Reimbursement: The Future Is Now
October 2004 Issue
The American population is growing older. The "baby boomers" are getting to the age where they will increasingly rely on the Medicare system to provide for their orthotic and prosthetic needs.
Due to medical and technological advances, people who would not have been able to lead productive lives after an injury, amputation, or survival of an illness now can. The loss of a limb or the attack on the brain by a stroke now is not as much of a limiting factor in living a productive life as it was in previous generations.
The Medicare system will look to control these costs, which are accelerating astronomically. The Centers for Medicare & Medicaid Services (CMS) is looking closely at almost every product or service in the O&P and DME field. O&P needs to distance ourselves from the DME field; CMS sees the O&P field as providers of products, not services.
Orthotists especially are going to be affected by this continued association, since CMS sees items that can be fit and used by the patient with little or no modification. These services are best provided by certified orthotic fitters, not orthotists. The orthotists' responsibility in the future will most likely be determined by the need for custom-made devices.
Being able to document the need for custom-fabricating an orthosis or a prosthetic socket or replacing prosthetic "hardware" is going to be more vital than ever before.
The research in O&P has been directed primarily into products that enhance the lives that they touch. These new products take full advantage of the latest in materials science, but they also carry a large price tag to the consumer. The fact that the orthotics field finally has a stance control knee joint is a tremendous breakthrough and has the possibility of enhancing many lives. What was CMS's response? An improperly assigned L-Code that severely limits the accessibility of this progressive technology to patients who are covered under the CMS guidelines. Other technological advances in the use of carbon fiber and acrylic resins in orthotics are being down-coded to the point where they cannot be provided at an appropriate rate.
The development of new items is also hindered by the time and cost of obtaining an appropriate L-Code and a fair reimbursement rate that covers materials cost and the necessary education, research, and experience to provide these items.
Deep Discounting Drags Us Down
Insurance companies also are looking to decrease costs for covered services. A discounted contract with a large O&P provider makes sense to these entities; the value of services is being lost. This situation is primarily the fault of the O&P industry. The deep discounting that O&P providers are giving HMOs is being noticed by CMS and other regulatory agencies. If the industry can afford to greatly discount fees, then the mindset of the regulatory agency is that the original fee must have quite a bit of padding built into it. As the reimbursement rate is adjusted to account for this, the ability to provide more than just a product diminishes.
Research will go on wherever there is money to fund it. Manufacturers are providing funds for education and research. Manufacturers take on enormous risk and great costs, which are built into the price of the item. If the investment in time, materials, and money does not meet the projected return, then research will dwindle.
Getting Fairer Reimbursement
Educating consumers, payers, and the public is critical. They need to realize that O&P provides a vital service above and beyond products--and that this service, along with the costs of research and development of new and better devices, is built into the costs to consumers and payers. We need to partner with other organizations and allied health providers to educate patients and payers. We need to separate ourselves from DME. And we need to stop deep discounting.
Paul T. Webber, CPO, FAAOP, ABDA, BOCPO, owns Chico Orthopedic Lab Inc., Chico, California. He serves as treasurer for the Board of Orthotist/Prosthetist Certification (BOC) and is a charter member of the American Academy of Orthotists & Prosthetists.