RESCIND the Draft LCD for Lower Limb Prostheses!

The more NAAOP reads of the proposed draft Local Coverage Determination (“LCD”) for Lower Limb Prostheses found at http://www.medicarenhic.com/viewdoc.aspx?id=3109, which was issued by the DME MACs two weeks ago, the more alarming the proposed policy becomes.

This is a tour de force of bad Medicare policy that will literally harm patients. The proposed policy is supported by virtually no evidence, will set the standard of care back by decades, and appears to be motivated by a misguided attempt to save money to the detriment of amputees and the providers who serve them. The draft LCD must be rescinded in its entirety. No amount of tweaking will improve this policy.

Request to Rescind the LCD: On Friday, July 31st, NAAOP joined with other members of the O&P Alliance in writing to CMS Acting Administrator Andy Slavitt requesting this policy be rescinded. In the alternative, the letter requested an indefinite suspension of the draft policy until a more rational and transparent process could be established to address CMS’s concerns with lower limb prostheses. We requested a national meeting at CMS solely devoted to this LCD and a suspension of the LCD at least until such time as CMS issues a final rule on prior authorization, which is pending final publication in the next few months.

Online Petition: In addition, NAAOP has initiated a “WE THE PEOPLE” online petition on the White House website. We need 100,000 signatures by the end of August in order for the White House to officially respond. ALL NAAOP members, friends, family members, employees and patients should be encouraged to sign this online petition. It takes three minutes and can be found at http://wh.gov/iIIoi. Please do everything you can to help rescind this restrictive and unfair Medicare policy.

Public Comments: Public comments on this proposed policy are due by August 31, 2015. NAAOP is working with the O&P Alliance to draft a comprehensive set of comments. We will also be posting sample comments on our website for our members and friends to use as templates in drafting their own comments to the DME MACs, which we strongly encourage. Templates can be useful to assist with these submissions, but your personal comments and reactions to this policy from a clinical or patient standpoint are critical. There will also be a public meeting on August 26th in Linthicum, Maryland on this policy.

The proposed LCD is a comprehensive re-write of the existing LCDs, addressing all aspects of coding, coverage, and payment of lower limb prostheses for Medicare beneficiaries. The draft LCD is highly restrictive and returns the Medicare prosthetic benefit to a 1970’s standard of care. Because many of the proposed changes involve the Uniform Code Set, which applies to all payers, these policies once finalized are likely to impact all amputees using prostheses. Many of the changes proposed in the draft LCD raise serious concerns for patients, prosthetists, physicians, and other health care providers and suppliers caring for patients with lower limb amputations.

The fate of prosthetic care in this country hangs in the balance. Thank you for your continued participation and support.

  • Written by NAAOP

Comprehensive Analysis on FY 2008 Budget/Appropriations

On Monday, February 5, 2007, the Bush Administration released it fiscal year (FY) 2008 budget request, calling for significant cuts to many domestic programs, including Medicare and Medicaid. The $2.9 trillion budget requests nearly $700 billion for all security-related spending which includes $275 billion to fund the wars in Iraq and Afghanistan through FY 2008. However, the President’s budget would essentially freeze domestic spending at $376 billion in FY 2008.

FY 2007 Appropriations

Although the release of the President’s budget request marks the beginning of the new Congressional budget/appropriations process, Congress has yet to pass last years’ spending bills. Last week, the House approved a $463 billion overall spending bill for fiscal year (FY) 2007 and the measure is now awaiting Senate consideration, which is expected next week.

Known as a continuing resolution (CR), the bill will fund government spending through September 30, 2007 – the end of the 2007 fiscal year. Prior to adjournment in December, the 109th Congress passed a previous CR or “stop-gap” spending measure through February 15th because agreement could not be achieved on nine of the eleven appropriations bills. The new CR bundles those remaining spending bills together in an “omnibus” package.

Although the CR freezes most spending at FY 2006 levels, Congressional appropriators shifted approximately $10 billion from earmarks and other programs to increase funding for some domestic priorities of the Democratic Party. For example, the National Institutes of Health (NIH) would receive an additional $620 million in FY 2007. Similarly, Veteran Health would receive a $3.6 billion increase and the FDA would receive a $76 million increase from 2006 levels. However, most domestic spending will remain flat from FY 2006 funding levels.

As a result of the pending FY 2007 CR which will freeze most domestic spending levels at FY 2006 levels, the FY 2008 budget numbers below are compared to FY 2006 appropriations, rather than FY 2007.

FY 2008 Budget Request – Education

Of most direct impact to the O&P community, the elimination of “earmarks” this year translated into a loss of a $500,000 grant awarded earlier in the appropriations process for fiscal year 2007 to the American Academy of Orthotists and Prosthetists to fund the fifth year of AAOP’s Project Quantum Leap Initiative. While there is still a small chance that some funding may attainable, it is unlikely to occur in FY 2007.

