L-Code Obstacles: Experience from the Front Lines

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By Gerald Stark, CPO/L, FAAOP, Beth Stiner, C.Fom

Two O&P professionals discuss the four main obstacles to dealing with the Centers for Medicare & Medicaid Services (CMS) Healthcare Common Procedure Coding System (HCPCS) Coding Committee and the Statistical Analysis Durable Medical Equipment Regional Carrier (SADMERC).

1. Time Handicap: Before you can apply for a code, you need six months of sales data. January 1 is the annual deadline for applications. Therefore, if you complete your six-month sales data on January 2, you cannot submit your application until the following January 1, and you will receive no communication until that date. It then takes another six months to get the information into the system, and typically, the reimbursement amounts are not released at the same time. This additional delay can last six to 12 months.

Gerald Stark, CPO/L, FAAOP
Gerald Stark, CPO/L, FAAOP

All told, it can easily take two and a half to three years to get a code approved for processing and reimbursement in the field. If an error occurs and a code is classified or consolidated incorrectly, it can take 12 months to correct the mistake. Meanwhile the SADMERC or CMS can change codes with just two months notice before full implementation of the code reclassification and/or reimbursement change.

Added to this, the SADMERC (Palmetto GBA of North Carolina) role is changing. According to www.fbo.gov, a contract award was posted on June 17, 2008, to Noridian Administrative Services LLC of Fargo, North Dakota, for pricing, data analysis, and coding (PDAC). Although we hope good things will come of this change, the lack of public announcements from CMS may mean more immediate time-handicap issues.

2. Stymied Innovation and Consolidating Codes: It would seem that CMS goal is not to grant more codes, but to limit the number of codes offered. The SADMERCs goal is to consolidate the existing codes. Their view appears to be that the O&P healthcare industry is a very small part of healthcare and has an inordinate number of codes. This perspective makes it difficult to match an existing code appropriately to a new technology. Often, codes from more traditional or unrelated designs are instituted for new technologies as "functional equivalents," at much lower reimbursements. This makes it difficult, if not impossible, for manufacturers to provide new technology to the profession. As a result, the manufacturers research and development groups are pressed to find inexpensive ways to provide the same functional equivalent or package more functions together in a product to get more codes and better reimbursement. This pushes the consolidation and duplication of many products. In many ways, this "development" is less risky than pushing the technology envelope and hoping to get an appropriate L-Code in three years. This also affects private insurance companies who use CMS classifications and reimbursements as their standard. These practices do not necessarily keep the patients needs at the forefront. The current process is clearly to reduce the number of codes to administer.

Beth Stiner, C.Fom
Beth Stiner, C.Fom

3. O&P Should Not Be Linked to Durable Medical Equipment: CMS, SADMERC, and others continually lump O&P in with durable medical equipment (DME). These are two entirely different business types. DME is a device distribution industry; O&P is a health-services industry. The orthosis or prosthesis is just the end product of the service, and yet we are only paid for the device. Since the individual device is reimbursed rather than the service, the practitioner must see as many patients as possible, leaving less emphasis on follow-up. O&P healthcare professionals need to be recognized and reimbursed for the service they provide, not for just the device.

4. Coding Administration Uniformity: Not only are the acceptable codes and the reimbursement amounts region specific, but the way the claims are processed vary from place to place. Region C may have a much higher number of rejected claims on a particular product than Region A. Region B may reimburse carbon orthotic lamination better than Region D. A particular foot may be rejected more in one region because a case manager at that contracted carrier may not be well informed. The carrier may change, and then the process must begin all over. Often, case managers have little or no healthcare experience, let alone O&P experience, and yet they impact decisions that dictate mobility. This non-uniformity makes it difficult to pinpoint how much a device will be reimbursed or if it will be accepted at all.

Of course there are many more obstacles, but these seem to be the major impediments. Orthopedic surgeon Doug Smith, MD, from the University of Washington, Seattle, presented an excellent lecture on the topic at the 2008 American Academy of Orthotists and Prosthetists Annual Meeting and Scientific Symposium as a part of a panel discussion by Gary Berke, MS, CP, FAAOP, titled, "The Future of O&P: Will We Really Just Be 'Gnomes in the Basement?'"

Gerald Stark, CPO/L, FAAOP, is the vice president of product development and education at Fillauer Companies, Chattanooga, Tennessee. Beth Stiner, C.Fom, is a contract and coding administrator at Fillauer.