A Fighting Chance

National O&P organizations and individual state associations have
remained vigilant in their fight against cuts or caps of O&P benefits in
difficult economic and political environments. The O&P profession is in a
better position than many health care providers, but the custom nature of the
industry does lend itself to some high expenses. With legislators searching for
ways to cut costs, it is crucial to prove the fiscally positive impact
qualified O&P providers have on their patients.

How did we get here?

State governments are in the midst of a budgetary nightmare. The
stimulus money from the American Recovery and Reinvestment Act, which plugged
budgetary shortfalls for 2 years, expired in June 2011. Medicaid enrollment has
increased dramatically since 2009, due to high unemployment. Specifically,
according to Ryan Ball, government relations, Orthotic and Prosthetic Group of
America (OPGA), the stimulus provided increased funding to the Federal Matching
Assistance Percentage (FMAP) — the percentage of matching payments the
federal government provides to the states, which is normally between 50% to
76%. On July 1, 2011, the FMAP reverted to pre-stimulus levels. The stimulus
program had increased FMAP rates by a minimum of 6.2%. Decreased revenues and
the increased overall costs of Medicaid due to the expiration of stimulus money
left an even larger hole for state governments to fill.

“Unlike the federal government, states must pass balanced budgets,
so they have the option to raise taxes, implement some sort of managed care
program to deal with the most costly ‘dual eligible’ population, cut
benefits, reduce enrollment or cut provider reimbursements,” Ball told
O&P Business News. “The most politically palatable
options are provider cuts. Provider cuts and managed care are leading the way
in terms of overall budget cuts to the Medicaid program for individual

On the chopping block

In Arizona, Medicaid providers will be reimbursed 5% less, retroactive
to Oct. 1, 2011. Arizona Medicaid providers will be paid approximately 70% of
the typical reimbursement payment. In Texas, state legislators proposed an 18%
cut in reimbursements for O&P services to Medicaid beneficiaries. In
Minnesota, state representatives proposed the elimination of optional services,
including prosthetics. California O&P associations are currently battling a
10% across the board reimbursement reduction for all MediCal services.
Thirty-nine states restricted rates this year and 46 plan to do so in 2012,
according to the Kaiser Commission on Medicaid and the Uninsured 50-State

Why is O&P care on the chopping block? O&P was not listed as a
mandatory benefit when the Medicaid language was first enacted. This can be
remedied in two ways, according to Tom Fise, executive director, American
Orthotic and Prosthetic Association (AOPA). First, O&P could try to expand
the scope of the Medicaid statute. Fise quickly dismissed this idea because the
O&P profession simply does not have millions of dollars available for such
battles. The more prudent and realistic opportunity is to be included in the
Essential Health Benefits (EHB) package.

“If we could win the battle to assure that the O&P is treated
as an EHB, that would in my estimation become the de facto standard for
Medicaid as well,” Fise told O&P Business News.
“Winning that battle is the best thing we can do to keep this from
happening in each and every state. We are not a mandated benefit, so we have to
play by the current rules.”

The current rules have made running a profitable O&P business in
states like Texas, Arizona and California, a much tougher prospect.

“When you are talking about cuts, it becomes difficult to do
business, especially as a practitioner out there on your own, just seeing
patients and trying to make the numbers work,” Ball said. “You have
to tighten the reins on the business side to keep yourself profitable. It is a
difficult environment across the board.”


On June 8, 2011, Mitch E. Presley, Jr., LPO, president of the Texas
Association of Orthotists & Prosthetists (TAOP), sent out a memo informing
his TAOP members about the state effort to impose an 18% cut in reimbursements
for O&P services to Medicaid beneficiaries. The memo asked business owners
to attend a public hearing to comment on the proposed reduction in
reimbursement. On June 15, TAOP sent a letter to Sen. Kevin Eltife detailing
the prospective impact on the proposed cuts on amputees, wounded warriors and
other Texas citizens with limb impairment.

  Ryan Ball
  Ryan Ball

“Several studies, eg, one conducted by the state of Colorado, have
concluded that the provision of appropriate O&P care saves the state
money,” Presley co-wrote with Thomas DiBello, CO, LO, FAAOP, president,
American Orthotics and Prosthetics Association (AOPA). “Cutting Medicaid
reimbursement for mobility-restoring prosthetics and custom-fabricated
orthotics by 18% would actually serve to increase the risk of costly secondary
complications, which would need to be covered under Medicaid’s

Presley, along with the president of the Texas chapter of AOPA and
nearly 60 proxies, traveled to Austin, Texas to voice their opposition to the
proposed cuts before a four-member panel.

