NAAOP’S Formal Letter to CMS Administrator on Section 302(a)

Mark McClellan, M.D., PhD
c/o Ms. Karen Daily
Center for Medicare and Medicaid Services

Department of Health and Human Services
Attention: CMS-1429-P
P.O. Box 8012
Baltimore, MD 21244-8012

Dear Dr. McClellan:

This letter constitutes formal comments from the National Association for the Advancement of Orthotics and Prosthetics (“NAAOP”) to the Centers for Medicare and Medicaid Services (“CMS”) on Section 302(a)(2) of the Medicare Program Revisions to Payment Policies Under the Physician Fee Schedule for Calendar Year 2005 (69 Fed. Reg. 47488, August 5, 2004) addressing clinical conditions for coverage of Durable Medical Equipment (“DME”).

NAAOP is a national non-profit association representing the collective interests of certain specialized clinicians-as well as the rehabilitation and disability communities they serve-who are engaged in the provision of quality orthotic and prosthetic (“O&P”) healthcare. Specifically, NAAOP represents highly trained and educated clinicians who carefully evaluate both limb loss and limb or trunk dysfunction for the purpose of providing appropriate, custom-designed orthoses (orthopedic braces) and prostheses (artificial limbs). Quality O&P care assures a custom body interface to each patient’s unique shape and activity level in order to maximize function and minimize an individual’s disability. These clinical services often mean the difference between functional independence and long term disability for people with amputations, musculoskeletal conditions, neurological disorders, stroke, and large numbers of congenital and acquired physically disabling conditions.

NAAOP is responding to this proposed rule because CMS has proposed to extend Section 302(a)(2) of the Medicare Modernization Act from DME to all orthotics, prosthetics and supplies (commonly referred to as “DMEPOS”), without regard to the limits set forth in the statute as to the application of Section 302(a)(2).

The Expansion of Section 302(a)(2) of the MMA from DME to all DMEPOS is Inconsistent with the Statute and Fails to Recognize Significant Distinctions Between the Provision of DME Items and Professional Orthotic and Prosthetic Clinical Care and Related Custom Technology

Section 302(a)(2) of the MMA requires the Secretary of Health and Human Services to establish clinical conditions for payment of covered items of durable medical equipment. The law requires the Secretary to establish types or classes of covered items that require a face-to-face examination of the individual by a physician or practitioner and also requires a prescription for items of DME. However, the proposed rule seeks to expand this face-to-face physician visit requirement to orthotics, prosthetics and supplies. CMS reasons that this expansion is appropriate because it believes that orthotics, prosthetics and supplies require “the same level of medical intervention and skill as DME.” NAAOP strongly disagrees with this reasoning since professional O&P clinical care requires clinical judgment while DME is often drop shipped or supplied by lay sales representatives. Consequently, NAAOP objects to the expansion of the face-to-face physician visit requirement to orthotics and prosthetics. We have no position with respect to expansion of this requirement to “supplies” as NAAOP’s members do not generally supply these items.

Expanding the Face-to-Face Physician Requirement to Professional O&P Clinical Care is Inconsistent with the Statute:

The statutory language of the MMA is very clear with regard to which Medicare benefits CMS should apply the face-to-face physician visit requirement. The statute specifically states that “motorized or power wheelchairs” require a face-to-face examination of the individual by a physician or other practitioner as well as a written prescription for the item. MMA, Section 302(a)(2). The statute then directs the HHS Secretary to establish similar standards on a priority basis for which the Secretary determines there has been “a proliferation of use, consistent findings of charges for covered items that are not delivered, or consistent findings of falsification of documentation to provide for payment” of covered items.

There is very little evidence that the proliferation of use witnessed with some items of DME is present in the orthotic and prosthetic benefit. In the one report where the Office of Inspector General examined a spike in billings under a small number of orthotic billing codes, the principal reason for the problem was identified to be non-certified suppliers (e.g., DME suppliers) inappropriately utilizing the orthotic billing codes. See, Medicare Payments for Orthotics – Inappropriate Payments (OEI-02-99-00120), Office of Inspector General, (March 2000). To address this concern, the OIG recommended, and Congress later enacted in BIPA 2000, special payment provisions for the provision of orthotics and prosthetics.

NAAOP asserts that the rather stringent standard of demonstrable and repeated fraudulent and abusive conduct established by Section 302(a)(2) of the MMA statute has not been met in the case of orthotics and prosthetics and, therefore, the face-to-face physician requirement should not be expanded to these professions.

Expanding Section 302(a)(2) Fails to Recognize the Distinction Between the Provision of DME Items and Professional Orthotic and Prosthetic Clinical Care and Related Custom Technology:

Contrary to the proposed rule’s statement that “items of [prosthetics, orthotics and supplies] require the same level of medical intervention and skill as DME,” DME and orthotics and prosthetics are completely separate and distinct. While it is true that DME and O&P are both reimbursed under a fee schedule by the Durable Medical Equipment Regional Carriers (“DMERCs”), they each have separate statutory authority for coverage under the Medicare program. 42 U.S.C. 1395x(s)(6) and 42 U.S.C. 1395x(s)(9), respectively. Providing professional orthotic and prosthetic clinical care and related custom technology to Medicare patients is vastly different from the provision of DME items and supplies.

