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VOLUME 5, ISSUE 2 

 2022 

 

LETTER TO THE EDITOR 

Pardy C, Scott S, Barnert J, Reimer C. Letter to the editor regarding: Evolving business models in orthotics by Schneider N. Canadian Prosthetics & Orthotics 

Journal. 2022; Volume 5, Issue 2, No.5. https://doi.org/10.33137/cpoj.v5i2.38313 

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https://doi.org/10.33137/cpoj.v5i2.38313


 

1 

Pardy C, Scott S, Barnert J, Reimer C. Letter to the editor regarding: Evolving business models in orthotics by Schneider N. Canadian Prosthetics & Orthotics 
Journal. 2022; Volume 5, Issue 2, No.5. https://doi.org/10.33137/cpoj.v5i2.38313 

 

 

LETTER TO THE EDITOR 

 

LETTER TO THE EDITOR REGARDING: EVOLVING BUSINESS MODELS IN ORTHOTICS 

BY SCHNEIDER, N. 

Pardy C1*, Scott S2, Barnert J2, Reimer C3 
 
1 Alberta Orthotic and Prosthetic Centre, Calgary, AB, Canada. 
2 Cascade Prosthetic Services, Calgary, AB, Canada. 
3 Colman Prosthetics and Orthotics, Calgary, AB, Canada. 

  

ABSTRACT   

The purpose of this letter is to continue the dialogue 

regarding the paper "Evolving business models in Orthotics" 

in the Canadian Prosthetics & Orthotics Journal Volume 4, 

Issue2, No.3, 2021. In it we present the perspective of the 

current Alberta Association of Orthotists and Prosthetists 

(AAOP) and provide additional context and information on 

historical events. Finally, we provide additional clarity on 

how costing is approached in the Province of Alberta 

(Canada) and the purported inequity in compensation 

between the two disciplines. 

Dear Canadian Prosthetics & Orthotics Journal Editorial 
Board,  
 
This response is on behalf of the Alberta Association of 

Orthotists and Prosthetists (AAOP). The AAOP is a 

voluntary non-profit professional organization that promotes 

communication and awareness in all matters pertaining to 

our profession. Within that framework, our role is to promote 

the professional services of our members within Alberta 

who provide orthotic and prosthetic treatments which enrich 

the lives of those we help. This role includes being a 

collective voice in discussion with various organizations with 

respect to matters of pricing and policy. We are not a 

governing body and do not set pricing on our own accord.  

We have a recommended pricing structure, though no 

individual clinic is required to adhere to it.  

The purpose of this letter is to comment on events and 

actions attributed to our association contained within the 

recent CPOJ article “Evolving business models in orthotics 

by Schneider, N.”1 and provide accurate contextual 

information and insight into the pricing of orthotic and 

prosthetic  treatment  in  Alberta  in  general,  and  how  it is  

 

applied by Alberta Aids to Daily Living program specifically.  

We hope this will help to expand the discussions that are 

presently occurring across the country with respect to 

National and Provincial pricing guides.  

To begin with, this article1 states that it provides a broad 

perspective of the orthotic business model and 

improvements that would have a positive impact on patient 

care and orthotic compensation. While that is a notable and 

welcome endeavour, in our opinion, we find the focus strays 

from that objective preferring to concentrate on grievances 

with the AAOP and a perceived discrepancy between 

prosthetic and orthotic compensation.  It must be noted that 

this article1 focuses on pricing as it pertains to the Alberta 

Aids to Daily Living program (AADL) even though, they are 

one of many organizations that provide funding for orthotic 

and prosthetic care and treatment to Albertans with mobility 

impairment.  

Orthotists and Prosthetists in Alberta are not licensed by the 

province and membership in the AAOP is voluntary and has 

no authority to dictate pricing or pricing models. Current 

AADL policy states that pricing is to be established through 

a “mutually agreeable” process, and in the past, AADL has 

worked with the AAOP to establish pricing. That is no longer 

the case as AADL sets its pricing with minimal consultation 

from the Vendor representatives. Each clinic has the 

freedom to establish its own pricing methodology for care 

and treatment of clientele who do not meet AADL eligibility 

criteria.  

