Noridian Healthcare Solutions, LLC, (Noridian), as the Supplemental Medical Review Contractor (SMRC) for the Centers for Medicare and Medicaid (CMS), has conducted post-payment review of claims for Medicare Durable Medical Equipment (DME) lumbar-sacral orthoses (LSO) billed with dates of service from January 1, 2021, through December 31, 2022. Below are the review results:

Background

A lumbar-sacral orthoses, is a back brace that can either be off-the shelf (OTS), custom fitted, or custom-fabricated. OTS LSO braces are prefabricated braces that may or may not require minimal self-adjustment for fitting at the time of delivery. Custom fitted LSO braces are prefabricated braces that requires more than minimal self-adjustment for fitting at the time of delivery, requiring a qualified practitioner or an individual with specialized training to make those adjustments.

The 2022 Comprehensive Error Rate Testing (CERT) report identified an improper payment rate of 51.7% for LSO, with a projected improper payment of $78,264,550; in 2021, the improper payment rate was 44.2%, with a projected improper payment of $76,454,328; and in 2020 the improper payment rate was 35.8% with a projected improper payment of $177,244,008.

The Office of Public Affairs in the Department of Justice (DOJ) issued a news release dated May 16, 2022, stating four orthotic brace suppliers in Dallas, Texas were convicted in a $6.5 million kickback scheme. Approximately $12.5 million was billed to Medicare for unnecessary braces. In addition, on April 9, 2019, the OIG alerted the public concerning a fraud scheme targeting Medicare recipients to get free or no-cost back and knee braces. Also, on October 25, 2019, the Federal Trade Commission (FTC) issued a consumer alert on scammers targeting Medicare recipients for free or low-cost back and knee braces.

On March 9, 2023, CNBC published an article “Inside the minds of criminals: How to brazenly steal $100 billion from Medicare and Medicaid” that discussed how easy Medicare and Medicaid are being targeted by criminals to conduct fraud schemes. These fraud schemes are estimated to cost taxpayers more than $100 billion a year.

In January 2023, Noridian completed research on Healthcare Common Procedure Coding System (HCPCS) code L0631 (Lumbar-sacral orthosis (LSO), sagittal control, with rigid anterior and posterior panels, posterior extends from sacrococcygeal junction to t-9 vertebra, produces intracavitary pressure to reduce load on the intervertebral discs, includes straps, closures, may include padding, shoulder straps, pendulous abdomen design, prefabricated item that has been trimmed, bent, molded, assembled, or otherwise customized to fit a specific patient by an individual with expertise.) The SMRC identified spending for L0631 as peaking at nearly $2.5 million in quarter two of 2021 and an increase from $1.5 million to nearly $2 million by the end of the second quarter of 2022.

Reason for Review

The SMRC conducted medical record reviews on LSO claims billed with HCPCS code L0631 billed with dates of service (DOS) January 1, 2021, through December 31, 2022.

The SMRC conducted medical record reviews in accordance with applicable waivers, flexibilities, statutory, regulatory, and sub-regulatory guidance.

Common Reasons for Denial

• Incomplete and/or Insufficient Documentation
  • Refer to 42 CFR 424.5(a)(6), Social Security Act (SSA) 1862(a)(1)(A), SSA 1833(e). Documentation did not include a detailed description of modifications performed to support custom fitting of the prefabricated LSO brace.
• Requested Records Not Received
  • Refer to Internet-only Manual (IOM) Published (Pub.) 100-08, Medicare Program Integrity Manual (MPIM) Chapter (Ch.) 3, Section (§) 3.2.3.8, 42 Code of Federal Regulation (CFR) 424.5(a)(6), Social Security Act (SSA) 1862(a)(1)(A), SSA 1833(e). The MPIM 100-08, Ch. 3, § 3.2.3.8 requires providers/suppliers to respond to requests for documentation within 45 calendar days of the additional documentation request for the dates of service under review. The documentation was not submitted or not submitted timely.

