Health insurers place restrictions on coverage for prosthetic limbs, raising doubts about their medical necessity

When Michael Adams was looking into health insurance options in 2023, he had a specific need in mind: he wanted coverage for prosthetic limbs.

51-year-old Adams has been through numerous prosthetic legs since losing his right leg to cancer four decades ago. Opting for a gold plan on the Colorado health insurance marketplace, Adams was able to secure coverage for prosthetics, including the advanced microprocessor-controlled knees that have provided him with stability and reduced his risk of falls for many years.

When his leg needed to be replaced last January after using it every day for about five years, his new health insurance plan did not approve it. The insurer claimed that the electronically controlled knee, which cost around $50,000, was not medically necessary. This decision was made despite the fact that Colorado law gives the patient’s doctor the authority to determine medical necessity. In fact, his doctor had been prescribing a similar leg for many years, even when he had employer-sponsored coverage.

According to Adams, a resident of Lafayette, Colorado, who resides with his wife and two children, the electronic prosthetic knee has been a life-altering innovation. He compares the experience without it to his childhood when he had a wooden leg. The knee’s microprocessor is capable of adapting to various terrains and slopes, automatically adjusting its stiffness to prevent falls.

In the United States, approximately 1.5 million knee or hip joint replacements were conducted in hospitals and hospital-owned ambulatory facilities in 2021, as reported by the federal Agency for Healthcare Research and Quality (AHRQ). However, unlike other medical procedures, patients requiring joint replacement surgery do not usually face coverage obstacles. An analysis revealed that the median cost for a total hip or knee replacement without complications at leading orthopedic hospitals in 2020 was slightly above $68,000. Nevertheless, health plans often negotiate lower rates for these surgeries.

People in the amputee community view the coverage disparity as a form of discrimination.

According to Jeffrey Cain, a family physician and former chair of the board of the Amputee Coalition, insurance only covers a knee replacement if it is covered with skin, not with plastic. Cain, who lost his legs in an airplane accident almost 30 years ago and now wears two prosthetic legs, shared this insight.

According to the Amputee Coalition’s Chief Strategy and Programs Officer, Ashlie White, health plans generally cover prosthetics when they are deemed medically necessary, such as for replacing a body part or assisting with walking and daily activities. However, in reality, the coverage for prosthetics can differ significantly among private health plans. While basic prosthetic coverage may be included in a plan, insurance companies often impose limits and restrictions on the approved devices.

According to Avalere, a health care consulting company, there are approximately 2.3 million individuals living with limb loss in the United States. This number is projected to potentially double in the future due to factors such as the aging population and an increasing prevalence of limb loss caused by diabetes, trauma, and other medical conditions.

According to a report by the AHRQ, less than half of individuals with limb loss have received a prescription for a prosthesis. Some insurance plans may refuse to cover prosthetic limbs by stating that they are not medically necessary or are experimental devices, despite the fact that microprocessor-controlled knees like Adams’ have been in use for many years.

Cain played a crucial role in the passage of a Colorado law in 2000, which mandates that insurers provide coverage for prosthetic arms and legs at the same level as Medicare. Under Medicare, coverage includes a 20% coinsurance payment. Following the implementation of this law, approximately half of the states have enacted “insurance fairness” laws, ensuring that prosthetic coverage is on par with other medical services covered by a plan. Additionally, some states have passed laws requiring coverage for prostheses specifically designed for sports activities. However, it is important to note that these laws only apply to plans regulated by the state, and more than half of individuals with private coverage are enrolled in plans that are not governed by state law.

The Medicare program provides 80% coverage for prosthetic limbs, similar to its coverage for other services. However, according to a report by the Government Accountability Office in October, only 30% of beneficiaries who lost a limb in 2016 received a prosthesis within the next three years.

Cost plays a significant role for many individuals.

According to White, regardless of your insurance coverage, most individuals still have to contribute financially towards their devices. Therefore, it is common for many people to opt for payment plans or even take out loans to afford their devices.

The Consumer Financial Protection Bureau has put forward a proposal to prevent lenders from seizing medical devices like prosthetic limbs and wheelchairs in cases where borrowers are unable to repay their loans.

According to White, the repossession of wheelchairs or prostheses by lenders is seen as a punishment to the individuals who rely on these devices. It is heartbreaking to hear about cases where people have had their replacement limbs taken away from them.

Adams ended up having to pay around $4,000 as a coinsurance payment for his new leg. This amount reflected his share of the negotiated rate between the insurer and the provider for the knee and foot portion of the leg. However, it did not include the expensive part that fits around his stump, which didn’t need to be replaced. Adams mentioned that the insurer approved the prosthetic leg on appeal, stating that they had made an administrative mistake.

As a self-employed leadership consultant, Adams considers herself fortunate to have the financial means to cover the 20% cost.

Leah Kaplan faced financial constraints due to her lack of a left hand, which prevented her from obtaining a prosthetic limb until recently.

As a child, Kaplan, now 32, didn’t want to draw any more attention to herself by using a prosthesis. However, a few years ago, she decided to get a prosthetic hand specifically designed for cycling. Fortunately, this device was covered by her health plan, which she receives through her county government job in Spokane, Washington. Her job involves assisting developmentally disabled individuals in their transition from school to work.

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