Department  of  Health  and Human  Services 
OFFICE  OF

NSPECTOR  GENERAL

MARKETING  OF  ORTHOTIC 
BODY  JACKETS 
MANAGEMENT  ADVISORY  REPORT 
MARCH  1994  OEI-O4-92-O1O81
 Department  of  Health  and Human  Services 
OFFICE  OF 
NSPECTOR  GENERAL 
MARKETING  OF  ORTHOTIC 
BODY  JACKETS 
MANAGEMENT  ADVISORY  REPORT 
MARCH  1994  OFFICE OF INSPECTOR GENERAL 
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 three OIG operating components:  the Office of Audit Services, the 
Office of Investigations, and the Office of Evaluation and Inspections.  The OIG also informs 
the Secretary of HHS of program and management problems and recommends courses to 
correct them. 
OFFICE OF AUDIT  SERVICES 
The OIGS Office of Audit Services (OAS) provides all 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 in order to reduce waste, abuse, and 
mismanagement and to promote economy and efficiency throughout the Department. 
OFFICE OF INVESTIGATIONS 
The OIGS Offke  of Investigations (01) conducts criminal, civil, and administrative 
investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries and of 
unjust enrichment  by providers.  The investigative efforts of 01 lead to criminal convictions, 
administrative sanctions, or civil money penalties.  The 01 also oversees State Medicaid fraud 
control units which investigate and prosecute fraud and patient abuse in the Medicaid program. 
OFFICE OF EVALUATION  AND  INSPECTIONS 
The OIGS Office of Evaluation and Inspections (OEI) conducts short-term management  and 
program evaluations (called inspections) that focus on issues of concern to the Department, 
the Congress, and the public.  The findings and recommendations contained in these inspection 
reports generate  rapid, accurate, and up-to-date information on the efficiency, vulnerability, 
and effectiveness of departmental  programs. 
OEISAtlanta  Regional Office prepared  this report under the direction of Jesse J. Flowers, 
Regional Inspector  General,  and Christopher Koehler, Deputy Regional Inspector  General. 
Principal OEI staff included: 
Atkmta Region  Headquarters 
Jacqueline Andrews, Project Leader  Tom Noplock

Betty Apt, Team Leader  Barbara Tedesco

Peggy Daniel

Joe Townsel

To obtain a copy of this report, call the Atlanta Regional Office at (404) 331-5022.
 EXECUTIVE  SUMMARY

PURPOSE 
To  describe  marketing  practices  of orthotic  body jacket  suppliers. 
BACKGROUND 
In  1993, the  Office  of Inspector  General  (OIG)  conducted  an  inspection  to determine 
whether  or not  Medicare  was appropriately  billed  for orthotic  body jackets.  We  found 
that 
Medicare  claims  and  allowed  charges  for orthotic  body jackets  have  increased 
	
substantially  since  1990, and 
95 percent  of the  orthotic  body jacket  claims  paid  by Medicare  in  1991 under 
	
code  L0430 were  for non-legitimate  devices.  They  did not  meet  the 
construction  requirements  and  medical  purpose  of legitimate  body jackets. 
While  conducting  the  inspection,  we found  that  many  suppliers  had  questionable 
marketing  practices  and  billed  Medicare  for non-legitimate  devices. 
FINDINGS 
SupplikIX,Rather  ?7um Physkians,  Initiated  Orders for  Non-Le@imate  Body  Jackets 
Licensed  orthotists  told  us physicians  should  refer  patients  needing  orthotic  body

jackets  to  orthotic  suppliers.  The  orthotists  said suppliers  should  not  independently

market  devices  to patients  themselves.  The  suppliers  of orthotic  body jackets  should

have  licensed  orthotists  trained  to take  patients  measurements  and  custom-fit  devices.

