Coding and Reimbursement for Cranial Remolding Orthoses

Throughout the years, there has been a lot of confusion regarding how to code and bill for cranial remolding orthoses. The purpose of this article is to review the historical and latest developments on the regulatory front to help the O&P professional navigate through the coding and reimbursement maze for cranial remolding orthoses.

There is no assigned reimbursement for the S1040 code because Medicaid and private insurance companies, not Medicare, recognize these types of orthotic devices for infants.
Photo courtesy Orthomerica

Orthotists and prosthetists have treated children with positional plagiocephaly since the 1970s. Dr. Sterlin K. Clarren, Dr. D.W Smith and Dr. J.W. Hanson wrote the first article about the use of cranial remolding orthoses to treat positional plagiocephaly in 1979 in a study done at the University of Washington. In 1998, the U.S Food and Drug Administration (FDA) ruled that cranial remolding orthoses fell into the category of class II medical devices. These devices require strict control standards which include specific manufacturer procedures, controls documenting skin biocompatibility, labeling instructions, clinical/caregiver instructions, etc. In order to continue providing these orthoses, companies had to apply for and receive FDA 510(k) clearance, which is an expensive and labor intensive process. As a result of these changes, many orthotists and prosthetists stopped providing cranial remolding orthoses because their design had not gone through the process of being cleared by the FDA.

Introduction of L-Codes

When the L-codes were developed in the late 1970s, there were two L-codes developed for cranial helmets:

  • L0100 – cervical, craniostenosis, helmet, molded to patient model
  • L0110 – cervical, craniostenosis, helmet, non-molded

These L-codes were originally created for protective helmets — not cranial remolding orthoses. Protective helmets are not dynamic in function and are not intended to remold the infant’s skull while the head is actively growing. Unlike many remolding designs, protective helmets encompass the entire skull and serve to protect adults and children from banging their heads or to cover an open area of the cranium secondary to trauma or surgery. Protective helmets require minimal clinical treatment time and cost significantly less than cranial remolding orthoses. The primary function of cranial remolding orthoses is to correct and remold the abnormal head shape of the skull toward greater symmetry. These orthoses are very service-intensive and require follow-up visits during a three- to six-month treatment program.

In July 2000, Orthomerica received 510(k) clearance from the FDA to market and manufacture the STARbandÔ cranial remolding orthosis to credentialed orthotists and prosthetists. Since there was no code available to address these types of orthoses, Orthomerica submitted an application to the HCPCS Alpha Numeric Panel in March 2001. Orthomerica received a response from the HCPCS Panel in October 2001 stating that they changed the existing nomenclature on HCPCS codes L0100 and L0110 to the following, effective Jan. 1, 2002:

  • L0100 – cranial orthosis (helmet), with or without soft interface, molded to patient model
  • L0110 – cranial orthosis (helmet), with or without soft interface, non-molded

However, no changes were made to the fee schedule for these codes. As John Michael noted in his column in the Feb. 15th issue of O&P Business News, the government’s hands are tied when working with O&P industry experts regarding policy decisions under the Federal Advisory Committee Act (FACA). One of the major challenges of FACA is that it puts the responsibility on both the manufacturers and the providers to challenge these decisions prior to implementing new policies and fee schedules. Unfortunately, these challenges require a significant investment of human and financial resources from all parties involved.

Plagiocephaly is a condition characterized by an asymmetrical or oblique head shape with a persistent flat spot on the back or one side of the head.

Grass Roots Campaign

In October 2001, Orthomerica started a grass roots campaign to acquire a unique billing code for remolding orthoses among physicians, orthotists experienced in treating children with cranial remolding orthoses, and other O&P providers and manufacturers with FDA cleared designs. Orthomerica engaged a regulatory attorney and initiated a letter writing campaign to all Medicare intermediaries including CMS, the SADMERC and DMERCs. Fortunately, the campaign paid off and the HCPCS Alpha Numeric Panel issued a new code in October 2002. Since cranial remolding orthoses are limited to infants, the panel did not assign an L-code to these types of orthoses. Instead, they assigned an S-code, which is also a HCPCS level II code. The descriptor of this code is as follows:

  • S1040 – cranial remolding orthosis, rigid, with soft interface material, custom fabricated (includes fitting and adjustment)

There is no assigned reimbursement for the S1040 code because Medicaid and private insurance companies, not Medicare, recognize these types of orthotic devices for infants. As a result, it is up to each insurance company and state Medicaid programs to establish coverage and reimbursement for cranial remolding orthoses billed under this code.

The HCPCS Panel sends coding information to state Medicaid programs and private insurance companies on a quarterly basis. Unfortunately, it takes time for these carriers to implement new codes such as the S1040. The great news is that many insurance companies are now starting to recognize the S1040 and establish a reasonable fee schedule for these service-intensive orthoses.

In the interim, cranial providers and state O&P associations will have to be diligent in educating insurance companies and state Medicaid programs about cranial remolding orthoses billed under S1040 to substantiate coverage and adequate reimbursement. Once implemented, this new code should help expedite claims processing and eliminate problems previously associated with billing not-otherwise-specified codes for this time-critical orthotic treatment program. If an insurance company has not received notification about S1040, this information can be found on the Centers for Medicare and Medicaid Services Web site at (PDF file format).

Policy Challenges

The O&P profession is facing significant challenges in terms of policy changes that impact new technologies, Medicare coverage and reimbursement. To their credit, the Medicare intermediaries have responded favorably and quickly to proposed changes in cranial and spinal policies throughout the years.

However, these changes come with a significant price tag. During the past three years, Orthomerica alone has spent more than $300,000 in regulatory attorney fees challenging these new policies on behalf of the industry. While Orthomerica will continue to closely monitor and respond to adverse regulatory changes, it is critical that the O&P profession becomes more proactive by responding to policies that may have a profound impact on our future.

About the Author
Bill Gustavson is director of marketing for Orthomerica in Orlando, Fla.

For more information:

  • Clarren SK, Smith DW, Hanson JW Helmet treatment for plagiocephaly and congenital muscular torticollis. J Pediatr. 1979;94:43-46.

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