“We could not do away with the cut completely, but we were hoping
to reduce it,” Presley told O&P Business News. “It
was more positive than I expected. You can tell that the panel listened to

Most of the business owners who were members of TAOP work with children.
In Texas, Medicaid pays for bracing and prosthetics for children under 21 years

“I know one practice in Houston; most of their business is
pediatrics and they do a lot of Medicaid,” Presley said. “If they got
hit with 18% cuts, it would be detrimental to his business and he would have to
let practitioners go. It would probably inhibit him from working with some of
the more intricate types of bracing that his patients would need.”

The final result called for a 6% cut for the first 2 years with an
additional 2% cut for the third year, totaling 14%. Presley credits attending
the public meeting for the panel’s decision to cut the initial proposal
nearly 20%.

  Teri Kuffel
  Teri Kuffel

“Had we not shown up and expressed our fears, it would have hurt a
lot of small businesses,” he said. “It may have shut their doors. I
am a former small business owner who did pediatric work in a small town. I told
them if I still had my practice and cut my income 18%, I would be forced to
make some dramatic cuts.”


When Teri Kuffel, Esq., from Arise O&P in Minnesota, heard that the
state legislature was proposing cuts to Medicaid programs including the
elimination of optional services such as therapies, eyeglasses and prosthetics,
she decided not to call just one person but a small army. Her first
communication was a mass email to more than a dozen people, including the
members of the Minnesota Society of Orthotists, Prosthetists and Pedorthists
(MSOPP); her three Minnesota lobbyists; Sue Stout, director, government
regulatory affairs, Amputee Coalition; and Leslie Pitt-Schneider, who was with
legal and compliance issues at Otto Bock HealthCare. Together they decided to
contact Tom Fise directly at AOPA for assistance with a campaign to defeat the
proposed language. The goal was to eliminate the word “prosthetics”
from the bill. With the help of a strong grassroots O&P community,
consisting of practitioners, patients, manufacturers, students, families and
friends, Kuffel and her team were able to hit the bill head on from every
possible angle.

“We found out who we needed to contact, specifically the conferees
on the committee who would be making the final decision,” Kuffel told
O&P Business News. “From there, we all inundated the
committee with letters, emails, voicemails and a few critical face-to-face

MSOPP board members met with conferees in person. Stout and
Pitt-Schneider met with the commissioner of Minnesota’s department of
Human Services, Lucinda Jesson. Jesson crafted a letter to every Minnesota
state representative urging them to maintain prosthetic coverage in the
Medicaid program.

Kuffel has been in and out of the O&P field for 15 years. When she
began her career, Kuffel was helping out with contracting, organizational
management and some appeals, but there was never a need for other services and
skills, such as examining state legislature proposals and bills.

“Now as politics keeps merging into our field, it is essential to
have individuals who can deal with the legislators,” Kuffel said. “We
have to do more than just assist our patients in the daily clinical sense. We
must protect the interests of the patient on different levels — on a
political level.”

Although the Minnesota campaign was successful and prosthetic coverage
remains intact, the Minnesota bill ended up cutting reimbursement rates across
the board by 3%.

“Given the recent rumor that Minnesota is now expecting a surplus
in 2012, I would hope that we do not see additional cuts to Medicaid in the
near future,” Kuffel added.

The role of state and national organizations

AOPA and the American Coalition of Amputees (the Coalition) have offered
to assist any of the states that have initiated efforts to cut O&P Medicaid
coverage. AOPA primarily works with the state association with respect to
public relations, advertising and messaging to the media.

“We are not trying to run the show, we are trying to help where
people want us to help,” Fise said. “We have ideas on how to tackle
the problem, but the people who are the most effective advocates are the
patients of the state and providers who take care of those patients.”

AOPA has a number of different tactics in its arsenal. Nationally, AOPA
and the Coalition sponsored a public service announcement that has run nearly
50,000 times across the United States and viewed by large audiences, according
to Fise. AOPA can also run a more locally focused campaign. When Nevada was
planning on eliminating coverage for Medicaid O&P beneficiaries for people
older than 18 years, AOPA bought a billboard along the highway that runs
through Carson City so the state legislators could not miss it.

“We had some success in Nevada,” Fise said. “The incoming
governor reversed course on that issue. You throw everything you can at the
problem. The messaging brings it home pretty well.”

The best way for O&P state associations to make their case to state
legislators is through data that show the importance of the O&P profession.
Gathering evidence-based data is an area where the profession is weak, but

“In order to stay on the right side of budget issues we must be
able to quantify the value that qualified accredited practitioners
provide,” Ball said. “We should be able to make the case that quality
practitioners have a positive impact on budgetary matters. That allows us to be
part of the solution, instead of the problem.”

