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VOLUME 4, ISSUE 2  
 2021 

 

STAKEHOLDER  PERSPECTIVES 

Highsmith MJ, Fantini CM, Smith DG. Contemplating health economics, coding and reimbursement in orthotics, prosthetics and pedorthics. Canadian 

Prosthetics & Orthotics Journal. 2021; Volume 4, Issue 2, No.5. https://doi.org/10.33137/cpoj.v4i2.36125 

This article has been invited and reviewed by Co-Editor-In-Chief, Dr. Silvia Ursula Raschke. 
English proofread by: Karin Ryan, M.A., B.Sc., P.T. 
Managing Editor: Dr. Hossein Gholizadeh 
 

SPECIAL ISSUE 

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Highsmith MJ, Fantini CM, Smith DG. Contemplating health economics, coding and reimbursement in orthotics, prosthetics and pedorthics. Canadian Prosthetics 
& Orthotics Journal. 2021; Volume 4, Issue 2, No.5. https://doi.org/10.33137/cpoj.v4i2.36125 

 

 

 
STAKEHOLDER  PERSPECTIVES 

 

CONTEMPLATING HEALTH ECONOMICS, CODING AND REIMBURSEMENT IN ORTHOTICS, 

PROSTHETICS AND PEDORTHICS 

Highsmith MJ1,2*, Fantini CM2, Smith DG3,4     
 

1 
School of Physical Therapy & Rehabilitation Sciences, Morsani College of Medicine, University of South Florida, Tampa, Florida, USA. 

2 
U.S. Department of Veterans Affairs, Rehabilitation & Prosthetics Services, Washington, USA. 

3
 Department of Physical Medicine and Rehabilitation, Uniformed University of the Health Sciences, Bethesda, Maryland, USA. 

4
 Department of Orthopaedics and Sports Medicine, University of Washington,  Seattle, Washington, USA.  

 
 
 

 

 

  

 

 

 

 

 

ECONOMIC SCIENCE IN ORTHOTICS, 

PROSTHETICS AND PEDORTHICS 

Health economics in Orthotic, Prosthetic and Pedorthics 

(O&P) may be thought of as maximizing O&P related 

rehabilitation for those using these services given limited 

available resources. A body of literature exists on the 

subject of healthcare economics in O&P. Included in this 

body of work is a State of the Science Conference 

Proceeding from the American Academy of Orthotists and 

Prosthetists (AAOP- O&P’s professional association in the 

U.S.) which includes twelve articles.1 Contributions in this 

work include projects commissioned by the American 

Orthotic and Prosthetic Association (AOPA- O&P’s trade 

association in the U.S.) such as a report comparing costs 

and outcomes in Medicare recipients receiving prosthetic 

care with those who did not receive prosthetic care and also  

 

 

comparing  those  of  selected  orthotic  care.2  Additionally, 

building upon previously published clinical literature on 

microprocessor knee technologies for patients with 

transfemoral amputation which studied topics such as 

function, quality of life, safety and other clinical issues,3 

AOPA commissioned a comprehensive economic analysis 

on the cost effectiveness of microprocessor knee systems 

compared to alternatives.4 This review concluded that MPK 

systems represent good, or potentially superior, value for 

money to comparable interventions in other healthcare 

sectors including total knee arthroplasty or implantable 

cardioverter defibrillators as cited examples.4 

Among many positive benefits, the State of the Science 

Proceeding and health economic O&P literature referenced 

thus far succeeded in: 

1. Raising awareness of health economic issues in 

O&P. 

2. Pulling together O&P’s body of knowledge in the 

health economic space. 

 
OPEN  ACCESS Volume 4, Issue 2, Article No.5. 2021 

 

 

Journal Homepage: https://jps.library.utoronto.ca/index.php/cpoj/index 

 

ABSTRACT 

Reimbursement to U.S. healthcare service providers is largely transitioning from fee for service to 

fee for value for those clinicians who code using current procedural terminology and through their 

coding, describe their professional services. The Orthotic, Prosthetic and Pedorthic profession 

(O&P), currently codes using a system that describes the devices they evaluate for, fabricate, fit 

and maintain and their professional services are incorporated into their codes. These O&P codes, 

in contrast to those for other healthcare disciplines, are predominantly product based rather than 

service based, focusing on product features and function more than clinical service. This editorial 

manuscript provides a brief overview of the system the US O&P profession uses currently, 

particularly in the context of other healthcare professions transitioning to value based coding and 

reimbursement and culminates in a call to action for the profession to academically consider the 

strengths and weaknesses of the current system relative to alternative systems. 

