Major O&P Policy Developments in the Age of a Pandemic

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By Peter W. Thomas, JD; Leela Baggett, JD; and Joseph Nahra

As America and the world continue to grapple with an historic pandemic, the Centers for Medicare & Medicaid Services (CMS), the US Department of Veterans Affairs (VA), and Congress continue to address public policies that impact access to O&P care. While the eyes of the world are on fighting the spread of COVID-19, key public policies continue to shape the O&P profession. Following is a summary of some of the most important developments over the past few months. 

Prior Authorization for Six Lower-limb Prosthetic Codes

Prior to the COVID-19 public health emergency (PHE), CMS stated that six lower-limb prosthetic Healthcare Common Procedure Coding System (HCPCS) codes (L-5856, L-5857, L-5858, L-5973, L-5980, and L-5987) would be subject to prior authorization as a Medicare condition of payment in Texas, Pennsylvania, Michigan, and California beginning May 11, in the form of a pilot program, and nationwide beginning October 8. In light of the pandemic, CMS paused this new prior authorization program for lower-limb prosthetics in March.

On July 1, CMS announced that it will resume this program and require prior authorization for the six codes with dates of service on or after September 1, 2020, in the same four states. CMS will then expand prior authorization nationwide beginning on December 1, 2020. This revised timeframe leaves only three months (instead of five months) to incorporate lessons learned from the pilot into the nationwide rollout of the program.

In addition, on June 26, the Durable Medical Equipment Medicare Administrative Contractors (DME MACs) and the Pricing, Data Analysis, and Coding Contractor (PDAC) published a joint announcement and a revised Lower Limb Prostheses Local Coverage Article announcing that claims will not be paid for these six prosthetic codes with dates of service on or after January 1, 2021, unless the specific prosthetic component has undergone PDAC code verification, and approval to bill a specific prosthetic L-Code has been published on the appropriate Product Classification List.

The O&P Alliance, of which the National Association for the Advancement of Orthotics and Prosthetics (NAAOP) is a member, submitted a letter to CMS requesting that the agency postpone the implementation of prior authorization for the six billing codes until January 1, 2021, which would coincide with the new coding verification requirement issued by the PDAC. Further delay in this new prior authorization is justified because physicians will need to be educated on the prior authorization process and will have to cooperate with prosthetists, therapists, and their patients before a patient can receive care that involves components described by any of these billing codes.

Given the ongoing PHE, the O&P Alliance does not believe it is an appropriate time to impose new documentation requirements on healthcare providers. The O&P Alliance also urged CMS to retain its previously announced duration of the pilot program—five months—before implementing prior authorization on a nationwide basis. In this manner, CMS can incorporate important lessons learned from the pilot into the nationwide program. A three-month differential in start dates may not be enough to achieve this purpose.

Concerns about prior authorization during a pandemic are obvious. Physicians fighting COVID-19 on the front lines should not be required to be educated about new documentation requirements for Medicare beneficiaries with limb loss to gain access to appropriate prosthetic care. The risk is that providers will seek to avoid delays in obtaining physician documentation by shifting practice patterns away from the six lower-limb codes, sending a false signal to CMS that these prosthetic components are not necessary for optimal prosthetic outcomes.

Medicare Fee-for-Service Audits

On July 1, CMS announced that Medicare contractors will resume Medicare fee-for-service claim audits beginning on August 3. On March 30, CMS suspended most Medicare fee-for-service medical reviews including pre-payment audits conducted under the Targeted Probe and Educate (TPE) program and post-payment audits conducted by the MACs, Supplemental Medical Review Contractor (SMRC), and Recovery Audit Contractor (RAC) due to the PHE. Despite the rise in cases of COVID-19 throughout the country since that time, CMS concluded that it is necessary to lift the suspension of audits given the "importance of medical review activities to CMS' program integrity efforts."

CMS advised providers selected for review to discuss with their contractor any COVID-19-related hardships they are experiencing that could impact the audit response. The agency's statement suggests that contractors may extend some flexibility to providers experiencing such hardships. CMS also noted that contractors will observe waivers and flexibilities in effect on the dates of service when evaluating claims to which these waivers apply.

CMS subsequently heard from multiple Medicare stakeholders—including the O&P community—and reportedly clarified that the August 3 rollout of medical review activities is delayed and limited to post-payment audits conducted by the MACs. CMS told stakeholders that, at this point, the MACs will review claims prior to March 1. The agency reportedly indicated that it has not established a timeframe for restarting TPE, SMRC, and RAC audits. However, the published report asserting these clarifications did not come from CMS. Instead, this information was included in an industry article that reported on verbal conversations with CMS on these issues and, at the time of this writing, cannot be verified. It is therefore quite possible that Medicare audits have, in fact, resumed by all of the contractors responsible for such activities.

