A Multi-State Analysis of the Fiscal Impact of Commercial Insurance Coverage for General-Use & Activity-Specific Prosthetic & Orthotic Devices in the United States

Abstract

Prosthetic and orthotic devices are assistive devices utilized by individuals with limb loss, limb difference, and mobility impairment. Research has shown these devices improve mobility and functionality, independence, and overall quality of life for individuals with disabilities who depend on them. This report focuses on two use types of prosthetic and orthotic devices: general-use and activity-specific. General-use prostheses and orthoses are designed to achieve the basic needs of ambulation and upper-limb functionality. In contrast, activity-specific devices are designed to support higher-intensity physical activities and recreation. Currently, 29 states do not require insurance coverage for general-use prosthetic and orthotic devices, and 45 states do not require insurance coverage for activity-specific devices, hindering individuals with limb loss, limb difference, and mobility impairment from essential life functions, including regular exercise required to prevent chronic illnesses. This study analyzes proposed legislation in 11 states, aiming to expand state-regulated coverage for prosthetic and orthotic devices for the purpose of improving quality of life and longevity of health, including chronic illness prevention. The methodology includes estimating the per member per month (PMPM) and net cost variations per state based on U.S. Census populations, Center of Medicare and Medicaid Services (CMS) Public Use Data Files and state-specific Medicaid fee schedules. The authors hypothesize that expanded insurance coverage could yield long-term social and fiscal benefits to the patient and healthcare systems. Results show PMPM estimates for states pursuing various levels of coverage, encompassing both general-use and activity-specific devices. The analysis conservatively estimates small PMPM increases based on assumptions related to device coverage costs and utilization. The results further emphasize potential overall healthcare savings from insurance coverage for these devices with the implementation of the 11 legislative initiatives, from improved health outcomes, with minimal fiscal impact.