Business News

Adding Up the Costs of Care

Scientific barriers have decreased in O&P, but some fear prior authorization could increase financial ones.

Prior authorization, a process meant to prevent unnecessary medical utilization and improve consistency with Medicare coverage, coding and payment rules, could have a significant impact on O&P if enacted.

While some believe that impact will be a good one, others believe the rule may hurt the profession.

Defining authorization

Under CMS, prior authorization employs a process for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). Under the final rule, it would require suppliers to provide information to the beneficiary before an item is furnished and before the claim is submitted for payment.


 Jeff A. Zeller, CP, BOCPO
Jeff A. Zeller

“Medicare has put forth a multitude of codes that they have outlined in the final rule, which would require a pre-authorization for [prostheses],” Jeff A. Zeller, CP, BOCPO, of Spectrum Prosthetics and Orthotics Inc., told O&P News. “The codes they have listed are numerous [but] there is no guarantee in their proposal that providers will be paid on that which was pre-authorized.”

Weighing the good

However, Joseph McTernan, director of coding and reimbursement, education and programming at the American Orthotic and Prosthetic Association (AOPA), said prior authorization could have its benefits.

Joseph McTernan
Joseph McTernan

“In theory, if [it] can be implemented and run efficiently so that there are no inherent delays in patients receiving care, that is a plus,” he said. “If a payment decision is made before any componentry needs to be purchased, that is different from the current prepayment review status, where the device is already delivered, the patient is using it, and then you get a payment decision. With prior authorization, you get that decision before the device is delivered, which allows you to control your inventory.”

Zeller added that if the rule is written in such a way that when something is authorized practices are paid with no chance of Recovery Audit Contractor (RAC) audits, then it could have a positive impact on the profession.

“But it needs to be truly that,” he said. “I believe if we have a solid feel that the work we have performed is clinically correct and we are going to be paid for that work, that would make running our clinic more efficient.”

Weighing the bad

However, Zeller added, “if it goes the other way, it gives [auditors] more openings to try and limit payment. It could cause a longer turnaround time for our revenue to be put in place, which requires more capital from the small business owner to be able to keep the bills paid and keep the rhythm of patient care flowing.”

Thomas H. Watson, CP, owner of Tom Watson’s Prosthetics and Orthotics Lab, agreed and added that prior authorization could cause significant delays.

Thomas H. Watson, CP
Thomas H. Watson

“Honestly, it does not do anything except hold up the process. My thought process is that it is just another layer of documentation and another waiting game,” he said.

“It is going to slow down care for someone in transition from hospital to transitional unit to nursing home to get to your office and then you throw another [week or] possibly 2 weeks into continuing care.”

According to McTernan, the way the process is written in the final rule “it could lead to patients not having access to higher quality limbs because Medicare will have the opportunity to find reasons to deny claims during the authorization process.”

He added, “Providers might take the low road and make a business decision to provide lesser functional equipment in order to get it through the process. What needs to be understood is that this is about the patient. When patients are losing access to services they desperately need, that is a problem.”

Looking ahead

While it has caused concern in the profession, prior authorization is “limited in scope right now,” McTernan said, and no official process has been implemented.

“What we have is a final rule. That rule sets the groundwork to implement an official process beyond lower limb prostheses. But, we have heard from multiple sources is that there is not an imminent decision.”

An official process is not expected for a year to 18 months, he said.

If prior authorization is officially enacted, McTernan said there are several “must haves” in order to make it work in O&P’s favor. There needs to be a guarantee of claim payments, no exposure to additional audits, no delay in patient medical access and prosthetists’ notes should be considered a part of the overall medical record, he said.

Zeller said, “As a profession, we need to come up with an outline as to what [prior authorization] would look like for the amputee patient population.

“I think we need to get the amputees involved again,” he added, “This pre-authorization needs to be written in a way that does not provide more roadblocks to their care.” – by Shawn M. Carter

Disclosure: McTernan, Watson and Zeller report no relevant financial disclosures.

