U.S. Orthotic and Prosthetic Device Markets Are Each Facing Distinct Reimbursement Pressures, With the Prosthetic Market Impacted Most Heavily

BURLINGTON, Mass., April 2, 2014 /PRNewswire/ -- Decision Resources Group finds that the U.S. market for prescription-based orthotic and prosthetic devices will grow modestly through 2022 despite each market facing distinct reimbursement challenges. This growth can be primarily attributed to the expanding aging population because older individuals are most susceptible to a variety of maladies, including arthritis, orthopedic soft tissue damage, diabetes, and peripheral artery disease which spur usage of these products.

Other key findings from the Medtech 360 report entitled US Markets for Orthotic and Prosthetic Devices 2014:

• Orthotics versus prosthetics: The U.S. orthotic device market accounts for 90 percent of total orthotic and prosthetic device revenues, and within that market, orthopedic braces generate a similar percentage. As a result, major orthopedic brace manufacturers such as DJO Global, Ossur, and DeRoyal are generating large shares in the overall market.
• Reimbursement cuts: Orthotic and prosthetic device manufacturers face significant pressure from general reimbursement reductions that will intensify as proposed cuts to Medicare continue through 2020, which is negatively affecting pricing. Pricing pressures have been further heightened by product commoditization.
• Over-the-counter orthotics: The proliferation of over-the-counter orthotics available through retail channels has also stifled demand for products available by prescription only.

Comments from Decision Resources Group Senior Analyst Brady Baker:

• "The prosthetic device market is facing an even greater threat through 2022 as Medicare audits continue to investigate the medical necessity of lower extremity prosthetic components. This may result in the denial of reimbursement, and the uncertainty is leading some facilities to choose lower-cost options."
• "Large competitors, such as Ottobock and Ossur, have distributed marketing literature to assist with coding and to ensure defensible reimbursement claims to deal with this hurdle. Although this strategy will help them stand out against their competitors, these audits will ultimately result in declining revenues in the lower extremity component market."

About Decision Resources Group
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SOURCE Decision Resources Group