The President’s budget request includes flat-funding of $106.7 million for the National Institute on Disability and Rehabilitation Research (NIDRR). NIDRR supports disability research, demonstration projects, and related activities for individuals with disabilities.

Assistive Technology would receive an approximate $4 million decrease from FY 2006, as the President requests $26 million FY 2008. The Assistive Technology Act (AT Act) supports grants to States to increase access to and funding for assistive technology devices and services for individuals with disabilities.

FY 2008 Budget Request – Medicare

The Administration’s FY 2008 budget proposes $101 billion in cuts from entitlement spending over the next five years. Calling Medicare’s growth unsustainable, the President’s budget would garner $76 billion of those savings from the Medicare program. However, almost all of the President’s proposals would require legislative action, and it is fairly unlikely that Congress would make many of the dramatic cuts suggested in the budget request.

Provider Reimbursement Cuts

More than half of the $76 billion in Medicare savings in the President’s Budget ($39 billion) would come from reducing scheduled updates to provider payments over the next five years.

The President’s budget would freeze inpatient rehabilitation facility (IRF) and skilled nursing facility (SNF) updates in 2008 and reduce them by 0.65% (the market basket minus 0.65 percentage points) each year after. These proposals would save $1.9 billion and $9.2 billion over five years respectively.

The President’s budget would similarly cut payments to hospitals, outpatient departments, and hospices by 0.65% annually from 2008 to 2012, saving $13.8 billion, $3.3 billion, and $1.1 billion respectively. The budget would also freeze Home Health reimbursement for the next five years followed by 0.65% reduction each year thereafter, saving $9.7 billion over five years.

Beneficiary Premium Increases

President Bush’s budget would also garner significant savings by increasing Medicare Part B and Part D premiums for higher-income beneficiaries. The Medicare Modernization Act of 2003 (MMA) requires that higher-income beneficiaries (individuals with income over $80,000 and couples with income over $160,000) pay a greater portion on their 2007 Part B premiums through annual indexing. The President’s budget would eliminate the annual indexing of thresholds for income-based Part B premiums beginning in 2008, thus requiring those with higher-incomes to pay even more above the standard monthly Part B premium. The President would establish a Part D premium structure similar to the proposed Part B reforms. These provisions would save approximately $10.4 billion over five years.

Other Cost-Savings Provisions

  • The President’s budget would establish a 13-month rental period for power wheelchairs. This provision was rejected as part of the Deficit Reduction Act of 2005 (DRA). (Saves $530 million over five years.)
  • The budget would create a Medicare trigger that would require a 4% across-the-board cut to providers when 45% of Medicare expenditures are being drawn from the general fund, i.e. general revenues comprise more than 45 percent of Medicare expenditures. The MMA required that the President propose a legislative solution if two consecutive Medicare Trustee reports predict such a situation within 7 years.
  • The budget includes a proposal to limit mandamus jurisdiction as a basis for obtaining judicial review of decisions by CMS and clarifying the HHS Secretary’s authority to resolve appeals of Medicare determinations. Mandamus jurisdiction in federal court would be available only to compel federal officers to perform “plainly defined ministerial duties”, that is, to discharge duties that they clearly owe the public by statute.

FY 2008 Budget Request – Medicaid

The President’s FY 2008 budget calls for nearly $25 billion in cuts to the Medicaid program over the next five years. Unfortunately, many of these proposals would reduce the State programs’ ability to provide services to individuals with disabilities, as well as some of the most vulnerable Medicaid recipients.

Legislative Proposals

The President’s budget includes a number of legislative proposals aimed at reducing Medicaid spending over the next five years. These proposals include a “streamlining” of the federal matching rate paid to states for administrative services. Most administrative services are currently matched by the federal government at 50%; however, certain administrative activities requiring highly skilled individuals are reimbursed at higher rates. This “streamlining” of the administrative matching rate at 50% would save approximately $5.3 billion over five years. Similarly, the budget proposes reducing federal Medicaid reimbursement for Targeted Case Management (TCM) services to a standard 50% rather than a higher matching rate for most states, saving an additional $1.2 billion.

Costing the government slightly over $1 billion combined, the President encourages Congress to extend through FY 2008 Transitional Medical Assistance, which allows families to maintain Medicaid eligibility for up to 12 months after increases in income make them ineligible for welfare benefits, as well as the Qualified Individuals Program, which provides premium assistance for Medicare beneficiaries with limited financial resources.

Administrative Proposals

The President’s Budget announces several controversial regulatory Medicaid proposals, including many which have been offered as legislative proposals in the past but have been rejected by Congress to date.

