Adding Podiatry Orthotics and DME Services to Your Practice
Custom orthotics, diabetic shoes and inserts, braces and walking boots are part of everyday foot and ankle care. Many practices already prescribe these items, but a formal podiatry orthotics and DME service line brings dispensing in-house, which can improve patient convenience and add an ancillary revenue stream.
It also adds regulatory, inventory and billing responsibilities that are different from professional services. This guide covers what owners should consider before adding the service and how it may be financed. Supplier, billing and referral rules vary by state and payer, and nothing here is legal, billing, compliance or tax advice.
Why Practices Add Orthotics and DME
Podiatry patients frequently need devices as part of their treatment plan. Dispensing them in the office can:
- Let patients leave with what they need instead of visiting another supplier
- Give the practice more control over fit, follow-up and adjustments
- Support related services such as diabetic foot care and wound care
- Add revenue that is not tied solely to provider visit volume
Whether the service line is financially worthwhile depends on patient volume, payer rules, product costs and how efficiently the practice runs it.
Regulatory Considerations for Podiatry Orthotics and DME
Dispensing durable medical equipment involves rules that do not apply to typical office visits. Owners should work with healthcare counsel and qualified billing or compliance professionals on items such as:
- Medicare supplier enrollment: billing Medicare for durable medical equipment, prosthetics, orthotics and supplies generally requires separate supplier enrollment and accreditation
- Supplier standards: requirements related to the physical location, record keeping, patient notices and product delivery
- Self-referral and anti-kickback rules: federal and state laws may limit how a practice refers patients to its own ancillary services and how it works with outside suppliers
- Documentation: diabetic footwear and other items may require specific documentation from the treating provider and, in some cases, another physician
- State licensing: some states have their own rules for dispensing or fitting orthotic devices
These requirements can take time to satisfy, and claims submitted before enrollment and accreditation are complete may not be payable. Planning ahead can help avoid revenue delays.
Operational Requirements
A successful orthotics and DME line depends on systems as much as products. Owners typically plan for:
- Space: a fitting area and storage for inventory
- Inventory management: tracking stock levels, sizes and expiration of supplies
- Casting or scanning: equipment to capture foot impressions for custom devices
- Staff training: fitting, patient education and documentation
- Billing workflow: separate processes for supplier claims and patient-pay items
- Lab relationships: agreements with fabrication labs for custom devices, reviewed by counsel
Cash Flow and Inventory
Unlike professional services, DME often requires the practice to purchase products before it is paid. That can tie up cash in inventory and receivables, especially when claims require additional documentation or are subject to review.
Owners should forecast how much inventory they need on hand, how long claims typically take to pay and how much patient-pay revenue they expect. Our article on podiatry practice working capital needs covers how to plan for these gaps, and a working capital line of credit may help smooth inventory purchases.
How Lenders View Ancillary Revenue
Lenders generally view diversified revenue favorably, but they also look at concentration and policy risk. Diabetic footwear and other Medicare-covered items can be subject to documentation requirements and payment changes, and a practice that relies heavily on one product category may be asked how it would respond to changes.
Lenders may ask for revenue broken out by service line and payer. Our article on how lenders review podiatry Medicare payer mix explains how lenders stress-test Medicare-heavy revenue.
Financing a Podiatry Orthotics and DME Expansion
The startup cost of an orthotics and DME service line is often smaller than a surgery suite or second location, but it can still require capital for build-out, inventory, scanning equipment and staffing. Options may include:
- Conventional practice loans for build-out and launch costs, based on each lender’s own underwriting
- Lines of credit to fund inventory and receivables
- SBA-backed loans in some cases, with eligibility and terms depending on the business, the borrower, use of proceeds, program rules and lender review
Every loan is subject to approval, and nothing here is a commitment to lend.
Mistakes to Avoid
- Dispensing and billing before supplier enrollment and accreditation are complete
- Overbuying inventory in sizes or products that move slowly
- Assuming every device will be covered without confirming payer rules
- Entering arrangements with labs or suppliers without review by counsel
- Treating the service line as an afterthought rather than assigning clear ownership
Questions to Answer Before You Launch
- How many patients do we currently refer out for orthotics, footwear or bracing?
- Which payers will cover these items, and what documentation will each require?
- Have we confirmed supplier enrollment, accreditation and state requirements with counsel?
- How much inventory will we need, and how will we fund it?
- Who on staff will own fitting, documentation and billing?
Final Thoughts
A podiatry orthotics and DME service line can improve patient convenience and diversify practice revenue, but it comes with supplier enrollment, referral rules, documentation requirements and inventory costs. Practices that address the regulatory groundwork first and plan for cash flow are generally better positioned to make the service line work.
US Medical Funding helps podiatrists finance new service lines, build-outs and the working capital that supports them. Learn more about our podiatry practice expansion financing and our full range of podiatry practice financing options.