Certified orthotists and prosthetists must undergo specialty instruction, skills training, clinical residency and extensive testing specific to the care and management of the O&P patient. Such specialty education and training is unique to O&P, encompassing bodies of knowledge and skills not embraced by any other health care specialty. The provision of professional orthotic and prosthetic care is a unique mix of hands-on clinical practice and biomechanical and technical skill. In order to provide quality orthotic and prosthetic care, O&P practitioners must have access to clinical care settings and technical laboratories designed to provide customized clinical care and technical services.

The provision of DME, in contrast, has little in common with the provision of orthotic and prosthetic patient care. DME suppliers have not been certified for many years and are only now, as a result of the MMA, being required to obtain certification. Clinical patient settings and laboratories are not needed to provide DME, which is usually sold in storefronts and in pharmacies across the country. Indeed, the field of DME requires far less “medical intervention and skill” than the provision of professional O&P clinical care and related custom technology.

As such, the safeguard of requiring a face-to-face physician visit in order for orthotic and prosthetic care to be reimbursed is completely unnecessary and burdensome to Medicare beneficiaries, the practitioners who provide these services, and physicians who prescribe these services. The education, training, and skill level that O&P practitioners have should accord them some degree of deference from CMS to act as partners with physicians in recommending an appropriate course of treatment to O&P patients. As such, the risk of inappropriate proliferation of use of professional O&P clinical care and related custom technology is far less likely than in the field of DME.

CMS Should Remain Consistent with Its Prior Treatment of DME and O&P

There are at least two recent examples where CMS has separately treated DME from orthotics and prosthetics that should serve as strong evidence that CMS should continue to treat these two distinct fields separately. First, in Section 531 of the Beneficiary Improvement and Protection Act of 2000 (“BIPA 2000”), Congress included a provision that permitted DME billing code applications to receive an in-person meeting between the manufacturer requesting a new billing code and the CMS coding panel. In response to the proposed rule implementing this provision of BIPA 2000 (66 Fed. Reg. 58743 (Nov. 23, 2001)), NAAOP requested that orthotic and prosthetic billing code applications receive the same treatment under this new law and submitted comments to that effect.

CMS did not publish a final rule but in telephone conversations with CMS staff, CMS confirmed that they declined to extend this statutory provision impacting DME to orthotics and prosthetics based on the premise that to do so would be an unauthorized expansion of Congressional authority. If this reasoning was valid in the year 2002-when NAAOP confirmed CMS’ position-this same interpretation should apply in 2004.

Similarly, in Section 302(b) of the MMA, Congress created a competitive acquisition program under Medicare for DME but specifically exempted all custom orthotics and all prosthetics. This constitutes that vast bulk of professional orthotic and prosthetic clinical care and related technology except for what the MMA defined as “off the shelf” orthotics. Congress’ reasoning behind this exclusion was that customized devices and services do not lend themselves well to a competitive bidding framework and that professional orthotic and prosthetic services were significantly different (as well as separate and distinct legally) from the provision of DME. This separate treatment of DME and O&P should not be inconsistently applied absent a clear directive from Congress, which clearly does not exist in this instance.

As a practical matter, it should be noted that virtually every orthosis and prosthesis that is reimbursed by the Medicare program must be accompanied by a written physician’s order detailing the O&P treatment required. Therefore, application of this face-to-face physician visit requirement to orthotics and prosthetics will provide CMS with little, if any, additional control over utilization of these services. However, application to orthotics and prosthetics of a number of provisions in the proposed rule could cause delays in treatment of O&P patients, potential compromising the functional outcomes and medical status of beneficiaries with amputations and other orthopedic impairments. Application of Section 302(a)(2) to professional O&P clinical care and related custom technology could erect unnecessary barriers to care, without any significant corresponding benefit to the Medicare program.

If the Secretary Chooses to Expand Section 302(a)(2) to Orthotics and Prosthetics, Medical Necessity Should be the Guiding Principal for Application of the Regulations to Professional O&P Clinical Care and Related Custom Technology

If the HHS Secretary insists on expanding Section 302(a)(2) beyond what the statute clearly seems to authorize, then NAAOP suggests that the final regulations should rely on the concept of “medical necessity” as the guiding principal when determining how the provisions of the rule will apply to professional O&P care.

The Physician’s Order Should Depend on the Medical Necessity of the Professional O&P Care Needed, Not Whether the Physician Designed an Overall Treatment Plan

The proposed rule states that the “face-to-face examination should be for the purpose of evaluating and treating the patient’s medical condition and not for the sole purpose of obtaining the prescribing physician’s or practitioner’s order for the DMEPOS.” The proposed rule continues by stating that the physician is expected to “conduct a sufficient examination of the patient’s medical condition to ascertain the appropriate overall treatment plan and to order the DMEPOS as only one aspect of that treatment plan.” NAAOP believes that for initial orders of orthotics and prosthetics, this proposal is not unreasonable, as the patient has invariably had an acute episode of illness or injury that requires, as part of a treatment plan, orthotic or prosthetic intervention. However, for long term users of orthoses and prostheses, this proposed rule seems misplaced and out-of-step with current medical practice.