The Administration plans to issue Medicaid regulations aimed at curbing reimbursement for some school-based services, particularly transportation costs for low-income students with disabilities, saving $3.6 billion over five years. There will likely be Congressional efforts to codify allowable Medicaid school-based services, in an attempt to preempt or reverse this extensive regulatory proposal and protect schools from loosing significant Medicaid funding.

The Bush Administration also plans to issue regulations that would narrow the definition of rehabilitative services under the Medicaid rehabilitative services option. Community rehabilitation providers are currently reimbursed for a wide range of services provided to individuals with disabilities under this option. Attempts to reduce the types of allowable services could severely restrict access for these individuals. A similar legislative proposal was offered to Congress during DRA negotiations but was ultimately rejected by lawmakers. This proposal would save $2.3 billion over five years.

FY 2008 Budget Request – National Institutes of Health

Legislation to significantly alter the structure of the National Institutes of Health (NIH) was singed into law earlier this year. This law caps the current number of 27 Institutes and Centers at the NIH as well as establishes a “common fund” for cross-cutting research. Under the President’s budget, the NIH would receive $28.9 billion for FY 2008. This is $341 million more than FY 2006 funding.

The Office of the Director would receive $517 million in FY 2008 under the President’s budget request. This is an increase of $39 million over FY 2006 levels. Some funding under the Office of the Director is intended to be used for trans-Institute research.

The National Institute of Child Health and Human Development would receive $1.265 billion in FY 2008 under the President’s request. That is $1 million more than appropriated in FY 2006. This institute houses the National Center for Medical Rehabilitation Research (NCMRR) which funds a significant orthotics and prosthetics research and development program.

The National Cancer Institute would be funded at $4.782 billion in FY 2008. This is $13 million less than appropriated in FY 2006.

FY 2008 Budget Request – Health Care Initiatives

The President’s Budget also contains many of the same health care proposals previewed in this year’s State of the Union Address. The budget proposes a new “Affordable Choices” grants program with the aim of helping states bring private health insurance within reach of uninsured citizens. These state grant programs would be funded with up to $30 billion in existing health care funds redirected away from other Medicare and Medicaid programs. Under the proposed grants program, states would choose a basic, low-cost health plan to offer its citizens with specific health plans varying from state to state.

The President also proposes a change in the federal tax code that would tax (for the first time) employer-provided health benefits and would offer deductions of $7,500 for individuals and $15,000 for families who have either purchased individual health insurance or are covered under a group plan through their employer. The President has said these revisions would “level the playing field” for individuals not insured through their employer, and for the uninsured, the deduction would free up money for the purchase of private health insurance. However, opponents argue that the President’s plan would shift greater burdens onto the middle and lower-middle classes as their employers have less incentive to provide their employees with health care.

Additionally, the budget encourages the expansion of health savings accounts andassociation health plans. Health savings accounts allow individuals to use pre-taxed dollars in combination with high-deductible health insurance plans to pay for care. Association health plans allow small groups to pool individuals to obtain lower prices but also subvert state insurance laws that protect consumers.

Conclusion

The President’s budget request was not well received by Congressional Democrats earlier this week who blasted the Administration’s proposal as an attempt to balance the budget by cutting programs and services to the most vulnerable populations while generously funding defense programs. However, several Republicans lawmakers praised the President’s budget as a bold step toward balancing the budget.

Following completion of the FY 2007 CR, Congress will begin work on its FY 2008 budget resolution. A budget resolution is not binding and ultimately serves as a blueprint for appropriations work as well as entitlement reform if they decide to include what is known as “reconciliation instructions.” The House is expected to introduce its budget resolution in the next several weeks. Despite criticism of the Bush Administration’s proposal, the FY 2008 Congressional budget is likely to be one of the most austere in recent memory as Democrats struggle with their pledge to return fiscal disciple to Washington in the face of many priorities they would like to fund.

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

  • Written by NAAOP

A Joint Letter from the O&P Alliance to the Orthotic and Prosthetic Profession

The four member organizations of the O&P Alliance (AAOP, ABC, NAAOP and AOPA) write this joint letter to inform our respective members about the status of Medicare DMEPOS supplier accreditation, quality standards, and competitive bidding.

There has been considerable confusion and misinformation in the field on these important issues and this letter is intended to clarify the situation as of this date. It is important to note two things: 1) that this situation is changing rapidly from day to day as CMS implements these new policies, and 2) that your national associations are actively working, in alliance, to advance your interests.

Competitive bidding for DME, supplies and some orthotics was enacted by Congress in the Medicare Modernization Act of 2003 (“MMA”) and is scheduled to be phased-in beginning in October 2007 in ten cities (i.e., Metropolitan Statistical Areas or “MSAs”) throughout the country. These ten cities have not yet been announced although CMS has informally suggested that they will be chosen from a broader list of 28 MSAs under consideration. Rumors in the field that CMS has already selected these ten cities are false.