The  non-legitimate  devices  we found  in our  sample  were  marketed  by Durable

Medical  Equipment  (DME)  salespersons  before  prescriptions  or Certificates  of

Medical  Necessity  (CMNS) were  written  by physicians.  Typically,  DME  salespersons

marketed  their  devices  for use by nursing  home  residents.  Salespersons  presented

their  products  to nursing  home  directors  and  physical  therapists  as restraint

alternatives  to help  patients  sit upright  in wheelchairs.  When  a patient  agreed  to

purchase  a device,  salesmen  either  completed  a CMN  or prescription,  or gave  nursing

home  staff wording  to use  and  they  completed  the  CMN.  The  nursing  home  staff  then

sent  the  CMN  to a physician  for signature.  Either  the  DME  salesperson  or the

nursing  home  physical  therapist,  not  a trained  orthotist,  made  any adjustments  to the

device.

i  Physic&ms  Roviiez.i  No  Control  for  I%venting  Sales  of Non-Legitimate  Devices 
Most  physicians  of beneficiaries  in our  sample  with non-legitimate  devices  were  not 
aware  of what  they  had  signed  a prescription  or CMN for.  They  simply  signed 
prescriptions  or  CMNS that  had  been  completed  either  by suppliers  or nursing  home 
staff  using  suppliers  wording.  Twenty-two  of 38 physicians  who had  signed  CMNS for 
non-legitimate  devices  had  never  seen  the  devices.  Eleven  of the  22 had  no record  of 
prescribing  any  type  of device.  Most  physicians  who had  seen  devices  did not  realize 
suppliers  had  billed  Medicare  for more  sophisticated  devices.  They  assumed  suppliers 
had  billed  for  cushioned  wheelchair  seating  supports  rather  than  custom-fit  orthotic 
body jackets. 
CMNS  Did  Not  Assure  Mdical  Necessity 
CMNS were  signed  by physicians  even  though  patient  diagnoses  and  conditions  listed 
on CMNS did  not  support  the  need  for orthotic  body jackets. 
Licensed  orthotists  told  us legitimate  orthotic  body jackets  are  commonly  used  to treat 
injuries  to  the  spine  such as vertebra  fractures  and  compression,  and  to facilitate 
healing  following  a surgical  procedure  on the  spine  or related  tissues. 
None  of the  diagnoses  listed  on CMNS for non-legitimate  devices  indicated  spinal 
injuries  or surgical  procedures.  The  diagnoses  suggested  that  the  patients  could  have 
problems  sitting  upright  in wheelchairs,  but  most  conditions  were  associated  with 
advanced  age  rather  than  spinal  injuries.  Frequently  mentioned  conditions  were 
dementia,  osteoarthritis,  Alzheimers  and  Parkinsons. 
CONCLUSION 
To  market  a non-legitimate  device  as an orthotic  body jacket,  DME  suppliers  took 
advantage  of (1)  nursing  homes  desires  for restraint  alternatives,  (2) nursing  home 
patients  with  both  Medicare  and  Medicaid  not having to pay for the  products,  and  (3) 
physicians  laxity  in attention  to CMNS they signed.  The  extent  of this practice  raises 
serious  questions  about  the  value  of CMNS and marketing  in nursing  homes  (95 
percent  of our  sample  were  non-legitimate  devices). 
OIG  has  inspections  planned  that  will study this issue in detail.  The  inspections  will 
look  at  (1)  the  usefulness  of CMNS, (2) the  appropriateness  of payments  for 
equipment,  supplies,  and  professional  services  provided  to beneficiaries  in nursing 
homes,  and  (3)  the  role  of physicians  in controlling  patients  medical  care. 
In the  meantime,  we suggest  that  HCFA  continue  to alert  their  regional  fraud  and 
abuse  coordinators  and  contractors  to potential  abuse  in this area,  and  advise 
contractors  to  exercise  diligence  in reviewing  claims for orthotic  body jackets. 
ii  TABLE  OF  CONTENTS

PAGE 
EXECUTIVE  SUMMARY 
INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

FINDINGS 
Suppliers  Initiated  Orders  for Non-Legitimate

Body Jackets  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...3

Physicians  Provided  No Control  in Preventing

Sales of Non-I@timateD  evices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...3

CMNs  Did  Not  Assure  Medical  Necessity  . . . . . . . . . . . . . . . . . . . . . . . . . . . ..4

