O&P Faces a New Era

Peter D. Rosenstein

Peter D. Rosenstein

The national Recovery Audit program, which began in 2005, according to the CMS website, “to identify Medicare overpayments and underpayments to health care providers and suppliers in randomly selected states” was once meant to be temporary.

In the 10 years since Recovery Audit Contractors (RACs) began auditing Medicare payments, the O&P profession has grappled with changing regulations, compliance requirements and learning the appeals process. In the next 10 years, “The reality is that more and more people are going to need orthotic and prosthetic care,” according to Peter D. Rosenstein, executive director for the American Academy of Orthotists and Prosthetists (AAOP).

In a session during the AAOP Annual Meeting and Scientific Symposium in New Orleans, Rosenstein said an increase in patients no longer equates to an increase in revenue for O&P facilities. The question practitioners are now asking themselves, he said, is “Will you be able to provide the kind of care you really want to for your patients, give them the best you believe you can, and get reimbursed for it?”

Individual impact

Bruce “Mac” McClellan, CPO, LPO, FISPO, FAAOP, who shared the AAOP podium with Rosenstein, said, “The O&P audits are not efficiently achieving CMS’ stated goal of reducing fraud. Instead, in the attempt to control fraud and abuse, the audits have created undue hardships for the profession as a whole.”

Copyright: Shutterstock

Image: © Shutterstock

He added, “I am not anti-audit … Auditing is fine, as long as it is done in a fair and reasonable manner. But the circumstances we have faced since the July 2011 “Dear Physician” letter was issued have not been that reasonable. The audits that followed were widespread, often retroactively applied and punitive in nature. The profession deserves better, our patients deserve better and quite frankly the government deserves better.” He added, “We should be working together to ensure fair reimbursement policies for services provided, with the anticipation of good patient care outcomes as the result.”

Joel Kempfer, CP, FAAOP, president of Kempfer Prosthetics Orthotics Inc., is frustrated with the apparent lack of understanding on the part of auditors about the value of O&P care.

Joel Kempfer, CP, FAAOP

Joel Kempfer

“It does not seem that they understand much about medical terminology or they do not understand about prosthetics, the medical necessity itself. We always obtain [the necessary documentation] prior to making a prosthesis but then we get the rejections anyway. We have documentation from the physician stating the purpose of the new prosthesis and it still gets denied.”

Kempfer’s business has undergone several audits and despite his success in the appeals process, the business has taken a hard financial hit.

“We have a 100% success rate [with administrative law judge appeal hearings] but our most recent [ruling] we received last week and it was a process of 2 years,” he said.

Kim Johnson, CMF, business manager for Kempfer’s practice, added, “We had some legs that were fit and billed in 2012, that are waiting to be seen before the administrative law judge. Now it is 2015 and we still have not been reimbursed for that.”

Because of the time span of the appeals process, Kempfer’s business now faces financial trouble.

“[Before the audits] we never had an issue. We had a capital fund that we set aside and never had a line of credit,” he said. Now, “I pay myself very sporadically as the business owner because we do not have enough capital to make payroll some weeks. I am essentially living check to check and month to month [even though] we run a very efficient operation as far as how we handle our money.”

He added, “It is very frustrating because I know a lot of [other practitioners] are in the same position. [Audits] are killing our industry as a whole at a time when [the availability of O&P care] should be ramping up.”


Kempfer pointed to the increasing elderly population and the growing prevalence of diabetes as factors that will lead to more amputees in the near future. This growing population combined with the decline in O&P services “is a perfect storm on the horizon,” he said.

Sara Beck

Sara Beck

Sara Beck, audit appeals specialist for San Joaquin Orthotics & Prosthetics in Stockton, Calif., works full time to handle audits in a single-practitioner office. She said most of the facility’s audits are for C-Legs and for custom orthoses.

“Medicare audits drastically changed my practice,” Beck told O&P News. “We had to downsize considerably to accommodate the delayed cash flow due to audits. We also have to place audit anticipation ahead of patient care. We are forced to hassle our referring physicians to get the excessive documentation, which has caused my office to lose many referrals and patients in the process.”

Beck believes CMS unfairly targets independent practitioners and has become a passionate advocate against the current RAC audit process. She plans to pursue a career as a legal advocate for independent O&P practitioners.