The overarching argument of this article appears to be that 

the Governance of AAOP has limited Orthotists and 

fostered a long-standing structural inequity between orthotic 

and prosthetic treatment. Further, that this perceived 

inequity is reflected in the AADL’s Approved Products Lists 

(APL’s) for orthotics and prosthetics,2,3 and favours 

prosthetics at the expense of orthotics. This document will 

address and provide documentation supporting the position 

we will put forth.  The article1 lays out many points 

 
OPEN  ACCESS 

* CORRESPONDING AUTHOR: 

Connor Pardy, M.Sc., CPO 
Alberta Orthotic and Prosthetic Centre, Calgary, AB, Canada. 
Past-President of the Alberta Association of Orthotists and Prosthetists 
Email: connor@aopconline.com 
ORCID ID: https://orcid.org/0000-0003-4475-9775 

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

Volume 5, Issue 2, Article No 5. 2022 

 

 

https://doi.org/10.33137/cpoj.v5i2.38313
http://www.albertaoandp.com/
http://www.albertaoandp.com/
mailto:connor@aopconline.com
https://orcid.org/0000-0003-4475-9775
https://jps.library.utoronto.ca/index.php/cpoj/index


 

2 

Pardy C, Scott S, Barnert J, Reimer C. Letter to the editor regarding: Evolving business models in orthotics by Schneider N. Canadian Prosthetics & Orthotics 
Journal. 2022; Volume 5, Issue 2, No.5. https://doi.org/10.33137/cpoj.v5i2.38313 

CANADIAN PROSTHETICS & ORTHOTICS JOURNAL 

ISSN: 2561-987X LETTER TO THE EDITOR 

Pardy et al., 2022 

purporting to substantiate their argument, we would like to 

add additional information and provide a more accurate 

picture of orthotic and prosthetic pricing in Alberta in 2021. 

The underpinnings of the article’s inequity argument appear 

to stem from the following issues. 

Pricing of Orthotic Procedures in Alberta 

The article1 stated that the current AADL’s Approved 

Product Lists are loosely based upon the American Orthotic 

Prosthetic Association’s (AOPA) cost accounting manual,4 

this is not entirely accurate. Prior to 2001 this was the case, 

however, since 2002 they have been based loosely on a 

formula developed by Dr. Phillip Jacobs in 2001, though 

there are some similar points in common with the AAOP 

cost accounting system.5  

From 2002 through to 2017, AADL pricing has been based 

on the following formula, Price = direct materials (materials 

+ 12% handling/loss/rework/warranty) + Shipping + (rate X 

time) this is substantially more closely aligned with the initial 

formula presented by Dr. Jacobs, price = direct materials + 

(rate X time) than it is with the AOPA cost accounting 

method.  

This method is still in use for pricing most of the orthotic and  

prosthetic care however, AADL abandoned it for some of 

the procedures and new benefit codes introduced in 2017.   

It is important to note that handling/loss/rework/ warranty 

“markup” has not increased since 2003 but, in fact, 

decreased from 16% to 12% with the implementation of the 

“Merle Taylor” report 6 of 2008.  This markup does not vary 

from component to component as the paper1 suggests but 

is applied equally across components and disciplines.  