CITATION 

Highsmith MJ, Fantini CM, Smith DG. 

Contemplating health economics, 

coding and reimbursement in orthotics, 

prosthetics and pedorthics. Canadian 

Prosthetics & Orthotics Journal. 2021; 

Volume 4, Issue 2, No.5. 

https://doi.org/10.33137/cpoj.v4i2.36125 

KEYWORDS 

Coding, Economics, Fee for Service, 

Orthotics, Prosthetics, Reimbursement 

 

 

* CORRESPONDING AUTHOR 

M. Jason Highsmith, PhD, DPT, CP, FAAOP 
School of Physical Therapy & Rehabilitation Sciences, Morsani 
College of Medicine, University of South Florida. Florida, USA. 

E-mail: mhighsmi@usf.edu 

ORCID ID: https://orcid.org/0000-0001-8361-7345 

Special Issue: Health Economics in Prosthetics & Orthotics 

https://doi.org/10.33137/cpoj.v4i2.36125
https://jps.library.utoronto.ca/index.php/cpoj/index
https://doi.org/10.33137/cpoj.v4i2.36125
mailto:mhighsmi@usf.edu
https://orcid.org/0000-0001-8361-7345


 

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Highsmith MJ, Fantini CM, Smith DG. Contemplating health economics, coding and reimbursement in orthotics, prosthetics and pedorthics. Canadian Prosthetics 
& Orthotics Journal. 2021; Volume 4, Issue 2, No.5. https://doi.org/10.33137/cpoj.v4i2.36125 

ISSN: 2561-987X 
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3. Identifying conclusions, evidence statements, 

recommendations, strengths, weaknesses and 

knowledge gaps in O&P health economic science. 

4. Providing foundational, economic methodologies 

that may be used in O&P research. 

5. Initiating a call to action for the O&P profession’s 

research community to work toward adding 

economic analyses to ongoing and future research. 

The aforementioned work also led O&P thought leaders to 

share and learn from healthcare disciplines outside of O&P 

to examine future directions relating to payment (i.e. 

reimbursement) structure. The purposes of this editorial are 

to point out a collection of health economic work in O&P, 

increase awareness of reimbursement changes taking 

place outside of O&P and to serve as a catalyst for 

conversation within the O&P profession by proposing a call 

to action related to potential next steps in advancing O&P’s 

coding and reimbursement conversation. 

REIMBURSEMENT CHANGES TAKING 

PLACE OUTSIDE OF O&P 

In 1965, the U.S. Congress created Medicare under Title 

XVIII of the Social Security Act.5 In 1966, the American 

Medical Association(AMA), in concert with other specialty 

organizations, developed the iterative, Current Procedural 

Terminology (CPT) system. The CPT system was 

developed to provide standardized, uniform language for 

describing medical procedures and services and initially 

had no relationship with reimbursement.5 The AMA reviews 

and updates CPT codes annually. Healthcare innovation 

since development of the CPT code system has 

necessitated updates numerous times across the decades. 