“Growing up in the O&P profession, I got to see the dedication and compassion providers have for their patients. O&P providers provide life changing service and give patients a life worth living. So, watching Medicare attempt to discredit that with such inequality and blatant injustice is not something I can sit back quietly and watch,” she said. “O&P needs a passionate advocate [who] truly has its best interest at heart.”

Beck hopes to see more practitioners appeal unfair audits and advocate for better regulations.

“Practitioners need to follow Medicare documentation guidelines and fight for their money, but practitioners can also get involved by contacting Medicare, legislative officials and legal advocacy organizations,” she said.

Changes to make now

According to Molly McCoy, L/CPO, a contractor who leads the Clinical Outcomes and Documentation Education (CODE) program at Southern Prosthetic Supply (SPS), a number of steps exist for facilities to improve compliance and lower their risk of being audited. Medicare is looking to cut costs in all areas of health care and this means looking at pay for performance rather than fee for service and continued audits until CMS sees fewer errors, she said.

Molly McCoy, L/CPO

Molly McCoy

Because CMS uses algorithms and predictive modeling to review audits, O&P facility owners can learn to create the type of documentation CMS is looking for in order to lower their risk of future audits.

McCoy cautioned that the eventual return of RAC audits will create complications but she expects them to be somewhat short-term.

“I think there is going to be a big hiccup and tough billing issues when they start RAC audits again. But I think it can and will improve with time,” she said.

The challenge of making sure each document has everything CMS looks for can seem overwhelming, but McCoy said there are simple steps that make it easier.

“It is not as daunting as it seems. It takes some changing of old habits and educating doctors, which is hard … but it is pretty clear in each LCD what you need to have and when,” she said.

McCoy said by preparing for a patient fitting by pulling the LCD and reviewing it – or basing evaluation forms on the LCDs to make sure all documentation elements are covered in the narrative chart note – a lot of time and trouble can be saved.

“The LCD informs not only what they can do for the patient who has Medicare coverage, but also what information they need to gather,” McCoy said. “I think often practitioners’ documentation practices are inefficient. They are doing a lot of work they do not need to do whereas, if they understood the LCD, they could gather just the information they need and be very specific about it and it would save them time.”


In fact, learning the LCDs may reduce the amount of work for practitioners in the long run because it will allow them to focus only on needed information.

“Changing processes and writing style is the harder part. There is a little bit of a learning curve, but once you get past that it could be very smooth … It could even make patient care a little easier because you are improving efficiency.”

Another point McCoy emphasized was language. O&P documentation should mimic the language of CMS – using “functional” rather than “useful,” “quality of life” rather than “satisfaction” and “increased physical activity” rather than just “walking more,” for example.

“All the words are in the LCD. It is pretty simple,” McCoy said. “Once the practitioner is familiar with the LCD – and the policy article, that is part of it as well – they need to pull those words out and be clear about how the prosthesis or orthosis improves overall daily function.”

McCoy said deliberate language is important for two reasons.

“Firstly, it is important because when you send in a claim, the first thing Medicare does is put it into a computer. The computer has language comprehension software so it picks out certain words and it needs to see those words. If it does not, you have more chance of going through a complex review. The second reason to use those keywords is so that when you are in complex review and a medical reviewer is looking over the file, they can easily understand how what you are doing relates to policy.”

This creates a direct link between the prosthesis or orthosis and the functional benefit to the patient.

Work with physician documentation

Teri Kuffel, Esq., vice president of Arise Orthotics & Prosthetics Inc. in Blaine, Minn., cites her practice’s biggest compliance-related challenge as “lack of control of physician documentation.”

Teri Kuffel, Esq.

Teri Kuffel

Kuffel’s suggestions for overcoming this challenge include providing referral sources with a copy of the “Dear Physician” letter; requesting or offering to be present at Activity Level Assessments; offering to review the physician’s notes for compliance; reminding physicians that they can amend their notes later; encouraging patients to request an amendment of physician notes through HIPAA; offering to teach the physician the protocols for future use; and offering to find an amputee clinic or referral physical medicine and rehabilitation physician for the patient who will provide the requisite activity level assessment.

