New Medicare Rules Take Effect for O&P Care

The Centers for Medicare & Medicaid Services (CMS) recently issued two new regulations that impact patient access to O&P care. On December 28, 2021, CMS issued a long-delayed final rule implementing various proposals related to benefit category determinations (BCDs) and pricing decisions for new O&P technologies. On January 13, CMS published a new rule updating the Healthcare Common Procedure Coding System (HCPCS) codes on the Required Prior Authorization List, the Required Face-to-Face Encounter and Written Order Prior to Delivery List (Face-to-Face List), and the Master List of HCPCS codes potentially subject to these requirements. 1 This article summarizes these important new rules. Benefit Category and Pricing Determinations The BCD and pricing rule finalizes several provisions that were proposed in 2020. But unlike prior years, a durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) final rule was not issued that year due to the ongoing impact of the COVID-19 pandemic and other delays within CMS. Proposed Rule CMS proposed to codify in regulation the processes for obtaining public input on BCDs as well as payment determinations for new items and services under the DMEPOS benefit. Under the proposal, the BCD and payment determination process would be incorporated into the biannual HCPCS coding cycle. This process would include the issuance of a preliminary BCD by CMS after consideration of relevant information, including an application for a BCD from a manufacturer or innovator. Similar information would be used to issue a preliminary payment determination if the item or service was placed in a Medicare benefit category under the preliminary BCD. Final Rule The majority of the proposed BCD and payment determination processes were finalized without revision. Under the new process, once a manufacturer submits an application for a new item or service, or when CMS decides to undertake a new BCD review under its own authority, the process will unfold as follows: ■ At the start of the coding cycle (typically shortly after January 1 and July 1 of each year), CMS will review whether the item or service is statutorily excluded from Medicare coverage. If not, the agency will make a preliminary BCD to decide whether the new technology or device qualifies under the durable medical equipment (DME) or O&P benefit. This is critical for O&P technologies because if CMS determines the device is covered as DME, there are restrictions to the BCD decision that do not apply to O&P. For instance, DME items must be medically necessary in the patient’s home and are often paid for on a rental basis. These restrictions do not apply to O&P. CMS states that this process will typically take between one week and two months, though it could take several months for more complex items or services. For this determination, CMS may review information about the item or service including the description included in the HCPCS application, past codes utilized to bill for the item or service, information on the manufacturer’s website, and information related to the Food & Drug Administration (FDA) clearance or approval process for the item or service. ■ If the preliminary BCD affirms that the item falls within a Medicare benefit category, CMS will make a preliminary payment determination regarding how fee schedule amounts will be established. Again, this process will typically take another one week to two months, or up to several months for more complex items. ■ After both preliminary determinations are established, they will be posted publicly two weeks before the applicable public meeting of the HCPCS Workgroup. At that meeting, applicants and other stakeholders may testify before the HCPCS Workgroup and present additional information and support for their position, after which the Workgroup will issue final determinations to be established through program instructions to the Medicare Administrative Contractors (MACs). CMS noted that many stakeholders found the two-week timeline to make preliminary decisions public too short; the agency believes, however, that this timeline strikes the right balance. This means that a negative preliminary decision on a BCD or pricing determination will necessitate intensive efforts from applicants and other stakeholders to address the reasons why the preliminary decision is viewed as incorrect. BCD and pricing determinations for new technologies and devices were traditionally handled by CMS staff in an informal process, usually as an adjunct to a new coding application or, in the case of a pricing determination, after a new code had been created. The final rule increases the level of transparency and public input into both of these determinations by subjecting them to the same HCPCS Workgroup review that new coding applications undergo. This could produce better results for manufacturers, innovators, and other participants in this process, potentially easing the path for new O&P technologies to be accessible to beneficiaries. However, the only appeals mechanism to applicants who are dissatisfied with their BCD or pricing decisions appears to be a resubmission of the application itself for review by the same HCPCS Workgroup that made the first decision. There is also concern that the HCPCS Workgroup members, whose expertise relates to Level II coding, may not have the expertise to determine benefit categories and pricing calculations. Additional Clarifications ■ CMS notes that in the future, manufacturers who request a BCD outside of the new process, including as part of a request for informal advice from the agency, will instead receive a BCD and payment determination issued through this newly established, more formal process. ■ CMS notes that the BCD process is separate from the HCPCS application process, although both processes