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Questionable Billing for Off-the-Shelf Orthotic Devices

Since 2014, claims for three off-the-shelf orthotic devices (L0648, L0650, and L1833) have grown by 97 percent and allowed charges have grown by 116 percent, reaching $349 million in 2016. The Social Security Act states that no payment may be made under Medicare Part B for any expenses incurred for items that "are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member." A Medicare Administrative Contractor (MAC) has identified improper payment rates as high as 79 percent for L0648, 88 percent for L0650, and 91 percent for L1833 within its jurisdiction. A top concern of the MAC is a lack of documentation of medical necessity in patients' medical records. We will examine factors associated with questionable billing for the three orthotic devices, and describe the billing trends for these devices from 2014 - 2016. Specifically, we will evaluate the extent to which Medicare beneficiaries are being supplied these orthotic devices without an encounter with the referring physician within 12 months prior to their orthotic claim and will analyze billing trends on a nation-wide scale.

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
January 2018 Centers for Medicare & Medicaid Services Questionable Billing for Off-the-Shelf Orthotic Devices Office of Evaluation and Inspections OEI-07-17-00390 2019

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