A Guide to Getting O&P Repairs and Replacement Coverage, Part III

O&P practices provide thousands of dollars in uncompensated repairs each year because of insufficient chart documentation to allow coverage. This article series will provide a summary of documentation requirements for repairs and replacement, proper coding for repairs and replacement, and sources of guidance that dictate the requirements The table of contents provides a guide to the three parts of the series to help enable you to navigate to the information you are searching for. Table of Contents Part I: General Document Guidance History of the Device Clinician Evaluation Documentation Assessment of Needs When Is a New Physician Order Required? Documentation for Continued Medical Need (Policy Article A55426) Part II: Definitions of Coverage Criteria What Is a Repair and When Is It Covered? What Is a Replacement and When Is It Covered? Summary of Medical Documentation Required for Coverage of Repair/Replacement Part III: Repairs and Replacement Coding Coding and Documenting Labor Involved to Perform Repairs How to Code for Replacement Parts Replacement Documentation Required for Prosthetic Replacement Documentation Required for Orthotic Replacement Pricing/Billing and Reimbursement Issues Modifiers Allowable Amounts Not Otherwise Specified Codes Payment Methodologies for Minor Parts/NOS Codes Medicare Medicare Gap Filling Explained Commercial Insurers Regulatory Mandates Conclusion In parts I and II of this series, we covered the applicable general documentation requirements described in Policy Article A55426 and the specifics of coverage criteria for repairs and replacement. In this final installment, we outline guidance for coding these types of services. Coding and Documenting Labor Involved to Perform Repairs In general, the only labor compensated as part of a repair is the actual labor involved with making the repair. According to Policy Article A52496, “Maintenance which may be necessitated by manufacturer’s recommendations or the construction of the device (taking apart a component to replace a part) is covered as a repair. L-7520: prosthetic repair device, labor component per 15 minutes is used to bill for labor associated with adjustments and repairs that either do not involve replacement parts or that involve replacement parts billed with L-7510. L-7520 must not be billed for labor time involved in the replacement of parts that are billed with a specific Healthcare Common Procedure Coding System (HCPCS) code. Labor is included in the allowance for those codes. One unit of service of code L-7520 represents 15 minutes of labor time. Documentation must exist in the supplier's records indicating the specific adjustment and/or repair performed and the time involved. The time reported for L-7520 must only be for actual repair time. Time performing the following services (not all-inclusive) must not be billed using code L-7520: Evaluation to determine the need for a repair or adjustment or follow-up assessment Evaluation of problems regarding the fit or function of the prosthesis General beneficiary education or gait instruction Programming of electronic componentry L-4205, repair of orthotic device, labor component, per 15minutes, may only be billed for time involved with the actual repair of an orthosis or for medically necessary adjustments made more than 90 days after delivery. L-4205 must not be billed for time involved with other professional services including, but not limited to: Evaluating the beneficiary Taking measurements, making a cast, making a model, use of CAD/CAM Making modifications to a prefabricated item to fit it to the individual beneficiary Follow-up visits Making adjustments at the time of or within 90 days after delivery The allowance for the labor involved in replacing an orthotic component that is coded with a specific L-Code is included in the allowance for that component. The allowance for the labor involved in replacing an orthotic component that is coded with the miscellaneous code L-4210 is separately payable in addition to the allowance for that component. How to Code for Replacement Parts If a component being replaced can be described by an existing HCPCS code, the correct code to use for replacement is the established HCPCS code. Some orthotic replacement items have unique HCPCS codes. For example, addition codes L-4002 through L-4130 and L-4392 are for billing of replacement components and are not payable at initial issue of a base orthosis. When claims for code(s) L-4002 through L-4130 and L-4392 are billed at the time of initial issue of a base orthosis, the addition code(s) will be rejected as incorrect coding. When a component with an established HCPCS code is replaced, there is no separate billing for labor because reimbursement for these services is included in the allowance for the HCPCS of the replacement item. This is also true when billing using a Not Otherwise Specified (NOS) code—you are essentially billing a placeholder for an established HCPCS code, and the documentation should include both the labor and the hardware as comprising the full amount billed. Do not bill a NOS code with L-4205 or L-7520. Some components with established HCPCS codes contain repairable parts that do not by themselves have an established HCPCS code, yet they can be replaced to return the component to optimal function. Regardless of the cost for these parts, Medicare guidance is to utilize the minor parts codes to bill for them. Replacements of these parts are typically billed using the minor parts codes, in conjunction with a labor code for the actual time to complete the replacement of the part. L-7510 (repair of prosthetic device, repair or replace minor parts) is used to bill for any minor materials (i.e., those without specific HCPCS codes) used to achieve the adjustment and/or repair of a prosthesis. Similarly, L-4210 is available for orthoses. L-4210 (repair of orthotic device, repair or replace minor parts) is not to be used for casting supplies or other materials used in the fitting or fabrication of an orthosis, but rather for parts replaced in a damaged