Navigating the Reimbursement and Appeals Process

reimbursement and appeals process can be both frustrating and
challenging for O&P practices. But practitioners can take several steps to
help them smoothly sail through this process, including providing detailed
justification and evidence from the start and being persistent in ensuring
coverage for patients. O&P Business News spoke with three
O&P practitioners with years of experience to collect their tips for
ensuring a smooth road to reimbursement.

Increasing initial approvals

The first steps in ensuring that claims are approved the first time
around are to ascertain what the patient’s policy actually covers and then
obtain proper authorization for treatment by writing a letter of medical
necessity. The letter should justify how the parameters of coverage are
satisfied by the proposed course of treatment, Brian Gustin, CP, president of
Forensic Prosthetics and Orthotics Consulting, said.

The letter should succinctly outline the proposed treatment plan and
paint a verbal picture that explains how the patient will benefit medically. In
addition, the letter should be written in a fashion so that a layperson can
understand it.


“My suggestion has always been to practitioners that before you put
the letter in the mail or before you run it through the fax machine, take it
home and have somebody who knows nothing about what you do read it,”
Gustin said. “If they can understand what this patient is presenting to
you, you have probably done a pretty good job of crafting the letter.”

Gustin also recommends that practitioners — not the physician,
therapist or office staff — should write the letter of medical necessity

“The practitioner knows the patient, and the practitioner has the
knowledge,” Gustin said. “The practitioner is the professional.”

Any and all communication that practitioners and their office staff have
with insurance companies regarding authorization should be clearly documented
in the patient’s record. This documentation should include the name and
telephone extension of the insurance representative, the date and length of the
conversation and what was discussed during the conversation.

Obtaining written authorization from the insurance company before
proceeding with treatment generally ensures payment. In the event that an
insurance company seeks recoupment at a later date, the authorization letter
serves as legal proof of the right to receive payment.

  Brian Gustin
  Brian Gustin

“This is where having that authorization letter is golden to you
because there is something in the legal world called equitable estoppel. This
means that the insurance company is estopped from reclaiming that money from
you because you relied on information provided to you in good faith by a
representative of that company,” Gustin said. “If you do not have
that documentation, you are really at a severe disadvantage. That is where
documentation administratively is just as important as documentation

Billing and coding

Another step practitioners can take to help ensure payment is to be
familiar with coding and billing practices. Staying current with updates and
changes in the coding system can aid in increasing a practice’s approval
and reimbursement rates while decreasing its appeals rate.

“It is really important that the practitioners learn what the codes
mean and how to use them properly because sometimes it can be very
confusing,” William Beiswenger, CPO, FAAOP, cofounder and owner of
Abilities Unlimited Inc., said. “We personally want to make sure that we
are only coding for what we do — nothing more, nothing less.”

One good source for practitioners to get updates on new codes and
regulations is the American Orthotic and Prosthetic Association’s (AOPA)
biweekly newsletter, AOPA in Advance, according to Beiswenger, who
is on AOPA’s Coding Committee. “We actually take time in our practice
and have meetings every 2 weeks. If anything new comes about in the coding
system, we certainly discuss it and make sure that we are using it
properly,” he said.

  John W. Michael
  John W. Michael

Beiswenger noted that many third- party payers have begun asking for
manufacturer’s invoices for custom-fabricated devices. Although creating
such invoices can be frustrating and time consuming for practitioners, he has
found that if the information payers are looking for is provided in a timely
manner, payment usually is made.

However, Gustin contends that the O&P facility is the manufacturer
of the device, because the facility owns 100% of the liability for the device.

“Invoices from component manufacturers will simply be used to pay
you on a cost-plus basis, eliminating your professional expertise,” he
said. “This needs to be explained to the payers so that they understand
who the true manufacturer is.”

Handling appeals

Regardless of the steps a practice takes to streamline and improve its
reimbursement and payment processes, some claims will inevitably be denied.

“My experience is a good justification letter, well documented with
some evidence, should succeed at least 80% to 90% of the time,” John W.
Michael, MEd, CPO/L, FAAOP, president of CPO Services Inc., said.
“That’s the initial approval rate you ought to anticipate. If you are
not getting that initial approval rate, there is something wrong with your
justification process.”

