Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
 
 
CMS H N P
  AS  OT  ROMULGATED 
 
R   T E
EGULATIONS  O  STABLISH 
 
P R
AY  MENT  EQUIREMENTS FOR  
P
ROSTHETICS AND 
C -F
USTOM ABRICATED 
O  
RTHOTICS 
 
Daniel R. Levinson  
Inspector General 
 
October 2012 
OEI-07-10-00410   
   
EXECUTIVE SUMMARY:  CMS HAS NOT PROMULGATED REGULATIONS 
TO ESTABLISH PAYMENT REQUIREMENTS FOR PROSTHETICS AND 
CUSTOM-FABRICATED ORTHOTICS  
OEI-07-10-00410 
 
WHY WE DID THIS STUDY  
 
Section 427(a) of the Medicare, Medicaid, and SCHIP Benefits Improvement and 
Protection Act of 2000 (BIPA) prohibits Medicare payments for prosthetics and 
custom-fabricated orthotics unless the items are (1) furnished by a qualified practitioner 
and (2) fabricated by either a qualified practitioner or a qualified supplier.  Section 427(b) 
of the BIPA required the Secretary to promulgate regulations to implement the 
requirements at section 427(a) of the BIPA.  As required by 42 CFR  424.57(c)(12), 
Medicare suppliers must also maintain documentation supporting that prosthetics and 
custom-fabricated orthotics were delivered to beneficiaries.  In 2010, the Centers for 
Medicare & Medicaid Services (CMS) allowed $276 million in Medicare payments for 
257,797 prosthetic and custom-fabricated orthotic claims (excluding accessories, 
additions, and other supplemental prosthetic and orthotic items). 
 
HOW WE DID THIS STUDY 
 
We selected a sample of 1,135 Medicare-allowed claims for prosthetics and 
custom-fabricated orthotics in 2010 to determine whether the claimed items were 
(1) furnished by qualified practitioners, (2) fabricated by either qualified practitioners or 
qualified suppliers, and (3) met delivery documentation requirements.  We interviewed 
CMS staff regarding the implementation status of the BIPA payment requirements.   
 
WHAT WE FOUND 
 
To date, CMS has not promulgated regulations related to BIPA payment requirements for 
practitioner and supplier qualifications for prosthetics and custom-fabricated orthotics.  
CMS used other legal authorities that limit who can be paid for prosthetics and custom-
fabricated orthotics; notwithstanding, in 2010, Medicare allowed nearly 1,000 claims 
inappropriately.  Despite the lack of regulations, most claims were allowed for prosthetics 
and custom-fabricated orthotics furnished and/or fabricated by practitioners and/or 
suppliers that were licensed, certified, or accredited.  Finally, Medicare inappropriately 
allowed 12 percent of claims for prosthetics and custom-fabricated orthotics that did not 
meet Federal requirements for delivery documentation. 
 
WHAT WE RECOMMEND 
 
We recommend that CMS (1) promulgate regulations to implement the BIPA payment 
requirements, (2) ensure that suppliers maintain delivery documentation that meets 
Federal requirements, and (3) take appropriate action to address inappropriately allowed 
claims identified in the population related to payment edits and in our sample related to 
delivery documentation.  CMS concurred with all three recommendations.   
   
   
TABLE OF CONTENTS 
 
Objectives ....................................................................................................1 
Background ..................................................................................................1 
Methodology ................................................................................................6 
Findings...................................................................................................... 11 
CMS has not promulgated regulations related to payment 
requirements for practitioner and supplier qualifications for 
prosthetics and custom-fabricated orthotics ................................... 11 
CMS has used other legal authorities that limit who can be paid  
for prosthetics and custom-fabricated orthotics; notwithstanding, in 
2010, Medicare allowed nearly 1,000 claims inappropriately. ......12 
Despite the lack of regulations, most claims were allowed for 
prosthetics and custom-fabricated orthotics furnished and/or 
fabricated by practitioners and/or suppliers that were licensed, 
certified, or accredited ...................................................................12 
Medicare inappropriately allowed 12 percent of claims for  
prosthetics and custom-fabricated orthotics that did not meet 
Federal requirements for delivery documentation .........................13 
Conclusion and Recommendations ............................................................16 
Agency Comments and Office of Inspector General Response .....17 
Appendixes ................................................................................................18 
A:  States That License Prosthetists and Orthotists .......................18 
B:  Specialty Codes Listed in Transmittal 656 ..............................19 
C:  Detailed Sampling Design and Response Rates.......................20 
D:  Specialty Codes for All Other Practitioners and  
Suppliers ........................................................................................21 
E:  Actions Taken That Limit Who Can Be Paid for Prosthetics and 
Custom-Fabricated Orthotics .........................................................22 
F:  Point Estimates, Sample Sizes, and Confidence Intervals ........27 
G:  Agency Comments ...................................................................29 
Acknowledgments......................................................................................32
   
   
OBJECTIVES 
To determine the extent to which: 
1.  the Centers for Medicare & Medicaid Services (CMS) has 
implemented the payment requirements found at Section 427(a) of the 
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection 
Act of 2000 (BIPA);  
2.  Medicare allowed claims for prosthetics and custom-fabricated 
orthotics furnished and/or fabricated by unqualified practitioners 
and/or suppliers; and 
3.  Medicare allowed claims for prosthetics and custom-fabricated 
orthotics that lacked delivery documentation that met Federal 
requirements. 
BACKGROUND 
Prosthetics and orthotics are covered under the Durable Medical 
Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Medicare 
benefit.1  In 2010, CMS allowed $276 million in Medicare payments for 
257,797 prosthetic and custom-fabricated orthotic claims (excluding 
accessories, additions, and other supplemental prosthetic and orthotic 
items). 2  Industry representatives have asserted that unqualified 
practitioners and suppliers are furnishing and/or fabricating Medicare-paid 
prosthetics and custom-fabricated orthotics.  These representatives are 
concerned that unqualified practitioners and suppliers, who lack necessary 
training and education, are providing substandard custom-fabricated items 
to Medicare beneficiaries.3  Additionally, a 2000 Office of Inspector 
General (OIG) report concluded that qualifications of orthotic suppliers 
varied, with noncertified suppliers being the ones most likely to provide 
inappropriate items and services.4  OIG has not specifically reviewed the 
qualifications of practitioners and suppliers of prosthetics and 
custom-fabricated orthotics previously. 
 
1 To be payable by Medicare, prosthetics and orthotics must be reasonable and necessary 
for the diagnosis or treatment of an illness or injury or to improve the functioning of a 
malformed body member.  Social Security Act (SSA)  1862(a)(1)(A); 42 U.S.C. 
1395y(a)(1)(A).   
2 Custom-fabricated items are individually fabricated over a positive model of the patient.   
3 We conducted preinspection interviews with several industry representatives, who 
expressed their opinions that enforcement of Medicare qualifications is lax, and that 
many unqualified practitioners are fitting and fabricating prosthetics and 
custom-fabricated orthotics. 
4 OIG, Medicare Payments for Orthotics:  Inappropriate Payments, OEI-02-99-00120, 
March 2000. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  1   
   
Federal Statutory Payment Requirements 
Section 427(a) of the BIPA, enacted on December 21, 2000, added special 
payment requirements for prosthetics and certain custom-fabricated 
orthotics at section 1834(h)(1)(F) of the SSA (the BIPA payment 
requirements).5  This section prohibits Medicare payments for prosthetics 
and custom-fabricated orthotics unless the items are (1) furnished by a 
qualified practitioner and (2) fabricated by a qualified practitioner or a 
qualified supplier at a facility that meets such criteria as the Secretary 
determines appropriate.6  Generally, Medicare qualifications are intended 
to protect beneficiaries, promote high-quality care, and safeguard 
Medicare funds by ensuring that only qualified individuals and health care 
organizations furnish Medicare items and services.7  Section 427(b) of the 
BIPA required the Secretary to promulgate regulations to implement 
Section 427(a) of the BIPA no later than December 21, 2001 (i.e., 1 year 
after the date of enactment), using a negotiated rulemaking process.8 
Qualified practitioners.  The BIPA payment requirements define a 
qualified practitioner as a physician or other individual who is: 
  a qualified physical or occupational therapist;9 
  licensed in prosthetics or orthotics by the State in which the item is 
supplied;10 or 
  providing prosthetics or orthotics in a State that does not license 
practitioners of prosthetics and orthotics and is specifically trained and 
 