NAAOP believes that CMS should make a distinction in the final rule between one-time, temporary users of orthoses (i.e., those who have a need for support of an injured body part following an acute episode until such time as routine healing and rehabilitation restore function to that body part) and permanent, long term users of orthoses. Many people with orthopedic impairments who require orthotic treatment are permanent users of orthotic devices and, therefore, have a long term need.

Similarly, all amputations are permanent and, therefore, all prosthesis (i.e., artificial limb) users have a long term need for prosthetic care. Except for a new amputee’s first prosthesis in which the physician has significant involvement, long term prosthesis users do not require, and routinely do not have, a close relationship with their physician for their prosthetic needs (absent ongoing medical complications). In these instances, the trained, professional orthotist and/or prosthetist, working with the seasoned patient, are in the best position to assess the continued orthotic and/or prosthetic needs of the individual, and make a recommendation to the physician for approval of the plan of care.

Other than chronic or progressive conditions and instances where medical complications are at issue, most individuals who have long term orthotic and/or prosthetic needs do not have an active “medical condition,” but rather, have long term impairments or disabilities. These individuals usually become very familiar with their O&P needs and establish close working relationships with their O&P practitioners. These practitioners are highly trained to provide ongoing professional services to O&P patients with limited involvement from the physician, in most instances.

Again, other than chronic or progressive disorders, it would be rare that an individual who has lived with an amputation or orthopedic impairment for a significant period of time would require an ongoing plan of treatment designed by a physician, unless other complications are in play. To subject these individuals to a requirement for a face-to-face physician examination that specifically prohibits such a visit for “the sole purpose” of obtaining the physician’s order-when this is exactly what is needed from the physician-appears to be an unnecessary barrier that is out-of-step with current medical practice and will lead to nothing more than a delay in treatment, additional barriers to care, and unnecessary costs to the program.

In these instances, the physician’s role should be to assess and, if appropriate, approve themedical necessity of the recommended orthotic or prosthetic treatment, whether or not a face-to-face examination with the physician has occurred and whether or not a plan of treatment has been developed by the physician. Indeed, for long term O&P users, there is usually no other treatment that would be appropriately prescribed other than the professional O&P clinical care and related custom technology itself. To require physicians to develop a plan of treatment for these patients where the O&P care is “only one aspect of that treatment plan” could prompt physicians to unnecessarily prescribe other services such as physical or occupational therapy or other services, just to ensure the physician is in compliance with this rule and is ultimately reimbursed for the face-to-face visit. This has the potential to add unnecessary costs to the Medicare program without any corresponding benefit.

The Physician’s Prescription Should be Effective for the Life of the O&P Device, including Repairs, Maintenance, Minor Revisions and Replacement of Component Parts

The proposed rule suggests that CMS would “promulgate through contractor instructions othercriteria required for payment, such as for prescription renewal requirements, repair, minor revisions and replacement.” [Emphasis added]. NAAOP strongly supports an exemption from the face-to-face physician requirement for these types of services. To impose such a requirement every time an orthotic or prosthetic user needed an adjustment, revision, repair, or component replacement would create a significant burden on physicians, raise significant barriers for patients and O&P practitioners to provide timely and appropriate care, and would yield no corresponding benefit to the Medicare program in terms of proliferation of use or quality of care.

O&P practitioners clearly have the training and skills necessary to assess for themselves, in consultation with the O&P patient, whether that patient’s orthosis or prosthesis is in need of maintenance, repair or revision. The physician’s original prescription signifying the medical necessity of the orthosis or prosthesis in need of maintenance or repair should extend to the life of the device, as is currently the case under the Medicare O&P benefit. Absent medical complications involving the use of the orthosis or prosthesis, there is no reason for continued physician involvement during the course of routine use necessitating repair or maintenance of the orthosis or prosthesis.

Thank you for your consideration of our comments to this very important issue. If you have any questions or need additional information, please do not hesitate to contact me or our Washington counsel, Peter W. Thomas, Esq., at 202-466-6550.

Sincerely,
Michael J. Allen, CPO, FAAOP President
cc: NAAOP Board of Directors

  • Written by NAAOP

CMS Proposes New Coverage Criteria for DMEPOS

In the proposed physician fee schedule for federal fiscal year 2005, the Centers for Medicare and Medicaid Services (CMS) published proposed coverage criteria for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). If finalized in their current form, these coverage criteria will impose additional requirements on Medicare coverage of orthotic and prosthetic services.

The proposed regulations are in response to the Medicare Modernization Act (MMA) that was enacted at the end of last year. As part of an effort to improve quality and reduce fraud, section 302(a)(2) of the MMA requires CMS to establish regulatory standards governing the coverage of durable medical equipment. Of note, the statutory language does not instruct CMS to create these standards for orthotic or prosthetic services. Additionally, the MMA states that CMS’s standards should specify the “types or classes” of DME that require a face-to-face examination with a physician (or certain other practitioners) and that CMS should first establish standards for types of DME where there has been “a proliferation of use, consistent findings of charges for covered items that are not delivered, or consistent findings of falsification of documentation.”

Despite the language of the MMA, CMS proposes to apply these regulations to all DMEPOS, not just DME. Additionally, the agency has chosen not to prioritize the restrictions based on which services have been associated with past fraud and abuse.

