NAAOP discusses state of CMS audits

In its July webcast, the National Association for the Advancement of Orthotics and Prosthetics discussed CMS Recovery Audit Contractors (RACs) and their effect on the O&P industry.

The first issue addressed was the recent proposed regulation that would allow CMS to disenroll a Medicare supplier if it has a pattern of high error rates in Medicare audits, even if the denied claims are being appealed.

“What this proposed rule really does, in our view, is subvert or obviate the appeals process, which is authorized by regulations in Medicare law,” Peter Thomas, JD, general counsel for NAAOP, stated in the release. “That’s a problem, and we’ve said that. We have submitted comments along with the O&P Alliance, and we will push back on that provision very strongly.”

Thomas discussed the recent report issued by the Department of Health and Human Services Office of Inspector General on surety bonds that has already prompted some contractors to begin collecting on surety bonds even in instances where Medicare regulations prohibit this from occurring.

Thomas also stated that CMS issued a transmittal allowing CMS to deny enrollment applications of O&P and other providers and suppliers when an overpayment exists, even though that overpayment is in the administrative appeals process.

Lastly, Thomas delivered some good news about the Senate Finance Committee’s recent hearing about RACs, in which they interviewed a RAC representative and two representatives from providers.

“Every senator except one expressed serious concern that the RACs may be too financially incentivized and may be going after legitimate claims ultimately for the purpose of building their profits,” Thomas stated in the video. “An OIG report recently stated that 60% of claims that are appealed to the ALJ level are overturned in favor of the providers, and that was of great concern to almost all of the Senators on the panel.”

NAAOP will continue to monitor and respond to these developments. To watch the entire webcast, visit

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