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Questionable Billing by Suppliers of Lower Limb Prostheses

We found a number of problems with Medicare payments for lower limb prostheses. In 2009, Medicare inappropriately paid $43 million for lower limb prostheses that did not meet certain Medicare requirements. These payments could have been prevented by using claims processing edits. Lower limb prostheses are designed to replace, as much as possible, the function of a missing limb. The Medicare requirements we reviewed stipulate how suppliers must submit claims for certain types and combinations of prostheses.

Medicare paid an additional $61 million for beneficiaries with no claims from their referring physicians. Medicare requires that a supplier have an order from a physician before providing the prostheses to the beneficiary. Billing for prostheses when the beneficiary had no claims from the referring physician raises questions about whether the physician ever evaluated the beneficiary and whether these devices were medically necessary.

We also found that 267 suppliers of lower limb prostheses had questionable billing. This included, for example, suppliers that frequently billed for unusual combinations of prostheses or for beneficiaries who had no history of an amputation or missing limb. We also found that CMS contractors had varying claims processing edits in place for lower limb prostheses; however, none had edits for all requirements.

We recommend that CMS: (1) implement additional claims processing edits to prevent inappropriate payments, (2) strengthen monitoring of billing for lower limb prostheses, (3) implement requirements for a face-to-face encounter to establish the beneficiary's need for prostheses, (4) revise the requirements in the local coverage determination, (5) enhance screening for currently enrolled suppliers of lower limb prostheses, and (6) take appropriate action on suppliers with questionable billing. CMS concurred with five of the six recommendations. It did not concur with the fifth recommendation.