CONCLUSION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5
 INTRODUCTION

PURPOSE 
To  describe  marketing  practices  of orthotic  body jacket  suppliers. 
BACKGROUND 
In  1993, the  Office  of Inspector  General  (OIG)  conducted  an inspectionto  determine 
whether  or not  Medicare  was appropriately  billed  for orthotic  body jackets.1  The 
inspection  was conducted  in response  to an allegation  from  a company  which  provides 
Medicare  billing  services  to nursing  homes.  The  allegation  was that  suppliers  were 
billing Medicare  approximately  $1,200 per  claim  for devices  consisting  of nothing 
more  than  a $50 piece  of foam  rubber.  The  bills were  submitted  to Medicare  with  a 
code  used  for  devices  described  by the  Health  Care  Financing  Administration  (HCFA) 
as a Thoracic  Lumbar  Sacral  Orthosis  (TLSO),  Anterior-Posterior-Lateral  Control 
(Body Jacket)  with  interface  material  custom  fitted. 
The  OIG  inspection  found  that 
Medicare  claims  and  allowed  charges  for orthotic  body jackets  have  increased 
	
substantially  since  1990, and 
95 percent  of the  orthotic  body jacket  claims paid  by Medicare  in 1991 under 
	
code  L0430  were  for non-legitimate  devices.  They  did not  meet  the 
construction  requirements  and  medical  purpose  of legitimate  body jackets. 
While  conducting  the  study, we found  that  many  suppliers  used  questionable 
marketing  practices  and  billed  Medicare  for non-legitimate  detices.  Their  practices 
differed  from  marketing  practices  of suppliers  of legitimate  devices.  We  describe 
those  differences  in this Management  Advisory  Report. 
SCOPE 
We  focused  this inspection  on marketing  practices  for devices  sold under  code  L0430 
of the  HCFA  Common  Procedure  Coding  System.  Our  analysis  of 1991 data  for  all 
body jacket  codes  showed  that  code  L0430 had  the  most  significant  increase  in number 
of claims.  We  conducted  our  inspection  between  May and  October,  1993. 
~Officeof InspectorGeneral,UnitedStatesDepartmentofHealthandHumanSewices,Medicare 
Paymentsfor Orthotic BodyJackets. OEI-O4-92-O1O8O. 
1  METHODOLOGY

We  reviewed  a one  percent  random  sample  of all Medicare  paid  claims  for code

L0430  shown  in HCFAS  1991 Common  Working  File.  Our  sample  comprised  95

claims.

To  determine  marketing  practices  of the  suppliers  who sold devices  to beneficiaries  in

our  sample,  we interviewed  46 nursing  home  administrators.  Forty-four  of our

intemiews  were  by telephone.  We  also reviewed  marketing  brochures  for  all 21

suppliers  who  had  claims  appearing  in our sample.

To  determine  how suppliers  of legitimate  body jackets  marketed  their  devices,  we

consulted  five licensed  orthotists,  three  of whom  were  members  of the  American

Orthotic  and  Prosthetic  Association  (AOPA).

To  determine  physicians  awareness  of what  they had  prescribed,  we sent

questionnaires  to the  55 physicians  in our sample  for whom  we had  addresses.

Medicare  requires  that  body jackets  be  prescribed  by physicians.  We  got  physicians

addresses  from  Certificates  of Medical  Necessity  (CMNS) that  suppliers  submitted  with

their  claims.  Sixty-four  of the  claims  in our  sample  were  accompanied  by CMNS, and

55 of those  CMNS listed  the  physicians  address.  Forty  of the  55 (73 percent)

responded  to our  suwey.

This  inspection  was conducted  in accordance  with the  Quality  Standards  for  Inspections

issued  by the  Presidents  Council  on Integrity  and  Efficiency.

