An In-depth Look at BIPA Section 427: What It May Mean for the O&P Profession

By Peter W. Thomas, JD
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One of the last regulations proposed by the Obama administration was published in the Federal Register on January 12 by the Centers for Medicare & Medicaid Services (CMS): a Notice of Proposed Rulemaking interpreting Section 427 of the Benefits Improvement and Protection Act (BIPA) of 2000. Comments on this proposed rule are due March 13, and it is not yet clear whether the new president's actions will further delay the publication of a final rule on this topic. CMS has failed to implement this section of the Medicare law for 17 years and this is the first proposed rule on Section 427 published to date.

BIPA Section 427 prohibits Medicare payment for prosthetics and custom-fabricated orthotics unless they have been (1) furnished by a qualified practitioner, and (2) fabricated by a qualified practitioner or qualified supplier at a facility that meets criteria the secretary of the U.S. Department of Health and Human Services (HHS) determines to be appropriate. To implement this section of the BIPA statute, the proposed rule specifies:

  1. The qualifications needed for qualified practitioners to furnish and fabricate, and qualified suppliers to fabricate, prosthetics and custom-fabricated orthotics
  2. The accreditation requirement that qualified suppliers must meet in order to bill for prosthetics and custom-fabricated orthotics
  3. Requirements that an organization must meet in order to accredit qualified suppliers to bill for prosthetics and custom-fabricated orthotics
  4. A timeframe by which qualified practitioners and qualified suppliers must meet the applicable licensure, certification, and accreditation requirements
  5. The removal of the current exemption from accreditation and quality standards for certain practitioners and suppliers
  6. The penalty for submitting claims for payment of custom-fabricated orthotics or prosthetics without the required qualifications

History of the Regulation

There is a long and tortured history to this regulation. A Negotiated Rulemaking Committee in 2003 failed to reach consensus on the meaning of this provision and several years passed when CMS seemed to completely ignore the law. In the meantime, a more generic accreditation requirement was implemented for suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) that was not reconciled with BIPA Section 427, but O&P practitioners were exempted from meeting those accreditation requirements and quality standards, even though CMS designed specific quality standards for suppliers of custom-fabricated orthotics and prosthetics. In 2008 and 2014, two different CMS administrators promised that they would issue regulations for BIPA Section 427, but nothing was forthcoming.

In 2012, the HHS Office of Inspector General issued Report No. OEI-07-10-00410, titled CMS Has Not Promulgated Regulations To Establish Payment Requirements for Prosthetics and Custom-Fabricated Orthotics. The report concluded CMS should proceed with implementation of regulations on Section 427 of BIPA. In addition, congressional interest in issuing the regulations began to grow in recent years as O&P patients and providers continued to advocate for publication of the regulations.

Provisions of the Proposed Rule

  1. The qualifications needed for qualified practitioners to furnish and fabricate, and qualified suppliers to fabricate, prosthetics and custom-fabricated orthotics

To reiterate, BIPA Section 427 states that "no payment shall be made for custom-fabricated orthotics or for an item of prosthetics unless furnished by a qualified practitioner and fabricated by a qualified practitioner or a qualified supplier at a facility that meets criteria the [HHS] secretary determines appropriate." There are many concepts in this general statement that the proposed rule seeks to interpret, but overall, CMS has interpreted the statute broadly.

Qualified Practitioner: The proposed rule states that a qualified practitioner is any of the following eligible professionals (i.e., occupational therapists, ocularists, orthotists, pedorthists, physical therapists, physicians, and prosthetists) or other persons who furnish or fabricate prosthetics or custom-fabricated orthotics and must meet either of the following licensure and certification requirements:

  1. Licensed in orthotics, pedorthics, or prosthetics by the state in which they practice. In states that do not provide licenses for orthotics, pedorthics, or prosthetics, a qualified practitioner must be
    1. Specifically trained and educated to provide and manage the provision of pedorthics, prosthetics, and orthotics; and
    2. Certified by any of the following [certification organizations]:
      1. American Board for Certification in Orthotics, Prosthetics and Pedorthics (ABC)
      2. Board of Certification/Accreditation (BOC)
      3. A secretary-approved organization that has the standards equivalent to the ABC or BOC

The proposed rule appears to apply these requirements to everyone, including physicians, physical therapists, occupational therapists, prosthetists, orthotists, and others (although durable medical equipment (DME) suppliers and pharmacists, two of the most prevalent billers of O&P codes, are not mentioned in the rule). There is some ambiguity as to the interpretation of this requirement, which is likely to generate significant public comment.