The Health Insurance Portability and Accountability Act 

(HIPAA) of 1996, required the Department of Health and 

Human Services to name standards and code sets for 

electronic transactions of health information. This catalyzed 

further assessment of the CPT system, expanding beyond 

the reporting of procedures and services and into the 

reporting of pay for performance measures. The CPT 

coding system is the basis for service provider 

reimbursement when used with a relative value modifier.5    

A detailed history of coding systems is beyond the scope of 

this manuscript but the abbreviated history presented 

serves to show that an interest in, and legislative action 

supporting early pay for performance concepts can clearly 

be observed as far back as HIPAA’s passage in 1996.5 

Legislative push away from fee for service (FFS) and toward 

fee for value (i.e. value over volume) has continued since 

then. For example, multiple medical specialists including 

urologists, gastroenterologists and orthopedists have begun 

chronicling the movement and emphasis of value over 

volume.6-9 More specifically, the Merit Based Incentive 

Payment System (MIPS) is also being discussed by 

specialist communities.10     

Cost, specifically rising healthcare cost, has been central to 

this discussion since the origins of reimbursed care 

provision.11 While it is a core issue, cost represents merely 

half of the discussion as it relates to value.12 This is because 

mathematically, value is equal to the difference in two 

interventions in terms of outcome divided by cost.6 While 

mathematically, the value discussion seems straight 

forward, it is actually very complex and includes many other 

factors such as patient selection, outcomes, risk 

stratification, patient registry, guideline based practice, care 

coordination and others. Use of clinical guidelines and 

registries and other best practices offer insight on practice 

decisions and may serve to reduce variability.6 As 

mentioned previously, the sum of all of this can be 

quantitatively described in terms of value, cost and quality 

or outcome. In medicine however, other variables are also 

measured and evaluated. These can include length of stay, 

readmission and complication rates.6 

CONSIDERATIONS FOR POTENTIAL NEXT 

STEPS FOR O&P  

The history of the development of the Healthcare Common 

Procedure Coding System (HCPCS) level II device L codes 

used by O&P to describe devices and services provided are 

documented elsewhere.13 Briefly, AOPA and Blue Cross 

and Blue Shield from South Carolina developed the 

template for the HCPCS L code system in the 1970’s. It was 

piloted in 1979 and soon after, other insurance companies 

began following use of the system.13 The development of 

the associated fee schedule reimbursement methodology 

can be found in the U.S. Omnibus Reconciliation Act of 

1987, which was implemented in 1989. The associated 

values were based on average payment amounts measured 

from 1986 to 1987 and are updated annually. Regulations 

for this methodology are in the U.S. Code of Federal 

Regulations (42 CFR 414.200). These coding and 

reimbursement methodologies have been associated with 

controversy by third party groups to government agencies 

who provide reimbursement based upon them and within 

the profession itself.  It is important to note that in contrast 

to the CPT system, the L code system has not been 

maintained and updated with the same degree of 

modernization and applicability to current clinical O&P 

practice. 

For instance, the Offices of the Inspector Generals for the 

U.S. Department of Health and Human Services and for the 

U.S. Department of Veterans Affairs have published 

numerous reports related to O&P. Some have been more 

clinically focused, exploring issues of population 

description, quality of care and other non-fiscal or less 

fiscally focused matters.14,15 However, the majority of these 

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have been related to questionable or fraudulent 

procurement, acquisition, payment and purchasing,16-21 

coding22 or billing23 related to O&P.  

Additionally, editorial publications from members of the 

O&P community have also speculated as to whether or not 

the current and continued use of HCPCS L codes is a viable 

path forward.13,24,25 Among the issues cited in these 

publications are: delays and uncertainty in the coding 

application process and the seemingly diminishing success 

rate of receiving newly developed codes for newly 

developed technology. The latter issue is further being 

discussed as a potentially limiting factor in the investment 

and pursuit of research and development efforts to explore 

creation of new technologies. The DARPA/LUKE arm 

technology26-28 was cited in 2008 as an example of a 

government funded technological advancement that may 

not be assigned a code25 and as of this writing in 2021, the 

component remains uncoded. Additional challenges with 

the current L code system include incorporation of 

professional service fees into the device reimbursement. 

This limits recognition of the contributions of the 

credentialed O&P clinician as a professional member of the 

healthcare team and perpetuates the image that the O&P 

clinician may serve more as device provider. Restated, 

because the L-codes describing O&P interventions are 

included within durable medical equipment (i.e. fee for 

device), the prosthetist-orthotist may not necessarily be 

afforded or regarded with comparable professional standing 

relative to providers who describe their services using CPT 

codes (i.e. fee for service providers). To the authors’ 

knowledge, the O&P profession has not published data on 

the practitioner’s work and service as assessed by time, 

mental effort, judgment, technical skill, physical effort, 

amortized educational costs (both entry level and continuing 

education), psychological stress and other factors as other 

professions have.  