Times to Perform Orthotic Procedures  

The perceived inequity if procedure times stems from an 

alleged 1991 AAOP decision to discount the times to 

perform orthotic procedures in the AOPA cost accounting 

system by 20%. No citation was provided for this claim other 

than a statement that this was reported by an AAOP 

member at an AAOP meeting on September 19, 2002, 11 

years after that event.  A search of the AAOP archives have 

revealed no discount occurred; personal communications 

with the individual specifically named, indicated that he has 

no recollection of making that statement, though he does 

recall the meeting.7   

Further, discussions with Orthotist members who were 

practicing and active with the AAOP at the time have no 

recollection of this. However, they did indicate that the 

AADL, on their own initiative, did reduce the times of some 

knee bracing procedures and there is some debate as to 

whether that has been rectified with the current pricing 

methodology. There exists some evidence that this 

occurred but was limited in scope of application and 

appears to have been addressed in 2001 and 2002.7  

Additionally, a scan of the times to perform orthotic 

procedures in Alberta and those of other jurisdiction that 

also used the AOPA cost accounting manual, as well as the 

Merle Taylor Report that reviewed selected times to perform 

procedures from Ontario and Manitoba show no evidence 

of any serious discrepancy in this area (Alberta Professions 

and Occupations Bureau Letter, Charlton D to Guest D, 

August 08, 1991;  Ref: HDB.31/8974-1). 

The standard mantra of documentation is that “if it is not 

written it did not happen”, in this case no written 

documentation is presented or can be found; therefore, one 

can only conclude that this did not happen.    

AAOP Introduced a Profit Margin on Material Costs  

The article1 asserts that in 1991 the AAOP introduced a 

profit margin on material costs that varied from component 

to component, and that the original AOPA cost accounting 

system contained no such profit margin. A review of the 

AOPA cost accounting manual indicates that a “loss and 

rework” factor are added to the material and component 

costs prior to arriving at a “total cost of direct materials ”. 

This varied from component to component based on risk of 

loss and formed the material cost entry on the calculations 

worksheet.4 It was this practice, consistent with the AOPA 

cost accounting system that was added into AAOP 

calculations and is not a margin of profit.   

Governance of AAOP  

The article1 refers, though provides no citations, to three 

studies being instrumental in the development of pricing 

formulae: the study by Dr. Jacobs, the Frameworks Survey, 

and the Merle Taylor report. Both Dr. Jacobs study and the 

Merle Taylor report were funded by AADL, while the 

Frameworks study was funded by the AAOP. The 

Frameworks study did not validate Dr. Jacob’s work, as it 

dealt with times to perform procedures and not 

compensation or labour rates. After a thorough review the 

AAOP determined Frameworks contained some serious 

flaws and was never accepted by the AAOP and was not 

officially given to AADL and played no role in the pricing 

discussions. Ultimately, the AAOP committee decided that 

an enhanced version of the Dr. Jacobs formula would 

become the go forward pricing formula presented by the 

AAOP to the AADL in April 2003.7   

There are no documents to support the argument that AADL 

has “offered” to implement separate applications of the 

AOPA cost accounting system. AADL consistently used the 

“Merle Taylor” formula from 2008 until 2017, when this was 

arbitrability changed by AADL without AAOP input.  In 2007, 

a proposal was put forth to AADL to implement a pilot 

project creating a ”service” model of pricing for Orthotics.8 

This was never implemented. While the membership of the 

AAOP has fluctuated through the years the split between 

Orthotic and Prosthetic members has always been fairly 

even. At present AAOP has 35 members: 12-Prosthetists, 

https://doi.org/10.33137/cpoj.v5i2.38313


 

3 

Pardy C, Scott S, Barnert J, Reimer C. Letter to the editor regarding: Evolving business models in orthotics by Schneider N. Canadian Prosthetics & Orthotics 
Journal. 2022; Volume 5, Issue 2, No.5. https://doi.org/10.33137/cpoj.v5i2.38313 

CANADIAN PROSTHETICS & ORTHOTICS JOURNAL 

ISSN: 2561-987X LETTER TO THE EDITOR 

Pardy et al., 2022 

11-Orthotists, 6-Dually certified, 2-Associates (who are both 

from solely Orthotic facilities), 2-Registered Prosthetic 

Technicians, and 2-Registered Orthotic Technicians. It is 

not reasonable to assume that the Dual Certifees are partial 

to prosthetic issues over orthotic issues, nor is it reasonable 

to state that “prosthetic issues tend to drive the agenda”.    

