8/3/2007
Congress Takes August Recess, NAAOP Doesn't
August 3, 2007
Legislative Update:
By a vote of 225-204, the House, this week, approved legislation to reauthorize the State Children's Health Insurance Program (CHIP) and make significant changes to the Medicare and Medicaid programs. Of particular importance to NAAOP, the House legislation does not target the Medicare orthotic and prosthetic fee schedule in order to pay for major "cost-ers" in the bill.
Having received a significant 4.3% increase to the Medicare orthotic and prosthetic fee schedule on January 1, 2007, the O&P field was bracing for cuts to next year’s CPI update. However, the House legislation does not include such cuts and it appears the O&P field may be spared in the final bill. However, with a likely Senate Medicare bill pending and subsequent conference negotiations, the O&P fee schedule could still be susceptible to cuts as other costly provisions make their way into the legislation. This means that NAAOP will be hard at work in August to protect the O&P fee schedule from reductions or freezes.
The House bill - the Children's Health and Medicare Protection ("CHAMP") Act of 2007 - would reauthorize CHIP and invest an additional $50 billion dollars over five years in the program. The bill would also eliminate a scheduled 10 percent Medicare physician payment cut in fiscal year (FY) 2008, providing doctors with a 0.5 percent payment bump each year for the next two years.
But the 465-page bill goes well beyond these two primary provisions to address several additional Medicare and Medicaid priorities. For example, the bill would freeze further implementation of Medicare's so-called "75% Rule" on inpatient rehabilitation facilities, which requires that a certain percentage of patients have one of thirteen specified diagnoses in order to maintain its status as an inpatients hospital or unit. The legislation would also place a moratorium on promulgation of Medicaid regulations that would restrict allowable rehabilitation and school-based services.
Although a $0.45 tobacco-tax increase and a nearly $47 billion cut to the Medicare Advantage program pay for much of the cost of the bill, the CHAMP Act would also find savings through cuts to many Medicare provider groups. For example, $2.7 billion would be saved under Medicare by zeroing-out the FY 2008 payment update to Skilled Nursing Facilities (SNFs) and $2.4 billion would saved from cuts to inpatient rehabilitation facilities next year.
The Senate also approved CHIP legislation this week, by a vote of 68-31. The Senate's $35 billion CHIP reauthorization bill is funded entirely by a $0.61 increase in tobacco and contains no provisions impacting the Medicare program.
The Bush Administration issued a formal veto threat on the Senate and House legislation last week, using a philosophical argument that expansion of CHIP represents a step toward government-run
healthcare. The Senate approved its CHIP measure by a veto-proof margin, but the House does not have the need two-third votes for an override.
While there has been speculation as to whether or not the Senate will draft its own Medicare bill or simply conference its CHIP legislation with the House's CHIP/Medicare bill, it now looks like the Senate Finance Committee will begin work on such Medicare and Medicaid legislation in September. Although Congress is leaving Washington DC for the August recess, NAAOP will continue to work to protect its members’ interests.
Regulatory Update:
In regulatory news, last week the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would require suppliers of Durable Medical Equipment, (e.g. wheelchairs, scooters, canes) and Prosthetic, Orthotics and other Supplies (DMEPOS) to post a $65,000 "surety" bond in order to participate in the Medicare program.
CMS states that the requirement for the surety bond would ensure that Medicare can recover erroneous payments up to $65,000 that result from fraudulent or abusive supplier billing practices and it is clear that these proposed changes are a direct result of recent fraud and abuse discovered in Florida and other parts of the country. However, the impact of this surety bond could be very detrimental to small O&P providers and is just another example of CMS unfortunately grouping O&P with DME in the Medicare program. NAAOP will be submitting comments to the agency opposing these changes.
Prepared by Peter W. Thomas, NAAOP General Counsel
