Position on MMA Subjecting the TSD to O & P Payment Rules
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CMS subjecting the Therapeutic Shoes for Persons with Diabetes (TSD) benefit to the Orthotics and Prosthetics

Fee Schedule Payment Rules

The Pedorthic Footcare Association (PFA) opposes the deterioration of reimbursable rates for the Therapeutic Shoes for Persons with Diabetes benefit (TSD) that resulted from the Centers for Medicare and Medicaid Services (CMS) recently released fee schedule payment rules for orthotics and prosthetics mandated by Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) using the methodology in Section 1834(h) of the Social Security Act.  At risk is patient access to a benefit provided by professional allied health care providers that has shown quantifiable results at reducing lower extremity amputations.  Quality patient care will suffer as a direct result of lower fees as less-than-qualified practitioners cut corners on time and material, and the qualified professionals opt out of accepting Medicare assignment completely.

Base reimbursable rates for off-the-shelf modified and custom molded shoes and inserts for diabetics were statutorily fixed and have remained unchanged (less an annual inflation adjustment until the transitional freeze in 2003) since the inception of the TSD benefit in the late 1980's.  Additionally, those rates when originally set did not accurately reflect the practitioner's time necessary to initially consult with the patient and perform a fitting, produce the individual shoes and/or inserts, conduct a follow-up dispensing visit, or manage the administrative aspects of the benefit, in addition to the cost of the actual materials used to create the prescription footwear.  Essentially, shoes and inserts shouldn't be looked at simply as footwear, but as medical devices.

Today's allowable rates for the TSD are such that those suppliers accepting Medicare assignment are actually experiencing a negative equity flow in their practice with each billing. In essence, the reimbursable amounts for these codes have failed to keep pace with rising labor and material costs that are all-inclusive.  PFA believes that failure to address this issue will lead to an increase in practitioners not accepting Medicare assignment.  This will serve to further limit patient access to a benefit that yields measurable results for the high-risk diabetic population, and could lead to an increase, not a decrease, in the number of lower extremity amputations resulting from diabetic complications.

Background Summary of PFA's Advocacy Efforts with CMS

During CMS's process to derive the current fee schedule, the PFA met with CMS and requested consideration of the following two points when calculating the new allowables for the fee schedule:

1. That all of the costs associated with providing diabetic footwear to a patient be taken into account when formulating reimbursement rates.  Using only the manufacturer's wholesale and retail prices with a standard markup factor does not account for all of the components of care necessary to adequately provide a diabetic patient with foot complications the appropriate level of care necessary to head off more traumatic and costly treatments.

To accomplish this, PFA recommended using the existing codes for diabetic shoes (A5500 and A5501) as the base codes, and the remaining insert and modification codes as separately billable "addition(s) to" codes. In addition, repairs to shoes and inserts should also be separately billable codes in units of 15-minute increments, with rates set according to the task.  This would make the TSD time and materials reimbursable scheme consistent with other O and P HCPCS category allowables.

2. When calculating the fee schedule rates, CMS andPDAC should have selected shoes and inserts that are truly representative of those devices commonly provided to diabetic patients by pedorthic practitioners.  There is a concern that devices that would not be provided by a pedorthic professional have been included in the calculation of the Medicare allowables, such as shoe inserts commonly available over-the-counter in drug and retail shoe stores.

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