The article1 postulates that the governance practices of the 

AAOP limits orthotists. One example cited is inclusion in the 

Health Professions Act of 1996 and making the condition of 

licensure the minimum standard in Allied Health. Many 

factors work against licensure for this profession in Alberta 

and across the country and the AAOP has not been the only 

provincial association to attempt to achieve this goal.  

Issues that exist today were also present in 1996 and no 

provincial association has managed to attain licensure, 

however, in Alberta it has not been for lack of effort or 

acceptance of a government offer.  

In 1991, the AAOP approached the Health Disciplines 

Board making a presentation on our profession. We were 

advised by the Registrar that the Act did not restrict the right 

to practice and only restricts the use of titles (Alberta 

Professions and Occupations Bureau Letter, Charlton D to 

Guest D, August 08, 1991.  Ref: HDB.31/8974-1). At that 

time, subsequent the decision in the matter of Canadian 

Board for Certification of Prosthetists and Orthotists v. 

Canadian Pharmaceutical Association and Board for 

Orthotists Certification, titles were protected by trademark, 

and it appears the overriding opinion was this would have 

been costly and laborious for little to no gain. This matter 

was brought to the fore front by the AAOP, and the same 

individual who spearheaded the initiative in 1991, sought a 

legal opinion on this again in 2001. It was the opinion of the 

association’s lawyer (according to a letter by Renouf S to 

Guest D in September 27, 2001) at the time that success 

would have been unlikely. This was not simply a matter of 

the AAOP “declining” an offer.    

The Merle Taylor Formula  

In response to an impasse in discussions, and a rejection of 

the pilot project for two different pricing methods for 

orthotics and prosthetics, the AAOP and AADL mutually 

agreed to a 3rd party review of orthotic and prosthetic 

business arrangements in Alberta. AADL contracted, and 

paid, Merle Taylor consulting to carry out this review. The 

objectives being to determine:  

• Whether AADL’s current payment arrangements and fee 

schedule for orthotic and prosthetic services are 

adequate compared to similar services and  

• Whether there are different payment approaches that 

would improve the efficiency and fairness of the 

payment process.  

The result was a process that removed the aspect of profit 

from materials and componentry and created a formula for 

developing a charge-out rate (should never have been 

called a labour rate) that was equitable, though not equal, 

between orthotics and prosthetics. This formula takes into 

account public sector salaries for both clinicians and 

technicians, administrative time, inflation, billable/non-

billable hours, benefits, weighted labour times (prosthetic 

more clinician time vs orthotics more technician time), 

overhead, and a profit objective. In short, all the costs of 

operating a prosthetic and orthotic facility are captured in 

this rate, as a result, the rates differ between orthotics and 

prosthetics but are equitable. The labour component of this 

formula was based on the “top-of-range” from the public 

facilities for both clinicians and technicians as derived from 

the Health Sciences Association of Alberta collective 

agreements and applied equally to both the orthotic and 

prosthetic calculations. They were not, however, based on 

“total compensation” as asserted in the paper.1  

In 2008, the Merle Taylor Report determined that for 

facilities to realize a potential profit of 10% charge-out rates 

of $162.00/hr for prosthetics and $130.00/hr for orthotics 

was required.  While the final numbers were different, these 

results were similar to internal reviews taken in 2002 that 

identified differing rates for orthotics and prosthetics. While 

this was equitable, it was not equal. It was put forward that 

given orthotists and prosthetists have the same 

qualifications and must meet the same national standards, 

the practice of blending the rates to create a single charge-

out rate would continue.  This reduced the prosthetic rate 

and profit potential and increased the orthotic rate and profit 

potential.   

