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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. 
You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101. 
 
The rules say that 
 
A lower limb prosthesis is covered when the beneficiary: 
 
Will reach or maintain a defined functional state within a reasonable period of time; and 
 
Is motivated to ambulate. 
 
FUNCTIONAL LEVELS: 
 
A determination of the medical necessity for certain components/additions to the prosthesis is based on the 
beneficiarys potential functional abilities. Potential functional ability is based on the reasonable expectations 
of the prosthetist, and treating practitioner, considering factors including, but not limited to: 
 
The beneficiarys past history (including prior prosthetic use if applicable); and 
 
The beneficiarys current condition including the status of the residual limb and the nature of other medical 
problems; and 
 
The beneficiarys desire to ambulate. 
 
Clinical assessments of beneficiary rehabilitation potential must be based on the following classification levels: 
 
Level 0: Does not have the ability or potential to ambulate or transfer safely with or without assistance and a 
prosthesis does not enhance their quality of life or mobility. 
Level 1: Has the ability or potential to use a prosthesis for transfers or ambulation on level surfaces at fixed 
cadence. Typical of the limited and unlimited household ambulator. 
Level 2: Has the ability or potential for ambulation with the ability to traverse low level environmental barriers 
such as curbs, stairs or uneven surfaces. Typical of the limited community ambulator. 
Level 3: Has the ability or potential for ambulation with variable cadence. Typical of the community ambulator 
who has the ability to traverse most environmental barriers and may have vocational, therapeutic, or exercise 
activity that demands prosthetic utilization beyond simple locomotion. 
Level 4: Has the ability or potential for prosthetic ambulation that exceeds basic ambulation skills, exhibiting 
high impact, stress, or energy levels. Typical of the prosthetic demands of the child, active adult, or athlete. 
 
The records must document the beneficiarys current functional capabilities and his/her expected functional 
potential, including an explanation for the difference, if that is the case. It is recognized, within the functional 
classification hierarchy, that bilateral amputees often cannot be strictly bound by functional level 
classifications. 
 
An axial rotation unit (L5982, L5984, L5985, L5986) is covered for beneficiaries whose functional level is 2 or 
above. 
 
A microprocessor controlled ankle foot system (L5973), energy storing foot (L5976), dynamic response foot 
with multi-axial ankle (L5979), flex foot system (L5980), flex-walk system or equal (L5981), or shank foot 
system with vertical loading pylon (L5987) is covered for beneficiaries whose functional level is 3 or above. 
You can find this information in Medicare's Local Coverage Determination (LCD): Lower Limb Prostheses (L33787). 
 
The rules say that when submitting a prosthetic claim, the billed code for knee, foot, ankle and hip (HCPCS 
codes L5610, L5611, L5613, L5614, L5616, L5710, L5711, L5712, L5714, L5716, L5718, L5722, L5724, 
L5726, L5728, L5780, L5810, L5811, L5812, L5814, L5816, L5818, L5822, L5824, L5826, L5828, L5830, 
L5840, L5848, L5856, L5857, L5858, L5859, L5930, L5961, L5970, L5971, L5972, L5973, L5974, L5975, 
L5976, L5978, L5979, L5980, L5981, L5982, L5984, L5985, L5986, L5987) components must be submitted 
with modifiers K0 - K4, indicating the expected beneficiary functional level. This expectation of functional 
ability information must be clearly documented and retained in the prosthetist's records. The simple entry of a 
K modifier in those records is not sufficient. There must be information about the beneficiarys history and 
current condition which supports the designation of the functional level by the prosthetist. 
 
Codes L5968, L5982, L5984, L5985, L5986 and L5988 describe separate products which provide either a 
single motion or a combination of motions generally attributed to functional movement of the lower limb 
during ambulation. The use of these codes can be used to fully describe additional features or functions not 
found in the prosthetic foot system (L5969, L5970, L5971, L5972, L5973, L5974, L5975, L5976, L5978, 
L5979 L5980, L5981 and L5987). L5986 describes a product that is used as an addition to L-code foot systems 
for lower limb prosthesis construction. The product provides multiaxial motion in all three planes of motion, 
sagittal, coronal, and transverse. This code does not describe the multiaxial motion achieved from the inherent 
flexibility of the prosthetic keel or a split keel/heel prosthetic foot design. The predicate product is a device that 
was manufactured by Medical Center Prosthetic, which is represented in the coding narrative by MCP. 
 
Use of L5968, L5982, L5984 or L5986 is based on the beneficiarys K-level modifier (K0-K4), as referenced 
in the LCD. 
 
Codes L5968, L5982, L5984, L5985, L5986 and L5988 describe separate products which provide either a 
single motion or a combination of motions generally attributed to functional movement of the lower limb 
during ambulation. The use of these codes can be used to fully describe additional features or functions not 
found in the prosthetic foot system (L5969, L5970, L5971, L5972, L5973, L5974, L5975, L5976, L5978, 
L5979 L5980, L5981 and L5987). 
 
Addition codes for lower extremity prostheses, L5970, L5971, L5972, L5974, L5975, L5976, L5978, L5979, 
L5980, L5981, L5987 are considered an upgrade to the SACH foot. The beneficiary may qualify for an 
upgraded prosthetic foot based on their assigned K-level modifier (K0-K4) as referenced in the LCD. A single 
addition code (L5970, L5971, L5972, L5974, L5975, L5976, L5978, L5979, L5980, L5981, L5987) can fully 
describe a complete foot and thus the use of more than one code would be considered incorrect coding 
(unbundling). 
 
L5968, L5982, L5984, L5985, L5986, L5988, L5990 are additional features and/or functions that do not 
describe a complete prosthetic foot and may be used in combination with L5970, L5971, L5972, L5974, 
L5975, L5976, L5978, L5979, L5980, L5981, and L5987. The use of additional feature L-codes may also 
depend on the assigned K-Level modifier (K0-K4) as referenced in the LCD. 
 
L5980 describes a product that can be used for either endoskeletal or exoskeletal lower limb construction. The 
Flex Foot has an energy storing J-shaped keel design. Heel component is attached onto the J-shaped keel 
section. The Flex Foot Systems J-shaped keel design extends proximally as a monolithic composite shank. 
Shank height is determined and modified by supplier to utilize the dynamics of the composite shank. L5980 
includes foot cover. 
 
L5981 describes a product that can be used for either endoskeletal or exoskeletal lower limb construction. The 
Flex Walk has an energy storing J-shaped keel design. Heel component is attached to the J-shaped keel section. 
The Flex Walk J-shaped keel design proximally terminates at a nonadjustable fixed height determined and modified by the prosthetic foot manufacturer. L5981 includes foot cover. You can find this information in 
Medicare's Local Coverage Article: Lower Limb Prostheses - Policy Article (A52496). 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.