Efforts to Expand Telehealth to O&P Care

On April 30, CMS announced that during the PHE it is waiving the requirement limiting the types of practitioners that may bill for their services rendered via telehealth. According to CMS,
this allows "health care professionals
who were previously ineligible to fur-
nish and bill for Medicare telehealth services…to receive payment for Medicare telehealth services."

Although CMS' waiver potentially eliminates one barrier for orthotists and prosthetists to submit claims for Medicare telehealth services, there are other obstacles that prevent O&P practices from billing for these services. First, CMS does not recognize any HCPCS L-Codes as Medicare telehealth services. Medicare Part B pays for covered services included on CMS' list of telehealth services, but L-Codes are not on the approved list. CMS added two Current Procedural Terminology (CPT) codes that describe O&P services to the list of covered services, but these codes cannot be billed by orthotists or prosthetists for purposes of Medicare reimbursement. The two CPT codes are:

  • CPT 99760 (Orthotic(s) management and training (including assessment and fitting when not otherwise reported), upper extremity(ies), lower extremity(ies) and/or trunk, initial orthotic(s) encounter, each 15 minutes); and,
  •  CPT 97761 (Prosthetic(s) training, upper and/or lower extremity(ies), initial prosthetic(s) encounter, each 15 minutes).

Second, there is currently no mechanism of O&P practitioner reimbursement for non-repair clinical services provided to beneficiaries after the 90-day period already included in the L-Codes from the date of delivery of a new orthosis or prosthesis.

Although there are clearly some hands-on aspects of O&P care that do not lend themselves to telehealth, a number of valuable O&P services can be effectively rendered via telehealth, such as addressing issues that are preventing the safe use of a prosthesis or orthosis. On June 11, the O&P Alliance, including NAAOP, submitted a letter to CMS urging the agency to authorize appropriately credentialed orthotists and prosthetists to bill for clinical services rendered virtually during the COVID-19 PHE when the clinical services are provided beyond 90 days after the delivery of the orthosis or prosthesis. The O&P Alliance requested that CMS explore coding options that would allow orthotists and prosthetists to bill for such services. CMS has not yet responded directly to this request, but the profession continues to advance this argument both with CMS and in Congress.

While CMS has authority to extend coverage for some telehealth practices, many of the telehealth services expanded during the pandemic are legislatively authorized only during the declared COVID-19 PHE. The PHE has currently been extended into October, but under current law, CMS' authority to allow a broad array of practitioners to conduct telehealth for beneficiaries across the country will cease once the PHE is lifted. There is widespread agreement in Congress that at least some of the current telehealth authorities should be extended permanently, but how and when that may happen is still unclear.

Several legislators have proposed legislation that would evaluate the current use of telehealth under the PHE to better understand its impact on beneficiaries and the Medicare program, but these would be seen as a stepping-stone to determine which policies to permanently expand in law. Additionally, a recent proposal by Republicans on the Senate Finance Committee would extend CMS' authority to conduct telehealth waivers at least through the end of 2021. However, Congress will have to come to an agreement on any final action to permanently allow telehealth to be conducted more broadly once the PHE has ended.

ALJ Backlog of Medicare Appeals

On June 26, CMS filed its quarterly status report with the federal court in the American Hospital Association lawsuit on the Administrative Law Judge (ALJ) backlog. As part of the decision in that case, the court ordered CMS to reduce the backlog to 217,563 appeals by September 30, 2020, and it must be eliminated entirely by September 30, 2022.

CMS continues to make progress toward reducing the ALJ backlog. As of March 31, the backlog was down to 242,995 appeals. Although this is a significant number of undecided appeals, it is far less than the 886,418 appeals that were in the backlog at the beginning of federal fiscal year 2016. During the first half of the current federal fiscal year (October 1, 2019, through March 31, 2020), CMS lowered the backlog by 49,522 appeals. At this pace, CMS seems likely to meet its target of 217,563 appeals by September 30, 2020. If this occurs, the pace at which Medicare appeals may be heard before ALJs is expected to improve dramatically, especially compared to the past several years.

VA Maintains Authority to Issue Codes for New O&P Technologies

On June 24, the Veterans Health Administration (VHA) released VHA Directive 1045 establishing the policy and responsibilities for developing and utilizing appropriate coding, market analyses, and contract guidance for prosthetic limbs and custom orthoses. Among other things, VHA Directive 1045 confirms that the VA may "develop a VA based coding system to classify emerging technology" that does not fall under existing HCPCS L-Codes.

