OIG Recommends CMS Review Orthoses Allowable Amounts

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The Department of Health and Human Services (HHS) Office of Inspector General (OIG) released a report that compared Medicare payments for orthoses to payments made by non-Medicare payers from 2012-2015. The OIG cited an increase in Medicare payments for certain spinal, knee, elbow, and wrist orthoses from $631.8 million in 2012 to $815.5 million in 2018—an increase of nearly 30 percent—as the reason for conducting its investigation. The OIG reported that for 142 orthosis codes, Medicare paid $337.5 million more than non-Medicare payers during the three-year review period. The OIG reported that for 19 orthotic codes, Medicare paid $4.7 million more than non-Medicare payers during the same three-year period.

The OIG identified 95 of the 161 codes for which the Medicare allowable amounts could be adjusted using existing legislative authority to make those amounts comparable with payments made by select non-Medicare payers. For the remaining 66 codes, CMS would be required to seek new legislative authority to make those adjustments.

The OIG recommended that CMS (1) review the allowable amounts for 161 orthotic device HCPCS codes for which Medicare and beneficiaries paid an estimated $337.5 million more than select non-Medicare payers and adjust the allowable amounts, as appropriate, using regulations promulgated under existing legislative authority or if the allowable amounts cannot be adjusted using regulations promulgated under existing legislative authority, seek authority to align Medicare allowable amounts for these items with payments made by select non-Medicare payers; and (2) routinely review Medicare allowable amounts for new and preexisting orthotic devices to ensure that Medicare allowable amounts are in alignment with payments made by select non-Medicare payers or pricing trends.

CMS concurred with the recommendations.

To read the report, visit https://oig.hhs.gov/oas/reports/region5/51700033.pdf.