Regulatory change is nothing new in O&P—but 2025 is shaping up to be a pivotal year. Between new Medicare initiatives, tougher compliance enforcement, and a push toward electronic documentation, the pace of change is accelerating.
Rather than feel overwhelmed, this is the moment to lean in. These changes—while challenging—can reveal opportunities to improve your operations, reduce audit risk, and build a stronger revenue cycle.
Here’s a breakdown of two critical updates O&P practices should have on their radar and what to do now to stay ahead.
Electronic Documentation Submission Requirements Are Coming
CMS is actively transitioning to a fully electronic environment not just for claims, but for attachments including
the following:
- Physician orders
- Face-to-face visit documentation
- Office visit documentation
- Physician corroborating documentation
While most claims are already submitted electronically, many practices still fax or mail supporting documents. However, CMS is implementing new technical standards (FHIR and X12 275) that will eventually require electronic submission of all attachments.
There’s no hard deadline yet, but the infrastructure is in place and early enforcement is expected to ramp up in 2025-2026, especially for DMEPOS and O&P providers.
If your current systems can’t transmit these documents electronically, you risk:
- Delayed payments
- Claim holds or denials
- An “inefficient” or “noncompliant” flag by CMS or the MACs
Action Step:
Audit your current process. Can your EMR or billing platform send attachments electronically? If not, start evaluating upgrades or integrations now.
Compliance Enforcement: It’s No Longer Just About Repayment
While enforcement tools have been on the books since 2006, CMS is now using them more aggressively. Today, it’s not just about recovering overpayments from denied claims. CMS is actively identifying providers with patterns of errors—missing documentation, incorrect coding, or repeated claim denials—and using those patterns as justification to revoke billing privileges.
We’re no longer in an era where practices can use the “we’ll fix it if it gets denied” strategy. CMS is shifting from a pay-and-chase model to a prevent-and-punish model, and it already has the tools to do it.
Historically, if claims were submitted with missing documentation or coding errors, CMS would:
- Pay the claim
- Conduct a postpayment review/audit (TPE, RAC, SMRC)
- Recoup the overpayment if errors were found
But in 2025, CMS is aggressively targeting providers with patterns of errors even if no fraud is intended. Using data analytics and repeated audit cycles, CMS is now taking the following actions toward those providers:
- Placing providers on a prepayment review for every claim
- Adding noncompliant providers to the Medicare Preclusion List
- Revoking Medicare billing
Common red flags include:
- Consistently billing custom-fitted when OTS may be more appropriate. Be sure to audit these codes and make sure the documentation supports the code that was used.
- Missing physician orders, SWOs, or signatures
- Repeated use of modifiers like KX without justification
- For example, a KX modifier is not just stamped on a claim to get it paid. A KX modifier is telling CMS that the item/device procedure code the provider is billing meets all the necessary criteria, and the documentation is in the medical record.
Action Step:
Implement or refresh a compliance review process. Start with quarterly internal audits. Focus on high-risk codes (L-1832, L-0631, L-1843, etc.), documentation quality, and tracking denials.
Policy changes don’t have to catch you off guard. If you stay informed and act now by tightening documentation, educating staff, and upgrading systems, you can stay compliant and protect your revenue.
Erin Cammarata is president and owner of CBS Medical Billing and Consulting. She can be contacted at [email protected].
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