2
 FINDINGS

Suppliers, Rather  Than  Physicians, Initiated Orders  for Non-Legitimate  Body  Jackets 
The  licensed  orthotists  we interviewed  said physicians  of patients  needing  body jackets 
should  refer  patients  to orthotic  suppliers.  The  orthotists  said  suppliers  should  not 
independently  market  the  devices  to patients  themselves.  Medicare  requires  that 
medical  necessity  exist in order  for an orthotic  device  to be  covered  by Medicare.  The 
licensed  orthotists  told  us physicians  of patients  with spinal  problems  should  call 
orthotic  suppliers  to order  body jackets  for their  patients.  Trained  orthotists  employed 
by the  suppliers  then  take  patients  measurements,  order  devices  from  manufacturers, 
and  custom-fit  the  devices  to ensure  they provide  the  support  needed  to stabilize  the 
spine. 
Conversely,  the  non-legitimate  devices we found  in our  sample  were  marketed  by 
Durable  Medical  Equipment  (DME)  salespersons  before  prescriptions  or CMNS were 
written  by physicians.  Typically,  DME  salespersons  marketed  their  devices  for use by 
nursing  home  residents.  Salespersons  presented  their  products  to nursing  home 
directors  and  physical  therapists  as restraint  alternatives  to help  patients  sit upright  in 
wheelchairs.  When  a patient  agreed  to purchase  a device,  the  salesperson  either 
completed  a CMN  or prescription,  or gave nursing  home  staff  appropriate  wording  to 
use  and  they  completed  the  CMN  form.  The  nursing  home  staff  then  sent  the  CMN 
or prescription  to a physician  for signature.  Either  the  DME  salesperson  or the 
nursing  home  physical  therapist,  not  a trained  orthotist,  made  any adjustments  to the 
device. 
This  particular  marketing  strategy  was effective  because  the  1990 Omnibus  Budget 
Reconciliation  Act  prohibited  the  use of physical restraints  with  nursing  home  patients, 
and  nursing  home  staff  needed  alternatives.  Further,  salespersons  pointed  out  to the 
nursing  home  staff  and  patients  families  that  there  is no expense  to patients  covered 
by Medicaid.  Medicare  covered  80 percent  of the  cost and  Medicaid  the  remaining  20 
percent. 
Physicians Provided  No Control  For  Preventing Sales of Non-Legitimate  Devices 
Physicians  provided  no control  for assuring  the  medical  need  and  legitimacy  of orthotic 
body jackets.  Most  physicians  of beneficiaries  in our  sample  with  non-legitimate 
devices  were  not  aware  of what  they  signed  a prescription,  or CMN,  for.  They  simply 
signed  prescriptions  or CMNS that  had  been  completed  either  by suppliers  or nursing 
home  staff  using  suppliers  wording.  In many instances,  physicians  never  saw the 
products,  and  when  they  did, they  did not  realize  suppliers  had  billed  Medicare  for 
more  sophisticated  devices.  They  assumed  suppliers  had  billed  for  cushioned 
wheelchair  seating  supports  rather  than  custom-fit  orthotic  body jackets. 
3
 One  physician  we surveyed  said  he was outraged  by the  commercialization  of the 
[non-legitimate]  product.  He  had  a large  nursing  home  practice,  and  in one  nursing 
home  with approximately  60 patients,  he had  received  30 to 40 requests  for such 
products.  According  to the  physician,  Salesmen  go out  and  sell the  nursing  home 
staff on the  product  and  then  believe  the  doctor  will simply sign off. 
In our  survey,  we found  that  many  physicians  did simply sign off on suppliers  orders, 
and,  typically,  their  patients  received  non-legitimate  devices.  Most  of the  CMNS 
physicians  signed  either  had  the  word  orthotics  or TLSO  on the  CMN.  However, 
many  physicians  expressed  surprise  when  we told  them  Medicare  had  paid  for an 
orthotic  body jacket. 
Of the  40 physicians  who  had  signed  CMNS and  responded  to our  survey,  2 had 
	
patients  with  legitimate  orthotic  devices.  Patients  of the  other  38 physicians 
received  non-legitimate  devices. 
Twenty-two  of the  38 physicians  who had  signed CMNS for  non-legitimate 
	