component of an existing orthosis. While Medicare does not limit the amount of reimbursement for minor parts except to specify that the cost of the total repair cannot exceed 60 percent of a cost of a new device, some commercial payers have established allowable amounts for L-7510 and L-4210 that preclude billing repairs to these plans utilizing Medicare guidelines. For example, Aetna and CareFirst have erroneously established allowable amounts of $25 to $35 rather than using individual consideration for the L-7510 and L-4210 (minor parts) codes; therefore replacements billed to these commercial plans for components that do not have a unique HCPCS code must be billed with an NOS code (e.g., L-2999, L-3999, L-5999, and L-7499) instead of L-7510 and L-4210, or the provider will be undercompensated for the repair. Replacement Documentation Required for Prosthetic Replacement Replacement prosthetic components are covered when they are identical to the original delivered prescription, or are a minor part required to make an original delivered component functional. If the intention, however, is to replace with a different component than original, then a new order and new medical necessity documentation must be obtained. Medicare will pay for replacement prostheses when the ordering physician and prosthetist determine the replacement is reasonable and necessary. Documentation in the physician’s and prosthetist’s records must support one of the following conditions: A change in the patient’s physiological condition such as weight gain/loss Changes in the residual limb Changes in the patient’s functional level Repairing the original device will cost more than 60 percent of the cost to the payer to purchase a new device The device is irreparable, with supporting documentation A replacement prosthesis requires a new Detailed Written Order (DWO) and physician medical records that explain the reason for replacement. If this reason is a change in functional level, the physician is expected to discuss this change explicitly (supported by objective information as evidence of the change). The prosthetist must also document the reason for replacement in the patient’s medical record. It is important to be specific and detailed about the reason for replacement. Photographs of any broken component or ill-fitting socket are also useful to support replacement justification. Documentation Required for Orthotic Replacement Orthotic devices have a minimum five-year reasonable useful lifetime (RUL) per the Medicare Benefit Policy Manual (Internet-Only Manual 100-02), Chapter 15, Section 110.2, with the exception of certain knee orthoses that have HCPCS code-specific RUL instructions of one, two, or three years depending upon the HCPCS code. The knee orthoses RUL requirements can be found in the associated CMS Policy Article (A52465)-Knee Orthoses . If your service is a repair, the original signed standard written order (SWO) will serve as evidence of continued medical need (so long as the expected length of need indicates the device should still be in use). You must then document the reason the repair is needed, what repair was performed, and the time required for the repair. If your service is a replacement of a component part in an existing device that continues to be adequate as originally prescribed, you will need the original SWO. If the original SWO defines the length of need as permanent, documentation of continued medical need within the preceding 12 months is met. If not available, a new order and a face-to-face physician visit documenting continued medical need or use of the item and the reason the current brace is not useable must be obtained (Transmittal 546, CR 8942) . (Note: The only covered reasons for replacing the entire orthosis are a change in condition or a loss or irreparable damage to the original device caused in a specific incident e.g., accident or natural disaster). In the case of repairs to a beneficiary-owned durable medical equipment, prosthetic, orthotic, and supplies (DMEPOS) item, if Medicare paid for the base equipment initially, medical necessity for the base equipment has been established. With respect to Medicare reimbursement for the repair, there are two documentation requirements: The treating physician must document that the DMEPOS item being repaired continues to be reasonable and necessary (continued need); and, either the treating physician or the supplier must document that the repair itself is reasonable and necessary. If the replacement is due to loss, theft, or irreparable damage, consider including copies of police records, the insurance claim, or a physician or patient’s written, signed statements. Orthotic replacements, because of the RUL requirements, are more complex than prosthetic replacements and must have documentation evaluated to explain both the change of condition that necessitates the change from same or similar equipment previously provided and, in addition, for the medical necessity of the replacement device. If an entire orthosis needs to be replaced within the RUL of a prior device, due to a change in condition, be certain to collect a new physician-signed SWO along with the medical record documentation by the physician and orthotist to document the change that makes the old device unsuitable, along with an Advance Beneficiary Notice signed by the patient, as well as any documentation to specify the medical necessity of the new device (see specific LCD and Policy Article guidance for coverage criteria for each device type). With this documentation, you can submit the claim with a GA modifier, then after the explanation of benefits is available, use the documentation to appeal to overturn the patient responsibility decision and allow coverage. Pricing/Billing and Reimbursement Issues Modifiers When submitting a repair or replacement claim to Medicare, the applicable replacement modifiers are: RA: replacement of a DME, orthotic, or prosthetic item RB: replacement of a part of a DME, orthotic, or prosthetic item furnished as part of a repair Use of the RA modifier implies that the entire DMEPOS item (base equipment) is