Which Policy is Paramount, Local or National?

A recent DME question asked about L3000 reimbursement, with the responder suggesting that the national policy does not cover them (except, as with Medicare, an integral part of a brace attached to a shoe). Hence, the carrier is correct in requiring recoupment after a post-payment audit for previous orthotic claims that were paid. Is that correct and can we always assume that is the case?

If the physician had obtained pre-determination of benefits that the orthotics would be covered, was the carrier’s initial payments a mistake or due to something else?

In this scenario, it turns out that the provider was paid for numerous orthotic claims over an extended period. For each claim that had previously been submitted, a request for pre-determination of benefits was obtained, with the records clearly indicating there was no brace involved. That being the case, it is likely that the carrier has a local carve-out policy covering foot orthotics.

Perhaps the auditors used the national policy when reviewing the charts instead of focusing on the local policy. This is quite common, especially for ERISA plans, where the insurance company serves as the administrator for some other entity, such as a union, or federal or state government. It is these entities which dictate the coverage parameters to the insurance company, not the other way around.

For example, in my home state of New York, the union representing NYS-employed building tradesman covers foot orthotics, which is managed by UHC. In New Jersey, state law requires foot orthotic coverage by local carriers. BC Federal has a similar policy mandating coverage. Yet UHC, like Cigna, BC, and others have a national policy following Medicare’s exclusionary policy of foot orthotic coverage.

So while national policies often exist, one must check with the carrier(s) to determine whether a local policy exists, usurping the “nationally” excluded policies. When there is a local coverage policy, that usually will take precedence over the national policy. The only way to find out is to contact the carrier and obtain and review the local and national policies and obtain a pre-determination (AKA organizational determination) of benefits.

Hence, as in this case, it is wise not to provide absolutes. One should refrain from saying this or that is never covered. There are usually exceptions to every rule (notice I didn’t say always).

The next column will provide a summary of the differences between a prior authorization and a pre-determination of benefits.

—Paul Kesselman, DPM