to be “significantly higher” than one of these peer groups, it was one step closer to being sent a CBR.

The Percentage of Allowed Services Submitted without a Visit to the Referring Provider within 90 Days of the DMEPOS Service Date.  Another factor analyzed by the CBR contractors is whether a significant percentage of beneficiaries fitted (either custom-fitted or off-the-shelf) for a brace by a specific supplier had not been seen by their referring provider within 90 days of the DMEPOS service date (the date that the spinal orthosis order was filled by the DMEPOS supplier).  Simply stated, red flags are going to be raised if you fill a prescription / order for a brace and the patient hasn’t seen his / her referring provider within the previous 90 days.[8]  Once again, the CBR contractor compared each specific supplier’s percentage to the percentage billed to their DME MAC contractor by other suppliers in their respective peer specialty group.  Each supplier’s percentage of custom-fitted brace billings were also compared to the national average.

The Average Allowed Charges per Beneficiary for the One-Year Period.  The CBR contractors also examined the average allowed charges of each supplier billed to Medicare per beneficiary and compared this number to average allowed charges of other suppliers in their peer specialty group.  If a supplier’s average allowed charged were significantly higher than that of their peers, it was more likely to be issued a CBR.

V.  The Results of an Assessment by eGT:

After reviewing the utilization and billing practices of each spinal orthoses supplier, if a specific supplier’s measures were considered to be Significantly Higher than their peers in at least one of the three factors discussed above, the supplier was issued a CBR.

  1. Supplier is significantly higher than at least one of its peer groups on at least one of the measurements studied;

  2. Supplier is near or above the 45th percentile in allowed charges ($5,000); and

  3. Supplier had at least ten beneficiaries.

VI. Responding to a CBR:

If your company received a CBR, you likely noted the fact that eGT may expressly state in its reports that “no reply is necessary.”   While that may technically be the case, after handling CBRs for many years, our experience (and the collective experience of our associates) has been that your organization is much more likely to be audited if you do not respond and address any misconceptions or incorrect positions about your billing pattern stated by the contractor in its report.

To be clear, if you receive a CBR, you need to immediately take steps to validate or invalidate eGT’s findings.  If, in fact, your billing practices have been improper, you have an affirmative obligation to take steps to remedy any deficiencies. Additionally, the risk issues identified by eGT should be incorporated into your existing Compliance Program and should be taken into account when you perform periodic internal claim audits and monitoring functions.

VII.  Get Ready for Follow-Up Audits by ZPICs / UPICs!

Although your claims haven’t yet been audited, if you received one of these reports an audit of your claims may be right around the corner.  While it has been our experience that responding to a CBR is helpful, (and may reduce your chances of having a prepayment or postpayment Zone Program Integrity Contractor (ZPIC) or Uniform Program Integrity Contractor (UPIC) audit) if eGT has based its assessment on incorrect assumptions, there are no guarantees that a CMS program integrity contractor won’t still choose to initiate an audit of your claims for one or more braces billed to Medicare.

As a CBR recipient, you need to recognize that your organization has been identified as an outlier and there is significant likelihood that your spinal orthoses claims will be audited in the near future by a ZPIC or a UPIC, especially if you have not taken steps to identify and correct any misconceptions about your billing practices that the CBR contractor has made.

Now, more than ever, it is essential that suppliers review their documentation and ensure that they are fulling complying with all applicable requirements to show that each brace was medically necessary, fully documented, properly coded and billed.  For instance, as set forth under the Medicare Program Integrity Manual:

“All DMEPOS items…require detailed written orders prior to billing. Detailed written orders may take the form of a photocopy, facsimile image, electronically maintained, or original ‘pen-and-ink’ document. The written order must be sufficiently detailed, including all options or additional features that will be separately billed or that will require an upgraded code. The description can be either a narrative description (e.g., lightweight wheelchair base), or a brand name/model number. All orders must clearly specify the start date of the order.”

The failure to fully document the delivery of a brace is another significant risk faced by spinal orthoses suppliers.  ZPICs and UPICs routinely refuse payment citing this reason for denial.  As discussed in the Medicare Program Integrity Manual:

“Suppliers are required to maintain proof of delivery documentation in their files. Proof of delivery documentation must be maintained in the supplier’s files for 7 years (starting from the date of service).” 

Pursuant to 42 C.F.R. Sec. 424.57(c)(12), proof of delivery:

Must be responsible for the delivery of Medicare covered items to beneficiaries and maintain proof of delivery. (The supplier must document that it or another qualified party has at an appropriate time, provided beneficiaries with necessary information and instructions on how to use Medicare-covered items safely and effectively).”[9]

VIII.  Potential Liability for Non-Compliance:

After receiving a CBR, you may soon find that your supplier claims will be subject to  prepayment or postpayment audit by a ZPIC or UPIC. Alternatively, you may merely receive an “Additional Document Request” (ADR) from a CMS contractor.  ADRs aren’t uncommon and most suppliers have received multiple such requests since becoming a participating supplier in the Medicare program.  Nevertheless, in recent years, ADRs have taken on a new level of importance. ZPICs and UPICs aren’t hesitating to place a supplier on 100% prepayment review if the documentation submitted in response to an ADR results in the denial of one or more claims.