Prosthetics are completely exempted from competitive bidding by law and many orthotics are as well. CMS has not yet announced which orthotics will be included in competitive bidding but the MMA law states that only “off-the-shelf orthotics” may be included. The term “off-the-shelf orthotics” is defined in the law so CMS must adhere to this definition when it interprets which orthotics are considered “off-the-shelf.” The O&P Alliance is actively working to ensure that the list of orthotic codes that are included in competitive bidding is as short as possible.

Under competitive bidding, suppliers will submit bids to the government to provide items and services to Medicare beneficiaries for reduced fee schedule rates. In exchange, CMS will select a limited number of suppliers for a given MSA. To help ensure that suppliers do not skimp on the care they provide beneficiaries, Congress mandated that CMS create quality standards. CMS will ensure that suppliers in the competitive bidding program are meeting the quality standards through an accreditation model. In fact, this past November, CMS selected 11 private organizations, including ABC, to accredit certain DMEPOS suppliers. A list of the 11 organizations is attached.

All suppliers wishing to participate in the competitive bidding program must be accredited and meet the quality standards and, so, CMS will require accreditation first in those MSAs that are selected for competitive bidding. O&P suppliers in the 10 selected MSAs who do not participate in supplying off-the-shelf orthotics through competitive bidding are not immediately required to become accredited.

However, ALL DMEPOS SUPPLIERS, including all O&P suppliers, must become accredited eventually if they intend to continue participating in the Medicare program,
whether or not they participate in competitive bidding. It is not known when CMS will enforce this accreditation requirement by discontinuing Medicare payment to suppliers who are not accredited, but this is likely to be years away. At present, only a small percentage of Medicare’s DMEPOS suppliers are accredited.

There are numerous, complex issues still unresolved and numerous decisions to be made as CMS implements this set of policies. There are also many unknowns at this time. For instance, several organizations selected to accredit DMEPOS suppliers have little or no experience with accreditation, let alone accreditation of O&P facilities. The learning curve for these organizations will be steep and some are likely to discontinue their interest in O&P as the complexities become clear.

ABC and the other ten selected accrediting organizations are in a difficult position at this point. CMS has stated that it expects all suppliers who will be participating in competitive bidding to be accredited by April 2007. But the ten MSAs for competitive bidding have not yet been announced, the list of orthotic codes defined as “off-the-shelf” has not been determined, and CMS has recently suggested its interest in revising the quality standards that apply to orthotics and prosthetics. In addition, it is not clear at this time whether every MSA will include competitive bidding of off-the-shelf orthotics.

You may be contacted by one or more of the 11 accrediting organizations selected by CMS urging you to avoid delay in becoming accredited. We would like to collectively stress that at this point in time, it is important to proceed in a deliberate manner, to keep informed of new developments through your national associations, and to keep the implementation of these new policies in perspective.

We hope this letter lessens the confusion surrounding these issues in the O&P profession. Suffice it to say, we share your frustration with the uncertainties and misinformation and will continue to inform you of developments as they occur. Please contact any of the four groups that comprise the O&P Alliance for further assistance.

Mark DeHarde
President
National Association for the Advancement of Orthotics and Prosthetics
Stephen B. Fletcher, CPO
President
American Board for Certification in Orthotics and Prosthetics
Gary M. Berke, MS, CP, FAAOP
President
American Academy of Orthotists and Prosthetists
Ronald Ted Snell, CP
President
American Orthotic & Prosthetic Association
  • Written by NAAOP

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.

  • Written by NAAOP

109th Congress Adjourns: Maintains 4.3% O&P Medicare Payment Update

Before adjourning, the 109th Congress cleared a surprising number of health-related bills including several which impact the Medicare and Medicaid programs.

Medicare/Medicaid

Most notable perhaps, was the massive tax and trade legislation which included in it a freeze in Medicare physician payments for 2007. Under the controversial SGR payment system, physicians were scheduled to receive a 5.0% payment cut in the coming year. The one-year fix also includes a 1.5% bonus payment beginning in July 2007 for those physicians who voluntarily submit data on quality measurements.

Of particular importance to NAAOP and the O&P profession, this legislation would not cut the O&P Medicare fee schedule and, therefore, O&P will maintain its 4.3% payment update in 2007.

The tax and trade legislation also included a one-year extension for the Deficient Reduction Act’s (DRA) therapy cap exception process. Under Medicare, therapy services are technically capped at a certain (and arbitrary) level; however the exception process allows beneficiaries requiring additional services to apply for exceptions to the cap. Additional provisions in the legislation include increases in Medicare dialysis payments, technical corrections to the 2005 DRA, and an extension of Transitional Medical Assistance (TMA) for low-income families transitioning off of Medicaid.