The VA's ability to timely furnish innovative prostheses and orthoses
to veterans is largely attributable to the fact that the VA permits orthotists and prosthetists to use "not otherwise classified" (NOC) HCPCS L-Codes when CMS has not yet determined a more specific HCPCS billing code or a new O&P technology or component. VHA Directive 1045 preserves the ability of VHA providers to continue using NOC codes in appropriate circumstances, clarifying and bolstering this longstanding VHA practice, which was called into question and put on hold in 2018 due to publication of the VA Office of Inspector General's report titled,
Veterans Health Administration: Use of Not Otherwise Classified Codes for Prosthetic Limb Components.

VHA Directive 1045, however, does not describe in detail the VA processes for assigning miscellaneous NOC billing codes, developing VHA-specific codes for new O&P innovations, or establishing appropriate reimbursement levels for prosthetic limb and orthotic technologies and components. The O&P Alliance submitted a letter to the VA commending the agency for preserving the separate VHA coding function and expressing a desire to work with VHA leadership to gain a greater understanding of the coding and reimbursement processes not detailed in VHA Directive 1045.

Veterans Funding Bill Includes O&P Provisions

The House of Representatives has continued to advance the Fiscal Year 2021 appropriations process, though the parallel process has stalled in the Senate. On July 24, the House passed a "minibus" spending bill, comprising four funding bills for federal agencies, including the Military Construction and Veterans Affairs appropriations package. The legislative text was accompanied by a written report that included statements of congressional intent directing how funding should be allocated toward specific programs. The VA report contained two research provisions of interest to O&P practitioners.

First, the funding bill had an increase of $40 million for medical, rehabilitative, and health services research within the VHA. The accompanying report language emphasized the importance of the VHA prosthetic research program for the development and testing of prosthetic, orthopedic, and sensory aids for improving the care and rehabilitation of disabled veterans, including amputees and paraplegics. Additionally, the bill provided $1.3 billion for telehealth and connected care within the VHA, specifically highlighting work on home telehealth "prosthetics," although prosthetics under the VHA are defined much more expansively than they are under the Medicare program.

Next COVID-19 Stimulus Package

As of this writing, both political parties and both houses of Congress are working toward an agreement on the next COVID-19 stimulus package before the upcoming August recess. In May, House Democrats passed the HEROES Act, a more than 1,800-page proposal expected to cost nearly $3.5 trillion over the next ten years. However, Republicans in the Senate panned the bill as "dead on arrival," and encouraged a pause to evaluate the impact of previous stimulus spending before attempting another congressional response. In late July, Senate Majority Leader Mitch McConnell debuted a series of bills serving as an opening bid for negotiations on the Republican side, but the rollout was marred by delays and internal disagreements within the Republican caucus and with the Trump Administration.

Despite the bumps in the negotiation process, it seems likely that Congress will be forced to act in some fashion. The expanded federal unemployment benefits included in previous legislation expired at the end of July and while there is significant opposition on the Republican side to extending the benefits at the current level, there is widespread agreement that some additional federal contribution is needed to forestall even further disruption in the economy months out from a national election. Additionally, state and local governments are in desperate need of additional funding for COVID-19 testing, tracing, and treatment efforts, as well as to address expected shortfalls in budgets due to the extra strain on government services and decreased tax revenues during the pandemic.

As businesses and schools continue to explore options for reopening, Senate Republicans are adamant about the need for liability shields for businesses and other entities to protect against a wave of lawsuits for failure to prevent infection, although data thus far suggests a wave of lawsuits is not materializing, at least not yet. Both parties are expected to support additional direct payments to individuals and families, likely at the same level as the previous payments in March.

The specific policies in the next package are still to be negotiated primarily between Democrats in Congress and the White House. The fact that Senate Majority Leader McConnell admitted that as many as one third of his Republican colleagues will not vote for any additional COVID-19 package has reduced his influence over these negotiations. In fact, while efforts to attain a deal accelerate, there are major fissures in the discussions and at least a possibility that the matter will not be resolved until after Labor Day. Still, as COVID-19 cases continue to rise and both parties look toward their political conventions and the 2020 elections, another major stimulus bill is expected at some point to address the nation's continuing healthcare and economic needs in the age of a worldwide pandemic.

Peter W. Thomas, JD, is a principal with the Powers Law Firm, general counsel for the National Association for the Advancement of Orthotics and Prosthetics (NAAOP), and counsel to the Orthotic and Prosthetic Alliance.

Leela Baggett, JD, is an associate with the Powers Law Firm. and Joe Nahra is the director of Government Relations at the firm.