Furthermore, the preamble expresses the agency’s view that orthotic and prosthetic services are equivalent to DME. CMS states that “we believe items of [prosthetics, orthotics, and supplies] require the same level of medical intervention and skill as DME.” Obviously, many orthotists and prosthetists believe that orthotic and prosthetic care requires far greater skill and training than DME and would, therefore, disagree with this statement.

Face-to-Face Visits. The most significant change to the regulations is the proposed requirement for a face-to-face visit with a physician, physician assistant (PA), clinical nurse specialist (CNS), or nurse practitioner (NP). (Note: This language would prohibit a physical therapist from prescribing DMEPOS, but not necessarily from providing orthotic and prosthetic services.) Currently, an orthotist or prosthetist may furnish an item to a beneficiary based on a physician’s written order, regardless of whether the beneficiary has recently had a face-to-face visit with a physician.

For example, currently, if a patient needs to replace a lower limb prosthesis, the prosthetist can communicate with the treating physician, request a written prescription, and then furnish the new prosthesis. Under the proposed regulations, the patient would have to first have a face-to-face visit with a physician, PA, CNS, or NP. While this is consistent with current practice in many instances, the proposed regulation may lead to a delay in some patients’ treatment.

Furthermore, the preamble states that “the face-to-face examination should be for the purpose of evaluating and treating the patient’s medical condition and not for the sole purpose of obtaining the prescribing physician’s or practitioner’s order for the DMEPOS.” The text of the proposed regulation states that Medicare will not pay for a face-to-face examination that is solely for the beneficiary to obtain a prescription.

How these statements apply to orthotic and prosthetic care is unclear. For example, if a patient needs a new upper limb prosthesis, the preamble to the regulation indicates that the patient must go to the physician so that the physician can evaluate and treat the patient’s medical condition, not solely so that the physician can prescribe a new artificial limb. Exactly what the physician is expected to do, in addition to prescribing the limb, is unclear. What is clear is that Medicare will not reimburse the physician for his time if the visit is solely so that the patient can obtain a prescription for a new prosthesis. This is obviously a major potential problem for the orthotics and prosthetics field.

Order Required Before Delivery. Currently, most items of DMEPOS may be delivered based on a verbal physician order. Only seven types of DME items currently require a written order prior to delivery: pressure reducing pads; mattress overlays; mattresses; beds; seat lift mechanisms; TENS units; and power operated vehicles. All DMEPOS items, however, require a written physician order prior to the supplier billing Medicare.

Under the proposed regulations, a supplier must have a signed written order prior to delivery of any DMEPOS item. While this will be a major problem for the DME field, it may be less of an issue for orthotists and prosthetists. Nevertheless, this is a change from the current documentation requirements, and the orthotics and prosthetics field will need to analyze this change’s effects and comment to CMS, if necessary.

Order Must Be Signed Within 30 Days of Visit. The proposed rule will also require that the physician’s written order is signed and dated within thirty days of the face-to-face visit. While in the past there have been time limits requiring delivery within thirty days of the written order, there has not been a requirement that the written order must be within thirty days of a face-to-face physician visit.

This requirement ignores the unique clinical circumstances surrounding orthotic and prosthetic care. For example, with respect to highly complex prostheses, it may take a number of patient visits before a prosthetist determines exactly what prosthetic components are appropriate. The written order should be sufficiently detailed to reflect each component for which the prosthetist bills Medicare. Often, thirty days from the patient’s visit with the physician will represent a very small window for the prosthetist to finalize the prosthesis design and obtain a sufficiently detailed written physician order.

Commenting on the Rule. CMS is accepting comments on the proposed rule through September 24, 2004. The preamble and text of the proposed rule can be found at www.cms.hhs.gov(PDF). It is of critical importance that orthotists, prosthetists, and others who are concerned with this proposal express their concerns to CMS (electronic comments can be submitted at www.cms.hhs.gov and should refer to CMS-1429-P). As part of this effort, the National Association for the Advancement of Orthotics and Prosthetics (NAAOP) will be submitting comments to CMS on these important issues.

Also, a more in-depth discussion of these and other Medicare documentation requirements will be included at the Third Annual Meeting: Protecting & Expanding Your Practice, to be held in Las Vegas on November 19th and 20th.

For more information, please visit oandpbiznews.com.

Adam H. Greene is a health care attorney with Powers Pyles Sutter & Verville, P.C. and frequently works with the National Association for the Advancement of Orthotics and Prosthetics. You may contact Mr. Greene at (202) 466-6550.

  • Written by NAAOP

Region B Knee Orthoses Policy Meeting

To: NAAOP Members

A Region B public hearing will be held for the purposes of soliciting comments on Knee Orthoses policy. You are encouraged to participate in person or through written comments.

Region B Public Hearing
When: Tuesday, October 19, 2004
Time: 1:00 to 3:00 PM (CDT)
Where: Board Room at AdminaStar Federal
8115 Knue Road
Indianapolis, IN 46250

Requests to Present Information at the Open Meeting

Interested parties who wish to make presentations at this meeting must submit a written request that includes the following items:

  • Name
  • Address
  • Telephone Number
  • E-mail Address
  • Name and address of the organization represented (If Applicable)
  • Brief Description of the Information Planned for Presentation

Requests must be received by October 8, 2004 to:

Adrian Oleck, MD
Region B DMERC Medical Director
AdminaStar Federal
8115 Knue Rd.
Mail Point AF10
Indianapolis, IN 46250

All requests will be acknowledged by either confirming or denying the request to present at the meeting.

