GAO Report Fails to Address Validity of HCFA Ruling 96-1
Prepared by Peter W. Thomas, Esq. and Adam H. Greene, Esq.
In response to a congressional mandate, the Government Account Office
(“GAO”) recently issued a report assessing the impact of CMS’ policy, issued in HCFA Ruling 96-1, which categorizes as DME any orthosis that attaches to a mobile frame, such as a wheelchair or other device. The GAO report concludes that if HCFA Ruling 96-1 were to be rescinded, it would lead to a modest increase in Medicare spending. The GAO also believes that a rescission of the ruling could lead to over- utilization, fraud, abuse, and confusion regarding the line between what is considered DME and what is considered an orthosis.
In response to the legal challenges to HCFA Ruling 96-1 and lobbying efforts by the O&P community, including the NAAOP, Congress included in the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (“BIPA”) a provision directing the GAO to review HCFA Ruling 96-1. Specifically, BIPA required the GAO to review (a) whether CMS’ ruling complied with the APA; (b) the impact of the ruling on the health of Medicare beneficiaries, especially those with degenerative musculoskeletal conditions; (c) the potential for fraud and abuse if the ruling were rescinded; and (d) the financial impact of overturning the ruling. Based upon this congressional mandate, the GAO issued its report in May 2002.
NAAOP representatives and many others in the O&P community met with representatives of the GAO over the past eighteen months to discuss the four issues mentioned in the statute. Despite this consultation, the GAO report completely fails to address the first two statutory requirements. The GAO’s report does not question the validity of the process used by CMS in issuing Ruling 96-1 and it makes no recommendation regarding whether the ruling should be rescinded. It also does not address whether the ruling is detrimental to the health of Medicare beneficiaries. Rather, the report only outlines the potential financial and program integrity implications were the government to rescind the ruling. The overall tone of the report, focusing exclusively on the negative impact of rescinding the ruling without offering any positive consequences on patient care and resultant cost savings, clearly does not bode well for attempts to alter this CMS’ policy and once again obtain coverage of attached orthotic bracing systems for the growing number of beneficiaries that are residents of nursing homes.
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