5 BIPA, H.R. 5601, 106th Cong.  427(a) (2000), adding SSA  1834(h)(1)(F), 42 U.S.C. 
1395m(h)(1)(F).  For purposes of this payment prohibition, certain custom-fabricated 
orthotics is defined to mean only those custom-fabricated orthotics that require 
education, training, and experience to custom fabricate and that are included in a list 
established by the Secretary of the Department of Health and Human Services (the 
Secretary) in consultation with appropriate experts in orthotics, including national 
organizations representing manufacturers of orthotics.  SSA  1834(h)(1)(F)(ii); 
42 U.S.C. 1395m(h)(1)(F)(ii).  We refer to certain custom-fabricated orthotics simply as 
custom-fabricated orthotics. 
6 SSA  1834(h)(1)(F)(i); 42 U.S.C. 1395m(h)(1)(F)(i). 
7
 71 Fed. Reg. 20754 (Apr. 21, 2006). 
8 CMS is the agency that would promulgate regulations to implement the BIPA payment 
requirements on the Secretarys behalf. 
9 Per 72 Fed. Reg. 66222, 66328 (Nov. 27, 2007), personnel qualifications in 42 CFR  
484.4 are applicable to all outpatient physical and occupational therapy services.  See 
also, CMS, Medicare Benefit Policy Manual, Pub. No. 100-02, ch. 15,  230.1(B) and 
230.2(B) (defining qualified physical therapist and qualified occupational therapist, 
respectively). 
10 If a practitioner (other than a physician, qualified physical therapist, or qualified 
occupational therapist) supplies the item in a State that provides for licensing of orthotics 
and prosthetics and the practitioner is not licensed by that State, under the BIPA payment 
requirement, the practitioner would not be a qualified practitioner and, therefore, would 
not be entitled to Medicare payment for the item. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  2   
   
educated to provide or manage the provision of prosthetics and/or 
custom-fabricated orthotics, and is certified by the American Board for 
Certification in Orthotics, Prosthetics & Pedorthics (ABC) or the 
Board of Certification/Accreditation, International (BOC), or is 
credentialed and approved by a program that the Secretary determines 
(in consultation with appropriate experts in prosthetics and orthotics) 
has training and education standards that are necessary to provide such 
prosthetics and orthotics.11 
See Appendix A for an overview of States that license prosthetists and 
orthotists. 
Qualified suppliers.  The BIPA payment requirements define a qualified 
supplier as any entity that is:  
  accredited by ABC or BOC, or  
  accredited and approved by a program that the Secretary determines 
has accreditation and approval standards that are essentially equivalent 
to those of ABC or BOC.12 
CMS Actions That Limit Medicare Payment for Prosthetics and 
Custom-Fabricated Orthotics 
CMS has established payment edits and implemented Medicare supplier 
enrollment requirements that limit who can be paid for prosthetics and 
custom-fabricated orthotics.13  For example, CMS issued Transmittal 656 
to establish a payment edit based on an existing supplier standard.14  This 
transmittal explains that, in States that license prosthetists or orthotists, 
Medicare payments for prosthetics and custom-fabricated orthotics are 
prohibited unless the furnisher is licensed by the State.15  More 
specifically, in States that license prosthetists and orthotists, Transmittal 
 
11 SSA  1834(h)(1)(F)(iii)(III).  The Secretary has not issued guidance specifying which 
programs, if any, meet the latter requirement found at SSA  1834(h)(1)(F)(iii)(III). 
12 In December 2006, CMS issued a document entitled Medicare New Deemed 
Accreditation Organizations For Suppliers of Durable Medical Equipment, Prosthetics, 
Orthotics And Supplies (DMEPOS) that lists the accrediting organizations for durable 
medical equipment (DME) suppliers based on the quality standards.  However, the 
Secretary has not issued guidance specifying which programs, if any, are essentially 
equivalent to those of ABC or BOC for the purposes of the BIPA payment requirements.  
See footnote 19. 
13 Payment edits are safeguards built into claims processing computer systems designed 
to prevent payment for noncovered and/or not medically necessary services. 
14 CMS, Medicare Claims Processing Manual, Pub. No. 100-04, Transmittal 656, 
Change Request 3959 (revising CMS, Medicare Claims Processing Manual, Pub. No. 
100-04, ch. 20,  130.1).  Accessed online at http://www.cms.gov on September 3, 2010. 
15 Transmittal 656 is based on a CMS DMEPOS supplier standard, which requires that 
suppliers furnish all Medicare-covered items in compliance with all applicable Federal 
and State licensure and regulatory requirements.  42 CFR  424.57(c)(1).  See also 
SSA  1834(j)(1)(B)(ii)(I). 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  3   
   
656 directs suppliers to send a copy of their State licenses to the National 
Supplier Clearinghouse (NSC) to ensure that the correct specialty code is 
on file.  The transmittal also directs that claims for prosthetics and 
custom-fabricated orthotics submitted by a supplier in one of those States 
be denied unless the claims contain one of the specialty codes listed in the 
transmittal.16  See Appendix B for the specialty codes listed in 
Transmittal 656.  Transmittal 656 also contains an attachment listing the 
Healthcare Common Procedure Coding System (HCPCS) codes for 
prosthetics and custom-fabricated orthotics affected by this payment edit. 
CMS also implemented Medicare quality standards that require DMEPOS 
suppliers to be accredited to furnish certain items and services, including 
prosthetics and orthotics.17  Quality standards are applied by independent 
accreditation organizations designated by the Secretary.18  CMS has 
deemed 10 organizations to be accrediting organizations, 9 of which 
(including ABC and BOC) are approved to accredit suppliers of 
prosthetics and custom-fabricated orthotics.19  Some suppliers, such as 
physicians, physical therapists, occupational therapists, prosthetists, and 
orthotists, are exempt from accreditation requirements.20 
 
16 Specialty codes indicate the specialty of the practitioner or supplier furnishing the item.  
For States that have licensure requirements, Transmittal 656 limits payment for 
prosthetics and custom-fabricated orthotics to items furnished by physicians, physical 
therapists, occupational therapists, prosthetic personnel, orthotics personnel, pedorthists, 
or medical supply companies with orthotics and/or prosthetics personnel as indicated by 
their specialty codes; these codes are listed in Transmittal 656. 
17 SSA  1834(a)(20)(A) (paragraph 1834(a)(20) was added by Section 302(a) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003, 
P.L. 108-173).  SSA  1834(a)(20)(F)(i) (subparagraph 1834(a)(20)(F), directing 
suppliers to submit evidence of accreditation by October 1, 2009, was added by 
Section 154(b) of the Medicare Improvements for Patients and Providers Act of 2008, 
P.L. 110-275). 
18 SSA  1834(a)(20)(A) and (B). 
19 Because the legal basis for these accreditation requirements is the DMEPOS quality 
standards, the accreditation requirements apply to a wide range of DMEPOS items, not 
just prosthetics and custom-fabricated orthotics.  Notwithstanding, the accreditation 
requirements included in the DMEPOS quality standards overlap with the BIPA payment 
requirements regarding qualified suppliers.  See SSA  1834(a)(20)(F)(i) regarding the 
Medicare quality standards accreditation requirement.  See also SSA  1834(h)(1)(F)(iv) 
on the subject of the BIPA payment requirement regarding qualified suppliers. 
20 SSA  1834(a)(20)(F)(ii).  CMS, One-Time Notification, Pub. No. 100-20, Transmittal 
710, Change Request 6566, dated May 21, 2010.  See also Attachment A of Transmittal 
710 for a full list of exempt suppliers. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  4   
   
All suppliers are responsible for the delivery of Medicare-covered items to 
beneficiaries and are required to maintain proof of delivery for 7 years.21, 22  
CMS guidance outlines documentation requirements for different methods 
of delivery.  Examples of delivery documentation include a delivery slip 
signed by the beneficiary or beneficiarys designee or, if the supplier uses 
a shipping service, the services tracking slip and the suppliers shipping 
invoice.23 
Previous OIG Work 
A 2000 OIG study found that miscoded orthotics resulted in $33 million in 
excessive Medicare payments in 1998.24  That study concluded that 
qualifications of orthotic suppliers varied, with noncertified suppliers 
being most likely to provide inappropriate devices and services.  The study 
also found that Medicare payments occurred even when the orthotics did 
not meet the specifications billed, the orthotics were not custom 
fabricated, or the parts billed were included in the base code for a larger 
orthotic. 
A 2011 OIG study examining questionable billings found that, in 2009, 
Medicare inappropriately paid $43 million for lower limb prostheses that 
did not meet local coverage determination requirements and that payments 
for these items could have been prevented by using claims-processing 
edits.25  Further, Medicare paid an additional $61 million for lower limb 
prostheses for beneficiaries who had not received an office visit or any 
other services from their referring physicians in the last 5 years.  The study 
also found that 267 suppliers providing lower limb prostheses had engaged 
in questionable billing practices.  The study concluded that Medicare 
contractors efforts to safeguard payments for lower limb prostheses 
varied. 
 