In 2010, AADL offered to discuss the separation of rates, 

while two attendees at the table agreed, the AAOP was 

unanimous keeping the same single charge out rate. The 

blending of the rates continues today, the current AADL 

charge-out rate that was established in 2019 of $185.77/hr9 

which is a blend of the calculated prosthetic formula rate of 

$205.94 and the orthotic formula rate of $165.59, this is a 

direct subsidy of $20.18 favouring orthotics and changes 

the potential for profit to 1% for prosthetics and 25% for 

orthotics.   

The article1 comments on subjects that are out of the scope 

of the AAOP, and which have been eloquently addressed in 

a letter to the editor by Orthotics Prosthetics Canada 

(OPC).10 

In summary, the article1 in question did not provide a 

complete historical account of the development of pricing 

models for orthotic and prosthetic services used today with 

the AADL in Alberta. This letter aims to provide additional 

information and clarification on the opinion that prosthetics 

unfairly benefits at the expense of orthotics. It also provides 

the background of the development of our current pricing 

methodology and provides facts surrounding licensure.    

https://doi.org/10.33137/cpoj.v5i2.38313
https://opcanada.ca/


 

4 

Pardy C, Scott S, Barnert J, Reimer C. Letter to the editor regarding: Evolving business models in orthotics by Schneider N. Canadian Prosthetics & Orthotics 
Journal. 2022; Volume 5, Issue 2, No.5. https://doi.org/10.33137/cpoj.v5i2.38313 

CANADIAN PROSTHETICS & ORTHOTICS JOURNAL 

ISSN: 2561-987X LETTER TO THE EDITOR 

Pardy et al., 2022 

There is a threat that exists for Albertans with mobility 

impairment, coming from the blended rate and removing 

profit potential from prosthetics. As AADL APL’s fail to keep 

pace with material inflation, more of the costs will fall on the 

clients who can least afford it. The ability to respond to 

articles such as this one1, providing additional perspective, 

is important so that individuals in positions of authority in 

matters such as this can base their decisions on a complete 

spectrum of available information in order to prevent further 

erosion patients’ accessibility to life enhancing care and 

treatment.  

CALL TO ACTION 

While the article1 in question was, in our opinion not fully 

comprehensive it did broach a topic that merits more 

consideration. As Orthotists and Prosthetists, we need to 

continue to move away from being perceived to be providers 

of things, to the reality that we provide professional services 

to preserve our unique niche within the healthcare 

continuum. This has long been a goal of our national body, 

Orthotics Prosthetics Canada, who have been working hard 

on this transition with the ongoing changes to exams and 

the national body itself with great success. A national coding 

guide that furthers this transition is the next logical step and 

merits discussion and action.  

Pricing for orthotic & prosthetic care and treatment is a 

complicated matter as we function in an area of Provincial 

Jurisdiction, also interacting with Federal Programs and 

nationwide insurance providers. Some provinces have 

established independent living programs that dictate pricing 

and service, but this is not universal in pricing formulae or 

benefits provided. Further, we provide professional services 

to support individuals with mobility or physical impairment, 

but at the end of the day it is a device that enables these 

individuals to attain a level of restored function.  

The AAOP pricing manner discussed in the article1 and this 

letter may not be perfect, but the structure does represent a 

substantial move away from device-based model to a 

professional services model as it is clear and transparent 

with all the pricing inputs. Our understanding is that OPC 

has initiated the process of developing a coding document 

that can be a reference for the provincial associations and 

to that end, AAOP is putting our full support behind it.    

ACKNOWLEDGEMENTS 

We would like to thank the following people for their contributions: 

Ryan Cochrane, CPO(c), and the many Members of the AAOP’s 

Board of Directors and Stakeholder Relations Committee, as well 

as David Moe, CP(c), FCBC and John Rahman, CO(c), for their 

invaluable contributions to this endeavour.    

DECLARATION OF CONFLICTING INTERESTS 

Connor Pardy is currently Past-President of the Alberta Association 

of Orthotists and Prosthetists (AAOP), and was the President at the 

time of writing. Connor Pardy is currently on the Board of Directors 

of Orthotics Prosthetics Canada (OPC), and is a practicing Certified 

Prosthetist and Orthotist at Alberta Orthotic and Prosthetic Centre. 