Prior authorization, a process meant to prevent unnecessary medical utilization and improve consistency with Medicare coverage, coding and payment rules, could have a significant impact on O&P if enacted.

While some believe that impact will be a good one, others believe the rule may hurt the profession.

Defining authorization

Under CMS, prior authorization employs a process for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). Under the final rule, it would require suppliers to provide information to the beneficiary before an item is furnished and before the claim is submitted for payment.


 Jeff A. Zeller, CP, BOCPO
Jeff A. Zeller

“Medicare has put forth a multitude of codes that they have outlined in the final rule, which would require a pre-authorization for [prostheses],” Jeff A. Zeller, CP, BOCPO, of Spectrum Prosthetics and Orthotics Inc., told O&P News. “The codes they have listed are numerous [but] there is no guarantee in their proposal that providers will be paid on that which was pre-authorized.”

Weighing the good

However, Joseph McTernan, director of coding and reimbursement, education and programming at the American Orthotic and Prosthetic Association (AOPA), said prior authorization could have its benefits.

Joseph McTernan
Joseph McTernan

“In theory, if [it] can be implemented and run efficiently so that there are no inherent delays in patients receiving care, that is a plus,” he said. “If a payment decision is made before any componentry needs to be purchased, that is different from the current prepayment review status, where the device is already delivered, the patient is using it, and then you get a payment decision. With prior authorization, you get that decision before the device is delivered, which allows you to control your inventory.”

Zeller added that if the rule is written in such a way that when something is authorized practices are paid with no chance of Recovery Audit Contractor (RAC) audits, then it could have a positive impact on the profession.

“But it needs to be truly that,” he said. “I believe if we have a solid feel that the work we have performed is clinically correct and we are going to be paid for that work, that would make running our clinic more efficient.”

Weighing the bad

However, Zeller added, “if it goes the other way, it gives [auditors] more openings to try and limit payment. It could cause a longer turnaround time for our revenue to be put in place, which requires more capital from the small business owner to be able to keep the bills paid and keep the rhythm of patient care flowing.”

Thomas H. Watson, CP, owner of Tom Watson’s Prosthetics and Orthotics Lab, agreed and added that prior authorization could cause significant delays.

Thomas H. Watson, CP
Thomas H. Watson

“Honestly, it does not do anything except hold up the process. My thought process is that it is just another layer of documentation and another waiting game,” he said.

“It is going to slow down care for someone in transition from hospital to transitional unit to nursing home to get to your office and then you throw another [week or] possibly 2 weeks into continuing care.”

According to McTernan, the way the process is written in the final rule “it could lead to patients not having access to higher quality limbs because Medicare will have the opportunity to find reasons to deny claims during the authorization process.”

He added, “Providers might take the low road and make a business decision to provide lesser functional equipment in order to get it through the process. What needs to be understood is that this is about the patient. When patients are losing access to services they desperately need, that is a problem.”

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Looking ahead

While it has caused concern in the profession, prior authorization is “limited in scope right now,” McTernan said, and no official process has been implemented.

“What we have is a final rule. That rule sets the groundwork to implement an official process beyond lower limb prostheses. But, we have heard from multiple sources is that there is not an imminent decision.”

An official process is not expected for a year to 18 months, he said.

If prior authorization is officially enacted, McTernan said there are several “must haves” in order to make it work in O&P’s favor. There needs to be a guarantee of claim payments, no exposure to additional audits, no delay in patient medical access and prosthetists’ notes should be considered a part of the overall medical record, he said.

Zeller said, “As a profession, we need to come up with an outline as to what [prior authorization] would look like for the amputee patient population.

“I think we need to get the amputees involved again,” he added, “This pre-authorization needs to be written in a way that does not provide more roadblocks to their care.” – by Shawn M. Carter

Disclosure: McTernan, Watson and Zeller report no relevant financial disclosures.