21 See 42 CFR  424.57(a), stating that a DMEPOS supplier is an entity or individual, 
including a physician or a Part A provider, which sells or rents Part B-covered items to 
Medicare beneficiaries and meets the supplier standards outlined in 42 CFR  424.57(c).  
The individual practitioners who received payments for the claims in our sample were 
also enrolled DMEPOS suppliers.  Therefore, they must meet the supplier standards.  
Because the individual practitioners were also enrolled DMEPOS suppliers, we use the 
term suppliers only when discussing our findings regarding delivery documentation. 
22 CMS, Medicare Program Integrity Manual, Pub. No. 100-08, ch. 4,  4.26.  See also, 
42 CFR  424.57(c)(12). 
23 Ibid., ch. 4,  4.26.1. 
24 OIG, Medicare Payments for Orthotics:  Inappropriate Payments, OEI-02-99-00120, 
March 2000. 
25 OIG, Questionable Billing by Suppliers of Lower Limb Prostheses, OEI-02-10-00170, 
August 2011. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  5   
   
METHODOLOGY 
We evaluated Medicare-allowed claims for prosthetics and 
custom-fabricated orthotics in 2010 to determine whether the claimed 
items were (1) furnished by qualified practitioners and (2) fabricated by 
either qualified practitioners or qualified suppliers.  We conducted 
structured interviews with CMS staff regarding the status of the 
implementation of the BIPA payment requirements.  For a sample of 
1,135 claims, we collected and reviewed documentation relating to (1) the 
qualifications of the practitioners and suppliers that furnished and/or 
fabricated the claimed items and (2) the delivery of the items.  All 
estimates in this report are projected to the specified population or 
subpopulation of allowed claims excluding accessories, additions, and 
other supplemental prosthetic and orthotic items (e.g., straps and joints 
added to a prosthetic limb). 
Scope 
We determined whether practitioners and suppliers were qualified to 
furnish and fabricate prosthetics and custom-fabricated orthotics using the 
definitions in Section 427(a) of the BIPA, together with the requirements 
in Transmittal 656 and the applicable quality standards.  We analyzed 
documentation submitted by the practitioners and suppliers that were paid 
for the sampled claims.  We did not determine the medical necessity of the 
claimed items.   
Population 
Our population included 257,797 Medicare-allowed claims in 2010, 
amounting to $276 million, for prosthetics and custom-fabricated 
orthotics.  The population excluded accessories, additions, and other 
supplemental prosthetic and orthotic items.  We obtained data from the 
2010 DME Standard Analytical File from the National Claims History 
File.  From the Standard Analytical File, we constructed a population of all 
allowed claims for prosthetics and custom-fabricated orthotics.  CMS 
provided a list of HCPCS codes for prosthetics and custom-fabricated 
orthotics.   
Sample Selection 
We selected a stratified random sample totaling 1,135 claims.  The sample 
had 12 strata based on specialty code and allowed dollar amounts.  See 
Table 1 for a summarized sampling design; Appendix C provides a table 
showing all 12 strata and details regarding the sample and population.  We 
designed the sample to produce estimates based on practitioner or supplier 
specialty codes and allowed dollar amounts.  As our data analysis 
progressed, it became clear that the number of unqualified practitioners 
and suppliers was too small for us to make reliable estimates based on 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  6   
   
specialty codes and allowed dollar amounts as we had planned.  Instead, 
we produced overall estimates of the number and amount of payments to 
unqualified practitioners and suppliers as defined in the BIPA payment 
requirements. 
 
Table 1:  Population and Sample Data for Medicare-Allowed Claims for Prosthetics 
and Custom-Fabricated Orthotics by Practitioner and Supplier Specialty, 2010 
Allowed 
Specialty  Allowed Claims  Sample Size 
Dollars 
Prosthetics:  Medical Supply Companies  $45,607,574  28,465  165 
Prosthetics:  Individual Practitioners   $118,473,931  69,997  335 
Prosthetics:  All Other Practitioners and Suppliers*  $11,309,824  10,023  115 
     Total Prosthetics:  $175,391,329  108,485  615 
Orthotics:  Medical Supply Companies  $24,950,710  29,663  145 
Orthotics:  Individual Practitioners   $46,099,212  57,572  220 
Orthotics:  All Other Practitioners and Suppliers*  $30,031,273  62,077  155 
     Total Orthotics:  $101,081,195  149,312  520 
     Overall Total:  $276,472,524  257,797  1,135 
Source:  OIG analysis of Medicare-allowed claims for prosthetics and custom-fabricated orthotics, 2010. 
*Transmittal 656 sets up these general groups of specialty codes, listing medical supply companies, prosthetic and orthotic 
personnel, physical and occupational therapists, and all other providers with specialty codes listed in Chapter 26 of the 
Medicare Claims Processing Manual.  The All Other Practitioners and Suppliers category includes physical and 
occupational therapists and all other providers with specialty codes listed in Chapter 26 of the Medicare Claims Processing 
Manual.  See Appendix D for a description of specialty codes for all other practitioners and suppliers. 
We did not send requests for documentation to the practitioners and 
suppliers for eight sampled claims because they were associated with 
ongoing OIG investigations.  As a result, we sent requests for 1,127 claims 
to practitioners and suppliers. 
Data Collection 
For each sampled claim, we sent a letter requesting documentation to 
support the certification, licensure, or accreditation of the practitioner that 
furnished and the practitioner or supplier that fabricated the prosthetic or 
custom-fabricated orthotic item.  We also requested documentation to 
support delivery of the item.  We sent a second letter to practitioners or 
suppliers that did not respond to our initial documentation request.  We 
attempted to contact practitioners or suppliers that did not respond to our 
second request by telephone to verify that they were in business and that 
we had the correct mailing address.  In a last attempt to contact the 
nonresponsive practitioners or suppliers, we sent a final certified letter 
through the U.S. Postal Service. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  7   
   
We received responses for 1,116 of the 1,127 claims for which we 
requested documentation, a response rate of 98 percent.26  Of the 
11 sampled claims for which we did not receive documentation, 8 were 
from practitioners or suppliers that received but did not respond to our 
request for documentation, 2 were from suppliers that did not respond to 
our request and whose operational status could not be confirmed, and 
1 was from a supplier that was no longer in business.27   
Data Analysis 
We determined whether the claimed prosthetic and custom-fabricated 
orthotic items were (1) furnished by qualified practitioners and 
(2) fabricated by either qualified practitioners or qualified suppliers.  
Although CMS may make different determinations when promulgating 
regulations to implement the BIPA payment requirements, for the purposes 
of this evaluation, we made certain broad assumptions regarding parts of 
the BIPA that are not yet defined.  We assumed that the nine organizations 
currently approved to accredit suppliers of prosthetics and custom-
fabricated orthotics will be approved once the BIPA payment requirements 
are implemented.  We did not make any assumptions about the criteria the 
Secretary will determine to be appropriate for facilities at which 
prosthetics and custom-fabricated orthotics are fabricated. 
Determination of Whether Practitioners and Suppliers Were Qualified.  In 
the 38 States that do not license prosthetists and orthotists, we considered 
items to have been furnished or fabricated by unqualified practitioners or 
suppliers if:  
  the furnisher (1) was not a physical or occupational therapist or a 
physician, or (2) did not have ABC or BOC certification on the date of 
the claim;28 or 
  the fabricator was not (1) a physical or occupational therapist or a 
physician, or (2) a practitioner that had ABC or BOC certification on 
 
26 We selected a sample of 1,135 claims but sent requests for documentation for only 
1,127 of those claims, as explained above.  To calculate the response rate, we divided the 
1,116 responses received by the total sample size of 1,135. 
27 We referred these 11 nonresponding practitioners and suppliers to CMS for appropriate 
action. 
28 BIPA, H.R. 5601, 106th Cong.  427(a) (2000), adding SSA  1834(h)(1)(F), 42 
U.S.C. 1395m(h)(1)(F).  Under the BIPA payment requirements, a qualified practitioner 
would also include an individual credentialed and approved by another program 
designated by the Secretary.  Therefore, if this provision is implemented, there may be 
other programs that can credential and approve individuals to become qualified 
practitioners. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  8   
   
the date of the claim, or (3) a supplier that had accreditation from one 
of the nine accrediting agencies on the date of the claim.29 
For claims from the 13 States that license prosthetists and orthotists, we 
considered items to have been furnished or fabricated by unqualified 
practitioners or suppliers if: 
  the furnisher (1) was not a prosthetist, orthotist, physical or 
occupational therapist, or physician; or (2) did not have licensure in 
the appropriate State on the date of the claim; or 
  the fabricator was not (1) a prosthetist, orthotist, physical or 
occupational therapist, or physician who had licensure in the 
appropriate State on the date of the claim; or (2) a supplier that had 
accreditation from one of the nine accrediting agencies on the date of 
the claim. 
In some cases, practitioners or suppliers indicated that a furnisher or 
fabricator was qualified but did not supply supporting documentation 
(e.g., a practitioner indicated that he or she was licensed but did not 
provide licensure documentation).  In these instances, we contacted the 
practitioner or supplier and requested the missing documentation a second 
time.  If the practitioner or supplier still did not provide the missing 
documentation, we attempted to verify the practitioners or suppliers 
qualifications by independently researching publicly available State 
licensure and/or certification and accreditation information online.  States 
and some certification and accreditation organizations maintain databases 
of their licensees and members online.  For example, if a practitioner 
claimed to be licensed by the State of Texas, we checked the Texas 
Department of State Health Services Web site to attempt to verify his or 
her licensure.  If a supplier claimed to be accredited by ABC, we checked 
the ABC Web site to verify that suppliers accreditation.  If we neither 
received documentation from the practitioner or supplier nor were able to 
independently verify the information, we considered the furnisher or 
fabricator unqualified. 
Determination of Delivery Documentation Errors.  In all States, we 
considered a claim to be allowed inappropriately if the documentation 
submitted did not meet Federal requirements for documentation of 
delivery to the beneficiary.  We determined claims to have been allowed 
inappropriately if we did not receive any delivery documentation or if the 
 