REFERENCES 

1.Schneider N. Evolving business models in orthotics. Can Prosthet 

Orthot J. 2021; Volume 4, Issue 2, No.3. https://doi.org/10.33137/ 

cpoj.v4i2.35876 

2.AADL approved product list: orthotic benefits [Internet]. Alberta 

Health, 2021; [cited 2022, August 9]. Available at: 

https://open.alberta.ca/dataset/f3ab974d-8f09-4f45-8045-

2498f464c2e3/resource/99cebd70-4063-4fa7-b411-

8b476f5b9619/download/healthaadl-manual-o-products-orthotic-

2021-10.pdf 

3.AADL approved product list: prosthetic benefits [Internet]. Alberta 

Health, 2021; [cited 2022, August 9]. Available at:   

https://open.alberta.ca/dataset/f3ab974d-8f09-4f45-8045-

2498f464c2e3/resource/fef4d4aa-632f-4b9b-a907-

f35e5066947c/download/health-aadlmanual-p-products-

prosthetic-2021-10.pdf 

4.Hammontree S, Bradshaw L, Fancher W, Molnar G, Scott G.  

American Orthotic and Prosthetic Association. Cost Accounting 

Manual. Date unknown. 

5.Development of a Professional Fee Guide for Orthotists and 

Prosthetists in Alberta.  Date and author unknown. 

6.Taylor M. Alberta Aids to Daily Living, review of orthotist and 

prosthetist business arrangements [Internet].  Alberta Seniors and 

Community Supports, 2008; [cited 2022, August 9]. Available at:    

http://www.albertaoandp.com/uploads/files/Member%20Docs/Merl

e%20Taylor%20report%202008.pdf  

7.Schneider M, Toller J, Allen J, Calder K, Faulkner B, Schneider N 

(Chair), Final Report. Study of Formula and Fee Schedule.  Alberta 

Association of Orthotists and Prosthetists.  April 21, 2003. 

8.Schneider N. Braceworks Custom Orthotics. Proposed Pilot 

Project: Test Application of Service Model Under Existing Formula 

for Orthotics. September 05, 2007. 

9.AADL Spreadsheet. AADL Charge Out Rate – 2018 proposed 

rate, implemented 2019. 

10.Laakso L. Letter to the editor regarding: Evolving business 

models in orthotics. Can Prosthet Orthot J. 2022; Volume 5, Issue 

1, No.3. https://doi.org/10.33137/cpoj.v5i1.37717 

 CITATION 

Pardy C, Scott S, Barnert J, Reimer C. Letter to the editor regarding: 

Evolving business models in orthotics by Schneider N. Canadian 

Prosthetics & Orthotics Journal. 2022; Volume 5, Issue 2, No.5. 

https://doi.org/10.33137/cpoj.v5i2.38313 

KEYWORDS 

Orthosis, Prosthesis, Prosthetics, Orthotics, Funding, Economic, Health 

Care, AAOP, AOPA, AADL, Orthotist, Prosthetist, Rehabilitation, 

Mobility Impairment 

https://doi.org/10.33137/cpoj.v5i2.38313
https://opcanada.ca/
http://www.albertaoandp.com/
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https://open.alberta.ca/dataset/f3ab974d-8f09-4f45-8045-2498f464c2e3/resource/99cebd70-4063-4fa7-b411-8b476f5b9619/download/healthaadl-manual-o-products-orthotic-2021-10.pdf
https://open.alberta.ca/dataset/f3ab974d-8f09-4f45-8045-2498f464c2e3/resource/99cebd70-4063-4fa7-b411-8b476f5b9619/download/healthaadl-manual-o-products-orthotic-2021-10.pdf
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https://doi.org/10.33137/cpoj.v5i1.37717
https://doi.org/10.33137/cpoj.v5i2.38313