being replaced. If you replace a specific part but not the base equipment, the service is considered a repair, and the RB modifier should be used on the claim. Allowable Amounts Although labor rates are not published by the Centers for Medicare & Medicaid (CMS) in the DMEPOS fee schedule, the rates are available on the websites of each DMEPOS contractor and range from $25 to $42 for L-4205 and $34 to $49 for L-7210: Region A Region B Region C Region D Not Otherwise Specified Codes According to the DMEPOS contractors, for Medicare billing, items billed with any HCPCS code with a narrative description that indicates miscellaneous, NOS, unlisted, or non-specified must also include the following information in loop 2400 (line note), segment NTE02 (NTE01=ADD) of the ANSI X12N, version 5010A1 professional electronic claim format or on Item 19 of the paper claim form in the narrative field. The narrative added to the claim must include: Description of the item or service Manufacturer name Product name and number Supplier Price List (PL) amount HCPCS code of related item (if applicable) If a repair part, the HCPCS code of the item being repaired The NTE 2400 Field of an electronic claim is limited to 80 characters; therefore, suppliers are encouraged to use the contractors’ list of Common Abbreviations to Use as Narratives to condense all of the required information into this field. Miscellaneous HCPCS codes billed without this information will be rejected and will need to be resubmitted with the missing information included. Regardless of what is submitted in the narrative field, due to the 80-character limit, these billings are typically denied, and records will need to be submitted to complete the claim processing. Payment Methodologies for Minor Parts/NOS Codes Even after sufficiently documenting a repair/replacement service and submitting a claim, there is still uncertainty about what a provider can expect as amount of reimbursement. Medicare Medicare manually prices these codes based on an unpublished formula using the information provided by the supplier for the manufacturer’s suggested retail price (MSRP) or invoice price in the claim narrative. This formula is not published by CMS. According to Noridian Region D , the methodology is gap filling. Medicare Gap Filling Explained The fee schedule for items for which charge data is not available or published is calculated based on: Fee schedule amounts for comparable equipment Fee schedule amounts of other DME MACs Supplier price lists Manufacturers wholesale price Where supplier price lists are used, efforts are made to obtain prices in effect during the base year. Mail order catalogs are often used as sources of price information. A deflation factor is applied if the price information is from a period other than the base period. This is done to approximate the base year price for gap filling purposes. For more information on the pricing methodology used for unpublished fee schedules, review the Internet-Only Manual (IOM), Publication 100-04, Medicare Claims Processing Manual, Chapter 23 , Fee Schedule Administration and Coding Requirements. Individual Local Coverage Determination (LCD) or Policy Articles (PA) will have specific NOS coding information. Visit Noridian’s website for specific LCDs or PAs for policy-specific NOS codes. For questions about correct coding, contact the Pricing, Data Analysis, and Coding (PDAC) contractor. In actual practice, there is no transparency in the method used to determine allowable amounts by CMS. Providers should name an MSRP equivalent to their billed amount and expect the allowable result will be less than billed. If a provider supplies an actual invoice for an amount they paid for a part, and the reviewer applies a formula intended to input an MSRP, the result will be the provider is paid less than their hard costs before the labor to complete a repair. Commercial Insurers If your commercial insurer contract specifies how repair code allowables will be calculated, that is the surest method to accurately predict reimbursement. Some payers pay a percentage of billed charges for repairs. This may be learned via repeat billings and setting a precedent, rather than specified contractually. Once you have a precedent well established, it can still offer a basis for appeal in event of a single service treated differently. We have already discussed certain commercial payers that established a single allowable for the minor parts code, which is almost certain to result in an underpaid service if billed by a provider. Regulatory Mandates Certain payers have their reimbursement methodology established by regulation (such as state Medicaid programs and state Workers’ Compensation programs). In these instances, and in cases where a contract with a commercial payer mandates you must supply manufacturer invoices when requested, you will be required to do so to be reimbursed. Most of these formulas offer payment so low (1.5 times cost, and shipping excluded) that it would not be sustainable for a business that only performed repairs. Other payers have subcontracted the responsibility for negotiation of these allowed amounts to outside entities (e.g., FairPay). Since there is no requirement for the provider to comply or negotiate with the outside entity, it becomes a matter of persistence and returning to the legitimate payer to explain the reimbursement offer is not acceptable when settlement offers are unreasonable. Conclusion Repairs are a necessary but low-reward part of O&P practice. Educating staff on the documentation requirements and billing requirements can help to alleviate the inefficiency and losses in obtaining reimbursement for these services. Susi Ebersbach, MT (ASCP), MBA, provides independent consulting and has over twenty years of experience in O&P reimbursement topics, working with both providers and manufacturers. While every attempt has been made to ensure accuracy, The O&P EDGE is not responsible for errors.

A Guide to Getting O&P Repairs and Replacement Coverage, Part III

Repairs and Replacement Coding

Poll Results: First Days of Fall and the Caregiver’s Role