References

Social Security Act (SSA), Title XI

• § 1135 Authority to Waive Requirements During National Emergencies

Social Security Act (SSA), Title XVIII

• § 1815(a) Payment to Providers of Services
• § 1833(e) Payment of Benefits
• § 1834(a) Payment for Durable Medical Equipment
• § 1862(a)(1)(A) Exclusions from Coverage and Medicare as Secondary Payer
• § 1877g Blanket Waivers of Section 1877(G) of the Social Security Act Due to Declaration of COVID-19 Outbreak in the United States as a National Emergency. Effective March 1, 2020

42 Code of Federal Regulations

• § 410.38 Durable medical equipment, prosthetics, orthotics and supplies (DMEPOS): Scope and conditions
• § 411.15(k)(1) Particular Services Excluded from Coverage
• § 414.200 Payment for Durable Medical Equipment and Prosthetic and Orthotic Devices
• § 414.240 Procedures for making benefit category determinations and payment determinations for new durable medical equipment, prosthetic devices, orthotics and prosthetics, surgical dressings, and therapeutic shoes and inserts
• §§ 424.5, 424.5(a)(6) Basic Conditions, Sufficient Information
• § 424.57(c)(12) Special Payment Rules for Items Furnished by DMEPOS Suppliers and Issuance of DMEPOS Supplier Billing Privileges
• § 424.516(f) Additional provider and supplier requirements for enrolling and maintaining active enrollment status in the Medicare program
• § 424.535 Revocation of enrollment in the Medicare program

Public Law

• Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (Pub. L. 116-123, March 6, 2020), Telehealth Services During Certain Emergency Periods. Retrieved from H.R.6074 – 116th Congress (2019-2020): Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 | Congress.gov | Library of Congress
• Public Law 117 – 103, Consolidated Appropriations Act, Approved March 15, 2022. Retrieved from Public Law 117 – 103 – Consolidated Appropriations Act, 2022 – Content Details – (govinfo.gov)
• Public Health Service Act, 2021, Section 319(e) Telehealth Enhancements for Emergency Response. Retrieved from https://www.congress.gov/109/plaws/publ417/PLAW-109publ417.htm
• Robert T. Stafford Disaster Relief and Emergency Assistance Act, Pub. L. No. 100-707, 102 Stat. 4689 (1988), Codified as Amended 42. U.S.C. § 5121. Disaster Relief and Emergency Assistance Amendments. Retrieved from Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended, and Related Authorities (fema.gov)

Federal Register

• Final Rule Volume 85, No. 66, Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency. Effective March 1, 2020. Retrieved from 2020-06990.pdf (govinfo.gov)
• Interim Final Rule with Comments (IFC), 5531. Medicare and Medicaid Programs, Basic Health Program, and Exchanges; Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency and Delay of Certain Reporting Requirements for the Skilled Nursing Facility Quality Reporting Program. CMS-5531-IFC. Effective March 1, 2020. CMS-55341-IFC

Internet Only Manual (IOM), Medicare Benefit Policy Manual (MBPM), Publication 100-02

• Ch. 15, § 110 Durable Medical Equipment – General
• Ch. 16 § 20 Services not reasonable and necessary

Internet Only Manual (IOM), Medicare Claims Processing Manual (MCPM), Pub. 100-04

• Ch. 1 General Billing Requirements
• Ch. 20 Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS)
• Ch. 30, § 50 Advanced Beneficiary Notice (ABN) of Noncoverage

Internet Only Manual (IOM), Medicare Program Integrity Manual (MPIM), Pub. 100-08

• Ch. 3 Verifying Potential Errors and Taking Corrective Actions
• Ch. 4, § 4.7.3.1 Supplier Proof of Delivery Documentation Requirements
• Ch. 5 Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Items and Services Having Special DME Review Considerations
• Ch. 13, § 13.5.4 Reasonable and Necessary Provisions in LCDs

Local Coverage Determinations and Policy Articles

Local Coverage Determinations (LCDs)

• L33790 Spinal Orthoses TLSO and LSO. Effective October 1, 2015

Local Coverage Articles (LCAs)

• A52500 Spinal Orthoses TLSO and LSO – Policy Article. Effective October 1, 2015
• A55426 Standard Documentation Requirements for All Claims Submitted to DME MACs. Effective January 1, 2017

Last Updated Jul 19, 2024