For the Bionics Revolution to Take Place – Advanced Prosthetics Must be Reimbursable by Medicare

Posted in Insurance Coverage, Medicare, Prosthetics
Jon Lichtenstein

The recent success of people like Elon Musk in developing game changing products such as reusable rockets, autonomous vehicles and the Hyperloop have created an illusion that useful revolutionary products will inevitably be adopted by the marketplace.  Every product however, faces a myriad of adoption issues. Products only succeed at certain price points. For some products, like autonomous vehicles, adoption will only happen to the extent government takes the initiative, changing laws and enacting intelligent regulations.  The Hyperloop has the potential to revolutionize travel and become the largest public works project since the interstate highway system, but like the interstate highway system, it will never happen unless enlightened leadership in Washington provides a pathway for it.

Despite the clear relationship between emerging technologies and government, many in the political class prefer to peddle the fiction that government’s only proper role with respect to commerce is to get out of the way. While there are reasonable debates such as whether Washington should be involved in picking winners and losers, it cannot be denied that the market for drones will be dependent on proper and thoughtful regulation, or that government subsidies for renewable fuels played a huge role in fostering what is now a burgeoning industry.

Which brings me to the subject matter of this blog. With little fanfare, there has been a bionics revolution in the design and development of lower and upper limb prosthetics.  Today, at a time when the majority of amputees continue to utilize arms with hooks and inanimate legs, prosthetics are available from different companies with fully articulated and motorized fingers and knees that amputees can learn to control through their own nervous system.  Recent advancements in several technological areas, including 3d printing, have taken the stuff of pure science fiction and have created products which have raised the hopes of amputees across the world, but which are still waiting for wide access into marketplace.

For decades solar and wind were inaccessible to the marketplace without government subsidies.  Like wind and solar, bionics is currently too expensive for the mass market.  While the United States government is providing some advanced prosthetics to soldiers injured in combat in accordance with its moral obligations, the average citizen amputee is still utilizing prosthetics technology from the 20th century.  Federally financed insurance programs like Medicare/Medicaid will pay for pacemakers, organ transplants, knee replacements and the myriad of other expensive medical procedures needed by the otherwise able-bodied, but will not pay to make whole an amputee through advanced neuro-prosthetics, since it continues to lump prosthetics in the same family of devices as “durable medical equipment” (DME) and general medical supplies, as if prosthetics were similar to wheelchairs, walkers and bandages.

What is and what is not reimbursable through Medicare depends on rules that are written and adopted by the Centers for Medicare & Medicaid Services (CMS).  Given the comprehensive nature of the Medicare and Medicaid, the CMS rules are also used by private insurers to develop their own criteria for what is reimbursable.  Given this, the reality is that government controls the market for advanced bionics/prosthetics and they will never become a mass consumer product until CMS through its Medicare/Medicaid rule making authority, creates a market for them.

Without a large enough market no private company sought to develop a truly multi-functional upper arm extremity.  It took the Defense Advanced Research Projects Association (“DARPA”) the research and development arm of the US government to partner with inventor Dean Kamen and his company DEKA to develop a powered shoulder, elbow and hand which could  reach  behind the back, lift a bag of groceries, manipulate a glass of water, hold an egg or a gallon of milk which would also communicate how firmly something was being grasped.  Only the government was willing to spend $25 million to invent a product with an uncertain economic payoff.  Even after DARPA developed the DEKA “LUKE” arm it spent two years trying to find a private developer to gift it too in exchange for an agreement to manufacturer and market it.  Finally, in July 2016 Mobius Bionics announced it would be bringing the DEKA arm to market in late 2016.

Despite this incredible assist from the US taxpayer, it remains doubtful that you will be seeing the LUKE arm any time soon.  The Mobious Bionics website does not cite the cost of the arm, nor is there any reference to any insurance programs willing pay for it, because there aren’t any.  It has been reported that its likely cost will be in the range of $100,000, although the ultimate cost will depend on the demand, a classic catch-22.  Instead of information on reimbursement, the Mobious website directs one to a page for donations  to the organization SoldierStrong which is working to provide the LUKE arm to veterans, since apparently, even our veterans who have lost limbs in service to this country will not be getting the Luke arm despite their incredible sacrifices to the country and to each one of us.

The only reason we live in a society where a quadruple bypass is possible is that CMS allows doctors to be reimbursed for performing one. Without insurance, the procedure would be far beyond the financial capability of the average citizen.  According to an American Heart Association report, the average hospital charge for  a heart bypass is $117,094 with heart valve replacement costing $164,238.  No sacrifice required.

The development of the opposable thumb allowed humans to master the world.  Yet many private plans will not reimburse for the most current hand prosthetics, which provide microprocessor controlled and motorized digits. Those that do, usually require a showing that a standard “body powered prosthetic device” cannot be used, or is insufficient to meet the function and needs of the person in  their activities of daily living.  In other words, if you have been getting by with your old prosthetic, you do not qualify.  Although Medicare does not explicitly require such a showing, it is unclear whether Medicare claim reviewers consider it when making determinations of “medical necessity.”

The current challenge for society and in particular CMS, is to work out how to effectively and efficiently make bionics technology available to the public and by doing do, start the process whereby manufacturers bring down the prices through mass production.  There is no reason that so many people are unnecessarily living their lives with prosthetics that have changed little since the early 20th century.  Nor is there any reason why an insurance company routinely pays $750,000 for a liver or lung transplant or $1.2 million for a new heart but refuses to pay a fraction of that to replace a lower or upper extremity.


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