New Congress Presents Opportunities for O&P Providers

On January 4, 2007, the Democrats took the reigns of Congress for the first time since 1994. The change in leadership sets the stage for a major shift in federal policy that could have a dramatic effect on health and human services and disability policy – changes that could prove both beneficial and threatening to programs important to NAAOP and the O&P profession.

Leadership and Committees

House Leadership

In the 110th Congress Democrats will hold 233 House seats and Republicans will hold 202 seats.

Former Minority Leader, Nancy Pelosi (D-CA), is now the Speaker of the House. Speaker Pelosi is the highest ranking elected female official in U.S. history as she takes control of the House in January. Former Minority Whip, Steny Hoyer (D-MD), is the new Majority Leader. Congressman Hoyer was one of the original authors of the Americans with Disabilities Act (ADA) and has a reputation of being very active on disability-related issues.

Former Majority Leader, John A. Boehner (R-OH) was elected to the highest ranking Minority position in the House, Minority Leader, and former Majority Whip, Roy Blunt, (R-MO) was elected to be second in line as Minority Whip in the House. Following the elections, former Speaker of the House, Dennis Hastert (R-IL), announced he would not seek a leadership position in the 110th Congress.

House Committees

Congressman Charles Rangel (D-NY) has taken over as Chairman of the powerful House Ways and Means Committee, which has jurisdiction over the tax code, Social Security, and much of Medicare. Chairman Rangel will likely promote an agenda that includes a simplified tax code, bolstered Social Security and Medicare programs, and perhaps a push for universal health care. Along with incoming Health Subcommittee Chairman Pete Stark (D-CA), Chairman Rangel will also likely attempt to reverse the ongoing shift toward the “privatization” of Medicare that his predecessor, Bill Thomas (R-CA), touted during his lengthy rein.
The new Chairman of the House Energy and Commerce Committee is John Dingell (D-MI). Congressman Dingell, who has served over 50 years in the House, was Chairman of this committee from 1981 to 1995. The Energy and Commerce Committee has jurisdiction over Medicaid and some Medicare programs. Chairman Dingell’s staff is uniquely accessible and empathetic to disability-related issues.

Senate Leadership

In the recent midterm elections, Republicans lost 6 seats in the Senate, giving the Democrats a 51-49 Majority. (Although Senator Joseph Lieberman (I-CT) and Bernard Sanders (I-VT) ran as Independents, following the elections they announced they would caucus with the Democrats.)

Former Senate Minority Leader Harry Reid (D-NV), is the new Senate Majority Leader in the 110th Congress and Senator Richard Durbin (D-IL) is the Majority Whip. Senator Mitch McConnell (R-KY) has taken over the top spot for the Republicans in the Senate as the previous Majority Leader Bill Frist (R-TN) retired at the end of 2006. Senator Trent Lott (R-MS) secured a one-vote win to become the Minority Whip. His victory marks a big political comeback for Lott who was forced to resign from his position as Senate Majority Leader in 2002 for comments made during a birthday party for now-deceased Senator Strom Thurmond (R-SC).

Senate Committees

Senator Max Baucus (D-MT) will control the agenda for the powerful Finance Committee, which has jurisdiction over taxes, Social Security, Medicare (including orthotics and prosthetics) and Medicaid. There is speculation that Chairman Baucus would likely focus on Medicare Part D reforms, the Children’s Health Insurance Program, and strengthening other social programs under the committee’s jurisdiction.

Senator Edward Kennedy (D-MA) is now the Chairman of the Senate Health Education Labor and Pensions (HELP) Committee, which had jurisdiction over the Individuals with Disabilities Education Act (IDEA), Job and Vocational Training, the Workforce Investment Act, public health and health insurance statutes, and many of the institutes and programs under the Department of HHS including the National Institutes of Health. Chairman Kennedy has an impressive record in terms of disability-related issues. Outgoing Chairman Michael Enzi (R-WY) and former Ranking Member Kennedy have maintained a strong working relationship which will likely continue. However, it is not likely that Chairman Enzi’s controversial Association Health Plan legislation, which would have allowed health insurance “associations” to preempt state law coverage mandates (including O&P mandates), will appear on the HELP Committee agenda any time soon.

Agenda

Speaker Pelosi has unveiled an ambitious “100-hour agenda” that will focus on implementing a pay-as-you go budget rule, increasing the minimum wage, cutting the interest rate on student loans, allowing the government to negotiate with drug companies for lower prices for Medicare patients, tightening earmark and lobbying rules, and expanding the types of stem cell research allowed with federal funding. Majority Leader Reid is said to have similar priorities on the Senate agenda, although Senate rules usually prevent legislation from moving as quickly as it does in the House.

It is also widely believed that the 110th Congress will attempt an entitlement reform bill next year (i.e., Medicare, Medicaid and Social Security legislation). The coming year offers a window of opportunity in which to potentially accomplish an entitlement reform bill prior to the Presidential election year, when such a bill would be unlikely to pass. The possibility of major entitlement reform presents an opportunity for NAAOP to engage Congress on Medicare and Medicaid-related O&P priorities. However, such legislation could also present a threat to the Medicare O&P fee schedule and Medicaid spending on O&P services.

The Democrats will likely be forced to deal with some familiar issues as well. At the end of 2006, Congress passed a one-year Medicare physician payment freeze. The legislation also created a quality reporting system, set to begin in mid-2007, which provides a 1.5% payment bonus for physician who report on quality measures. However, physicians will face another major cut in calendar year 2008 and it is unlikely that the next Congress could ignore this constituency.

Last year, Congress did not renew the 3-year O&P Medicare payment freeze, and, as a result, O&P providers will receive a 4.3% payment increase in 2007. However, NAAOP and other O&P organizations must continue to advocate against using O&P payment cuts or freezes to pay for physician payment increases or any other costly Medicare proposals. This is especially important if/when pay-go rules are implemented, requiring all mandatory spending increases to be offset.

Finally, Congress will deal with annual appropriation legislation. Recently, the new House and Senate Appropriation Committee Chairmen David Obey (D-WI) and Robert Byrd (D-WV) stated that they will attempt to pass a continuing resolution (CR) for the remainder of the FY 2007 appropriations cycle, which ends September 30, 2007. (The 109th Congress passed only two of the thirteen FY 2007spending bills.) The year-long continuing resolution would essentially freeze program spending at FY 2006 levels until FY 2008, representing relative cuts to many disability-related programs.

The President is scheduled to release his FY 2008 budget request in early February and there is little doubt that it will be one of the most austere budget requests in recent history. Although leaders in both chambers state that they are functioning under the assumption that Congress will be able to negotiate a FY 2008 budget, Democrats will have their work cut out for them as they attempt to improve funding for popular social while simultaneously decreasing the deficit.

Conclusion

Although too early to tell, the changes in Congress may trigger a new sense of bipartisanship in Washington, as the White House and the Democrats in Congress will have to work more cooperatively in order to accomplish any major legislation. And with new members and staff flooding Capitol Hill over the next few months, education efforts will have to be made to engage them on issues critical to O&P providers.

Compiled by Peter W. Thomas, General Counsel to NAAOP, and
Emily A. Niederman, Legislative Director, Powers Pyles Sutter and Verville, P.C.

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