Even the above suggestions can be difficult to follow if the practitioner does not have an established relationship with the physician. McCoy said improving communication with the physician is a hurdle for most practices.

“That is probably the toughest thing in all of this. It is so hard to get time in front of the doctor. I think that is something I have not fully figured out yet,” she said.

Some physicians have little time to read letters or forms from practitioners and even less time to meet in person.

“Maybe the best thing is to get to know the office staff,” McCoy said. “If it were my practice, I would be going to the doctor’s office physically and talking to office staff to see, based on each individual doctor, what the best way is to get information in front of them.”

Another change practitioners should make is to read the physician documentation before making any decisions about patient care.

“That is really hard … I think practitioners are having a hard time integrating it into their office processes,” McCoy said. “When the patient calls to make an appointment, the first thing that should be done is not just get the prescription, but get the doctor’s notes. Once the doctor’s notes are reviewed, then see the patient. That is hard because timing can be a real problem, but it has to be something you at least attempt.”


This can stop compliance problems before they develop. “It helps to inform you as to what you can and cannot do for the patient. It limits you if the doctor writes the wrong thing or does not write enough, but you would rather be limited and know that than … put all this gear on the person and afterward realize you cannot get paid for it.”

Assess and lower risk

Each O&P facility is at risk of facing an audit from CMS. The level of risk depends on the facility’s rate of denials and errors in documentation.

“CMS makes it clear that if you have a history of lots of denials and lots of errors in your paperwork, then they will audit you more. It is laid out in policy. It is very clear,” McCoy said. “So for those who have more audits, it is because they are not changing their processes, they are not yet able to decrease their denial rates. Those who get a lot of denials, have a lot of errors in their documentation but change their ways and make it better over time, have a lower Medicare risk level and get fewer audits.”

The good news, McCoy said, is each facility has a chance to change its risk level and be considered for fewer audits by CMS every 3 months.

“CMS reviews the number of denials and errors every 3 months, not including CERT audits, which are part of a separate audit system. So as an individual practice and practitioner, if you have gotten fewer errors, fewer denials and fewer audits in the last 3 months, then you can expect that trend to continue.”

Taking shortcuts, such as cutting out the use of codes that have led to audits in the past, will not help a facility; it will actually hurt it.

“There are a lot of triggers. One of the triggers for more audits is changing the way you bill after you get an audit,” McCoy said. “Cutting out codes that have given you problems in the past actually will not decrease your audits. That will make it worse. That is straight out of the Medicare Program Integrity Manual.”

A facility owner can determine the facility’s risk score with a simple equation. McCoy advises figuring out your own risk score rather than calling CMS to get it, as it is unclear from policy whether this would be a “trigger” that can put a facility on the CMS radar.

The risk score is determined by dividing the dollar amount of services denied by the dollar amount of services medically reviewed by the business’s Medicare Administrative Contractor.

“If [the risk score] is above 50%, expect more audits. If it is below 50%, expect audits to start to decrease,” McCoy said.

Facility owners also can request a comparative billing report (CBR) from CMS.

“That will show the practice how their billing varies from other practices in the area,” McCoy said, adding that this appears to be a neutral request and should not place the facility on CMS’s radar as a risk.

Fight back

When all the rules are followed, an item can still be audited. In those cases, Beck advised O&P professionals and business owners to push back.

“We all know that most of the time, providers could have all of the proper documentation, and then some, and still receive a denial,” she said. “Fight for your money. Follow the timelines given through the appeals process and be concise. When you receive an arbitrary or incorrect denial, bring attention to it. There are always ways to have an audit or appeal reviewed again.”

Similarly, Rosenstein urged practitioners to get to know their state and national legislators by visiting their local offices.

“You all have a responsibility to meet with them at home,” he said, adding that practitioners also can invite legislators to visit their O&P offices, which is a great publicity move for the legislator.

“It gets them in the door so that you can explain the issues that you care about,” he said. – by Amanda Alexander


McClellan M and Rosenstein P. Future political climate for health care. Presented at: American Academy of Orthotists and Prosthetists Annual Meeting and Scientific Symposium; Feb. 18-21, 2015; New Orleans.

Disclosures: Beck, Johnson, Kempfer, Kuffel, McClellan, McCoy, and Rosenstein report no relevant financial disclosures.

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