O&P: A challenging but viable market

Yes, the orthotics and prosthetics market is under increasing government scrutiny and CMS is proposing archaic practices as a cost-saving solution. It's true that a challenging market is getting even more so for O&P providers trying to serve a client base that needs special products. And eking out margins is expected to get even tougher.

Yet, there is reason for optimism. The retail component of the market is growing, demand is stable and providers are becoming more effective in operating their businesses. Together, these factors should ensure sustained viability of the market well into the future, manufacturers say.

O&P finds itself in the crosshairs of CMS, the OIG and RAC auditors due to a spike in claims for lower limb prostheses five years ago. An investigation at that time led to the government's recent move to change the coverage criteria, requiring a face-to-face visit and mandating a rehab program before covering a prosthetic device. CMS also seeks to consolidate many of the codes for the category into one.

“Prosthetic patients can get immediately fitted now, but the government wants them to go through phases of a post-operative prosthesis, preparatory prosthesis and then demonstrate their abilities before being issued a final prosthesis,” said Brad Ruhl, president and CEO of Ottobock Prosthetic and Mobility Solutions. “That is how it was done 40 years ago. It is an archaic throwback.”

CMS put the plan on hold for now, at least until it forms a workgroup to develop a consensus statement based on a review of the available clinical evidence that defines best practices in the care of beneficiaries who require lower limb prostheses. Ruhl believes the HME industry can do more to state its case with government decision makers.

“Part of our challenge is to focus on presenting the information that does exist about published, peer-reviewed research that supports current technology,” he said. “We should present better evidence on cost savings and identify gaps where we don't have good research. As an industry, I think we can do it.”

If it appears that O&P is unfairly designated for revision by the feds, it may only be a perception by those who work in the category and not the ultimate reality, claims Claudia Zacharias, president and CEO of the Board of Certification/Accreditation in Owings Mills, Md.

“I don't know that O&P is getting more attention than any other field in health care,” she said. “CMS has gone on record stating without reform, the nation's already excessive healthcare spending would reach unsustainable levels within the next few decades. If there is a disproportionate focus on O&P, I suspect it is related to the high price tag associated with some O&P products and services. That is why we partner with the O&P Alliance to educate CMS and others that quality O&P care actually saves money because it helps patients preserve or regain their mobility and lead healthier lives.”

RETAIL HORIZON

While not traditionally considered a market that is conducive to retail sales, O&P has the potential to become more consumer-focused, manufacturers say. Many items most likely to be purchased over-the-counter are related to O&P and created specifically for its patient base.

For instance, Lyme, Conn.-based Limbkeepers offers a product line that is designed to protect fragile skin on arms, hands, and legs from abrasions, skin tears and bruising. Created to look and feel like everyday clothing, the non-compression knit sleeves and gloves are made to preserve skin integrity while giving wearers “confidence and dignity,” said Deborah Vezan, president and owner.

The products are sold retail and can be marketed to O&P patients.

The orthotics and prosthetics themselves are also being reviewed for retail potential, Ruhl said, because the consumer base is becoming more accepting of the concept.

“There is a movement toward higher deductibles, so you're getting more people with skin in the game,” he said. “As the market becomes more consumer and retail focused, it is becoming more important to us as a company, as well.”

Therapeutic shoes are another item with O&P market crossover, said Rob Heglin, product manager for Mequon, Wis.-based Dr. Comfort.

“The shoe market has seen a decrease in shoes being dispensed through podiatry, but a significant increase in O&P,” he said. “One of the most common reasons claims are being denied is due to the physician notes. The O&P market is well-versed in the billing process and it is standard protocol for O&P providers to obtain the physician's notes when first meeting with the patient.”

Still a viable market

O&P always was, and continues to be, primarily a specialty market. But for those who need orthotics or prosthetics, it is a vital service that must be preserved.

“I am as optimistic as I am frustrated,” Ruhl said. “I truly believe what we do improves people's lives and maintains their mobility. That's a noble cause and we need the kinds of products in the market that provide care to amputee population. We just have to be better at delivering it and showing the value.”

Ruhl also contends that there is no reason why it won't be viable going forward.

“It's not all 'doom and gloom,'” he said. “At the end of the day, there is nothing wrong with improving efficiencies, improving outcomes and demonstrating how we generate savings for payers. Bad players need to be weeded out. Demand isn't going away. Overall, the industry is here to stay.”