devices  had  never  seen  the  devices  they had  prescribed. 
Eleven  of the  22 who  had  not  seen  the  devices  had  no record  of prescribing 
	
any type  of device.  Two  physicians  said their  patients  would  have  had  no need 
for  devices  because  they were  totally  bedridden.  All the  CMNS had  signatures, 
and  we did  not  try to determine  if the  signatures  were  those  of the  physicians 
or had  been  forged. 
Of  16 physicians  who  had  seen  the  devices,  13 described  the  devices  their 
	
patients  had  as cushioned  wheelchair  supports,  which  according  to the  licensed 
orthotists  we interviewed,  are  not  legitimate  orthotic  body jackets.  Yet,  these 
devices  were  billed  to Medicare  as custom-fitted  body jackets. 
Thirteen  of the  16 physicians  who had  seen  the  devices  said  they  thought  the 
	
approximate  $900 Medicare  allowed  for orthotic  body jackets  (under  code 
L0430)  was  excessive  for the  cushioned  wheelchair  supports  received  by their 
patients.  One  physician  said the  device  his patient  had  was unsophisticated, 
[and]  clearly  inexpensive  to produce. 
CMNs Did Not Assure  Medical  Necessity 
CMNS provided  no  control  for  assuring  medical  need  for orthotic  body jackets.  CMNS 
were  signed  by physicians  even  though  patient  diagnoses  and  conditions  listed  on the 
CMNS did  not  support  the  need  for orthotic  body jackets. 
The  licensed  orthotists  we interviewed  told  us legitimate  orthotic  body jackets  are 
commonly  used  to  treat  injuries  to the  spine  such  as vertebra  fractures  and 
compressions,  and  to facilitate  heaIing  following  a surgical  procedure  on  the  spine  or 
4  related  tissues.  Diagnoses  on the  CMNS of the  two patients  with legitimate  body 
jackets  were  spinal  stenosis  (narrowing  and  constriction  of diameter)  and  compression 
fracture. 
None  of the  diagnoses  listed  on the  CMNS for non-legitimate  devices  indicated  spinal 
injuries  or surgical  procedures.  The  diagnoses  suggested  that  the  patients  could  have 
had  problems  staying  upright  in wheelchairs,  but  most  conditions  were  associated  with 
advanced  age  rather  than  spinal  injuries. 
Most  CMNS listed  more  than  one  diagnosis  for each  patient.  Frequently  mentioned 
conditions  were  dementia  (18 patients),  osteoarthritis  (12 patients),  Alzheimers  and 
Parkinsons  (five patients  each).  Over  three-fourths  of the  CMNS (55 of 64) listed 
lumbar  sacral  dysfunction  as a primary  or secondary  diagnosis.  None  of these 
conditions  normally  require  an orthotic  body jacket,  according  to the  licensed 
orthotists  we interviewed.  At least  two of the  CMNS stated  that  previous  treatment 
for the  patients  conditions  had  been  restraints. 
CONCLUSION 
To  market  a non-legitimate  device  as an orthotic  body jacket,  DME  suppliers  took 
advantage  of (1)  nursing  homes  desires  for restraint  alternatives,  (2) nursing  home 
patients  with  both  Medicare  and  Medicaid  not  having to pay for the  products,  and  (3) 
physicians  laxity in attention  to CMNS they signed.  The  extent  of this practice  raises 
serious  questions  about  the value  of CMNS and  marketing  in nursing  homes  (95 
percent  of our  sample  were  non-legitimate  devices). 
OIG  has  inspections  planned  that  will study this issue in detail.  The  inspections  will 
look  at  (1)  the  usefulness  of CMNS, (2) the  appropriateness  of payments  for 
equipment,  supplies,  and  professional  services  provided  to beneficiaries  in nursing 
homes,  and  (3)  the  role  of physicians  in controlling  patients  medical  care. 
In the  meantime,  we suggest  that  HCFA  continue  to alert  their  regional  fraud  and 
abuse  coordinators  and  contractors  to potential  abuse  in this area,  and  advise 
contractors  to exercise  diligence  in reviewing  claims for orthotic  body jackets. 
5