Trade group says CMS failing to enforce laws against unlicensed orthotics, prosthetics

A trade group representing the orthotics and prosthetics industry is accusing the CMS of failing to enforce anti-fraud and abuse laws against unlicensed providers at a time when legitimate providers are coming under fire from increasingly aggressive Medicare recovery auditors.

The American Orthotic and Prosthetic Association—which represents more than 2,000 businesses that manufacture, distribute and supply patients with orthopedic braces and artificial limbs—released the results of a study this week that says the number of Medicare patients receiving the medical equipment from noncertified personnel has not changed significantly even though the rules were tightened in 2000 and 2005.

“This means that billions of dollars in payments were made to providers who Congress specifically intended to exclude from eligibility for payments,” between 2007 and 2011, a statement from the association says.

In 2010, Medicare paid for about 258,000 orthotics and prosthetics, amounting to $276 million in payments.

The study findings apply only in the dozen or so states that have laws on the books requiring that O&P services only be provided by certified personnel. A 2005 CMS document known as Transmittal 656 (PDF) mandated that Medicare will only pay for O&P services in those states if the providers meet the state-law requirements for certification.

The association study, authored by former CMS research director Allen Dobson, found that about 68% of the Medicare bills it analyzed in three states with such laws—Florida, Illinois and Texas—paid for orthotics or prosthetics that were supplied by noncertified people or companies. The study was limited to a 5% sample of Medicare data from 2007 to 2011.

Thomas Kirk, president of the association, said in a conference call with reporters that while only some states currently have such laws, they've been proposed in almost every other state.

According to the American Board for Certification in Orthotics, Prosthetics, and Pedorthics, 15 states currently have certification laws: Alabama, Arkansas, Georgia, Florida, Illinois, Iowa, Kentucky, Ohio, Oklahoma, New Jersey, Pennsylvania, Rhode Island, Tennessee, Texas and Washington state.

HHS' watchdog agency, the inspector general's office, issued a report last October (PDF) that said the CMS has never published rules to implement the Benefits Improvement and Protection Act of 2000, and it doesn't follow the guidelines in the 2005 transmittal letter that was issued in lieu of final rules.

And while earlier inspector general's office studies found that noncertified providers were more likely than their certified peers to have provided inappropriate devices and services, today about 97% of claims for O&P services nationally were filled by providers that met the certification rules, despite the lack of rulemaking.

CMS Administrator Marilyn Tavenner said in a letter accompanying the inspector general's office audit that rules to implement the certification standards in the 2000 law were currently under development, and she agreed with the recommendation that final rules be published.

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