All members of the public are invited to attend the open meeting as observers. If a person is physically unable to attend the meeting but is interested in teleconferencing into the meeting, please send e-mail todraft_lmrp_comments_DMERC@naaop.com. Approximately seven (7) days prior to the meeting, teleconference, parties will be notified of the telephone number and access number to the Open Meeting.

Comments on Draft Policies

All members of the public are invited to offer comment on this draft policy via e-mail or by the U.S. Postal Service. The formal comment period in which to submit comments for this draft policy is through October 25, 2004. Comments may be sent via e-mail by to draft_lmrp_comments_DMERC@naaop.com, or by hardcopy mail to the address above.

  • Written by NAAOP

Region D Knee Orthoses Policy Meeting

To: NAAOP Members

A public hearing will be held for the purposes of soliciting comments on Knee Orthoses policy. You are encouraged to participate in person or through written comments.

Region D Public Hearing
When: Wednesday, October 13, 2004
Time: 1:00 to 3:00 PM (CDT)
Where: Centers for Medicare and Medicaid Services
Region VII Regional Office
Pioneer Room #260
601 East 12th Street
Kansas City, Missouri

For other information: CIGNA Medicare

Thank you for your participation in this important process.

  • Written by NAAOP

President Bush’s (FY) 2006 Budget Proposal

To: National Association for the Advancement of Orthotics and Prosthetics

From: Peter Thomas, Dustin May, Emily Niederman

Date: July 20, 2004

Re: Legislative Update . Medicaid and Appropriations

The following is an update of activity in Congress that has occurred within the past two weeks. Appropriations issues are in full swing with the House of Representatives considering the annual FY 2005 Labor, HHS, and Education spending bill. Controversy surrounds the Family Opportunity Act, which is bogged down over a provision that would pay for the bill using funds currently devoted to Medicaid targeted case management. Additionally, legislation has been introduced to increase the federal Medicaid match and reinstate funding lost from last year.s temporary state fiscal relief that expired on June 30, 2004.

It appears that HR 1811, a bill combining the Family Opportunity Act (FOA) and the Money Follows the Person (MFP) Initiative, is stalled in the House of Representatives as supporters attempt to agree on an acceptable offset that would pay for the bill. As mandated by the recently passed House Budget Resolution, legislators must find an equal amount in budget savings from programs under the jurisdiction of the Energy and Commerce Committee to consider the legislation, and Republican leaders have looked to other programs within Medicaid programs for these savings.

FOA, originally sponsored by Senate Finance Committee Chairman Charles E. Grassley (R-IA) and passed by the Senate in May, provides Medicaid coverage for children with disabilities whose families’ incomes are at or below 250 percent of the federal poverty level. MFP supports Medicaid beneficiaries as they transfer out of institutional settings into their own homes.

In terms of the offset, lawmakers have focused on Medicaid.s targeted case management (TCM) program. The offset would level the federal matching assistance percentage (FMAP) in this program to a flat 50-50 rate, down from a higher matching. While such a change would not affect several states that currently have an FMAP of 50 percent, the low-income states that have higher matching rates could potentially be forced to reduce services.

The proposed Medicaid offset put legislators and the disability community in a difficult position, essentially having to choose between two important Medicaid programs. Key Senate supporters of FOA, including Chairman Grassley and Senator Edward Kennedy (D-MA), have publicly stated their disapproval of Medicaid cuts in the bill and it remains uncertain whether the House will identify more acceptable offsets in the near future. We will update you as developments occur.

In 2003, the federal government granted states $10 billion in fiscal relief to temporarily increase federal Medicaid payments. However, on June 30, 2004, those increases expired and states are expected to see significant drops of up to 3 percentage points in the amount states are reimbursed by the federal government for Medicaid expenses, otherwise known as the .Federal Medical Assistance Percentages. (FMAP). Although states. financial situations have generally improved since the relief was granted last year, many Medicaid programs are still fragile and will likely suffer with the reduction of this federal assistance.

Late last week, Senators John D. Rockefeller (D-WV) and Gordon Smith (R-OR) introduced S. 2671, a bill to extend the FMAP fiscal relief. It provides $4.8 billion over 15 months in fiscal relief for Medicaid, as well as reimburses states for the $1.2 billion in net costs from the Medicare drug bill. It is possible that the Senators will look to an appropriations or omnibus bill as a possible vehicle. We will keep you updated as developments occur.

On Wednesday, July 14, 2004, the House Appropriations Committee approved by voice vote legislation setting fiscal year 2005 funding levels for federal health agencies and programs. The FY 2005 spending bill for the departments of Labor, Health and Human Services, and Education totaled $492.3 billion, with $142.5 billion funding discretionary programs.

Overall, health care related funding remains relatively flat, with a small increase in discretionary funding . $202 million dollars more than President Bush requested in his budget proposal and a 2.2 percent increase from the 2004 fiscal year.