Some of the costs of these provisions are offset by using the 2003 Medicare Modernization Act’s (MMA) “stabilization fund,” originally set up to entice insurance companies to participate in the Medicare prescription drug program. Other cost-saving provisions include a recovery and audit program to identify and collect on inaccurate Medicare overpayments and a reduction in the Medicaid provider taxes ceiling from 6.0% to 5.5%. States often find some Medicaid revenues from taxing hospitals, nursing homes, managed care organizations, and other health care providers. This provider tax provision preempts the Administration’s expected regulations that would have reduced the provider tax limit to 3.0%, severely impacting states’ Medicaid budgets.

Appropriations:

Although the final hours of the 109th Congress were extremely busy, many pieces of legislation were left unfinished including the fiscal year (FY) 2007 Labor-HHS-Education appropriations bill. The 109th Congress postponed action on this, and eight other spending bills, by passing a continuing resolution (CR) into February, 2007. However, on Monday, December 11th, incoming House and Senate Appropriations Chairmen David Obey (D-WI) and Robert Byrd (D-WV) stated that they will attempt to pass a CR for the remainder of the FY 2007 appropriations cycle, which ends September 30, 2007. The year-long continuing resolution, if enacted, would essentially freeze program spending at FY 2006 levels until FY 2008.

NIH/SCHIP Legislation:

Another last-minute legislative package set to be enacted, would impact HIV/AID funding, the National Institutes of Health (NIH), and State Children’s Health Insurance Programs (SCHIP).
Among the top priorities of outgoing House Energy and Commerce Committee Chairman, Joe Barton (R-TX), was reauthorization legislation for the NIH. Chairman Barton’s NIH reauthorization bill will significantly restructure the agency and create a common fund to be used for cross-cutting research between centers.
Meanwhile, last week Senate HELP Committee Chairman Michael Enzi (R-WY) and Ranking Member Edward Kennedy (D-MA) were pushing the House to clear the Senate-passed Ryan White Care Act Reauthorization legislation which provides funding for low-income individuals with HIV/AIDS. And, HELP Bioterrorism and Public Health Preparedness Subcommittee Chairman, Richard Burr (R-NC), was also pushing the House to pass his Senate-approved reauthorization of the 2001 bioterrorism law.

The four lawmakers crafted a deal during the 109th Congress’ final hours that combined the three bills. However, as part of the deal in the Senate, lawmakers attached a provision which allowed for redistribution of surplus 2004 and some 2005 State Children’s Health Insurance Plans (SCHIP) funding (which were set to expire) to states with SCHIP shortfalls in 2007. The legislation was approved by both Chambers just prior to adjournment and now heads to the President for his signature.

Conclusion:

The Medicare physician payment freeze, included in the recent tax and trade legislation, proved extremely important to NAAOP members, as O&P will now receive a 4.3% update in calendar year 2007. However, Medicare provider payment rates, as well as many other important Medicare and Medicaid issues, are likely to be debated again in the 110th Congress, set to convene on January 4, 2007.

We will keep you updated as developments occur.

Compiled by Peter W. Thomas, NAAOP General Counsel
Emily A. Niederman, Legislative Director, Powers, Pyles, Sutter & Verville

  • Written by NAAOP

September 2006 Action Alert

National Regulation/Quality and Qualifications

NAAOP, both individually and in partnership with other O&P organizations, has consistently sought to separate legislative and regulatory treatment of professional O&P care from the provision of durable medical equipment. These efforts have been largely successful through the years, witnessed by more favorable treatment for O&P in the area of Medicare fee schedule freezes and competitive bidding. These victories have been accomplished through years of persistence. In fact, there are now laws on the books that were written to protect Medicare beneficiaries from receiving substandard care from individuals who are not qualified to provide professional O&P care to Medicare beneficiaries. This battle was won because NAAOP and its allies in the O&P field finally convinced legislators that the provision of O&P care is complex, clinical, and critical for Medicare patients with orthopedic conditions and disabilities.

CMS regulators are now interpreting these laws as they relate to the establishment of quality standards and accreditation requirements. This matter deserves your attention because you and your patients will suffer if non-qualified suppliers are permitted to provide care to patients, and bill the Medicare program for it. It is again necessary to use the arguments that convinced legislators to press the case with regulators interpreting the statutes. To do this, the O&P profession must put a human face on the issue of quality standards and the adverse consequences of O&P patients receiving care from individuals not qualified to provide professional care

You may have the evidence needed to advocate for your patients and your profession. You can help! Please provide NAAOP with specific examples of the effect of non-qualified individuals providing O&P care. When providing these examples, please provide as much evidence as possible, giving facts, including timeframes, disclosing only what you know, and do not include information that would identify a particular patient. If you have questions, please call NAAOP at 800-622-6740 or e-mail us at info@naaop.org. We want to hear from you.

O&P is a relatively small profession and in order to compete in the larger healthcare arena we must continue to present a factual and compelling account of the threats facing O&P patients and professional O&P care.

