NAAOP Update

The 109th Congress kicked off its first session of 2005 on January 4 in what
is likely to be a contentious and partisan year. As a result of the
election, the Senate Republicans gained 4 seats to achieve a 55-44-1
majority; the House of Representatives also added 3 Republican seats and now
stands at 232-201-1, with one vacancy. Featuring prominently this year will
be a major budget fight over the fiscal future of Medicare and Medicaid.
The battle over Medicare competitive bidding will heat up in 2005 with new
meetings of the Program Advisory and Oversight Committee. Meanwhile, the
Medicare Payment Advisory Commission (MedPAC) is in the midst of announcing
Medicare payment and program recommendations, among them a long awaited
study on direct access to physical therapy services. O&P professionals
should prepare for a busy year in Congress.

Competitive Bidding DME and “Off the Shelf” Orthotics

The Program Advisory and Oversight Committee (PAOC) for competitive bidding
of Durable Medical Equipment, some orthotics, and supplies held a meeting on
December 7-8, 2004, and will meet again on February 28-March 2, 2005. There
appears to be consideration of inclusion of some spinal and lower limb
orthoses, in competitive bidding. However, no specific codes were outlined
nor was there consideration of how broad the scope of “off-the-shelf
orthotics” should be set. Clearly there are many unanswered questions that
remain to be answered with respect to how professional orthotic care will be
impacted by the implementation process. Among topics for discussion at the
next meeting are the methodology for setting payments, the bid solicitation
process, small supplier issues and data collection, accreditation
organizations, supplier standards, criteria for evaluating suppliers, and
financial standards.

Budget Showdown on Medicare and Medicaid Cuts

Amidst growing concerns among many in Congress over a rising deficit and a
looming fiscal crisis, a major battle over Medicare and Medicaid funding is
likely to ensue. Though at the time of this writing President Bush has not
yet released his Fiscal Year 2006 budget proposal to Congress, it is widely
anticipated that a Medicaid reform package and recommendations for cuts to
Medicare will be included. Republican leaders on Capitol Hill appear to be
achieving consensus to cut roughly $20 billion for Medicaid and $80 billion
for Medicare over the next 10 years.

MedPAC Study on Physical Therapist “Direct Access” Casts Doubt on Viability
of Proposal

The Medicare Payment Advisory Commission (MedPAC) released a highly
anticipated report on December 31, 2004, that casts into doubt the
possibility that Congress could authorize Medicare beneficiaries’ access to
physical therapists without first having to obtain a prescription from a
physician. This report, ultimately, is good news for the O&P field.
Because the physical therapists have made progress in the states in
expanding their scope of practice to include O&P services, the elimination
of the physician referral requirement at the federal level may have had the
effect of permitting PTs to self-prescribe and then provide O&P care. This
could have conceivably cut out O&P providers from treating large numbers of
Medicare and other patients. The MedPAC report was a significant blow to
the PTs’ strategy and, in this respect, represents a significant victory for
the O&P field.

Written by Peter W. Thomas, Esq., NAAOP General Counsel and Dustin W.C. May,
Legislative Director, Powers, Pyles, Sutter & Verville, P.C., January 24, 2005

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