The following numbers are for the House bill only. The Senate is not expected to begin consideration of a bill until September.

Under the spending bill, total HHS spending would increase 3.9 percent to $374.3 billion.

Funding for the Centers for Disease Control (CDC) would receive $4.48 billion, a $138 million decrease from FY 2004, under the House.s spending bill, although that is actually $15 million more than the President.s FY 2005 request.

The Centers for Disease Control.s Birth Defects/Developmental Disabilities/Disability and Health programs would receive an increase of $6.5 million from the $113 million in FY2004. This program provides for research and epidemiological patterns of diseases and conditions that precipitate birth defects and developmental disabilities. It also studies research into potential cures.

CDC.s Chronic Disease Prevention and Health Promotion program was funded at $853 million in FY 2004 and a proposed $915 million for FY 2005, an increase of 7.27 percent.

CDC Injury Prevention and Control would receive level-funding from last year, although the $155.5 million is $2 million more than the President.s FY 2005 budget request. CDC is the lead Federal agency for injury prevention and control. Programs are designed to prevent premature death and disability and reduce human suffering and medical costs caused by: fires and burns; poisoning; drowning; violence; lack of bicycle helmet use; lack of seatbelt and proper baby seat use; and other injuries. The national injury control program at CDC encompasses non-occupational injury and applied research in acute care and rehabilitation. Funds are utilized for both intramural and extramural research as well as assisting State and local health agencies in implementing injury prevention programs.

The Agency for Healthcare Research and Quality (AHRQ) is slated to receive level funding at $327 million in the FY 2005 Appropriations Bill, consistent with the President.s FY 2005 Budget. Although AHRQ is level-funded, funding for projects related to the Medicare bill has lowered the budgets for other AHRQ programs in general. The Agency was established in 1990 to promote improvements in clinical practice and patient outcomes, promote improvements in the financing, organization, and delivery of health care services, and increase access to quality care. AHRQ is the federal agency charged to produce and disseminate scientific and policy-relevant information about the cost, quality, access, and medical effectiveness of health care.

The NIH received an overall increase of 2.7 percent increase in the House.s spending bill, as requested by the President.s budget proposal. The NIH was funded at $28.044 billion in FY 2004 and the FY 2005 budget proposes funding at $28.773 billion. Within the NIH budget, the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) received a 2.96 percent increase from $1.822 billion in FY 2004 to $1.876 billion in FY 2005. The National Institute of Child Health and Human Development (NICHD) received a 3.14 percent increase from $1.242 billion in FY 2004 to $1.281 billion in FY 2005. The NICHD is the institute that houses the National Center for Medical Rehabilitation and Research (NCMRR), and that center should receive at least this level of increase. The National Institute of Neurological Disorders and Stroke (NINDS) received a 2.93 percent increase from $1.501 billion in FY 2004 to $1.545 billion in FY 2005.

Vocational Rehabilitation State Grants received a modest increase in funding of $51.6 million, from $2.584 billion in FY 2004 to $2.635 billion in the spending bill and the President.s proposed FY 2005 budget. These grants fund vocational rehabilitation in each of the states.

Assistive Technology state grants received $15 million under the FY 2005 Appropriations bill and the President.s budget proposal. That is a 42 percent decrease from the $26 million that Congress gave the program in FY 2004 after the FY 2004 budget proposed to eliminate funding for the program. The Assistive Technology program is designed to improve occupational and educational opportunities and the quality of life for people of all ages with disabilities through increased access to assistive technology services and devices. It provides grants to States to develop comprehensive, consumer-responsive statewide programs that increase access to, and the availability of, assistive technology devices and services. The National Institute on Disability and Rehabilitation Research administers the program.

The National Institute for Disability and Rehabilitation Research (NIDRR) received level funding of $107 million in the spending bill and the President.s FY 2005 budget, the same figure as the final funding level in the FY 2004 spending bill. This is $3 million less than the FY 2003 funding level. This decrease is largely attributable to across the board reductions due to the multiple continuing resolutions before funding levels were settled.

Separate funding for Supported Employment State Grants was eliminated again under the President.s FY 2005 budget but this program was flat-funded under the spending bill at $37.7 million. Similar to Projects with Industry, VR funds have been used to continue to fund these programs. The Supported Employment program assists persons who may be considered too severely disabled to benefit from vocational rehabilitation services by providing the ongoing support needed to obtain competitive employment. Short-term vocational rehabilitation services are augmented with extended services provided by State and local organizations. Federal funds are distributed on the basis of population.

It is unlikely that Medicaid legislation will be considered prior to the November elections. The activity surrounding Medicaid is likely to set the stage for greater reform in the next Congress. With regard to appropriations, the House.s quick action on appropriations this year will be stalled in the Senate until September. A final bill is unlikely to occur before the national elections; most likely it will occur in a .lame duck. Congressional session following the elections.

  • Written by NAAOP

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.