29 For purposes of the BIPA payment requirements, CMS has not issued guidance 
specifying which programs, if any, have accreditation and approval standards that are 
equivalent to ABC or BOC.  However, for this evaluation, we consider accreditation from 
any of the nine CMS-approved accrediting organizations to be sufficient. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  9   
   
documentation that was provided lacked a beneficiary or designee 
signature.30 
Communication With CMS Staff 
Throughout our data collection and analysis, we conducted structured 
interviews and corresponded via email with CMS staff regarding:  (1) the 
status of implementation of the BIPA payment requirements, and (2) the 
application of the requirements of Transmittal 656 and the Medicare 
quality standards to the practitioners and suppliers in our sample of claims. 
Limitations 
Our analysis was limited to the information available in the claims data 
and the documentation that we requested from the practitioners and 
suppliers of the sampled claims.  Therefore, we were unable to determine 
whether the furnishers and fabricators identified in the documentation that 
we received did indeed furnish and/or fabricate the prosthetic or 
custom-fabricated orthotic.  For example, if a claim in our sample was 
billed by a licensed prosthetist, we requested documentation to support the 
qualifications of the prosthetist listed on the claim.  Some items claimed in 
our sample were furnished by a registered assistant practicing under the 
supervision of a licensed prosthetist or orthotist.  We confirmed with CMS 
staff that a registered assistant met the definition of a qualified practitioner.   
It is possible that other items claimed in our sample were furnished by a 
registered assistant not practicing under the supervision of a licensed 
prosthetist or orthotist.  However, if the licensed prosthetist or orthotist did 
not inform us that the claimed item was furnished by the registered 
assistant and simply provided documentation to support his own 
qualifications, we had no way of determining that the registered assistant 
furnished the item. 
While we did not set out to review the payment edits based on specialty 
codes in Transmittal 656, we noted that some claims in our sample were 
from practitioners and suppliers with specialty codes not listed in 
Transmittal 656.  Our evaluation did not include determining why the 
payment edits failed; therefore, we cannot determine why claims were 
paid to practitioner and suppliers with specialty codes not listed in 
Transmittal 656. 
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
 
30 In cases in which the delivery documentation provided was a shipping receipt, the 
claim was not determined to be inappropriately allowed despite the lack of a beneficiary 
or designee signature. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  10   
   
FINDINGS 
CMS has not promulgated regulations related to 
payment requirements for practitioner and supplier 
qualifications for prosthetics and custom-fabricated 
orthotics 
Section 427(a) of the BIPA, enacted December 21, 2000, prohibits 
Medicare payment for prosthetics and custom-fabricated orthotics unless 
they are furnished by a qualified practitioner and fabricated by a qualified 
practitioner or a qualified supplier at a facility that meets criteria 
determined by the Secretary.  Section 427(b) requires the Secretary to 
promulgate regulations to implement section 427(a) of BIPA not later than 
December 21, 2001, using a negotiated rulemaking process.  To date, CMS 
has not promulgated regulations to implement this requirement. 
Beginning in 2002, CMS established a negotiated rulemaking committee 
and held several meetings to attempt to reach consensus on the substance 
of a proposed rule.31  CMS set a deadline of 6 months, beginning with the 
date of the first meeting (October 1, 2002), for the committee to complete 
work on the proposed rule.32  The final meeting of the negotiated 
rulemaking committee was scheduled for July 2003 (i.e., more than 
8 months after the first meeting), and the committee failed to reach 
consensus.33 
In 2002, CMS stated that if the negotiated rulemaking committee was 
unable to reach consensus, CMS would develop a proposed rule.34  
However, in October 2005, CMS indicated that it had terminated the 
rulemaking process in June 2005, almost 2 years after the final meeting of 
the negotiated rulemaking committee.35  Thus, despite the BIPA mandate 
to promulgate regulations to implement the BIPA payment requirements 
 
31 See, e.g., 67 Fed. Reg. 48839 (July 26, 2002) (announcing the establishment of the 
Negotiated Rulemaking Committee on Special Payment Provisions and Requirements for 
Prosthetics and Certain Custom-Fabricated Orthotics and the dates of the first two 
meetings) and 68 Fed. Reg. 38269 (June 27, 2003) (announcing the date of the final 
meeting). 
32 67 Fed. Reg. 13297 (March 22, 2002). 
33 68 Fed. Reg. 38269 (June 27, 2003). 
34 67 Fed. Reg. 13297 (March 22, 2002). 
35 A proposed rule implementing Section 427(a) was listed in the semiannual regulatory 
agenda, but CMS withdrew the item from its agenda in June 2005.  See, e.g., 
69 Fed. Reg. 73119, 73168 (Dec. 13, 2004); and 70 Fed. Reg. 26817, 26871 
(May 16, 2005) (providing a timetable for issuance of a proposed rule implementing 
Section 427 of the BIPA).  See 70 Fed. Reg. 64533, 64623 (Oct. 31, 2005) (indicating 
that action on the proposed rule was completed because it was withdrawn). 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  11   
   
no later than December 21, 2001, to date, no regulations have been 
promulgated. 
CMS has used other legal authorities that limit who 
can be paid for prosthetics and custom-fabricated 
orthotics; notwithstanding, in 2010, Medicare allowed 
nearly 1,000 claims inappropriately 
In lieu of implementing the BIPA payment requirements, CMS has used 
other legal authorities that limit who can be paid for prosthetics and 
custom-fabricated orthotics.36  For example, based on the supplier 
standards, CMS issued Transmittal 656, instructing its contractors to 
implement payment edits based on specialty codes in the 13 States that 
license prosthetists and orthotists.  Notwithstanding, in 2010, Medicare 
allowed 966 claims, totaling $776,154, for prosthetics and 
custom-fabricated orthotics from practitioners and suppliers in the 
13 States that license prosthetists and orthotists that did not have a 
specialty code listed in Transmittal 656.  Transmittal 656 states that claims 
from practitioners and suppliers with specialty codes not listed in that 
document should be denied payment.  Therefore, these payments were 
inappropriate. 
Another approach CMS used, based on the quality standards, mandates 
that all nonexempt DMEPOS suppliers attain accreditation.  See Appendix 
E for an overview of actions taken that limit who can be paid for 
prosthetics and custom-fabricated orthotics. 
Despite the lack of regulations, most claims were 
allowed for prosthetics and custom-fabricated 
orthotics furnished and/or fabricated by practitioners 
and/or suppliers that were licensed, certified, or 
accredited 
Approximately 97 percent of Medicare-allowed claims (246,081 claims) 
for prosthetics and custom-fabricated orthotics were for items furnished by 
practitioners and/or fabricated by practitioners or suppliers that were 
licensed, certified, or accredited per the BIPA definition of qualified 
practitioners or qualified suppliers.  The payments for these claims 
amounted to $260 million in 2010.  See Appendix F for 95-percent 
confidence intervals and sample sizes for all estimates presented in this 
report. 
 
36 The limits established based on the other legal authorities do not fulfill the mandate to 
promulgate regulations to implement the BIPA payment requirements.   
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  12   
   
Medicare inappropriately allowed 12 percent of claims 
for prosthetics and custom-fabricated orthotics that 
did not meet Federal requirements for delivery 
documentation 
For 12 percent of claims, amounting to $13.6 million, suppliers failed to 
provide documentation meeting Federal requirements to show that 
prosthetics and custom-fabricated orthotics were delivered to 
beneficiaries.  These claims were either missing all documentation of 
delivery, or lacked a beneficiary signature on the provided documentation.  
As Table 2 indicates, claims for custom-fabricated orthotics were more 
likely to lack delivery documentation.37  Tables F-2 and F-3 in Appendix F 
show the statistical tests supporting this analysis. 
Table 2:  Inappropriately Allowed Claims and Payments Because of Lack of 
Delivery Documentation 
Percentage of Claims  Inappropriate 
Type of Claim 
Inappropriately Allowed  Payments 
Overall   11.6*  $13,588,310 
Prosthetics  4.0  $4,771,226 
Custom-Fabricated Orthotics  17.2  $8,817,084 
*The weighted average of the inappropriately allowed rates for prosthetics and custom-fabricated 
orthotics using the estimated proportion of population claims for each type of claim as weights. 
Source:  OIG analysis of Medicare-allowed claims for prosthetics and custom-fabricated orthotics, 2011. 
Eight percent of claims had documentation of delivery that was 
insufficient because it lacked a beneficiarys or designees signature.  A 
beneficiarys or designees signature acknowledges that the beneficiary or 
designee received the item.  For 3 percent of claims, we received a 
response from the supplier, but the response did not include any 
documentation to support the delivery of the item.  Table 3 provides 
estimates of the claims lacking beneficiary or designee signatures on 
delivery documents or lacking delivery documents altogether. 
   
