[Untitled]

Charles Barocas

7/8/2002

While I have read about concerns of competitive bidding on the listserver, I
have not read about two developments that might have a greater impact on O&P
economically.
1. The Supreme Court hearing a case from Kentucky.
2. The VA billing medical insurances.

1. The Supreme Court case involves a lawsuit by a health provider that was
kept off an HMO panel because the panel was �closed� for his specialty. If
this health provider is successful, it will mean that all qualified health
professionals must be accepted onto an HMO panel if they are willing to
accept the HMO or PPO contract. This could lower the rates paid to O&P.
More providers on the panel, the more chance for HMO�s to lower fees.
In my area, one provider accepted 60% of Medicare allowable to get a
contract.
Will orthotic manufacturers be allowed on panels and be able to bill
insurances direct? Some unique braces might even become franchised in a
particular area like CPM machines were. I could see manufacturers keeping
the distribution and retail patient fittings for themselves due to O&P shops
having to use competitive cheaper products to meet lower agreed contract
levels.

At the VA (they don't have an O&P shop)in Daytona,FL, brace fittings are
done by manufacturer reps because the VA can pay wholesale to the
manufacturer instead of sending the patient to the local O&P where they
would have to pay retail. The VA is happy (they save 50%), the reps are
happy (they make a commisssion), the manufacturer is happy (theysold a
brace) and the patient (I spoke to one) is happy. This just might be a
future business model.


2. The VA has been mandated to start billing for O&P service where the
Veteran has insurance. Will the VA use Medicare billing rates or a
percentage there of? Or maybe, just a percentage above the wholesale cost.
   Will the VA use legal add-on codes to up-charge or be satisfied with just
billing a base L code? Will insurances use the VA as the �standard in
pricing�? Does the VA have to collect co-payments or deductibles? Will an
insured patient go to a VA O&P to avoid co-payments?

If you bill more than the VA for the same L code to the same insurance
company, will they deny or lower your claim?

This should all play out in the next 6 months.


Charles Barocas, CO

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