  • Written by NAAOP

Medicaid Reform Update: Budget Resolution Slated to Cut Medicaid

To: National Association for the Advancement of Orthotics and Prosthetics

From: Peter W. Thomas, Dustin W.C. May

Date: April 5, 2004

Re: Medicaid Reform Update: Budget Resolution Slated to Cut Medicaid

The past several weeks have been very busy in Congress as lawmakers are wrestling with attempts to reduce overall funding to entitlement programs in the FY 2005 Congressional Budget, particularly Medicaid. The Senate recently approved an amendment that removed $11 billion in cuts to Medicaid. This week, however, the House of Representatives is slated to consider its version of the budget, which would cut $2.2 billion from Medicaid over 5 years. As the competing budget resolutions head toward a conference committee, Congress appears likely to approve some form of Medicaid cuts, assuming a final budget resolution is approved.

The annual Congressional budget resolution sets spending priorities for Congress and provides Congressional committees with “reconciliation” instructions on funding levels for various programs, including entitlements like Social Security, Medicare, and Medicaid. While the reconciliation instructions are non-binding, committees often comply with the instructions by passing legislation that concurs or “reconciles” with the budget resolution. Legislation that would spend federal funds in excess of the Congressionally-approved budget resolution is subject to additional procedural hurdles and is unlikely to pass.

This year, the budget resolution is shaping up to include a modest amount of tax cuts, approximately $100 billion over 5 years, and spending increases on other priority programs, such as defense. As a result, both the House and Senate Budget Committees are recommending cuts to entitlement programs over the next 5 years in order to offset the new spending.

Amidst the budget debate are increasing concerns over “waste, fraud, and abuse” in the Medicaid program. President Bush’s FY 2005 budget also highlighted several quasi-legal Medicaid funding streams that states have used to secure federal Medicaid matching funds, such as use of Intergovernmental Transfers and the Upper Payment Limit. These Medicaid payment issues, which have been the subject of debate in Congress for several years, combined with a desire not to initiate cuts to popular entitlements like Medicare and Social Security, leave lawmakers with an attractive alternative to reducing entitlement spending in an election year.

The Senate originally crafted a budget resolution that would have effectively cut approximately $11 billion from Medicaid over the next 5 years. However, many Governors, Medicaid providers and consumers expressed fear that reductions in federal Medicaid contributions would only exacerbate the number of uninsured persons and increase state health care deficits.

Ranking Member of the Senate Finance Committee, Senator Max Baucus (D-MT), countered the Budget Committee’s instructions on the Senate floor with an amendment that stopped $11 billion in Medicaid cuts. The amendment was passed in the Senate by a 53 to 43 margin, collecting 8 Republican votes. The success of the amendment is largely attributable to efforts of groups like NAAOP. NAAOP was very active in supporting the Baucus amendment and signed onto a letter sponsored by FamiliesUSA.

Senator John D. Rockefeller (D-WV) sponsored a different amendment that would have set aside special funding to continue the state fiscal relief (FMAP) originally passed in the 2003 tax bill. His amendment, however, was ruled out of order on procedural grounds. Early Friday, March 12, the Senate passed its $2.4 trillion budget package by a final vote of 51-45.

The House begins consideration of the FY 2005 budget resolution on the floor the week of March 22. Last week the House Budget Committee approved, on a party-line vote, a budget that purports to cut $2.2 billion from Medicaid and other entitlement programs. The House budget resolution’s cuts, which had originally been forecast to cut $13 billion from Medicaid, appear to have been mollified due to pressure from many House Republicans and interest group efforts. Nevertheless, the budget still contains $2.2 billion in cuts and is expected to pass the House by the end of this week.

Attempts by lawmakers to carry the Senate’s pro-Medicaid momentum and strip the Medicaid cuts on the floor will be difficult to sustain with House rules likely to limit consideration of a Medicaid restoration amendment.

Medicaid appears to be a safe target for cuts this year as Congress tackles a looming budget deficit and crafts an election-year tax package. NAAOP continues to work diligently to stave off cuts to Medicaid as the budget resolution continues to work through Congress and moves toward an eventual conference committee. As states continue to have additional fiscal pressure to cut Medicaid funding and the federal government continues to cut Medicaid in light of “waste, fraud, and abuse,” providers will continue to face fiscal challenges.

We will keep you updated on events on the budget and on Medicaid in the future.

  • Written by NAAOP

NAAOP Government Relations Update

2003 was a very active year for NAAOP’s legislative and regulatory efforts. Clearly the largest issue of the year was Medicare reform, which was enacted on December 8, 2003 and is in the process of being implemented by CMS this year. 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 recent victory on an orthotic “coding clarification” issued by the SADMERC.

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.

Competitive Bidding Becomes Law, O&P Spared Major Impact: The recently enacted Medicare bill established nationwide “competitive bidding” starting in 2007 for all DME, supplies, and “off-the-shelf” orthotics. The inclusion of a 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.

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 protests by 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 failed Negotiated Rulemaking dispute in favor of the position that all O&P care must be provided by health care professionals certified/accredited in the practice of orthotics and prosthetics. 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 providers.” Whether or not Congress intended to settle this issue in the Medicare bill, the provision appears to be very favorable to NAAOP’s position on the issue of the definition of a “qualified provider.” 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.

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.

