NAAOP Government Relations Update

2004 has been far less active than 2003 on the legislative front but significant regulatory activity is beginning to develop, largely as a result of enactment of the Medicare Modernization Act (MMA) on December 8, 2003. Although treatment of professional orthotic and prosthetic care in the Medicare bill can generally be considered a “mixed bag,” there are clearly some important victories in the bill. In addition to the Medicare bill and monitoring its implementation, NAAOP continues to be active on several regulatory fronts including a victory earlier this year on an orthotic “coding clarification” issued by the SADMERC.

Competitive Bidding Becomes Law, O&P Spared Major Impact: The MMA established nationwide “competitive bidding” starting in 2007 for all DME, supplies, and “off-the-shelf” orthotics. The inclusion of a relatively narrow definition of “off-the-shelf” orthotics, at NAAOP and other groups’ urging, should be considered a victory for the O&P profession since most orthotics and all prosthetics will not be subject to the nationwide system of Medicare competitive bidding that begins in 2007. Many aspects of how that competitive bidding system will work are currently being discussed at the Centers for Medicare and Medicaid Services (CMS) but little has been settled. It is the O&P community’s responsibility to meet with CMS and assist them in appropriately applying to “off-the-shelf orthotics” a competitive bidding system that will be designed primarily for DME.

Call for Nominations for DME Competitive Bidding Advisory Board: The MMA requires the Secretary to establish and administer a Program Advisory and Oversight Committee (PAOC) that will provide advice on the development and implementation of the Competitive Acquisition Program. On May 28, 2004, CMS announced that it is requesting nominations for individuals to serve on the Program Advisory Oversight Committee. The notice will be published in the Federal Register on June 2. Applications for the 12 to 15-member panel will be accepted through 5:00 PM (EST) on June 28, 2004.

O&P Medicare Fee Schedule Frozen through 2006, but Longer-Term Freeze and FEHBP Pricing Avoided: The most immediate ramification stemming from the Medicare reform legislation was a freeze of the entire O&P fee schedule, along with all DME and supplies, at 2003 rates for three years (2004-2006). Despite objections from NAAOP and other interest groups, the provision freezing all O&P was included in the final bill. However, the fee freeze under the Medicare bill continues through 2008 for certain items of DME, clearly indicating a separation between treatment of DME and professional O&P care. Also, O&P was spared application of a provision mandating a cut in reimbursement for the top five utilized DME items in 2005 to the median price reimbursed by the Federal Employees Health Benefits Plan, which would represent a cut in fees of approximately 20% under current levels.

Negotiated Rulemaking Process “Trumped” by Medicare Bill, Analysis Ongoing: The Medicare bill includes a provision that appears to “trump” the Negotiated Rulemaking process that ultimately ended in a stalemate last summer. The MMA seems to favor the position that all O&P care must be provided by health care professionals certified/accredited in the practice of orthotics and prosthetics. This is consistent with the position that NAAOP took during the Negotiated Rulemaking Committee.

The Negotiated Rulemaking process concluded in July of 2003 without resolution of the key sticking point in negotiations-the definition of which providers of O&P care would be considered “qualified practitioners.” NAAOP will continue to analyze the provision for its specific impact on O&P practice, and continue to meet with CMS officials as the regulations on this provision are implemented.

SADMERC Add-On Coding Clarification Rescinded: NAAOP actively participated in an effort in December 2003 to convince the SADMERC to rescind a “coding clarification” relating to “add-on” orthotic codes. The coding clarification had stated that suppliers of orthotic services may not use add-on L codes in conjunction with “prefabricated” orthotic codes. NAAOP aggressively worked with the SADMERC to explain how the “clarification” would have adversely impacted practitioners and the Medicare program, and would have deprived patients of necessary options that enhance comfort, stability, and, most-importantly, function of orthoses. NAAOP will continue to monitor and react to potentially similar actions in the future.

Direct Access Provision in Medicare Bill Watered Down, MedPAC to Issue Study: The Medicare bill addressed the issue of “direct access” to physical therapists without a physician’s prescription by rejecting a demonstration project and, instead, requiring a study of the issue. Rather than changing the law to allow for direct access or propose a demonstration project, as was included in the original Senate bill, the final bill authorized a study by the Medicare Payment Advisory Commission (MedPAC) on whether physical therapists should be able to self prescribe their services under Medicare, including, potentially, O&P services and devices.

Final 75% Rule Issued by CMS; Major Problems Remain: The 75% Rule, which governs whether a hospital or unit is considered a rehabilitation hospital or unit, and, thus, paid in a different manner, was issued in final form in late April, capping a long battle between CMS and the rehabilitation industry. The new rule will go into effect beginning July 1st. The rule reduced to 50% the number of patients that must meet one of 13 conditions commonly treated in the inpatient setting in order to be paid as a rehabilitation hospital, rather than an acute care hospital. But this percentage steadily increases until in 2007 when the 75% rule will be fully reinstated. The impact of this rule is expected to be dramatic over the coming years, as significant numbers of rehabilitation patients will likely be denied an inpatient rehabilitation course of treatment. Because the rule, combined with the local medical review policies (discussed below), will have the effect of tightening medical necessity requirements, it is quite possible that some amputees and others requiring orthotic care will not be able to access inpatient rehabilitation. The rehabilitation interest groups, including the NAAOP, continue to fight for appropriate access to inpatient rehabilitation.

Concern over LMRP Issue Continues: Amidst CMS’s issuance of new rules regarding the 75% Rule, some Medicare fiscal intermediaries (FIs) are drafting local medical review policies (LMRPs) intended to constrain and limit the coverage guidelines set by CMS for inpatient rehabilitation. Depending on how the final versions of these policies are drafted, they may have a significant impact on O&P patient care in this setting. NAAOP will continue to work to ensure that these policies are appropriate and do not restrict access to inpatient rehabilitation.

If you have questions regarding these issues, please contact Peter Thomas, NAAOP General Counsel, or Dustin May, Legislative Director, Powers, Pyles Sutter, and Verville, PC, at 1-800-622-6740.

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