Please share this information with a colleague.

Coverage and Reimbursement

DRA 9-Day Payment Hold
This message is for all providers and physicians who bill Medicare contractors for their services.

A brief hold will be placed on Medicare payments for all claims during the last 9 days of the Federal fiscal year (Sept 22 through Sept 30, 2006). These payment delays are mandated by section 5203 of the Deficit Reduction Act of 2006. No interest will be accrued and no late penalties will be paid to an entity or individual by reason of this one-time hold on payments. All claims held during this time will be paid on October 2, 2006.

Please note, however, that contractors handling large volumes of paper checks may have some difficulty putting all checks in the mail in a single day. Consequently, delivery of checks to providers may take a few extra days.

This policy only applies to claims subject to payment. It does not apply to full denials, no-pay claims and other non-claim payments such as periodic interim payments, home heath request for anticipated payments and cost report settlements.

Please note that payments will not be staggered and no advance payments will be allowed during this 9-day hold.
Please refer to:
MLN Matters article #MM5047; Change Request #5047; Transmittal# R944CP
or refer your questions to your FI/RHHI or Carrier

Thank you for your support.

Respectfully,

Mark DeHarde
President
George W. Breece
Executive Director
Peter W. Thomas
General Counsel
  • Written by NAAOP

O&P Shared Vision Summit Yields Great Promise

NAAOP’s Executive Director and General Counsel, George Breece and Peter Thomas, participated recently in a two and a half day leadership conference in Chicago organized by the American Orthotic and Prosthetic Association and attended by many business, clinical, research and education leaders in the O&P field, nearly 75 people in all. The Summit was the first of its kind since 1987 when a similar strategic planning session was held.

While many important leaders in the field were not in the room, the participants consisted of a diverse cross-section of the field of orthotics and prosthetics, which lead to a rich dialogue on the pressing issues of the day. A main topic of discussion focused on the need of the O&P field to have a consistent, unified voice when representing the field to others. The O&P Alliance, which was formed earlier this year and functions as an informal government relations coalition between AAOP, ABC, AOPA and NAAOP, was seen as an effective force and a significant step forward.

With the help of a top-notch facilitator, the group discussed a variety of priority topics in both breakout sessions and as a full group, moving toward a consensus agenda for the future. Priority topics included the need to promote outcomes based research as well as technology R&D, ensure that Medicare regulations properly link payment to provider qualifications, and ensure that education requirements lead the field to new and higher levels of competence.

One of the many highlights of the conference was the closing speaker, Tammy Duckworth, former Democratic candidate for Congress in a suburban Chicago district. Tammy narrowly lost her House race in a Republican-leaning district on election day. Tammy spoke of her experience being shot down while piloting a Black Hawk helicopter in Iraq. After losing her legs (AK/BK) and the partial use of one arm, she received her rehabilitation and prosthetic care at Walter Reed Army Hospital. Tammy challenged the group to think in new ways about serving the needs of injured veterans and pledged to work hard in the future to secure additional funding for O&P research and services. She also suggested that the O&P field should actively recruit from the ranks of returning veterans.

A key challenge identified during the conference was the need to follow through on the groundwork laid during the two-day session. NAAOP intends to do its part to promote the consensus themes of the conference and actively work with other partners in the O&P field to make the “shared vision” a reality in the years to come.

  • Written by NAAOP

NAAOP November Government Relations Update

Mid-Term Election Impact and Brief Analysis

Democrats scored major victories in the election, becoming the majority party in the U.S. House of Representatives, achieving a majority of state governorships, and taking control of the U.S. Senate by a one vote margin. The results were largely consistent with most polling and political prognostications prior to the election, but the margins that Democrats achieved were generally larger than anticipated. Most analysts attributed the extensive Republican losses to the Iraq war, the unpopularity of President Bush, the economy, and a series of scandals that plagued the majority party. Following the election results, Defense Secretary Donald Rumsfeld resigned.

Impact on Policy: This sets that stage for a major shift in federal policy that could have a dramatic effect on health and human services, education, disability policy and policies that impact orthotics and prosthetics. Of particular interest to health care providers awaiting action on Medicare issues and funding levels for FY 2007, the change in leadership probably means that Congress’ lame duck session scheduled to begin November 13th will not be particularly fruitful. For the field of O&P, this means the likelihood of receiving a 4.3% Medicare fee schedule update on January 1st is very high.

House: In the House, at the time of this writing, the Democrats hold 230 seats and the Republicans hold 196, with 9 races throughout the country being too close to call. The margin to control the House is 218 seats. There is a real chance that Republicans may be shut out from taking any seats taken from Democrats, which would be the first time in history that this has occurred. But even if the Republican candidate in all 9 of these undecided races wins, the Democrats will still control the House. This means that a new Speaker of the House will be elected and all of the committees will change leadership. This also means that the agenda and the rules for debate in the House will no longer be run by Republicans, the party of President Bush.

