O&P: Opportunity for profit?
The orthotics and prosthetics market is undergoing extensive review by CMS about who should furnish the products and who should qualify for them. It could mean a change in the landscape and HME providers need to consider that, if they are currently working in the field or contemplating adding the category to their business mix.
The CMS initiatives have been met with both acceptance and pushback. A proposed rule in January that aims to establish qualifications and requirements for certified O&P suppliers is seen as a generally positive development, while an attempt to restrict qualifying criteria for prosthetics has faced stiff opposition.
In a market that has its share of uncertainty, HME providers need to consider whether O&P means “Opportunity & Profit,” or “Oppressive & Punishing.” Which definition applies is up to the provider, industry analysts say.
“If HME providers wish to enter the O&P space, this could be an excellent extension of their current business model,” said Brad Ruhl, president of U.S. HealthCare for Ottobock. “This is not an uncommon practice in other parts of the world, in particular in Western Europe and especially in Germany. That said, it’s not an easy decision to make as it may require significant capital investment and certainly the hiring and staffing of trained, licensed and certified practitioners to ensure quality care and outcomes for their patients.”
Market projections point up in terms of demand and sales volume going forward. A market forecast from Reportstack predicts the orthotic braces and supports market will reach nearly $3.5 billion by 2021, largely driven by the aging population and patient preference for braces and supports as non-invasive treatment options. The forecast concludes that the U.S. will dominate the global orthotics space, retaining over 50% of the market share throughout the forecast period.
“Braces are increasingly being adopted thanks to their dynamic therapeutic approach, especially in fracture treatment and post-operative rehabilitation,” Reportstack researchers found. “While the market is dominated by knee braces, upper extremity braces are expected to grow at the fastest rate during the forecast period, at a compound annual growth rate of 5.1%.”
O&P certification eyed
CMS published its proposed rule on O&P certification in the Federal Register on Jan. 12. It would establish qualifications and requirements to be considered a qualified O&P practitioner or supplier. It would also amend the payment rules to bill Medicare for prostheses and custom-fabricated orthoses and amend requirements an organization must meet to accredit qualified suppliers to bill Medicare for prostheses and custom-fabricated orthoses.
A qualified practitioner must be licensed by the state, or in absence of licensure requirements, certified by the American Board for Certification in Orthotics, Prosthetics and Pedorthics; by the Board for Certification/Accreditation; or “credentialed and approved by a program that the U.S. Department of Health and Human Services secretary determines, in consultation with appropriate experts in O&P.”
The certification requirement has long been advocated by the HME industry and has the support of Ottobock and other O&P manufacturers, Buhl said.
“The O&P field welcomes the accreditation requirement as it was originally intended to protect consumers and CMS against fraud and abuse,” he said. “Legitimate providers of traditional O&P services are accredited, although this may not even be a requirement depending on the state they are practicing in.”
Ongoing RAC audits have permeated virtually all areas of HME and O&P is no exception. Therefore, thorough documentation is essential to keep the auditors at bay.
“Audits have certainly been a challenge, but overall, the industry has faced this challenge and as a result are committed to being certain that claim documentation requirements are met and that physicians are better at providing appropriate and more detailed prescriptions for their patients,” Buhl said.
Building on O&P
Establishing an O&P category might only be a small step for companies that already offer compression hosiery, custom footwear, post-mastectomy products and off-the-shelf orthotics. The keys are to have the expertise, certification and reimbursement knowledge necessary for each product.
While retail sales are a front-burner focus for the HME industry, O&P is a category that still relies mainly on reimbursement.
“Certainly there are instances where some patients that do not have insurance or adequate insurance to cover the cost of their prostheses or custom orthoses are willing to pay for them out-of-pocket,” Buhl said. “However, in general, this is probably not a sustainable approach to the market on its own and would essentially be very opportunistic in nature for the average facility.”
Developing a reputation as a full-service O&P supplier requires outreach to referral sources that are specific to the field, such as physiatrists, orthopedic and vascular surgeons. Physical and occupational therapists are also major referral sources due to their work in supporting amputees and those needing assistance with their mobility needs through the use of custom orthoses.
“Reaching out to local amputee support groups would also be a good approach in connecting with key demographics,” Buhl said.