Other issues cited include an inordinately lengthy list of 

codes relative perhaps to other professions. Some O&P 

professionals have suggested there may be interest to 

reduce the number of codes while others have suggested 

that more codes, allowing greater descriptive specificity are 

needed. The debate over the number of codes is further 

complicated when considering assertions of misapplication 

of codes potentially due to misunderstanding. This is an 

issue echoed in a recent OIG report.22 There are numerous 

other points of debate with the current coding system for 

O&P. To be clear, not all of the O&P community agrees that 

the L-code system is dysfunctional or in need of 

replacement. Some have indicated it is adequate, some 

have indicated revision may be in order and still others may 

be interested in an alternative system all-together.13,24,25 

 

CALL TO ACTION 

This manuscript provided a brief overview of the L-code 

system’s origins, controversies, strengths and weaknesses. 

However, the purpose was to challenge the profession to 

begin to contemplate next steps of coding and 

reimbursement against a backdrop where all of healthcare 

and medicine and reimbursement is clearly moving from fee 

for service to fee for value while O&P is currently in a 

different place entirely using a fee for device model. It would 

seem change is imminent but maybe not. It would seem 

timely for O&P to academically evaluate the strengths, 

weaknesses, opportunities, threats, merits and other 

considerations of: 

• staying with the current coding and reimbursement 

system,  

• revising and updating the current system,  

• alternate systems such as: 

o fee for service 

o fee for value 

o a hybrid system 

Further, perhaps there would also be value in studying the 

history and methods used to formulate the coding and 

reimbursement systems of other providers and specialists 

as well as those of other nations.29-38 This could assist in 

determining if elements of other models could benefit O&P 

or if other methods and models would serve the profession 

better in their entirety. Moreover, such an exercise could 

potentially be what is needed to affirm the current system is 

the best system and should remain in place. If however the 

O&P profession were to embark on the aforementioned 

discussion and conclude that the current system is not 

meeting the profession’s needs, perhaps completely 

reimagining the current HCPCS L coding and 

reimbursement methodology may be in order. To do this, it 

may be useful to objectively study and quantify the value of 

O&P professional service using methodologies outlined and 

previously used by other professions. Moving toward a 

novel, RVU based coding and reimbursement model used 

by and known to work for other healthcare service providers 

who also work with devices, could improve the professional 

standing of the O&P clinician within the interdisciplinary 

healthcare team and personify O&P professionals as 

service providers. 

In summary, the prior SSC1 was comprehensive and 

provided important professional awareness of and a call to 

action to engage more in economic science related to the 

O&P body of knowledge. The current call to action is in the 

context of legislative action driving all areas of healthcare 

toward value over volume. This is essentially driven by 

aligning incentives in such a way to prioritize the patient’s 

interests, in terms of their outcomes above all other 

considerations. In this, it seems wise for professions to lead 

and be an active part of change or risk having legislators 

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Highsmith MJ, Fantini CM, Smith DG. Contemplating health economics, coding and reimbursement in orthotics, prosthetics and pedorthics. Canadian Prosthetics 
& Orthotics Journal. 2021; Volume 4, Issue 2, No.5. https://doi.org/10.33137/cpoj.v4i2.36125 

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and payers make decisions on behalf of involved 

professions.   

ACKNOWLEDGEMENTS 

None.  

DECLARATION OF CONFLICTING 

INTERESTS 

The opinions and assertions expressed herein are those of the 

authors and do not necessarily reflect the official policy or position 

of any government or healthcare agency or academic institution to 

include the Uniformed Services University, the Department of 

Defense and/or the Department of Veterans Affairs. Dr. Douglas 

Smith received salary support through the Uniformed Services 

University of the Health Sciences under Award number 

HU00011920105 to the Henry M. Jackson Foundation for the 

Advancement of Military Medicine, Inc., and has been prepared in 

collaboration with the Center for Rehabilitation Sciences Research, 

Department of Physical Medicine & Rehabilitation, Uniformed 

Services University and the Department of Rehabilitation, Walter 

Reed National Military Medical Center. 

SOURCES OF SUPPORT 

None. 