 
37 The percentage of custom-fabricated orthotics claims lacking delivery documentation 
was statistically higher than the percentage of prosthetics claims lacking delivery 
documentation based on a Wald chi-square test of independence at the 95-percent 
confidence interval. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  13   
   
Table 3:  Inappropriately Allowed Claims and Payments Because of Lack of 
Delivery Documentation by Type of Missing Documentation 
Type of Missing  Percentage of Inappropriately  Inappropriate 
Documentation  Allowed Claims   Payments 
Overall  11.6  $13,588,310 
Lacked Beneficiarys or 
8.3  $9,354,658 
Designees Signature 
Lacked Any Documentation To 
3.3  $4,233,652 
Support Delivery 
Source:  OIG analysis of Medicare-allowed claims for prosthetics and custom-fabricated orthotics, 2011. 
Other practitioners and suppliers of custom-fabricated 
orthotics, such as physicians, physical and occupational 
therapists, and podiatrists, were most likely to lack delivery 
documentation  
Other practitioners and suppliers (i.e., physicians, physical and 
occupational therapists, podiatrists, and orthopedic surgeons) of 
custom-fabricated orthotics were most likely to lack delivery 
documentation. 38  See Appendix D for a description of the specialty codes 
for all other practitioners and suppliers. 
As Table 4 shows, 40 percent of the other practitioners and suppliers of 
custom-fabricated orthotics lacked delivery documentation, whereas less 
than 4 percent of the medical supply companies and individual 
practitioners lacked delivery documentation.39  Tables F-2 and F-4 in 
Appendix F show the statistical tests supporting this analysis. 
   
 
38 Ten percent of other practitioners and suppliers who submitted claims for prosthetics 
lacked delivery documentation, whereas 1 percent of medical supply companies and 4 
percent of individual prosthetists lacked delivery documents.  However, these differences 
are not statistically significant and, therefore, other practitioners and suppliers of 
prosthetics were not more likely to lack delivery documentation than the medical supply 
companies or individual practitioners who submitted claims for prosthetics.                  
See Table F-2 in Appendix F for these point estimates and their confidence intervals. 
39 The percentage of other practitioners and suppliers of custom-fabricated orthotics 
lacking delivery documentation was statistically higher than both the percentages of 
medical supply companies and individual practitioners of custom-fabricated orthotics 
lacking delivery documentation at the 95-percent confidence interval. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  14   
   
Table 4:  Percentage of Practitioners and Suppliers of Custom-Fabricated 
Orthotics Lacking Delivery Documentation by Specialty 
Percentage of Providers Lacking 
Specialty  Claims in Sample 
Delivery Documentation 
Overall   17.2*  507 
Medical Supply Companies  3.2  139 
Individual Orthotists  0.2  219 
Other Practitioners and Suppliers  40.1  149 
*The weighted average of the percentages for each specialty using the estimated proportion of population claims 
for each specialty as weights. 
Source:  OIG analysis of delivery documentation for custom-fabricated orthotics, 2011. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  15   
   
CONCLUSION AND RECOMMENDATIONS 
Section 427(a) of the BIPA, enacted December 21, 2000, prohibits 
Medicare payment for prosthetics and custom-fabricated orthotics unless 
they are furnished by a qualified practitioner and fabricated by a qualified 
practitioner or a qualified supplier at a facility that meets criteria 
determined by the Secretary.  Section 427(b) requires the Secretary to 
promulgate regulations to implement section 427(a) of BIPA not later than 
December 21, 2001, using a negotiated rulemaking process.  To date, CMS 
has not promulgated regulations to implement this requirement.  In lieu of 
implementing the BIPA payment requirements, CMS has used other legal 
authorities that limit who can be paid for prosthetics and 
custom-fabricated orthotics.  For example, based on the supplier standards, 
CMS issued Transmittal 656, instructing its contractors to implement 
payment edits based on specialty codes in the 13 States that license 
prosthetists and orthotists.  Notwithstanding, in 2010, Medicare allowed 
966 claims, totaling $776,154, for prosthetics and custom-fabricated 
orthotics from practitioners and suppliers in the 13 States that did not have 
a specialty code listed in Transmittal 656.  Another method, based on the 
quality standards, mandates that all nonexempt DMEPOS suppliers attain 
accreditation. 
Despite the lack of regulations, approximately 97 percent of 
Medicare-allowed claims for prosthetics and custom-fabricated orthotics 
were for items furnished by practitioners and/or fabricated by practitioners 
or suppliers that were licensed, certified, or accredited per the BIPA 
definition of qualified practitioners or qualified suppliers.  Medicare 
inappropriately allowed an additional $13.6 million for prosthetics and 
custom-fabricated orthotics that did not meet Federal requirements for 
delivery documentation.  Other practitioners and suppliers of 
custom-fabricated orthotics, such as physicians, physical and occupational 
therapists, and podiatrists, were most likely to lack delivery 
documentation. 
To ensure appropriate Medicare payments and beneficiary quality of care, 
we recommend that CMS: 
Promulgate Regulations To Implement the BIPA Payment 
Requirements 
Section 427(b) of the BIPA required regulations to implement the payment 
requirements found in Section 427(a) to be promulgated no later than 
December 21, 2001; however, CMS failed to do so.  To comply with 
Federal law and clarify who may be paid for prosthetics and custom-
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  16   
   
fabricated orthotics, CMS should promulgate regulations to implement the 
BIPA payment requirements. 
Ensure That Suppliers Maintain Delivery Documentation That 
Meets Federal Requirements 
CMS should ensure that suppliers are aware of their responsibility to 
maintain delivery documentation.  CMS should consider aiming its 
education efforts at suppliers of custom-fabricated orthotics other than 
medical supply companies and individual practitioners because these 
other practitioners and suppliers (e.g., physicians, physical and 
occupational therapists, podiatrists, and orthopedic surgeons) are most 
likely to lack required delivery documentation.  CMS could accomplish 
this by educating suppliers that they must meet certain standards, 
including maintaining delivery documentation. 
Take Action To Address Inappropriately Allowed Claims 
Identified in the Population Related to Payment Edits and in 
Our Sample Related to Delivery Documentation 
We will provide information regarding the claims inappropriately allowed 
in the population related to payment edits and in our sample related to 
delivery documentation to CMS in a separate memorandum. 
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
In its comments, CMS concurred with all three recommendations.  In 
response to the first recommendation, CMS stated that it is developing 
proposed regulations to implement the BIPA payment requirements.  In 
response to the second recommendation, CMS stated that it will direct the 
NSC to disseminate educational material about maintaining delivery 
documentation on its Web site and through other media as appropriate.  In 
response to the final recommendation, CMS indicated that it will 
investigate our finding of inappropriate payments for claims paid to 
suppliers that did not meet the specialty requirements, and it will 
determine the need to strengthen the exiting claims processing edit, or 
establish a new edit, to ensure proper payment of claims.  See Appendix G 
for the full text of CMSs comments. 
We did not make any changes to the report based on the CMSs comments. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  17   
   
APPENDIX A 
Table A-1:  States That License Prosthetists and Orthotists 
Does State License  Number of 
States 
Prosthetists and Orthotists?  States 
Alabama, Arkansas, Florida, Georgia, Illinois, Mississippi, 
Yes  New Jersey, Ohio, Oklahoma, Rhode Island, Tennessee,  13 
Texas, Washington 
Alaska, Arizona, California, Colorado, Connecticut, 
Delaware, District of Columbia, Hawaii, Idaho, Indiana, Iowa, 
Kansas, Kentucky, Louisiana, Maine, Maryland, 
Massachusetts, Michigan, Minnesota, Missouri, Montana, 
No  38 
Nebraska, Nevada, New Hampshire, New Mexico, New York,  
North Carolina, North Dakota, Oregon, Pennsylvania, 
South Carolina, South Dakota, Utah, Vermont, Virginia, 
West Virginia, Wisconsin, Wyoming 
     Total:     51 
Source:  Office of Inspector General analysis of States licensing of prosthetists and orthotists, 2011. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  18   
   
APPENDIX B 
Specialty Codes Listed in Transmittal 656 
Transmittal 656 updated the Medicare Claims Processing Manual to 
require that, in those States that license prosthetists and orthotists, only 
claims for prosthetics and custom-fabricated orthotics from suppliers with 
the following specialty codes be paid:40 
  Medical supply company with orthotics personnelspecialty 
code 51; 
  Medical supply company with prosthetics personnelspecialty 
code 52; 
  Medical supply company with prosthetics and orthotics 
personnelspecialty code 53; 
  Orthotics personnelspecialty code 55; 
  Prosthetics personnelspecialty code 56; 
  Prosthetics personnel, orthotics personnel, and pedorthists 
(i.e., practitioners who design and fabricate therapeutic  
shoes)specialty code 57; 
  Physical therapistspecialty code 65; 
  Occupational therapistspecialty code 67; and 
  Any Medicare physician specialty code, as listed in  10.8.2 of 
chapter 26 of the Medicare Claims Processing Manual. 41 
 
