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Noridian Healthcare Solutions, LLC, (Noridian) as the Supplemental Medical Review Contractor (SMRC) for the Centers for Medicare and Medicaid Services (CMS), is conducting post-payment review of claims for select Medicare Durable Medical Equipment (DME) lumbar-sacral orthoses (LSO) billed with dates of service from January 1, 2021, through December 31, 2022. 


The 2022 Comprehensive Error Rate Testing (CERT) report identified an improper payment rate of 51.7% for LSO, with a projected improper payment of $78,264,550; in 2021, the improper payment rate was 44.2%, with a projected improper payment of $76,454,328; and in 2020 the improper payment rate was 35.8% with a projected improper payment of $177,244,008.

The Office of Public Affairs in the Department of Justice (DOJ) issued a news release dated May 16, 2022, stating four orthotic brace suppliers in Dallas, Texas were convicted in a $6.5 million kickback scheme. Approximately $12.5 million was billed to Medicare for unnecessary braces. In addition, on April 9, 2019, the OIG alerted the public concerning a fraud scheme targeting Medicare recipients to get free or no-cost back and knee braces. Also, on October 25, 2019, the Federal Trade Commission (FTC) issued a consumer alert on scammers targeting Medicare recipients for free or low-cost back and knee braces.

On March 9, 2023, CNBC published an article “Inside the minds of criminals: How to brazenly steal $100 billion from Medicare and Medicaid” discussed how easy Medicare and Medicaid are being targeted by criminals to conduct fraud schemes. Also, it was identified these fraud schemes are costing taxpayers more than $100 billion a year.

In January 2023, Noridian completed research on Healthcare Common Procedure Coding System (HCPCS) code L0631 (Lumbar-sacral orthosis (LSO), sagittal control, with rigid anterior and posterior panels, posterior extends from sacrococcygeal junction to t-9 vertebra, produces intracavitary pressure to reduce load on the intervertebral discs, includes straps, closures, may include padding, shoulder straps, pendulous abdomen design, prefabricated item that has been trimmed, bent, molded, assembled, or otherwise customized to fit a specific patient by an individual with expertise.) The SMRC identified utilization for L0631 peaked at nearly $2.5 million in quarter two of 2021 and showed an increase from $1.5 million to nearly $2 million by the end of the second quarter of 2022.

Reason for Review

The SMRC is tasked to perform data analysis and conduct medical record reviews on claims billed with HCPCS code L0631 billed with DOS January 1, 2021, through December 31, 2022.

The SMRC will conduct medical record reviews in accordance with applicable waivers/flexibilities/statutory, regulatory, and sub-regulatory guidance.

Did you know vHG offers audit and appeal response services? 

If you receive an audit from the SMRC, the van Halem Group is here to help! Our clinical experts will review your files prior to submission, identifying issues and providing recommendations, as needed. Once the review is complete, we can submit the files to Noridian via esMD, on your behalf. In the event an overpayment is identified, our appeal experts will draft appeal arguments and follow the claims through to the Administrative Law Judge (ALJ).

Contact us today to learn more!