are handled by the HCPCS Workgroup. In addition, manufacturers and other stakeholders may request a BCD without an associated request for a new or revised HCPCS code. BCDs can also be requested through the broader National Coverage Determination process without having to go through the HCPCS Workgroup. ■ CMS acknowledges that BCD reviews have “slowed down the past few years,” attributing the delays to the lack of formalization of the BCD process. The agency anticipates being able to make more consistent and timely decisions moving forward. ■ Several coding applications in the past two years yielded temporary HCPCS coding assignments for new technologies due to internal CMS concerns with the process. CMS is expected to make permanent BCD and coding recommendations in the first round of HCPCS Workgroup consideration later this spring for these temporary codes. HCPCS Level II Code Application Process Proposed Rule Coding Changes Not Adopted In the 2020 proposed rule, CMS offered several revisions to the HCPCS Level II code application process, including codifying a biannual coding cycle for DMEPOS applications and a new specified process for evaluating code applications. Among other provisions, the proposed evaluation would allow CMS to make initial determinations regarding whether an item is “primarily medical in nature” before the coding application is brought before the HCPCS workgroup. After reviewing stakeholder comments, CMS decided not to finalize any of the proposed revisions to the HCPCS Level II code application process. Prior Authorization, Face-to-face Requirements, and the DMEPOS Master List On January 13, CMS published a new rule updating the HCPCS codes on the Required Prior Authorization List, the Required Face-to-Face Encounter List, and the Master List of DMEPOS potentially subject to these requirements. 1 The rule adds 11 codes to the required prior authorization list, including six K-Codes and five orthotic L-Codes. These new L-Codes are in addition to a small number of prosthetic L-Codes that have been subject to prior authorization since spring 2021. CMS added 53 codes to the Face-to-Face List, including 46 power wheelchair K-Codes that are statutorily required to be on the list and seven additional codes, primarily orthoses, added at CMS’ discretion. Finally, 31 codes are added to the Master List of items that can be added to the Prior Authorization and Face-to-Face lists in the future, but CMS is not choosing to do so now. Implementation of these requirements is effective on April 13. The new prior authorization requirements will be implemented in phases, based on states with the highest utilization. In phase 1, beginning on April 13, the requirements will go into effect for New York, Illinois, Florida, and California. In phase 2, beginning on July 12, the requirements will go into effect for Maryland, Pennsylvania, New Jersey, Michigan, Ohio, Kentucky, Texas, North Carolina, Georgia, Missouri, Arizona, and Washington. All other states and territories will be subject to these new requirements on October 10. For the DMEPOS items already subject to prior authorization requirements, no changes will be made. Required Prior Authorization List As noted, CMS is adding 11 new HCPCS codes to the Required Prior Authorization List, including five orthoses codes. These include two lumbar-sacral orthoses (L-0648 and L-0650) and three knee orthoses (L-1832, L-1833, and L-1851). These items will require prior authorization according to the phased implementation described above. CMS notes lower-limb orthoses (LLOs) and lumbar-sacral orthoses (LSOs) “have been identified by CMS’ Comprehensive Error Rate Testing (CERT) contractor as two of the top 20 DMEPOS service types with improper payments over the past several years,” citing improper payment rates of more than 60 percent for LLOs (a projected $235-$501 million in improper payments) and more than 32 percent for LSOs (a projected $116-$177 million in improper payments), since 2016. CMS also cites the 2019 law enforcement actions undertaken by the Department of Justice regarding fraudulent claims for medically unnecessary back, shoulder, wrist, and knee orthoses. Providers must submit a prior authorization request, including evidence that the item complies with all applicable Medicare coverage, coding, and payment rules, before providing an item on the Required Prior Authorization List to a beneficiary. Documentation must include the written order/prescription, relevant information from the beneficiary’s medical record, and supplier-produced documentation. CMS will issue specific sub-regulatory guidance, including timelines customized to each individual DMEPOS item, though no timeline is specified for the publication of this guidance. The rule also notes that “if at any time [CMS] become[s] aware that the prior authorization process is creating barriers to care, [the agency] can suspend the program.” The new list of L-Codes subject to prior authorization raises questions because at least some of the codes are also subject to competitive acquisition (i.e., competitive bidding), a program that took effect for 23 off-the-shelf (OTS) spine and knee orthosis codes on January 1, 2021. Specifically, four OTS orthotic codes are under the current round of competitive bidding and added to both the Prior Authorization and Face-to-Face Lists: L-0658 and L-0650 (lead items for spine orthoses in competitive bidding) and L-1851 and L-1833 (the lead items for knee orthoses in competitive bidding). OTS orthoses described by the 23 OTS codes are typically available and needed by patients at the point of a provider encounter and may not lend themselves to a delay in authorization under the prior authorization program. More information is needed from CMS on this issue to understand how both of these programs will work together in a manner