Is There Enough Margin In Medicare Reimbursement of Therapeutic Shoes and Inserts for Diabetics?

Is the $84 question the new $64,000 question?

A customer recently shared a new spin on the TSD program. After several years of hearing how difficult it is to get reimbursed and how little money the program pays given the amount of time and work involved, very few practitioners were still accepting assignment. As a shoe company that makes diabetic shoes, it was encouraging to hear the spin and we think it’s one to share with our other customers.

The customer shared with me his company’s conclusions and I have paraphrased them below:

• The demand for TSD service is still there. In fact, it’s arguably stronger than ever given the decline in the number of providers. There exists an opportunity if they could figure out the economics.
• The costs involved are materials, practitioner time and the administrative costs of reimbursement.
• Medicare reimbursement for a pair of shoes and three pairs of prefab inserts sits at $318.26 x 0.8 = $254.66
• They worked to the assumption that if materials cost 1/3, practitioner time cost 1/3, and administrative overhead cost 1/3 the TSD business model could work.
• The magic number for each component of that model is $84, leaving the 20% co-pay as a buffer.

The customer concluded the call by stating that they would use Pedors shoes where appropriate for the patient, but they would also be able to add the Genext shoes to their product mix if we could drop the shoes to $60. This would allow the shoes and inserts to meet their $84 ceiling.

It was a rallying call. So we’ve looked at it and had our own little think tank session.

We figure that if we can get the volume up on sales of our Genext line, then we can trim the wholesale cost on a pair of Genext to $60 per pair. It’s a really well made shoe and if you’ve not yet fitted it to a patient perhaps you’ll consider it the next time. It’s available as an athletic in white and black, men’s and women’s, Velcro and lace, and also as a comfort dress shoe and a hiker.

If you’d like to take advantage of our TSD Provider Pricing Program, please let me know and I'll get your account signed up right away.

Email me at: stephenohare@pedors247.com

Steve O'Hare
www.pedors247.com