Michael suggests practitioners should spend three quarters of their
resources on their justification process and one quarter or less on the appeals
process. His advice for successfully winning an appeal is to “aim first,
then shoot.”

“When I talk about aiming, what I mean is before you even start to
formulate the appeal, find out the specific rules in writing,” Michael
said. “If you are not willing to take that step, do not bother appealing;
you are really not serious and you are not going to get approved anyway.”

Before even starting the appeal process, practitioners need to resist
the urge to dash off a letter that appeals from passion rather than rational
thought. Such letters can be viewed as insulting to reviewers and may even
jeopardize the approval of future claims.

“Do not talk down to your third parties, do not lecture your third
parties, do not take umbrage that they dared to deny what you have recommended
and the doctor has prescribed,” Michael said.

Steps in the appeals process

The first step in the appeals process is to send a fax to the payer
asking for the written rationale for the denial, the policy language that
supports the denial, the qualifications of the persons who reviewed the claim
and determined the denial and the timetable for the full appeals process.
Payers are required by law to provide that information within a reasonable
period of time, Michael said.

Typically, the payer will respond with a 2- to 4-page document that
provides all of the requested information and will essentially serve as a
roadmap to help practitioners target an effective appeal. In states with a
parity law, if the denial was based on noncoverage of prostheses and orthoses,
the denial should be overturned immediately after contacting the state
insurance commissioner. However, if there is no parity law, Michael noted the
opportunity for appeal can be limited.

If a payer has responded that the treatment has to be medically
necessary, has to represent the least costly and effective alternative and also
must serve a therapeutic or medical purpose beyond convenience for the patient
or provider, the practitioner should ask for written definitions. The appeal
then should be organized into three sections that succinctly address each
reason for denial of the claim.

Greater Scrutiny Expected for Medicare Claims: How O&P
Practitioners Can Prepare

As the United States breathes a sigh of relief after
Congress reached an 11th-hour deal in the debt ceiling debate, O&P
practitioners can expect scrutiny of Medicare claims and reimbursement to be
even greater in the future. Consequently, most O&P practices can expect to
have their Medicare claims fall under review at some point.

“What people have to understand is unless you have been
living under a rock somewhere, as a country, we are broke, and the Medicare
program has been tagged as being infinitely unsustainable,” Brian Gustin,
CP, president of Forensic Prosthetics and Orthotics Consulting, told
O&P Business News. “So they are out there trying to
recoup money, and they know that fraud and especially abuse in the Medicare
program are rampant. They are looking to collect money back in a variety of
ways, and this is one area where we are getting tagged.”

Steps to ensure coverage

First, practitioners should be familiar with and understand
the Medicare local coverage determination (LCD) and policy article as it
applies to O&P services. In fact, Gustin noted that practitioners should
consider the Medicare LCD and policy article as “the Bible” in this

“The point is to make sure that you follow the policy
and that you document to the policy, and you can sleep easy at night,”
Gustin said. “That does not mean you are not going to get a letter; it
does not mean you are not going to have to pay money back. It just means you
have a pretty strong case when you go in for the appeal.”

Patient documentation should indicate as objectively as
possible how treatment has satisfied the Medicare policy articles. For example,
Gustin noted the policy dictates that before fabricating a custom ankle-foot
orthoses (AFO), practitioners must demonstrate why a prefabricated AFO would be
inappropriate and also meet at least one of five criteria for a custom AFO to
be reimbursed. The practitioner must document the objective means that were
used to determine why a custom AFO was necessary.

“Subjective means do not cut it today. You have to be
very objective,” Gustin said. “There is a large focus right now on
lower extremity prosthetics and functional levels, and I think that is where
the industry has the most vulnerability right now.”

When a claim is under review

When a claim is being reviewed by Medicare, practitioners
will receive a letter indicating that reimbursement is being questioned and
that the money paid to the practice is being reclaimed. If the amount of money
in question is not returned, Medicare will reclaim the amount from future

In addition, 11% interest begins to accrue on the amount in
question, even if the practice chooses to appeal.