Big winners in the House include Congresswoman Nancy Pelosi (D-CA), who is in line to become the first female Speaker of the House and highest elected female official in U.S. history. A long list of relatively unknown Democrats who toppled often well known Republicans follow, many of whom are either moderate or even conservative in their political outlook. Major figures who lost their reelection bids include Nancy Johnson (R-CN), Chairman of the House Ways and Means Health Subcommittee, Clay Shaw (R-FL), senior member of the Ways and Means full Committee and potentially the next chairman if House Republicans maintained their majority, and Speaker Hastert, who won reelection but announced that he will not seek the House Republican leadership post.

Senate: The Senate was less likely than the House to turn from Republican to Democratic control. In the Senate, Democrats have picked up six seats and now hold a 51 to 49 majority. The Democrats not only picked up six Republican seats but also held on to all of the Democratic seats including Maryland and New Jersey. With Democrats having taken the majority, they will be rewarded with controlling the agenda, chairing all committees and electing a new Majority Leader. Senator Harry Reid of Nevada, the present Senate Minority Leader, is expected to be elected Senate Majority Leader.

Political Analysis: In political terms, this election is a major shift in power in Washington and is being interpreted as a strong rebuke of President Bush and his leadership. Especially if the Democrats take the Senate, this election will have a major impact on the lame duck session of the 109th Congress, the last two years of the Bush Presidency, and perhaps the political dynamic in Washington.

Lame Duck Session: The lame duck session is likely to be shortened dramatically from what might have occurred if Republicans kept both Houses of Congress. If Republicans had won Congress, they would have returned on November 13th and continued to negotiate spending levels for fiscal year 2007, Medicare fixes such as physician payments and an extension of the therapy caps, and perhaps other legislation that is largely completed but has not received final approval before being sent to the President for signature. The likelihood now, in light of the Democratic gains, is a short lame duck session, pushing everything that can be postponed into next year for Democrats to address. Spending levels for federal programs will likely be addressed by passing a continuing resolution through some point next year (e.g., March 2007) at FY 2006 spending levels. This would be a major disappointment for anyone with provisions pending in this Congress as action on these provisions may not occur until well into next year. It is important to note, however, that this is informed speculation, and the incoming leadership may choose a different path in the coming days and weeks.

The 110th Congress: Because of the change in leadership, the 110th Congress will start with new leadership elections, selection of committee assignments and other organizing activities. The Democratic agenda is expected to focus on raising the minimum wage, increasing spending for homeland security and education, and promoting alternative fuels with less reliance on foreign oil. In addition, the House is widely expected to exercise greater oversight authority by probing Iraq reconstruction spending and other issues. Another key goal will be to authorize the federal government to negotiate pricing with prescription drug companies, thereby reducing the costs of the Medicare Part D program and perhaps allowing those savings to reduce the size of the gap in coverage under the existing program. A key challenge will be entitlement spending (i.e., Medicare, Medicaid and Social Security), as 2007 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.

Bipartisanship: Although too early to tell, the election results 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. Although Democrats have a fairly comfortable lead in the House and a razor thin margin in the Senate, they will need moderate Republican votes to move most legislation and President Bush still holds the veto pen, which will not be easily overridden in Congress as the House and Senate margins currently stand.

  • Written by NAAOP

Political Update

  • As expected, Congress was unable to wrap up its work on 10 out of 13 federal spending bills before recessing for the mid-term elections. Also expected to appear in a post-election “lame duck” session of Congress is a Medicare bill to spare physicians from a 5.1% cut in reimbursement scheduled to take place on January 1st if Congress does not intervene. It is this legislation that might include some changes that impact the expected 4.3% increase to the O&P fee schedule, also scheduled to take place on the first of the new year. NAAOP will be monitoring this situation closely and will intervene if necessary.
  • Several major pieces of legislation are still in play as a likely “lame duck” session is shaping up for late November, but this will be significantly impacted by the outcome of the elections.
  • The potential for a change in party leadership in the House and/or Senate complicate the outlook for a post-election legislative showdown over a Medicare bill.