For instance, the preamble to the proposed rule addresses application of these new requirements on physicians. The proposed rule requires that "for the purposes of furnishing or fabricating prosthetics and custom-fabricated orthotics, a physician must be specifically educated, certified, or trained in the area of prosthetics and custom-fabricated orthotics." The physician must be knowledgeable and competent (as evidenced by education and experience) in the assessment, furnishing, fabrication, care, and follow-up needs of the patient as specifically delineated in the DMEPOS quality standards. The preamble also states:

We are proposing such knowledge and competency requirements because we believe it is only specialty physicians who are trained and experienced, and who understand the specialized needs of the beneficiary requiring prosthetics and custom-fabricated orthotics. We are specifically requesting comments on these proposed additional qualifications for a physician to furnish prosthetics and custom-fabricated orthotics.


  1. The accreditation requirement that qualified suppliers must meet in order to bill for prosthetics and custom-fabricated orthotics

Qualified Supplier: In addition to enrolling in the Medicare program, meeting CMS' supplier standards, and receiving a supplier number, which enables DMEPOS suppliers to bill the program, the proposed rule states that to be a qualified supplier under BIPA Section 427, "the DMEPOS supplier must be accredited by a CMS-approved accreditation organization to fabricate prosthetics and custom-fabricated orthotics" and meet the DMEPOS quality standards. The accreditation must indicate the specific products and services for which the DMEPOS supplier is accredited. The statute also requires the qualified supplier to fabricate the orthoses or prostheses at a "facility that meets such criteria as the secretary determines appropriate."

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The proposed rule creates a new definition for the term "fabrication facility." These facilities must be U.S.-based businesses organized under applicable state and federal laws that include appropriately credentialed staff, a laboratory area with appropriate safety equipment, a separate waiting area and chairs with armrests, a patient care and fitting room with appropriate levels for privacy, a fabrication facility information system, parallel bars and a full-length mirror, proper tools, equipment, and computers commonly used in the fabrication of orthotics and prosthetics, and many other detailed requirements. The proposed regulation goes so far as to specify equipment a fabrication facility must have, including a band saw, welding equipment, a drill press, milling machines, ovens capable of heating plastics, and many other highly specific tools of the O&P profession.

These requirements apply whether or not the fabrication facility is the same location as that of the DMEPOS supplier. Accreditation organizations cannot accredit or renew the accreditation of a qualified supplier unless the qualified supplier uses a fabrication facility that meets these criteria. The proposed rule seems to conflate fabrication facilities with patient care facilities and does not sufficiently recognize various practice arrangements used across the country, including the concept of central fabrication. This is likely to be a major area for public comment.

Qualified suppliers must also meet the DMEPOS quality standards, including Appendix C, which pertains specifically to custom-fabricated orthotics and prosthetics. These quality standards will be updated once the final rule is issued and CMS plans to solicit comments on the updated quality standards when they are published through its website, www.CMS.gov/MedicareProviderSupEnroll. The quality standards are updated via CMS' subregulatory process.

  1. Requirements that an organization must meet in order to accredit qualified suppliers to bill for prosthetics and custom-fabricated orthotics

CMS specified the criteria, by regulation in 2006, that all approved accreditation organizations must meet to accredit DMEPOS suppliers. In this proposed rule, CMS specifies additional requirements that any of the ten CMS-approved accreditation organizations must meet to accredit qualified suppliers fabricating prosthetics and custom-fabricated orthotics.

In order to accredit qualified suppliers of prosthetics and custom-fabricated orthotics, the proposed regulation states that "an independent accreditation organization must be one of the following:

  • American Board for Certification in Orthotics and Prosthetics Incorporated (ABC)
  • Board for Orthotist/Prosthetist Certification International Incorporated (BOC)
  • An organization that
    • Employs or contracts with an orthotist, prosthetist, occupational therapist, or physical therapist who
      • Meets the definition of qualified practitioner (specified in the regulations); and
      • Is utilized for the purpose of surveying the supplier or practitioner for compliance; and
    • Has the authority granted by CMS to approve or deny the accreditation of qualified suppliers as defined [under the regulation] based on a determination that the organization has standards equivalent to the ABC or BOC."

Both ABC and BOC have educational and experiential requirements that must be met in order to be certified as a prosthetist/orthotist and accredited as a prosthetic/orthotic facility. The proposed rule does not clarify exactly which ABC/BOC requirements must be used (i.e., those standards that are "equivalent" to ABC or BOC) by other accrediting organizations to be approved by the HHS secretary to grant accreditation of qualified suppliers. For instance, both ABC and BOC require that the supplier have a licensed or certified prosthetist on staff to be accredited to provide limb prosthetics. The proposed rule does not specifically address whether this requirement will apply to physicians, physical therapists, occupational therapists, and other professionals, but the rule reads as if this is CMS' intention.