75% Rule Still on Hold, Congress Weighs In: The 75% Rule, which governs whether a hospital or unit is considered a rehabilitation hospital or unit, and, thus, paid in a different manner, is currently on hold pending CMS’s revision of the rule. Although CMS has stated that it will release the final rule shortly, Congress bolstered the arguments of NAAOP and other groups for a continued hold. “Report language” in the Medicare bill and the recently passed Omnibus Appropriations bill directs CMS to continue the delay in publication pending a study to examine the rule’s effectiveness. Although the report language is not law, it nevertheless sends a strong message to CMS that implementation of the 75% Rule as CMS has proposed would be highly restrictive to inpatient rehabilitation care, including inpatient rehabilitation received by amputees and others with orthopedic impairments.

Concern over LMRP Issue Continues: Amidst CMS’s drafting of new rules regarding the 75% Rule, some fiscal intermediaries (FIs) are drafting local medical review policies (LMRPs) intended to constrain and limit the coverage guidelines set by CMS for inpatient rehabilitation. These LMRPs significantly impact O&P patient care in this setting. Because LMRPs must be consistent with all statutes, rulings, and regulations, and may not conflict with CMS National Coverage Decisions or interpretive manuals, the fiscal intermediaries should await CMS guidance on the 75% Rule before implementing revisions to coverage policies for inpatient rehabilitation stays. NAAOP, along with other rehabilitation groups, continues to press CMS to direct FIs to withdraw the current LMRPs and discontinue further action until an independent panel of national clinical experts on inpatient rehabilitative care is convened and has fully examined the issues associated with medical necessity.

NAAOP will continue to monitor the implementation of specific provisions in the Medicare bill as they relate to O&P, particularly competitive bidding and the application of certification/accreditation standards to O&P providers. The 75% Rule and the LMRP issue will also be of continuing concern for O&P and NAAOP will be actively involved to prevent implementation of regulations unfavorable to O&P patients and providers. NAAOP will also continue to closely monitor Congress and the Bush Administration for any potentially deleterious policy initiatives in the future.

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.

  • Written by NAAOP

SADMERC to Rescind Policy on Prefabricated Orthoses Add On Code

NAAOP is pleased to report that its efforts, and the efforts of other O&P organizations, to challenge the SADMERCÂ’s recent coding decision regarding add on codes have been successful. NAAOP has verbally confirmed that the SADMERC will rescind its policy prohibiting the use of add on orthotic codes in conjunction with prefabricated orthotic base codes. This represents a clear victory for NAAOP and the O&P community in maintaining quality orthotic care.

Officials with the SADMERC stated during a recent conference call that “A formal article rescinding the advisory is forthcoming and a clarification letter will be issued in the next publication cycle.” Pursuant to this statement, the advisory was removed from the SADMERC website and the SADMERC will continue to work on this issue and make recommendations to add on codes where appropriate.

On December 23, 2003, NAAOP wrote to the SADMERC and DMERC Medical Directors, stating that the new “coding clarification” policy would adversely impact practitioners and the Medicare program, and would deprive patients of necessary options that enhance the comfort, stability, and, most-importantly, function of orthoses.

Not only does the action by the SADMERC to rescind the advisory elimination the immediate reimbursement impact of the decision, it also eliminates the need to challenge the process in which the coding advisory was issued. The SADMERC originally issues this advisory without following proper notice and comment procedures. Had the coding advisory been allowed to stand, additional policies may have been issued in the future using the same flawed procedure and averting proper notice and comment guidelines.

Please join NAAOP today to ensure that we are able to remain active and vigilant on behalf of the O&P community. Please contact NAAOP at (800) 622-6740 or on the web atwww.naaop.org.

  • Written by NAAOP

O&P Facilities’ Obligation to Provide Interpreters

“In a response to the message sent on the listserve regarding an O&P facility’s obligations to provide interpreters to deaf or hard of hearing patients, the following describes an O&P facility’s rights and responsibilities under the Americans with Disabilities Act of 1990 (“ADA”).

O&P facilities are considered “public accommodations” under Title III of the ADA, regardless of the size of the business or number of employees. As a public accommodation, an O&P facility has a responsibility to provide “effective communication” through its policies and procedures with the public, including patients. “Effective communication” does not require the provision of an interpreter for every patient who requests it or who is deaf or hard of hearing. In many instances, note taking and the use of other auxiliary aids and services to achieve effective communication are perfectly acceptable. However the complexity of the communication is largely what determines what form of communication would be considered “effective.” For a routine patient encounter, an interpreter is not required absent extenuating circumstances. However, if the patient encounter involves a more complex set of communications and consideration of more complicated issues, an interpreter may well be required by the ADA.

If the patient requests an interpreter, the practitioner should engage in a dialogue with the patient and/or his/her representative or family members to arrive at the method of communication that suits the particular needs of the patient and the circumstances of the patient visit.

If an interpreter is determined to be required, the O&P facility is obligated to pay for the interpreter entirely and may not impose a surcharge on the patient, even if the reimbursement for the patient service is less than the cost of the interpreter needed for that patient visit. The cost of interpreter services are measured against the revenues of the entire operation, not against the individual requiring the interpreter. In other words, the provision of interpreters or other auxiliary aids and services to deaf and hard of hearing patients is a cost of doing business with the public.

This response is provided to the O&P community as a service of the National Association for the Advancement of Orthotics and Prosthetics (NAAOP). Although drafted by NAAOP’s General Counsel, Peter W. Thomas, it does not constitute legal advice.”

  • Written by NAAOP