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AUTHORS SCIENTIFIC BIOGRAPHY 

M. Jason Highsmith, PT, DPT, 

PhD, CP, FAAOP, attended 

Northwestern University’s 

prosthetics program in 2004 and 

was certified following residency 

in 2006. He is dual licensed in 

physical therapy and prosthetics. 

He currently serves as the VA’s 

National Director of Orthotic, 

Prosthetic & Pedorthic Clinical 

Services Program Office. He is 

joint appointed as a Professor at 

the University of South Florida 

(USF), is a Past-President of the 

American Academy of Orthotists & Prosthetists and is a Captain 

(Physical Therapist) in the US Army Reserves. Dr. Highsmith 

manages a considerable research portfolio and has published 

numerous peer-reviewed scientific manuscripts. The views 

expressed in this article are his alone, and do not represent the US 

Departments of Defense, Veterans Affairs, any university or any 

other organization.    

Christopher Fantini, MSPT, CP, 

BOCO, is a board-certified 

Prosthetist/Orthotist with over 25 

years of physical rehabilitation 

experience.  Mr. Fantini received 

a Master of Science in Physical 

Therapy from Columbia University 

in New York City and earned post 

graduate Certification in 

Prosthetics from Northwestern 

University in Chicago. Mr. Fantini 

has participated in notable work 

on advanced prosthetic devices to 

help facilitate the progression of 

emerging concepts & technologies to their clinical application. He 

has authored numerous peer reviewed articles as well as several 

chapters in texts relating to prosthetic care. He participates in the 

education/mentoring of Residents in the disciplines of Physical 

Medicine & Rehabilitation and Orthotics/Prosthetics. He has and 

continues to work on several projects relating to both direct patient 

care as well as strategic planning to advance the field of O&P. The 

views expressed in this article are his alone, and do not represent 

the US Department of Veterans Affairs or any other organization.    

https://doi.org/10.33137/cpoj.v4i2.36125
https://oig.hhs.gov/oei/reports/oei-03-11-00351.pdf
https://www.va.gov/oig/pubs/VAOIG-16-01913-223.pdf
https://oig.hhs.gov/oei/reports/oei-02-10-00170.pdf
https://opedge.com/Articles/ViewArticle/2008-08-01/2008-08_03
https://opedge.com/Articles/ViewArticle/2008-08-01/2008-08_03
https://opedge.com/Articles/ViewArticle/2008-08-01/2008-08_02


 

6 

Highsmith MJ, Fantini CM, Smith DG. Contemplating health economics, coding and reimbursement in orthotics, prosthetics and pedorthics. Canadian Prosthetics 
& Orthotics Journal. 2021; Volume 4, Issue 2, No.5. https://doi.org/10.33137/cpoj.v4i2.36125 

ISSN: 2561-987X 
CONTEMPLATING HEALTH ECONOMICS, CODING AND REIMBURSEMENT  

Highsmith et al., 2021 CPOJ 

Special  

 

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Douglas G. Smith, MD is a 

board-certified Orthopaedic 

Surgeon with over 30 years of 

experience in amputation 

surgery, the rehabilitation of 

individuals with limb loss, 

prosthetic prescription and 

prosthetic evaluation.  He is 

Professor Emeritus in the 

Department of Orthopaedics and 

Sports Medicine at the University 

of Washington in Seattle.  He is 

also a Professor in the 

Department of Physical Medicine 

and Rehabilitation at the Uniform Services University of the Health 

Sciences in Bethesda, Maryland.  He works for the Henry M. 

Jackson Foundation for the Advancement of Military Medicine, and 

in his role as the Chief Orthopaedic Advisor for The Center for 

Rehabilitation Sciences Research in the department of Physical 

Medicine and Rehabilitation at The Uniform Services University he 

provides clinical education, consultation to the multi-disciplinary 

amputee care team and he supervises clinical research in limb 

salvage, amputation surgery and rehabilitation.  He also serves on 

the American Orthotic and Prosthetic Association (AOPA) medical 

advisory board.  The views expressed in this article are his alone, 

and do not represent the US Department of Defense, any university 

or any other  organization.    

 

 

https://doi.org/10.33137/cpoj.v4i2.36125

