Congress is expected to work into the holiday season as House and Senate committees consider major legislation that could, in the end, impact orthotics and prosthetics. The main political driving force behind legislation is looming cuts in the Medicaid program, the federal/state program that provides health care to low income Americans. However, also driving the process is a scheduled cut in physician payments under Medicare that, if not rectified by the end of the year, would reduce payments to physicians by 4.5% in calendar year 2006. Though this cut does not impact orthotists and prosthetists, any Medicare bill that emerges from Congress is going to have to pay for itself, implicating a whole host of potential cuts to other Medicare providers. Despite this, the controversial new Medicare drug benefit has been declared “off-limits” by President Bush. To what extent O&P practitioners are impacted by changes to Medicare this fall is unclear at this point, but a host of changes are in the offing.
Any Medicare bill will most likely be attached to the anticipated end-of-year Omnibus Appropriations spending bill that will wrap up the first session of the 109th Congress in November or December. This is because members with be hard pressed to vote for cuts in Medicaid unless that are coupled with the end-of-the-year spending package.
O&P practitioners are still smarting from a three-year fee freeze enacted in the Medicare Modernization Act of 2003. The cut, which is scheduled to run through 2006, is not likely to be extended. The Chairman of the influential Senate Finance Committee, Charles Grassley (R-IA), has stated that a Medicare package will likely not contain fee schedule freezes for O&P providers. But that assessment may be muted by the need for Congress to fund ways to pay for other priorities, specifically to offset an increase to physician payments. With the fiscal climate very unfavorable to any new Medicare spending, Congressional leaders will be looking at all provider payments and this includes O&P practitioners.
Another potential issue impacting the Medicare population is the $1,500 per patient, per year caps on physical/speech therapy and occupational therapy that are scheduled to be implemented in 2006 if Congress does not act. The caps, which were initially enacted in the Balanced Budget Act of 1997, have been subject to a moratorium for much of the time since enactment with the exception of a brief period in 2002. If implemented, the caps have the potential to seriously impact people with disabilities who need routine physical therapy or an intensive course of therapy to rehabilitate an acute injury. But a long term fix to this problem is very expensive, potentially implicating additional cuts to other Medicare providers.
Another potential provision under consideration is Medicare beneficiaries’ “direct access” to physical therapists without physician referral. The latest draft of this proposal also has the potential to directly impact O&P practitioners by potentially allowing physical therapists to provide O&P services directly to Medicare beneficiaries-without a physician’s referral. Though advocates for direct access have been unsuccessful in enacting full direct access at the federal level, the Medicare Payment Advisory Commission (MedPAC) studied the issue and issued a report in December 2004. The recommendations did not endorse direct access; in fact, the Commission stated that direct access could be detrimental. But despite MedPAC’s less than enthusiastic assessment of direct access, influential leaders in Congress have pledged to work toward including a direct access provision in the next Medicare bill.
Although O&P providers may not be directly targeted this fall in the Medicare debate (at least at the time of this writing), they must remain vigilant to ensure that no “surprises” occur in November or December if a Medicare bill is enacted. NAAOP will be monitoring developments closely and plans on actively engaging Congress throughout this important time.