Medicare Legislation Prospects and Impact on O&P

  • Great pressure is being exerted on the 109th Congress to craft a Medicare bill before the end of the year. The main political driver for this bill is the proposed elimination of a 5.1 percent decrease in physician payments for Calendar Year (CY) 2007. Other provisions are in the works as well that could impact the O&P field.
  • Three main strategic factors form the debate heading into the fall: what specific reform proposal to attempt, how much to spend and how to pay for it, and what political strategy would best be applied. If Republicans hold their leadership position in the House and Senate, expect a major bill this year. If Democrats take over either body, expect most of the work to be pushed off until next year.
  • Cost is a major concern for lawmakers as a one-year physician fix would cost $10+ billion.
  • In 2003, Congress froze the O&P fee schedule to offset the cost of other Medicare provisions in the Part D prescription drug law. The 3-year freeze expires at the end of this calendar year.
  • This creates the possibility that Congress will extend the O&P fee schedule freeze to help offset the cost of the physician fee schedule fix. However, NAAOP and other O&P Alliance members have been advocating to key members of Congress that this should not occur and have received indications that the O&P fee schedule is likely safe for calendar year 2007. If this holds, this would translate into an O&P fee schedule increase of 4.3%.

Appropriations Update

  • Over the summer, House and Senate appropriators completed work on their respective Labor, HHS, and Education Appropriations bills, but a conference committee set to work out a final bill will not likely complete work until after the elections. Most programs of interest to the O&P field were level funded from current spending levels.
  • After extensive advocacy from the O&P Alliance, of which NAAOP is a member, the Senate Labor, HHS, and Education Appropriations bill included language funding the fifth year of AAOP’s Project Quantum Leap, at a level of $500,000. Additional work will be required this fall to ensure that this funding is included in the final bill.

Association Health Plan Legislation Impacting O&P Benefit Mandates

  • Earlier this year, Senate Health, Education, Labor and Pensions Committee Chairman Michael Enzi proposed a bill relating to Association Health Plans that many Republicans have touted as a remedy for uninsured Americans to access affordable health insurance.
  • The bill would allow health plans to offer insurance across state lines, which would preempt state benefit mandates, including all state laws mandating basic coverage for O&P services.
  • NAAOP and its Alliance partners strongly advocated against this bill preempting these O&P mandated benefits laws. The legislation is not expected to move this year, but the tenuous political situation in Washington could spur movement on this legislation at any time.

CMS Issues Final Rule on Quality Standards and Accreditation of DMEPOS Suppliers

  • CMS recently issued a final rule on the quality/accreditation standards for suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). The quality standards are much less stringent than proposed last Fall.
  • NAAOP and all Alliance organizations have been actively engaged in working with CMS during this debate. The fear is that the very basic Medicare quality standards may actually undermine the quality of care in a field like O&P, which is well accustomed to accreditation.
  • CMS anticipates using multiple accreditation organizations and a uniform set of quality standards, with a specific section for suppliers of O&P care. The accreditation requirements will be first implemented in cities where Medicare competitive bidding is implemented. Many questions remain and NAAOP will continue to closely work on this important issue.

Compiled by Peter W. Thomas, NAAOP General Counsel

Dustin W.C. May, Legislative Director, Powers, Pyles, Sutter & Verville, PC.

  • Written by NAAOP

NAAOP Action Alert

Dear O&P Professional:

The National Association for the Advancement of Orthotics and Prosthetics, both individually and in partnership with other O&P organizations, has consistently sought to separate legislative and regulatory treatment of professional O&P care from the provision of durable medical equipment. These efforts have been largely successful through the years, witnessed by more favorable treatment for O&P in the area of Medicare fee schedule freezes and competitive bidding. These victories have been accomplished through years of persistence. In fact, there are now laws on the books that were written to protect Medicare beneficiaries from receiving substandard care from individuals who are not qualified to provide professional O&P care to Medicare beneficiaries. This battle was won because NAAOP and its allies in the O&P field finally convinced legislators that the provision of O&P care is complex, clinical, and critical for Medicare patients with orthopedic conditions and disabilities.

CMS regulators are now interpreting these laws as they relate to the establishment of quality standards and accreditation requirements. This matter deserves your attention because you and your patients will suffer if non-qualified suppliers are permitted to provide care to patients, and bill the Medicare program for it. It is again necessary to use the arguments that convinced legislators to press the case with regulators interpreting the statutes. To do this, the O&P profession must put a human face on the issue of quality standards and the adverse consequences of O&P patients receiving care from individuals not qualified to provide professional care.

You may have the evidence needed to advocate for your patients and your profession. You can help! Please provide NAAOP with specific examples of the effect of non-qualified individuals providing O&P care. When providing these examples, please provide as much evidence as possible, giving facts, including timeframes, disclosing only what you know, and do not include information that would identify a particular patient. If you have questions, please call NAAOP at 800-622-6740 or e-mail us at info@naaop.org. We want to hear from you.

O&P is a relatively small profession and in order to compete in the larger healthcare arena we must continue to present a factual and compelling account of the threats facing O&P patients and professional O&P care.

Please share this information with a colleague.

Join your NAAOP colleagues in our efforts. Add your voice. Defend professional O&P patient care.

Respectfully,

Mark DeHarde
President
George W. Breece
Executive Director
Peter W. Thomas
General Counsel
  • Written by NAAOP