Wednesday, 28 May 2025

Orthotics Billing in 2025: Navigating Prior Authorization and Audit Pressures



Orthotics billing is no longer a behind-the-scenes process—it is more of a frontline battle for reimbursement. Plus, with more and more people using orthopedic products, managing it is requiring more attention now than ever. With the increase in CMS audits, prior authorization requirements, and the constant shift in HCPCS coding policies, it is no longer a secret that orthotics providers must rethink how they approach their revenue cycle in 2025. 

Why Orthotics Billing Is Under the Spotlight? 

Today undoubtedly the orthotics and prosthetics (O&P) sector are facing increased scrutiny. And this is mainly because, according to the Office of Inspector General (OIG), orthotic devices represent a significant area of Medicare billing errors, leading to increased audits and payment recoupments. In  fact, last year in 2024, CMS reported that improper payments for orthotics exceeded $ 400 million, largely due to documentation issues and coding errors; causing panic for many orthotics providers. So now the question is how can orthotics suppliers get properly reimbursed? 

Here’s what’s making waves in the orthotics billing landscape: 

1) The Rise of Medicare Prior Authorization Requirements needs more attention—Medicare has expanded its prior authorization (PA) mandate for certain orthotic devices under the DMEPOS (Durable Medical Equipment, Prosthetics, Orthotics, and Supplies) program. 

Trending Devices Requiring PA: 

  • Lumbar-sacral orthoses (LSOs) 
  • Knee orthoses (KOs) 
  • Some ankle-foot orthoses (AFOs) 

This move aims to reduce fraud and abuse, but it’s also creating major hurdles for providers who aren’t prepared. This is why today the best practice to ensure a faster orthotics reimbursement is to start with establishing a dedicated prior authorization team that can help in - monitoring the CMS list of required codes, submit documentation via the Noridian or CGS portals, and follow up on delayed authorizations proactively. 

2) Increased Pre- and Post-Payment Audits - Medicare and commercial payers are initiating more Targeted Probe and Educate (TPE) audits, looking for: 

  • Lack of physician orders 
  • Inadequate proof of medical necessity 
  • Missing proof of delivery 
  • Incorrect use of modifiers (e.g., KX, GA, GZ) 

In fact, 90 % of denials in recent CMS audits stemmed from insufficient or illegible documentation, especially physician progress notes that don’t explicitly state the need for orthotics. So one needs to be careful during documentation checklist for audit readiness: starting from- physician’s order with start date, detailed written order (DWO), face-to-face notes supporting functional need, proof of delivery (with recipient signature) and compliance with LCD (Local Coverage Determination) policies 

HCPCS Code Revisions & clear Billing Confusion - As of 2025, CMS has introduced revisions to orthotic-related HCPCS codes, consolidating or redefining some commonly used codes. This has resulted in billing confusion, especially when: 

  • Providers bill custom-fitted vs. off-the-shelf items incorrectly. 
  • Codes are used without proper modifiers, triggering automatic denials. 

 Example: 

HCPCS code L0648 (custom-fit LSO) vs. L0650 (prefabricated LSO)—incorrect use can lead to overpayments or claw backs. Thus, an orthotics provider's billing strategy should - always verify code definitions in the Medicare Fee Schedule, use the KX modifier only when you have full documentation to support medical necessity, and align codes with your supplier enrollment classification—custom fabricators vs. OTS suppliers. 

Use of EHR Integration & Digital Billing Platforms - With the move toward interoperability, orthotics providers who integrate their EHRs with billing platforms are seeing: 

  • Faster documentation sharing between clinicians and billers 
  • Fewer rejections due to incomplete data 
  • Easier compliance with CMS audit data requests 

In fact, last year, in a 2024 industry survey, providers with full EHR-billing integration reported 21% faster average claim turnaround time. 

How to Stay Ahead in Orthotics Billing 

To keep pace with these trends and prevent revenue leakage, consider these actionable strategies: 

Invest in Training - Staff must be trained to: 

  • Understand updated HCPCS coding for orthotics. 
  • Follow payer-specific authorization workflows 
  • Document medical necessity clearly 
  • Automate Where Possible 

Use billing software that flags: 

  • Modifier misuse 
  • Missing prior auths 
  • Documentation gaps 

Outsource to orthotics billing specialists. 

If you're overwhelmed, outsourcing orthotics billing to experienced RCM firms can help reduce denials, streamline cash flow, and ensure compliance with regulatory changes. Orthotic device claims, especially those billed under Medicare with modifiers and prior auth, take an average of 22–28 days longer to process than standard DME claims. The delay is often due to: 

  • Lack of detailed physician notes 
  • Incomplete delivery confirmation 
  • Misclassification of codes 

Thus, to avoid these delays, one needs to front-load your documentation and PA efforts. 

Compliance is the New Competitive Edge 

Orthotics billing in 2025 is not just about submitting claims—it’s about staying ahead of audits, navigating prior authorizations, and getting paid without disruptions. With CMS tightening rules and commercial payers following suit, the time to modernize your orthotics billing workflow is now. 

Whether you’re a solo provider or a large O&P clinic, aligning your billing strategy with current trends is essential, and outsourcing to an experienced orthotics billing professional only makes your billing process easier, generates better revenue, helps reduce risk, and delivers uninterrupted patient care. 


  

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