that does not compromise access to patient care. Required Face-to-face Encounter and Written Order Prior to Delivery List The new rule includes updates to the Face-to-Face List that were previously postponed due to the COVID-19 public health emergency. The items on this list will require a face-to-face encounter effective after 90 days’ notice, beginning April 13. CMS states that the agency believes it is appropriate to “add a limited list of items that pose a risk to the Medicare Trust Funds” to the list. Power Mobility Devices (PMDs) require a face-to-face encounter and written order per statutory requirement; these codes will remain on the Face-to-Face List “indefinitely.” CMS has also added seven additional HCPCS codes under its own regulatory authority, after considering operational limitations, item utilization, acute needs, pandemic impacts, cost-benefit analysis, emerging trends, vulnerabilities identified in official agency reports, and other factors. Six of these seven codes are L-Codes, five of which are the same new codes added to the Prior Authorization List (L-0648, L-0650, L-1832, L-1833, and L-1851). One additional orthotic L-Code was added to the Face-to-Face List, L-3960, a shoulder-elbow-wrist-hand orthosis (airplane design). It is not clear why this particular orthosis was added to this list but, going forward, all six of these L-Codes will require a face-to-face physician visit and a written order prior to delivery of the orthosis. This differs from the written order requirement that applies to all O&P benefits, which requires a written order prior to submission of the claim. The rule also states that CMS will make “widely available” information to the public regarding these requirements and necessary documentation. Finally, CMS notes that telehealth may be utilized to meet the face-to-face encounter requirement when appropriate. Virtual or in-person encounters must be documented in the patient’s medical record, and documentation must include “subjective and objective beneficiary specific information used for diagnosing, treating, or managing a clinical condition for which the DMEPOS item(s) is ordered.” Master List of DMEPOS Frequently Subject to Unnecessary Utilization The Master List of DMEPOS Frequently Subject to Unnecessary Utilization was created in the November 2019 DMEPOS final rule. 2 This list was intended to streamline and standardize the list of DMEPOS items that could be potentially subject to prior authorization and/or the face-to-face encounter and written order prior to delivery requirements. CMS automatically updates the list annually based on certain payment thresholds and can also revise the list at the agency’s own discretion. In this rule, CMS added 31 HCPCS codes to the Master List. Eighteen were added because they met the updated average purchase/rental fee criteria, and 13 were added because they accounted for at least 1.5 percent of Medicare DMEPOS expenditures. The full updated Master List (encompassing approximately 450 total and 254 L-Codes) can be accessed on the CMS website. 2 The new additions include six orthotic L-Codes including a halo code (L-0830), a scoliosis orthosis (L-1005), an AFO (L-1905), two addition codes (L-2580 and L-2624), and a battery charger code (L-7368). One L-Code was removed from the Master List, L-3761, an elbow orthosis. Parting Comments As it signaled in previous regulations, CMS is using its authority to impose competitive bidding, prior authorization, and face-to-face physician visits to combat suspected areas of waste, fraud, and abuse in the DMEPOS benefit. These most current regulations make it clear that CMS is closely monitoring claims activity and is taking steps to rein in suspect provider behavior. While there is no evidence that behavior from certified and/or licensed orthotists and prosthetists is creating these concerns, the field is certainly not cast in a kind light by the necessity to impose these countermeasures. This continues to underscore the need for implementation of regulatory provisions to link quality with the qualifications of the practitioner and to enact legislative proposals, such as provisions in the Medicare O&P Patient-Centered Care Act, that would address these issues in a holistic manner. Peter W. Thomas, JD, is managing partner at Powers law firm, Washington DC. He serves as general counsel to the National Association for the Advancement of Orthotics and Prosthetics (NAAOP) and counsel to the O&P Alliance. Joseph Nahra is director of government relations, Powers law firm. References Medicare Program; Updates to Lists Related to Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Conditions of Payment, 87 Fed. Reg. 2051 (Jan. 13, 2022). Medicare Program; Updates to Lists Related to Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Conditions of Payment, 87 Fed. Reg. 2051 (Jan. 13, 2022). Medicare Program; End-Stage Renal Disease Prospective Payment System, Payment for Renal Dialysis Services Furnished to Individuals with Acute Kidney Injury, End-Stage Renal Disease Quality Incentive Program, Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Fee Schedule Amounts, DMEPOS Competitive Bidding Program (CBP) Amendments, Standard Elements for a DMEPOS Order, and Master List of DMEPOS Items Potentially Subject to a Face-to-Face Encounter and Written Order Prior to Delivery and/or Prior Authorization Requirements, 84 Fed. Reg. 60648 (Nov. 8, 2019). https://www.federalregister.gov/documents/2019/11/08/2019-24063/medicare-program-end-stage-renal-disease-prospective-payment-system-payment-for-renal-dialysis Master List of DMEPOS PDF: https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-Compliance-Programs/DMEPOS/Prior-Authorization-Process-for-Certain-Durable-Medical-Equipment-Prosthetic-Orthotics-Supplies-Items

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