40 Centers for Medicare & Medicaid Services, Medicare Claims Processing Manual 
(Internet-only manual), Pub. No. 100-04, ch. 20,  130.1. 
41 In addition, Transmittal 656 contains a list of Healthcare Common Procedure Coding 
System codes for prosthetics and custom-fabricated orthotics that are subject to the 
payment edits defined in the transmittal. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  19   
   
APPENDIX C 
Table C-1:  Detailed Sampling Design and Response Rates 
Average 
Number of  Response 
Total Claims in  Payment per  Claims in 
Stratum  Provider Type  Dollar Amount  Nonresponding  Rate 
Population  Population  Sample 
Sample Claims*  (Percentage) 
Claim 
Medical Supply 
1  $1$960  21,299  $570  80  4  (4)  95.0 
Companies 
Medical Supply 
2  Over $960  8,364  $1,530  65  2  (0)  96.9 
Companies 
3  Individual Practitioners  $1$930  42,829  $557  110  0  (0)  100.0 
4  Individual Practitioners  Over $930  14,743  $1,510  110  1  (1)  99.1 
5  Other Practitioners  $1$740  52,321  $338  95  3  (1)  96.8 
6  Other Practitioners  Over $740  9,756  $1,265  60  3  (1)  95.0 
     Total orthotics  149,312  $677  520  13  (7)  97.5 
Medical Supply 
7  $1$1,400  14,866  $454  45  3  (1)  93.3 
Companies 
Medical Supply 
8  Over $1,400  13,599  $2,857  120  0  (0)  100.0 
Companies 
9  Individual Practitioners  $1$1,360  34,592  $445  50  0  (0)  100.0 
10  Individual Practitioners  $1,361$4,250  33,120  $2,681  235  2  (0)  99.1 
11  Individual Practitioners  Over $4,250  2,285  $6,257  50  0  (0)  100.0 
12  Other Practitioners  All  10,023  $1,128  115  1  (0)  99.1 
     Total prosthetics  108,485  $1,617  615  6  (1)  99.3 
     Total overall  257,797  $1,072  1,135  19  (8)  98.3 
* The first value is the number of claims for which practitioners and suppliers did not respond.  The number in parentheses indicates how many of the nonresponding 
claims were from practitioners and suppliers that did not receive requests because they were associated with ongoing Office of Inspector General (OIG) investigations. 
 
Source:  OIG analysis of Medicare-allowed claims for prosthetics and custom-fabricated orthotics, 2011.
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  20   
   
APPENDIX D 
Specialty Codes for All Other Practitioners and Suppliers 
We selected a stratified random sample totaling 1,135 claims.  The sample 
had 12 strata based on specialty code and allowed dollar amounts.  We 
defined the following groups of specialty codes for use in stratification:  
medical supply companies (specialty codes 5153), individual 
practitioners of prosthetics and orthotics (specialty codes 5557), and all 
other practitioners and suppliers.  The specialty codes of the other 
practitioners and suppliers that were in our sample appear below. 
01General practitioner 
02General surgery 
08Family practice  
20Orthopedic surgery 
35Chiropractic 
40Hand surgery 
41Optometry 
48Podiatry 
54Medical supply company not included in specialty codes 5153 
65Physical therapist 
67Occupational therapist 
70Single or multispecialty clinic or group practice 
77Vascular surgery 
87All other suppliers (e.g., drugstores) 
99Unknown physician specialty 
A0Hospital 
A5Pharmacy 
A6Medical supply company with respiratory therapist 
B2Pedorthic personnel 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  21   
   
APPENDIX E 
Table E-1:  Actions Taken That Limit Who Can Be Paid for Prosthetics and Custom-Fabricated 
Orthotics 
Legal Basis 
   
Statutory Payment  Supplier Standard 
Date  Quality Standards  Additional Information 
Prohibition  42 CFR  
SSA  1834(a)(20) 
SSA*  1834(h)(1)(F)  424.57(c)(1) 
 
(1) Section 427(a) of BIPA added subsection 
Medicare, Medicaid, and  (F) to SSA  1834(h)(1), the payment 
SCHIP** Benefits  prohibition for prosthetics and certain 
Improvement and  custom-fabricated orthotics. 
Protection Act of 2000   
(BIPA) enacted:  (2) Section 427(b) of BIPA provided that [n]ot 
  later than 1 year after the date of enactment of 
December  (1) adding payment  this Act, the Secretary of Health and Human 
   
21, 2000  prohibition at  Services shall promulgate revised regulations 
1834(h)(1)(F), and  to carry out the amendment made by 
  subsection (a) using a negotiated rulemaking 
(2) mandating issuance of  process under subchapter III of chapter 5 of 
regulations within 1 year  title 5, United States Code.  However, to date, 
using negotiated  the Centers for Medicare & Medicaid Services 
rulemaking process  (CMS) has not promulgated regulations to 
implement this provision. 
 
CMS established the Negotiated Rulemaking 
Committee on Special Payment Provisions and 
Requirements for Prosthetics and Certain 
Custom-Fabricated Orthotics.  67 Fed. Reg. 
48839 (July 26, 2002).  According to that 
notice, the first meeting for the negotiated 
First scheduled negotiated  rulemaking committee was scheduled for 
October 1, 
rulemaking committee      October 13, 2002. 
2002 
meeting   
In an earlier notice of intent to establish the 
negotiated rulemaking committee at 67 Fed. 
Reg. 13297, 13300 (Mar. 22, 2002), CMS 
stated that [i]f the committee is unable to 
reach consensus, we will proceed to develop a 
proposed rule. 
In 68 Fed. Reg. 38269 (June 27, 2003), CMS 
Final scheduled negotiated  scheduled the final negotiated rulemaking 
July 14, 
rulemaking committee      committee meeting for July 14, 2003, and 
2003 
meeting  stated that the Committee does not anticipate 
the need for additional meetings. 
*Social Security Act. 
**State Childrens Health Insurance Program. 
 
 
   
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  22   
   
Table E-1:  Actions Taken That Limit Who Can Be Paid for Prosthetics and Custom-Fabricated Orthotics 
(continu ed) 
Legal Basis  
 
Statutory Payment  Supplier Standard  Additional Information  
Date   Quality Standards  
Prohibition   42 CFR  
SSA  1834(a)(20)  
SSA  1834(h)(1)(F)   424.57(c)(1)  
Section 302(a) of MMA added SSA  
1834(a)(20), requiring the Secretary of Health 
and Human Services (the Secretary) to 
establish and implement quality standards for  
Durable Medical Equipment, Prosthetics, 
Orthotics, and Supplies (DMEPOS) suppliers to 
Medicare 
be applied by independent accreditation 
Prescription Drug, 
organizations. It also requires suppliers to 
Improvement, and 
comply with the quality  standards  to furnish 
Modernization Act 
December 8,  items set forth in 1834(a)(20)(D), including 
    of 2003 (MMA) 
2003   prosthetic devices, orthotics, and prosthetics, 
enacted, adding 
and to receive or retain their provider or 
supplier quality  
supplier numbers.  
standards at SSA  
 
1834(a)(20).  
SSA  1834(a)(20)(E) permits the Secretary to 
establish the quality standards by program  
instruction or otherwise and requires the 
standards to be published on the Internet 
website of the Centers for Medicare & Medicaid 
Services. 
CMS issued Transmittal 
329, Change Request 
3373, entitled DMERC* 
Only  - Payment to  
Providers/Suppliers 
Qualified to Bill Medicare  
October 22,  for Prosthetics and Certain 
     
2004   Custom-Fabricated 
Orthotics.  
 
The effective date was 
July 1, 2005, but the 
transmittal was rescinded 
before that date.  
CMS rescinded 
November 23, 
Transmittal 329, Change       
2004  
Request 3373.  
In its semiannual  CMS included a Notice of Proposed Rule 
regulatory agenda, CMS  Making to implement 427 of BIPA in its 
stated that it was  semiannual regulatory agenda at 69 Fed. Reg. 
December 13,  considering issuance of a  73119, 74268 (Dec. 13, 2004), with a timetable 
   
2004   proposed rule  date of July 2005.  That date was postponed in 
implementing the payment  other Federal Register documents (see e.g., 70 
prohibition at  427 of  Fed. Reg. 26817, 26871 (May 16, 2005) 
BIPA by July 2005.  (postponing date to November 2005)).  
*Durable Medical Equipment Regional  Carrier (DMERC). 
   
