Payors, in questioning the value of
their money, are less inclined to
cover the cost of microprocessor
-controlled knees for US amputees

Payors less inclined to cover high-tech prosthetics for amputees

October 30, 2017
by John R. Fischer, Senior Reporter
Medicare and private health insurers have created a tech gap by tightening eligibility criteria for U.S. amputees to qualify for new microprocessor-controlled knees (MPK), according to a new study released by the RAND Corporation.

Payors, in questioning the value of their money, have been less inclined to cover MPKs, which are slightly more expensive over a lifetime compared to non-MPKs (NMPK), and are more efficient in reducing the occurrence of preventable injuries and deaths.

“I think that in many instances, payors believe that short-term savings are an objective,” Tom Fise, executive director of the American Orthotic and Prosthetic Association (AOPA), told HCB News. “And so, if they can find a way to provide a cheaper device for today – even if long-term, it’s not cost-productive. That somehow, the people feel they’re achieving their economic missions.”

MPKs are equipped with a computer component that prevents trips and falls by anticipating changes in slope or the angle of the ground that a person walks on. NMPKs use technology developed in the 1970s that has not been significantly updated since, according to Fise.

The study consisted of a literature review of the clinical and economic impacts of prosthetic knees with technical experts discussing their findings in panel meetings and implementing a simulation model over a ten-year period for unilateral transfemoral Medicare amputees with Medicare Functional Classification Levels of 3 and 4.

MPK users were noted to experience a reduction in injury-related falls and incidents of osteoarthritis, and gained about 0.09 life years per person over ten years, compared to NMPK users. In the same time, MPKs are associated with an incremental cost of $10,604 per person and provide an increase of 0.91 quality-adjusted life years per person, resulting in a total incremental cost of $11,606 per quality-adjusted life year gained.

Yet, fewer amputees have had access to MPKs, with the study indicating a 15 percent decline in Medicare total payments from 2010 to 2014 despite advances in technology.

This lack of access to new technology puts many at risk of injury, with a fall rate of 86 percent among NMPK users compared to 26 percent of those who use advanced prosthetic technology. A total of 182 falls that result in injuries per 1,000 NMPK patients will take place each year with 14 resulting in death. In contrast, 38 MPK amputees out of the same number will experience falls with only three fatalities.

MPKs are associated with a decrease in direct health care costs by $3,676 per person per year, and indirect ones by $909 per person per year. Overall annual costs for MPK and NMPK users are $15,083 per patient and $13,382 per patient, respectively, creating a net increase of $1,702 based on current payment levels for devices and repair services. Economic benefits are comparable to those of total knee replacements and better than those of an implantable cardioverter defibrillator.

Hangsheng Liu, a policy researcher for RAND Corporation and the lead author of the study, says the value of health care should be defined based on the benefits that MPKs provide for amputees.

“There are two major sources of benefits," he told HCB News. "One is the reduction in the number of injuries. The second is the reduction in incidents of osteoarthritis. These two are the drivers of cost-savings. If you just look at the dollar amount, you probably won’t get a net savings per se. The quality of life of MPK users is much higher. That’s how we define the value. This is a very standard way of defining value in health care. How much money do you have to spend in order to gain a quality-adjusted life year?”

Fise agrees with Liu’s assessment and says that payors should take into consideration the clinical and financial benefits of MPKs when deciding whether to cover the use of one for an amputee.

“I think that with the kind of data that we now have, such as the greater safety, savings of lives and the expense, we have to be looking for all payors to take that information into account and make it a smaller allocation of resources,” he said. “Yes, there might be a slightly [higher] upfront in costs for the MPK, but in the long-run, it saves them money.”

The authors do not address exact MPK and NMPK criteria of payors.

Research was sponsored by AOPA and conducted by RAND Health.