OIG: Medicare remains vulnerable to orthotics fraud 

WASHINGTON – The Office of Inspector General says there are still issues related to CMS’s oversight of off-the-shelf braces, including providers that ordered braces for enrollees for whom there was no history of a treating relationship. 

The OIG also found new suppliers located in geographic areas with known Medicare fraud; Medicare paid more than private payers for OTS braces; and suppliers used prohibited solicitation to contact enrollees. 

“These issues continue to put Medicare and its enrollees at risk and demonstrate the need for CMS to strengthen its oversight related to supplier billing requirements, ordering provider requirements, supplier enrollment and monitoring, Medicare allowable amounts for OTS braces, telemarketing to Medicare enrollees, and fraud related to OTS braces,” the OIG stated. “If not addressed, these issues could result in improper payments, potential enrollee harm, and Medicare paying more than non-Medicare payers, such as private insurance companies, for OTS braces.” 

CMS has consistently found that orthotic braces were consistently among the top 20 items of DMEPOS with the highest improper payment rates. 

To reduce the risk of fraud, waste, and abuse related to OTS braces and to protect the health of Medicare enrollees, the OIG recommends that CMS strengthen its oversight of Medicare billing for OTS braces by: 

• Taking steps to prevent payments for claims for replacement OTS braces billed without required modifiers; 
• Identifying providers who ordered OTS braces for enrollees with whom they had no treating relationships, and use that information to determine whether to provide additional education to or take administrative or legal action against the ordering providers or associated suppliers; 
• Analyzing supplier billing patterns to determine whether to conduct additional prepayment or post-payment reviews of suppliers;  
• Ensuring that Medicare allowable amounts are reasonably comparable with payments made by non-Medicare payers; 
• Educating suppliers and enrollees on telemarketing practices for OTS braces; and 
• Using predictive data analysis and information from other federal agencies and from state agencies to identify emerging fraud schemes related to OTS braces and using CMS’s authority to prevent further losses to the Medicare program. 

CMS did not state whether it concurred with the OIG’s recommendations but described its efforts to reduce and prevent improper payments related to OTS braces. 

From calendar years 2014 through 2020, Medicare paid approximately $5.3 billion for orthotic braces. 

Go here to read the full report.