Gustin noted, however, that if the claim is won on appeal
and Medicare must return the amount to the practice, “CMS does not pay you
11% interest on the money that was rightfully yours to begin with.”

“The government wants to get their money back and they
want to get it back quickly, so they are giving you an incentive by charging
you a very high interest rate,” he said. “How people choose to do it
all depends on how viable they are as a company. Some people may have to take
out a loan or have to take it on a line of credit. Given the economic times,
either may be difficult.”

Medicare can question claims at any time for a period of 3
years. However, if Medicare finds reason to believe that claims were submitted
or paid incorrectly, the review can go back for a longer period of time.

Gustin noted that Medicare reviews can be triggered by high
utilization rates for specific codes. In addition, Medicare’s coordination
of benefits means that all of the claims submitted by all health care providers
for individual patients will fall under review and be compared. — Mary
L. Jerrell, ELS


As with the initial letter of medical necessity, the letter of appeal
should be written by the practitioner in language that will be understood by a
layperson. Michael estimates that 90% of the time, the individual reviewing the
appeal will be “an interested layperson who is willing to be

Practices can expect their appeals success rate to be lower than their
initial approval rate.

“If you are getting 80% to 90% initial approval based on your
justification, you should expect to get 60% to 75% approval on your
appeals,” Michael said. “If you are falling much shorter than that,
you need to refine your appeals process.”

Often, the reviewer’s decision to approve or deny an appeal is a
judgment call. For instance, Michael notes that words such as
“comfort” and “convenience” often serve as red flags to
reviewers that translate to “deluxe” features and should be avoided
if at all possible when writing an appeal.

Escalating the process

If the appeals process has not been successful in overturning the
denial, the patient, practitioner and referral source can consider several
levels of escalating the claim if they are all motivated and decide they want
to pursue the matter further. Michael described the following strategies for
escalating the appeals process:

  1. Have a conversation with the state insurance commissioner.
    “There is no charge, and they are very interested in this area,”
    Michael said. “Most of them are really sincere, good people who want to
    help, and they will tell you if you have any legal grounds.”
  2. Involve state and federal representatives. “Sometimes the third
    party will decide by the time they explain it to the senator and his office, it
    will cost them more in time than if they just approved the claim, and they will
    let it slide through even if they would not normally have approved it,”
    Michael said. “It sets no precedent, but it typically does no harm.”
  3. Contact local news media outlets. “Most of your local news
    outlets are very interested in a person with a disability who is not able to
    get the care that their physician has prescribed and would certainly like to
    have a little discussion on the evening news with maybe a follow-up story on
    the weekend,” Michael said. “Sometimes even mentioning that you have
    that appointment scheduled in 10 days will expedite matters.”
  4. File a lawsuit. “This is normally very costly in time and money.
    It obviously convinces everybody to be your adversary even more than the other
    three escalations,” Michael said. “Rarely is this a good idea unless
    you see a pattern of denials that are not being resolved any other way.”

Considering post-appeals options

Once the appeals process and escalation strategies have been exhausted,
the patient, practitioner and referral source must decide the next step.

“You have to have that frank discussion with the client and the
referral source: ‘OK, team, what do we want to do now? Do you want to
forego the care since it is not possible with your present coverage to fund
what we really think is best for you? Or do you want to take something that is
certainly better than nothing but is perhaps not as good as it could have been
under other circumstances?’” Michael said.

There are a variety of postappeals mechanisms practitioners should
explore with patients. Patients may be able and willing to make arrangements to
cover the costs themselves. Sometimes financial assistance can be obtained from
other nontraditional sources, such as funding from churches or service
organizations that are earmarked for such events. Various types of credit
opportunities offer interest-free short-term loans.

Ultimately, Michael noted that the quality of justifications has
steadily improved during the past decade.

“We are on the right track. We need to be a little more diligent
about citing the evidence that is available, but that is all incremental,”
Michael said. “We are getting better and better at understanding the
evidence that supports what we do and then providing the CliffsNotes of that
evidence to the third parties so that they understand the value of covering our
services.” — by Mary L. Jerrell, ELS

Disclosure: Beiswenger, Gustin and
Michael have no relevant financial disclosures.

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