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The proposed rule mandates that qualified suppliers notify the accreditation organization of any changes in conditions, practices, or operations that accrediting organization used in their determinations at the time of accreditation. As the preamble to the regulation explains, this would include, but not be limited to, a requirement for notifying the accreditation organization of any changes in personnel, including changes in status or qualifications of employees of the qualified supplier or of any personnel used by the qualified supplier via contract or other business relationship. This requirement is included to ensure that, once accredited, qualified suppliers continue to meet all of the accreditation and other supplier standards on an ongoing basis. Depending on the size of a supplier's workforce, this may place a significant burden on suppliers to ensure they remain in compliance once they receive accreditation.

  1. A timeframe by which qualified practitioners and qualified suppliers must meet the applicable licensure, certification, and accreditation requirements

Qualified practitioners must meet the licensure and certification requirements proposed and subsequently finalized via rulemaking within one year of publication of the final rule. Qualified suppliers who bill Medicare for prosthetics and custom-fabricated orthotics must meet a similar deadline. They would need to meet the requirements of the final rule no later than one year after the posting date of the updated and final quality standards, or at the time of the supplier's reaccreditation cycle, whichever is later. The preamble notes that this takes into account the average length of time (5.5 months) needed by a DMEPOS supplier to complete the DMEPOS accreditation process, in addition to the time needed for an eligible professional to become a qualified practitioner (licensed or certified). CMS seeks comments on this timeframe to ensure that patient access is not compromised.

  1. The removal of the current exemption from accreditation and quality standards for certain practitioners and suppliers

In order to implement the proposed rule on BIPA Section 427, CMS proposes to remove the current exemption from the quality standards and accreditation requirements for DMEPOS suppliers and "certain eligible professionals and other persons" who bill Medicare for prosthetics and custom-fabricated orthotics. This exemption was premised on statutory language that allowed an exemption unless the HHS secretary determined that the standards were designed specifically to be applied to such eligible professionals and other persons, or that licensure, accreditation, or other quality requirements applied to such persons.

The preamble to the proposed rule states:

Through this proposed rule, we are now designing standards specifically to apply to such eligible professionals and other persons. We believe that it is imperative to have both licensure and certification requirements for all qualified practitioners (eligible professionals and other persons who furnish or fabricate prosthetics and custom-fabricated orthotics) and to have accreditation requirements for all qualified suppliers (DMEPOS suppliers that fabricate or bill for prosthetics and custom-fabricated orthotics that are subject to the requirements of this proposed rule). Moreover, we believe that the provisions in [BIPA Section 427] were enacted to achieve that objective.


Therefore, the proposed rule removes the existing exemption for certain eligible professionals and other practitioners (including physicians, physical therapists, occupational therapists, prosthetists, and orthotists) to satisfy the DMEPOS quality standards and accreditation requirements in order to bill Medicare for prosthetics and custom-fabricated orthotics.

  1. The penalty for submitting claims for payment of custom-fabricated orthotics or prosthetics without the required qualifications

The proposed rule goes beyond the statutory requirements of BIPA Section 427 by creating a serious penalty for practitioners and suppliers who bill the Medicare program for custom-fabricated orthotics and prosthetics but are not considered "qualified" under the new rule. Rather than denying payment on the claim, as BIPA Section 427 specifically mandates (i.e., "No payment shall be made...."), the proposed rule seeks to revoke enrollment and billing privileges of such practitioners/suppliers in the Medicare program. According to the preamble, the revocation decision will be made based on the facts and circumstances of the particular situation. The preamble also states that "a single individual billing or miscoding mistake alone on the part of a supplier" will not trigger this sanction.

Revocation of Medicare enrollment and billing privileges is a serious penalty. While it may serve as an effective enforcement mechanism for the proposed rule, it also has the potential to ensnare well-intentioned practitioners and suppliers who may wind up losing their Medicare billing privileges for an oversight in reporting the status of an employee, for instance, to their accrediting organization. The statements in the preamble referencing single reporting errors or mistakes are not part of the proposed regulatory language, so practitioners and suppliers should take little comfort in the assertion that single errors will not trigger revocation. The final rule would be more consistent with the statute if the sanction consists of denial of payment, not revocation of billing privileges.

Conclusion

In the anti-regulatory environment of the Trump administration, the job of getting these regulations revised based on public comment and published in final form just got harder. Another complicating factor is that CMS interpreted the statute broadly, extending the licensure and accreditation requirements to all practitioners and suppliers of custom-fabricated orthotics and prosthetics. This is expected to generate considerable controversy. The O&P community will have to be strategic as we seek to advance this regulation to final publication and implementation, bearing in mind that the intent of BIPA Section 427 is to improve the quality of O&P patient care while limiting waste, fraud, and abuse in the Medicare program.

Peter W. Thomas, JD, is general counsel for the National Association for the Advancement of Orthotics and Prosthetics (NAAOP).

Editor's note: To access the proposed rule, visit www.oandp.com/link/352.