The trade association representing prosthetic medical device makers filed a lawsuit in federal court against Medicare and the U.S. Health & Human Services Dept. over what it calls "unfair and unauthorized" payment rules.
In a complaint filed in the U.S. District Court for the District of Columbia, the American Orthotic and Prosthetic Assn. alleged that the government is unfairly denying payment to suppliers of prosthetic devices.
"At issue here are rules implemented in August 2011 by the Centers for Medicare & Medicaid Service, a unit of the Dept. of Health & Human Services," according to the lawsuit. "The CMS rules provide that suppliers of prosthetic devices will be denied payment for the devices unless they secure specific documentation from physicians who prescribed the devices. CMS and its contractors are relying on the new rules to deny AOPA members payment for the prosthetic devices the AOPA members have supplied Medicare patients, even when other documentation justifies the medical necessity for the devices."
OPA president Thomas Kirk said in a prepared release that the trade organization "will not stand by when government acts inappropriately to threaten either the quality of care we provide to our patients or the economic viability of the small businesses and providers that comprise the orthotics and prosthetics profession."
AOPA is asking the court to invalidate the rules that have been in place over the past 21 months, reverse denied claims and award damages because the government’s rules were based on "a flawed, and in some respects amateurish, report alleging fraud in the O&P field where there essentially was none," Kirk said.
The origins of the complaint can be found in an August 2011 report from the HHS inspector general’s office, "Questionable Billing By Suppliers of Lower Limb Prostheses," which found that spending for lower-limb prosthetics increased 27% from 2005-2009 and that Medicare had "inappropriately" paid out $43 million for prosthetics.
The OIG recommended stricter rules on claims for prosthetics limbs, including adding lower-limb prosthetics to Medicare’s Recovery Audit Program.
AOPA alleged that, in following the report’s suggestions, CMS "dramatically revised the standards by which a prosthetic claim would be judged for reimbursement approval," according to the lawsuit.
"We believe that in doing so, Medicare violated the law, specifically the federal Administrative Procedure Act and the Medicare Act. Then CMS contractors/auditors proceeded to apply this ill-conceived new standard retroactively to claw back money on claims which no one asserts involved any fraud, but which originated years before CMS contractors devised the new "standard,’" according to the lawsuit.