CMS Releases CY 2024 Home Health Prospective Payment Final Rule

Published in Government and Regulatory on November 03, 2023

CMS has released it's "Final Rule" this week. Please read the following update from Peter Thomas, General Council, NAAOP on why this is significant to the O&P Profession.

This week, CMS released the CY 2024 Home Health Prospective Payment final rule (“Final Rule”), which contains a section codifying the definition of a “brace” or “orthosis” in the federal regulations.  This constitutes a significant win for the O&P Alliance organizations as well as the broader rehabilitation and disability communities.  The ITEM Coalition’s numerous rehabilitation and disability organizations, which the Powers firm coordinates, also signed on in support of the proposed rule.  The final rule largely tracks the proposed rule but offers some clarifications on topics raised by the O&P Alliance in its comment letter and in other communications with CMS and other stakeholders. CMS summarizes the final rule as follows: 

“We are finalizing our proposal without modification to amend the regulations at 42 CFR 410.2 to add the definition of brace to improve clarity and transparency regarding coverage and payment for the term brace as defined in section 1861(s)(9) of the Act. Also, we believe adding the definition in regulations will improve the efficiency of the administration of the Medicare program when considering whether a new device is a leg, arm, back, or neck brace for benefit category and payment determinations under our review procedures at §414.240. In addition, we believe that adding the definition of a brace in regulation would expedite coverage and payment for newer technology and powered devices, potentially providing faster access to these new healthcare technologies for Medicare beneficiaries.”

Among other provisions, we are pleased that CMS is finalizing its proposal to amend the regulations at 42 C.F.R. § 410.2 to add the definition of a “brace.”  Currently, the term “brace” is not defined in the Medicare statute or in its implementing regulations.  Instead, the Medicare Benefit Policy Manual (MBPM) defines braces as “rigid and semi-rigid devices which are used for the purpose of supporting a weak or deformed body member or restricting or eliminating motion in a diseased or injured part of the body.”  CMS is finalizing its proposal to codify this definition in regulation.  This solidifies the definition of an orthosis so that future administrations cannot easily restrict the definition through guidance documents.  If CMS wants to amend the definition in the future, it will have to go through the regulatory process.  In this respect, the orthotic benefit receives some measure of stability and protection from future restrictions in the breadth of orthotic coverage.

Rigid and Semi-Rigid Braces

CMS reiterates in the Final Rule that “[r]igid materials are used to eliminate motion but also to support underload,” and “semi-rigid materials … intentionally allow some amount of motion as compared to materials that completely immobilize a part of the body.”  These definitions are consistent with the proposed rule.  CMS also describes a three-point pressure system that is needed “for a brace to properly function:”

“In order for a brace to properly function, it must utilize a three-point pressure system to provide angular control over anatomical joints.  A three-point pressure system places a single force at the area of the deformity, while two counter forces act in the opposing direction. This pressure system requires that a brace be rigid or semi-rigid in structure to apply sufficient relevant force to support, restrict, or eliminate motion of the joint or specific body part.  The rigidity level of a brace is dependent on the body part and purpose for which the brace is used.  For example, a fully rigid brace is used to eliminate motion and support underload.”

CMS further states that “[b]races are typically prescribed to patients during the process of recovery and rehabilitation in order to stop limbs, joints, or specific body segments from moving for a pre-determined period.”  In addition, braces “may also be prescribed for ongoing medical problems that require restriction or limitation of joint movement; removal of weight or pressure from healing or injured joints, muscles, or body parts; or reduction of misalignment and function to reduce pain and facilitate improved mobility.” All of these definitions are consistent with the proposed rule.

The O&P Alliance supported codification of the MBPM definition of a brace but urged CMS to interpret this definition within the context of more contemporary orthotic practice, especially as new orthotic innovations are developed. The Alliance did not support adoption of a new definition of orthotics or braces, largely because of the potential for unintended consequences.  But the Alliance did urge CMS to update its thinking about the orthotic benefit.  CMS largely declined to adopt this recommendation, but it did explicitly note that orthoses that adopt elastic materials may be considered in future rulemaking.  CMS states:

“We are not aware of evidence that elastic or non-rigid devices are capable of supporting a weak or deformed body member or restricting or eliminating motion in a diseased or injured part of the body. We can consider addressing in future rulemaking should evidence supporting the effectiveness of elastic or nonrigid devices in performing the functions of a brace become available.”

Powered Features

CMS is finalizing as proposed its clarification that devices with power features designed to assist with traditional bracing functions are considered braces.  Specifically, the following powered upper extremity devices and powered lower extremity exoskeleton device will be classified as orthotics effective on January 1, 2024.  (CMS declined to make the effective date on the date of publication of the final rule.):

• L8701 (Powered upper extremity range of motion assist device, elbow, wrist, hand with single or double upright(s), includes microprocessor, sensors, all components and accessories, custom fabricated); (Code requested by MyoPro) 
• L8702 (Powered upper extremity range of motion assist device, elbow, wrist, hand, finger, single or double upright(s), includes microprocessor, sensors, all components and accessories, custom fabricated); (Code requested by MyoPro) 
• K1007 (Bilateral hip, knee, ankle, foot device, powered, includes pelvic component, single or double upright(s), knee joints any type, with or without ankle joints any type, includes all components and accessories, motors, microprocessors, sensors); (Code requested by ReWalk) 

CMS stated in the final rule:  “We appreciate the commenters’ support for classification of these devices as braces. We agree codifying the definition of brace and clarifying that newer powered devices described by these HCPCS codes will permit Medicare beneficiaries to access these newer technology braces and particularly help those with disabilities associated with muscular and/or neural (for example, spinal cord injuries) conditions.

CMS declined to expedite a payment determination for these three codes and will consider them in the second biannual 2023 HCPCS Coding Workgroup meeting, or the next coding cycle.  (This means that a preliminary payment determination will be made as early as next week in the subsequent cycle in the Spring of 2024.)

Shoes as Integral Part of Leg Brace

CMS is also finalizing its proposal without modification to specify at § 410.36(a)(3)(i)(A) that a brace may include a shoe if it is an integral part of a leg brace and its expense is included as part of the cost of the brace.  HCPCS codes L3224 (orthopedic footware; woman’s shoe) and L3225 (orthopedic footware; man’s shoe) are available to submit claims for orthopedic shoes that are an integral part of a brace.  This clarifies that orthopedic shoes used as an integral part of a leg brace are covered by Medicare and a separate billing code can be added to the orthotic claim to cover the cost of providing the patient with a shoe that is integral to the brace’s function.  This is consistent with the Alliance’s request of CMS to clarify this section of the proposed rule and should be considered a win.