The VA is paying community O&P providers at full Medicare rates now. Here's what changed.

Veterans who get prosthetic and orthotic care from providers outside VA facilities have a significant policy change to know about, and the American Orthotic and Prosthetic Association just released a FAQ document clarifying how it works.

The VA published new payment policies in June for community-based O&P services. The document, covering services delivered through the community-based care program, created a new reimbursement structure for providers outside the VA system. AOPA has now published responses from the VA to answer questions that came up after the June release.

What the new payment model does

The core change is that community O&P providers will be reimbursed at 100 percent of the Medicare fee schedule. Previous contracts required negotiated discounts, meaning providers accepted less than Medicare rates as a condition of participating. That discount requirement is gone under the new model.

For products that Medicare either doesn’t cover or doesn’t adequately reimburse, the VA will pay on a sliding scale based on the manufacturer’s invoice plus a designated markup fee. This covers not-otherwise-classified (NOC) codes and certain outlier products described by HCPCS codes where the Medicare fee schedule falls short of actual cost. The policy addresses a real gap: advanced prosthetic components frequently exceed Medicare’s fixed reimbursement ceiling, and community providers sometimes declined VA patients precisely because the math didn’t work.

What happens to existing contracts

Vendors already under VA contracts have two options. They can exit their current agreement early to participate in the new community-based provider program, which includes the revised rates and NOC code policy. Or they can stay under their existing contract for whatever is left of its term.

Going forward, the new model replaces all contracts and blanket purchase agreements. Community-based providers who want to continue serving veterans must meet the revised standards.

What this means for veterans

The shift to full Medicare rates removes one of the main financial reasons community providers have historically avoided VA patients. A provider who previously couldn’t make the numbers work on a complex prosthetic fitting under the old discounted structure now gets a more workable reimbursement. That’s generally good for access continuity.

The NOC code policy matters specifically for veterans who need equipment that Medicare prices inadequately. A microprocessor knee unit or a specialized upper-limb device often runs well above Medicare’s fixed rate, and the new sliding-scale model gives community providers a path to actually being paid for what those components cost.

Veterans using community care don’t need to take action. The changes affect how providers get paid, not whether veterans qualify for community care in the first place. If a current provider signals they’re reconsidering VA participation during the contract transition, that’s worth asking about directly: the provider may be weighing whether to exit their old contract early, or deciding whether to apply to the new program.

AOPA said the new structure “represents a strong effort by VA leadership to continue to build collaborative relationships with O&P providers based in the community and creates consistent policy across the entirety of the Veterans Integrated Services Networks.” The organization said it will use VISN liaisons to monitor how the changes land in practice and welcomes member feedback.

This article covers policy changes to how the VA reimburses providers. Amputee News does not provide individualized VA benefits, community care eligibility, or coverage advice. For questions about your specific situation, contact your VA care team or a Veterans Service Organization.