Similarly, if a supplier is placed on prepayment review and a significant percentage of your claims are denied when the associated supporting documentation is submitted, there is much higher risk that your claims will be subjected to a postpayment audit.  In some cases, a high error rate identified in a prepayment or postpayment audit has led to the suspension of Medicare supplier’s billing privileges. Unfortunately, this “snowball effect” of cumulative adverse administrative actions may not be over. In accordance with 42 C.F.R. Sec. 424.57(e), a CMS contractor may recommend to the agency that your billing privileges are “revoked” if a supplier is found not meet applicable conditions of payment:

“Failure to meet standards. CMS will revoke a supplier’s billing privileges if it is found not to meet the standards in paragraphs (b) and (c) of this section. (The revocation is effective 15 days after the entity is sent notice of the revocation, as specified in §405.874 of this subchapter.)” 

IX. Conclusion:

Despite what you may have been told, CBRs are far from benign.  If a provider or supplier has received a CBR (such as, but not limited to CBR201803), it may be a harbinger of future administrative audits or in more serious cases, a possible civil and / or criminal investigation of your billing practices.  While every case is different, if the CBR contractor’s CBR findings (as outlined in their letter to your organization) are incorrect, it is typically in your best interests to correct the record.  Our attorneys are experienced in assessing these matters and can assist your organization is putting its best foot forward when responding to a CBR, the receipt of an ADR, prepayment review or postpayment audit.  Give us a call for a free consultation.  1 (800) 475-1906.

CBR201803Robert W. Liles, J.D., M.B.A., M.S., serves as Managing Partner at the law firm of Liles Parker, Attorneys & Clients at Law.  Robert represents providers and suppliers around the country in ZPIC / UPIC audits, Medicare suspension actions and revocation cases.  For a complimentary consultation, please call: 1 (800) 475-1906.

[1] As set out in the Chapter 15, Section 130 of the Medicare Benefit Policy Manual, braces are “rigid and semi-rigid devices which are used for the purpose of supporting a weak or deformed body member or restricting or eliminating motion in a diseased or injured part of the body.”

[2] eGT’s analysis is based on a snapshot of claims in the Integrated Data Repository as of January 24, 2018.

[3] As set out in the Joint DME MAC Publication, a “Custom-Fitted Orthosis,” is defined as:

  • Devices that are prefabricated.
  • They may or may not be supplied as a kit that requires some assembly. Assembly of the item and/or installation of add-on components and/or the use of some basic materials in preparation of the item does not change classification from OTS to custom fitted.
  • Classification as custom fitted requires substantial modificationfor fitting at the time of delivery in order to provide an individualized fit, i.e., the item must be trimmed, bent, molded (with or without heat), or otherwise modified resulting in alterations beyond minimal self-adjustment.
  • This fitting at delivery does require expertise of a certified orthotist or an individual who has equivalent specialized training in the provision of orthosis to fit the item to the individual beneficiary.

[4] Off-the-shelf (OTS) orthotics are defined as:

  • Items that are prefabricated.
  • They may or may not be supplied as a kit that requires some assembly. Assembly of the item and/or installation of add-on components and/or the use of some basic materials in preparation of the item does not change classification from OTS to custom fitted.
  • OTS items require minimal self-adjustmentfor fitting at the time of delivery for appropriate use and do not require expertise in trimming, bending, molding, assembling, or customizing to fit an individual.
  • This fitting does not require expertise of a certified orthotist or an individual who has equivalent specialized training in the provision of orthoses to fit the item to the individual beneficiary.

[5] In both its 2016 and 2017 Work Plans, OIG noted that it would be reviewing the reasonableness of Medicare payments for orthotic braces when compared to the amounts paid by other non-Medicare payers..

[6]A “certified” individual is someone who is certified by either the American Board for Certification in Orthotics and Prosthetics, Inc., or the Board for Orthotist/Prosthetist Certification.

[7] As set out in Appendix C of the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Quality Standards, “Individuals supplying the item(s) set out in this appendix must possess specialized education, training, and experience in fitting, and certification and/or licensing.”  While the CBR contractors expressly recognized that an individual specially trained to custom fit beneficiaries that have a medical need for an orthosis.

[8] To determine this, the CBR contractor checks to see if the referring provider billed for a Part B visit within 90 days of the service date of the DMEPOS claim.

[9] https://www.gpo.gov/fdsys/pkg/CFR-2005-title42-vol2/pdf/CFR-2005-title42-vol2-sec424-57.pdf

 

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