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)   23    
Table E -1:  Actions T aken That Limit Who Can Be Paid for Prosthetics and Custom-Fabricated Orthotics 
(continued) 
 
Legal Basis 
 
Statutory Payment  Supplier Standard  Additional Information 
Date  Quality Standards 
Prohibition  42 CFR  
SSA  1834(a)(20) 
SSA  1834(h)(1)(F)  424.57(c)(1) 
CMS issued  Acknowledging the absence of national 
Transmittal 656,  Medicare payment policy regarding who may 
Change Request  bill and be paid for prosthetics and certain 
3959, entitled Full  custom-fabricated orthotics, Transmittal 656 
Replacement of  directed Durable Medical Equipment Medicare 
Change Request  Administrative Contractors (DMEMACs) to 
3607, Payment Edits  implement payment edits in States that 
in Applicable States  license/certify orthotists or prosthetists, 
August 19,  for DMEPOS  effective October 1, 2005.  This transmittal was 
   
2005  Suppliers of  based on the supplier standard at 42 CFR 
Prosthetics and  424.57(c)(1), requiring suppliers to comply with 
Certain  all applicable Federal and State licensure and 
Custom-Fabricated  regulatory requirements. 
Orthotics, Change   
Request 3607 is  Transmittal 656 also revised Chapter 20, 
rescinded (DMERC  section 130.1 of the Medicare Claims 
only).  Processing Manual, Pub. No. 100-04, to 
  address this payment edit. 
In its semiannual 
regulatory agenda, CMS 
indicated that the 
October 31,  proposed rule that would  See 70 Fed. Reg. 64553, 64623 
   
2005  have implemented  (Oct. 31, 2005). 
section 427 of BIPA was 
[w]ithdrawn on 
June 28, 2005. 
CMS announced 
that it had deemed 
May 25,  10 national 
    See 72 Fed. Reg. 29326 (May 25, 2007). 
2007  accreditation 
organizations for 
DMEPOS. 
Transmittal 236 added a new  21.1 (entitled 
DMEPOS Supplier Accreditation) to 
Chapter 10 of the Medicare Program Integrity 
Manual, Pub. No. 100-08, providing that: 
 
(1) on or after March 1, 2008, new DMEPOS 
suppliers must be accredited before submitting 
an application to the National Supplier 
Clearinghouse (NSC); 
CMS issued   
Transmittal 236,  (2) DMEPOS suppliers that enrolled for the first 
February 1,  Change Request  time with NSC between January 1 and 
   
2008  5892, entitled  February 28, 2008, must obtain and submit 
Update to  evidence of accreditation to NSC by 
Chapter 10.  January 1, 2009; 
 
(3) DMEPOS suppliers that enrolled in 
Medicare prior to January 1, 2008, must 
provide evidence of accreditation to NSC by 
September 30, 2009; and 
  
 (4) NSC shall revoke a suppliers billing 
privileges if the supplier fails to obtain and 
submit required evidence of accreditation. 
   
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  24   
Table E -1:  Actions T aken That Limit Who Can Be Paid for Prosthetics and Custom-Fabricated Orthotics 
(continued) 
 
Legal Basis 
Date  Statutory Payment  Supplier Standard  Additional Information 
Quality Standards 
Prohibition  42 CFR  
SSA  1834(a)(20) 
SSA  1834(h)(1)(F)  424.57(c)(1) 
Section 154(b) of MIPPA added subparagraph 
(F) to SSA 1834(a)(20): 
 
(1) requiring suppliers furnishing items and 
services on or after October 1, 2009, directly or 
as a subcontractor for another entity, to have 
Medicare 
submitted evidence of accreditation; 
Improvements for 
 
Patients and 
(2) stating that eligible professionals (as defined 
Providers Act of 
at SSA 1848(k)(3)(B)) and other persons 
2008 (MIPPA) 
specified by the Secretary are exempt from the 
July 15,  enacted, adding 
    accreditation deadline, unless the Secretary 
2008  SSA 
determines that the quality standards are 
 1834(a)(20)(F), 
specifically designed to apply to such 
requiring suppliers 
professionals and persons; and 
to provide evidence 
 
of accreditation by 
(3) allowing the Secretary to exempt such 
October 1, 2009. 
professionals and other persons specified by 
the Secretary from the accreditation deadline if 
the Secretary determines that licensing, 
accreditation, or other mandatory quality 
requirements apply to such professionals and 
persons. 
This final guidance (the DMEPOS Quality 
Standards) is at 
http://www.cms.gov/Medicare/Provider-
CMS issued final 
Enrollment-and-
guidance entitled 
Certification/MedicareProviderSupEnroll/Downl
Durable Medical 
oads/DMEPOSAccreditationStandardsCMB.pdf 
Equipment, 
October   
    Prosthetics, 
2008  Appendix C of the DMEPOS Quality Standards 
Orthotics, and 
is entitled Custom Fabricated and Custom 
Supplies 
Fitted Orthoses, Prosthetic Devices, External 
(DMEPOS) Quality 
Breast Prostheses, Therapeutic Shoes and 
Standards 
Inserts, and their Accessories and Supplies; 
Custom-Made Somatic, Ocular and Facial 
Prostheses. 
CMS issued a 
document entitled  This document lists the 10 accreditation 
Medicare New  organizations and refers to the DMEPOS 
Deemed  Quality Standards document. 
Accreditation   
Organizations For  This document is at: 
May 4, 
    Suppliers of  http://www.cms.gov/Medicare/Provider-
2010 
Durable Medical  Enrollment-and-
Equipment,  Certification/MedicareProviderSupEnroll/Downl
Prosthetics,  oads/DeemedAccreditationOrganizationsCMB.
Orthotics and  pdf 
Supplies   
(DMEPOS). 
   
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  25   
Table E- 1:  Actions T aken That Limit Who Can Be Paid for Prosthetics and Custom-Fabricated Orthotics 
(continued) 
 
Legal Basis 
Date  Statutory Payment  Supplier Standard  Additional Information 
Quality Standards 
Prohibition  42 CFR  
SSA  1834(a)(20) 
SSA  1834(h)(1)(F)  424.57(c)(1) 
Transmittal 710 identified the following as 
being exempt from the September 30, 2009, 
accreditation deadline: 
 
(1) eligible professionals (as defined at SSA 
1848(k)(3)(B)), including, but not limited to, 
physicians, physical therapists, and 
occupational therapists; and 
CMS issued 
 
Transmittal 710, 
(2) specified other persons, including, but not 
Change Request  
limited to, orthotists and prosthetists. 
6566, entitled 
(See Attachment A of Transmittal 710.) 
Guidance on 
 
Implementing 
If a supplier is not exempt from accreditation, 
May 21,  System Edits for 
    Transmittal 710 directs DMEMACs to deny a 
2010  Certain Durable 
suppliers claim for Healthcare Common 
Medical 
Procedures Coding System (HCPCS) codes in 
Equipment, 
Attachment C if the supplier has not been 
Prosthetics, 
identified by NSC as being accredited to supply 
Orthotics, and 
the specific product/service.  This requirement 
Supplies 
applies to claims with dates of service on or 
(DMEPOS) 
after July 6, 2010. 
 
Transmittal 710 states that edits for 
accreditation will begin by phasing in a limited 
number of product categories and HCPCS 
codes, as listed in Attachment C....  
Attachment C does not include orthotics or 
prosthetics. 
Source:  Office of Inspector General analysis of actions taken that limit who can be paid for prosthetics and custom-fabricated orthotics, 2012. 
   
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  26   
   
APPENDIX F 
Table F-1:  Point Estimates, Sample Sizes, and Confidence Intervals 
Estimate Description  Sample Size  Point Estimate  95-Percent Confidence Interval 
Estimates Related to Practitioner and Supplier Qualifications 
Percentage of claims that were furnished and 
fabricated by qualified providers as defined in 
the Medicare, Medicaid, and SCHIP* Benefits  1,116  97.3  96.298.1 
Improvement and Protection Act of 2000 (BIPA) 
in 2010 
Total claims for items furnished by practitioners 
and/or fabricated by practitioners or suppliers 
that were licensed, certified, or accredited per  1,116  246,081  242,668.5249,494.2 
the BIPA definition of qualified practitioners or 
qualified suppliers in 2010 
Payments for claims for items furnished by 
practitioners and/or fabricated by practitioners 
or suppliers that were licensed, certified, or  1,116  $259,998,432.51  $253,578,219.90$266,418,645.12 
accredited per the BIPA definition of qualified 
practitioners or qualified suppliers in 2010 
Estimates Related to Delivery Documentation 
Payments for claims that did not meet Federal 
1,116  $13,588,310  $10,162,404$17,014,217 
requirements for delivery documentation 
Percentage of claims that did not meet Federal 
1,116  11.6  9.514.2 
requirements for delivery documentation 
Percentage of prosthetics claims that did not 
meet Federal requirements for delivery  609  4.0  2.27.1 
documentation 
Payments for prosthetics claims that did not 
meet Federal requirements for delivery  609  $4,771,226  $2,388,422$7,154,030 
documentation 
Percentage of custom-fabricated orthotics 
claims that did not meet Federal requirements  507  17.2  13.921.2 
for delivery documentation 
Payments for custom-fabricated orthotics 
claims that did not meet Federal requirements  507  $8,817,084  $6,355,564$11,278,605 
for delivery documentation 
Percentage of claims that lacked beneficiary 
1,116  8.3  6.410.8 
signatures on delivery documentation 
Percentage of claims that lacked any 
1,116  3.3  2.15.1 
documentation to support delivery  
Payments for claims that lacked beneficiary 
1,116  $9,354,658  $6,487,93012,221,386 
signatures on delivery documentation 
Payments for claims that lacked any 
1,116  $4,233,652  $2,190,121$6,277,183 
documentation to support delivery 
Source:  Office of Inspector General (OIG) analysis of Medicare-allowed claims for prosthetics and custom-fabricated orthotics, 2011. 
*State Childrens Health Insurance Program, now referred to as CHIP.
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  27   
   