AOPA is currently working with the Amputee Coalition and a research
partner to study the cost effectiveness of O&P care. AOPA’s research
partner will be mining the Medicare database with permission from CMS, to track
amputations and examine patient records. At their disposal is a 5% sample of
the Medicare database of all patients who have undergone amputations. They will
then divide those patients into two groups: patients who were given prosthetic
care and those who were not.

“We will track over a 3-year period all expenditures from the study
groups to determine whether providing prosthetic care is ultimately a cost
effective endeavor,” Fise said. “This is a key ingredient. We may
have that data before the 2012 sessions get into full force. Right now, it is a
work in progress.”

Legal action in California

The California state legislature passed a bill reducing reimbursement
rates across the board by 10%. Medicaid providers believed a deep reimbursement
cut would cause providers to stop participating in the Medicaid program, making
it difficult for beneficiaries to access medical care. They also argued that
the state legislature did not submit their plan to CMS for proper approval.
According to the Kaiser Commission on Medicaid and the Uninsured, a group of
California Medicaid providers sued the California state Medicaid agency in
order to prevent the implementation of those cuts.

On Oct. 3, 2011, the US Supreme Court opened its 2011-2012 term
listening to oral arguments for Douglas V. Independent Living Center of
Southern California,
a case that will determine whether a Medicaid
provider or patient can sue a state for failing to pay the rates required by
the Medicaid Act. If the Supreme Court rules in favor of the providers and
beneficiaries, they can potentially ask the federal courts to stop
reimbursement cuts on the program.

The California Orthotics and Prosthetics Association (COPA) did not sign
on as a party to the lawsuit because the state association could not afford to
fund the lawsuit.

“We are in a difficult situation,” COPA president Ralph Nobbe,
CPO, told O&P Business News. “The problems are huge. From
the provider side, I can not provide my patients a device that reimburses less
than my hard costs. It is not possible. If the device meets the billing code,
that is what you bill and that is what you have to get paid. Right now, there
is no mechanism to adjust below cost reimbursements.”

Nobbe set up a screening mechanism in his office so his patients and
staff understood he can no longer provide certain services. He has had to turn
away patients.

“It happens on a fairly routine basis, actually,” he said.
“About 20% of the devices that are available in MediCal and have billing
codes we just do not provide because the reimbursement is so low and below

According to Ball, action on the Supreme Court case will likely take
place in the summer of 2012.

Be proactive

Unfortunately for state and national associations, the reimbursement
issue is not something that will be going away any time soon. It is estimated
that the Patient Protection and Affordable Care Act will significantly increase
the number of Medicaid beneficiaries starting in 2014.

“It was a confluence of events that put many states in the same
situation,” Ball said. “Not many states have their Medicaid budget
under control. It is a challenging environment and it will remain a challenge
until revenues recover or we find a better, more cost-effective way to provide
care for people in this country.”

Politics is a frustrating business and it is understandable to the
O&P leadership why so many practitioners hesitate to be more involved in
their state and local associations. Still, Presley, Kuffel and Nobbe all echoed
the same sentiment: get involved.

“We really need to work together,” Kuffel said. “We are a
much more powerful source together. I understand why there is a hesitancy to be
involved. But in the last few years, what is happening is critical to the
future of the O&P profession and its happening at such a fast pace. If you
cannot personally get involved, pay your dues so others can. This has less to
do with protecting our interests and more to do with protecting our
patients’ interests.”

Like Kuffel, Nobbe urged his colleagues to join and support state
organizations because the reimbursement battle affects all practitioners in all
50 states.

“If you do not support the state association, they cannot argue for
you,” Nobbe said. “We need to make a financial commitment to support
the industry. I think these battles will be more frequent. If that is the case,
more people will be reaching out to their state and national associations for
assistance, and in turn the associations will require your support.”
by Anthony Calabro

For more information:

  • Calabro, A. O&P profession faces challenging Medicaid
    pressures, cuts. O&P Business News. 2011; 20(3):12.

  • Kaiser Commission on Medicaid and the Uninsured. Results from a
    50-State Medicaid Budget Survey for State Fiscal Years 2011 and 2012. Available
    at: www.kff.org/medicaid/upload/8248.pdf. Accessed: Dec. 5, 2011.

  • Texas Association of Orthotists and Prosthetists. Prospective
    impact of proposed 18% cut in Medicaid reimbursement rates to amputees, wounded
    warriors and other Texas citizens with chronic limb impairment. Available at:
    Accessed Dec. 5, 2011.

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