Table F-2:  Point Estimates and Confidence Intervals Related to Delivery Documentation 
by Supplier Specialty  
95-Percent Confidence 
Estimate Description  Sample Size  Point Estimate 
Interval 
Percentage of claims from other practitioners and 
suppliers of custom-fabricated orthotics lacking  149  40.1  31.849.1 
delivery documentation 
Percentage of claims from medical supply 
companies providing custom-fabricated orthotics  139  3.2  1.38.0 
lacking delivery documentation 
Percentage of claims from individual practitioners 
providing custom-fabricated orthotics lacking delivery  219  0.2  0.031.6 
documentation 
Percentage of claims from other practitioners and 
suppliers of prosthetics lacking delivery  114  10.5  6.117.6 
documentation 
Percentage of claims from medical supply 
companies providing prosthetics lacking delivery  162  1.2  0.43.7 
documentation 
Percentage of claims from individual practitioners 
333  4.1  1.89.3 
providing prosthetics lacking delivery documentation 
Source:  OIG analysis of Medicare-allowed claims for prosthetics and custom-fabricated orthotics, 2012. 
 
Table F-3:  Chi Square Analysis on Delivery Documentation and Claim Type 
Claim Type Compared   Group A  Group B  Wald Chi-Square  F-Test Degrees of 
P-Value 
(Group A vs. Group B)  Rate  Rate  Test Statistic  Freedom 
Prosthetics vs.  numerator = 1 
4.0  17.2  36.1  <0.0001 
Custom-Fabricated Orthotics  denominator = 1104 
Source:  OIG analysis of Medicare claims data and supplier documentation, 2012. 
Table F-4:  Chi Square Analysis on Delivery Documentation and Practitioner and Supplier 
Specialty 
Practitioner and Supplier  Wald 
Group A  Group B  F-Test Degrees of  Bonferroni  Unadjusted 
Specialties Compared   Chi-Square 
Rate  Rate  Freedom  Threshold*  P-Value 
(Group A vs. Group B)  Test Statistic 
Medical Supply Companies 
numerator = 1 
vs. Other Practitioners and   3.2  40.1  61.1  0.01667  <0.0001 
denominator = 284 
Suppliers 
Individual Practitioners vs. 
Numerator = 1 
Other Practitioners and  0.2  40.1  79.6  0.01667  <0.0001 
Denominator = 364 
Suppliers 
*We did not plan on statistically testing whether other practitioners and suppliers were more likely to lack required delivery documentation than 
medical supply companies and individual practitioners, but we saw this through exploratory data analysis.  Consequently, we included a Bonferroni 
correction to account for this in the two comparisons above to keep our confidence level for these comparison tests at 95 percent.  For the percentages 
for the groups compared to be considered statistically different at the 95-percent confidence level, the unadjusted p-values need to be less than the 
Bonferroni Threshold of 0.05/3 = 0.01667.   
Source:  OIG analysis of Medicare claims data and supplier documentation, 2012. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  28  APPENDIX G 
Agency Comments 
Cl 
AAmilli~thltur 
nc x:r.&n 
w..~~>~M 
DAltt 	 MJG 1 1 2lH! 
'fO:  &tiel R. Levin$>'m 
ln~t'!<!c\fll: Ge.netal 
FROM: 	 ~-~'f"tll'l'~ 

Acting Adlt#!ni.mawr 

SOOJJ.lCf: 	 Olliee oflr~O<:!Wtld f0K1) Drn.fi Report; "CMS H~:~ No~ l'tottlcul~ated 

ltcgul:;tfiOt\11 to Establish l1aym<:tlt Requirements 1\n P'mslheticsand Custum

F~ ed Orthotks" (0 EI.07.ttl.-00410) 

The Centet''l for Medicate & MedicaiJ Sc.rvices {CMSI appreciroes the oPf!Qrtt~nit) to'( Ir e~ie  and 

i:X~UIInent oo the Of(i dm.t\ ft!l<)l't entitled. "CM~ Has Not f'tl!l.nulgateJ Regul:utions  Establislt 

Payment Requirernmu ror l,'n>titbeti<..'Sarul {,utifOf!lFahrkated Onhntk:.."'  Scction 427tn) ofthc: 

Med1t"l!J"e, Medicaid, and State O tldnm Hmlt k hl-.;utuce Pt~g:rnmBendll!> impti)Vill'l'Wnt ud 

Pt~Jt-ection Act f>f ~!000 {BI Pi\) pt\>hi!~its Medicare tta;mmts fm fll'lhthcties and .cu:.too:~> 

fnhticate<J mtlt(>tics ttnlesl>. tht' items are {I) filtlll.sh<d hr a (ltullified pmctitiutl<':t. and I~} 

fi1bfkured try citl-1" a.q uaiHicd prnclitiuru;r or a qualified 'IU~)plier at a lhciifiy thm m~~-cts such 

crilc:ria &.'>the &"\:rctacy detertrtil1i' appropru1  Ti'.cse qualifk,ali<ms tire htt<tlded lu prntet:l 

I'IC'Iu:lidaries, promote lugh quality a tre. aoo .lia~:uuro Mctticare funds b) msurin  that P!l!l)' 

qualified indhi<tuals and health cm-e organih:Kim:u fttm!!lh Mcdiare itttt1s and service 

The (:MS take!l :u:ri wdy ils rc>JX>nsibility to ~1the Mediet~re Tt'Utlt Funds and ensure that 

IJ0)!1'tldlU mllilk to  o ld:et~ IUld suwlim for ea.,~health ~"!.\ ~rvi<;a 11re approprlalc and 

c  tstcnl wit!t Medicare J(rcy  CMS Is~~the p~t1f dt I  ~ p:rup;.t&ed    tivm to 

implementlbe fUPA pmviMons. 

As detai.~ in OI<J, ~C~-IS ha'.l takfl atthm by Is-suing Tfmxsmiltal 656 (Chug.e Request 
3?59. issued on 1\Uitusl tq. ~I:JOS') n:nl$ttlittal 656 di&cecet the t.~~-----lt-------
~;laims pr~,jn eJi1 tQ ensme tlmt prof!Cf ~itinguf mat !l.t~daim ~in oe<lil' in tho!SC 
~~~where prusthetics {II onhotits mu~l be provided by a li~or ~ified ot1bvt1~ {or 
rrosthetist  Uwu ~tthout rcgulat  in place. the rc;p<n1 ti;nmd that 91 ~rcent ufM~Icare
aJ.kl\\~claim:> for p.rostbctk11 lflil'ld tl.l.<iW~U-fahricated ortltuli  \\<'el (ot ifA:mi> 1\mlish\.-d by 
! i~. tmlftc<t m aeere~fi~ provi<Jer'$ ud  ~$1~.: 
We apj''l:.'X':iah:; OlG' s eltoos In worldn& wilh CMS to help cftsute tlmt prosd>~k,-s tuld <U$1! 

tiihricw:d <Jttholics  tt(l.t wntili~.~t to he vulnemhle to uln.l&e. Our respt1fH>e.'l: to tile ()JG 

re\.~.WI  fotro:w. 

CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  29   
   
Agency Comments (continued)   
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  30   
   
Agency Comments (continued)   
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  31   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Brian T. Pattison, Regional 
Inspector General for Evaluation and Inspections in the Kansas City 
regional office, and Brian T. Whitley, Deputy Regional Inspector General. 
Rae Hutchison served as the project leader for this study.  Other Office of 
Evaluation and Inspections staff from the Kansas City regional office who 
conducted the study include Jordan Clementi and Michala Walker.  Central 
office staff who provided support include Kevin Farber, Scott Manley, and 
Debra Roush. 
CMS Has Not Promulgated Regulations To Establish Payment Requirements (OEI-07-10-00410)  32   
Office of Inspector General 
http://oig.hhs.gov 
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health and Human Services 
(HHS) programs, as well as the health and welfare of beneficiaries served by those 
programs.  This statutory mission is carried out through a nationwide network of audits, 
investigations, and inspections conducted by the following operating components: 
Office of Audit Services 
The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 
audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying 
out their respective responsibilities and are intended to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and 
mismanagement and promote economy and efficiency throughout HHS. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) conducts national evaluations to provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud, waste, or abuse and promoting 
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations 
of fraud and misconduct related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI utilizes its resources 
by actively coordinating with the Department of Justice and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to criminal 
convictions, administrative sanctions, and/or civil monetary penalties. 
Office of Counsel to the Inspector General 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 
OIG, rendering advice and opinions on HHS programs and operations and providing all 
legal support for OIGs internal operations.  OCIG represents OIG in all civil and 
administrative fraud and abuse cases involving HHS programs, including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program guidance, publishes fraud alerts, and provides other 
guidance to the health care industry concerning the anti-kickback statute and other OIG 
enforcement authorities.