12/26/2007
Congress Adjourns - Important O&P Issues
End-of-the-Year Legislation Offers Positive Developments to O&P Field
Congress adjourned last week, completing the first session of the 110th Congress. The last several days of the session proved to be the busiest of the year with numerous loose ends being tied up before Members of Congress went home. Of particular importance to NAAOP, Congress passed an omnibus spending bill this week which combined the 11 unfinished appropriations bills for fiscal year (FY) 2008, including the Labor-Health and Human Services-Education and Veterans Affairs spending bills. Congress also passed a Medicare package driven by a short-term fix to a pending Medicare physician payment cut without cutting other providers as was expected
Appropriations Update
Last week, Congress approved its fiscal year (FY) 2008 omnibus spending bill. The bill compiles the 11 remaining spending bills for FY 2008, including the Labor-Health and Human Services-Education (L-HHS) and Veterans Affairs (VA) appropriations bills, and enactment of the legislation completes Congress' annual appropriations work.
Democratic leaders have been at odds with President Bush and many Congressional Republicans over the spending levels in the FY 2008 appropriations bills. While Democrats would have liked to increase spending on many domestic priorities including health, education and labor programs, the President vowed to veto any legislation that went beyond his $933 billion overall request for discretionary spending. Because the Democrats did not have the needed Republican support to override the President's vetoes, the Congressional Majority was in the uncomfortable position of having to adhere to the President's demands or adjourn for the year without completing its annual appropriations work.
Last year, the Republican Majority passed a short-term continuing resolution (CR) at the end of the second session of the 109th Congress, leaving final action on FY 2007 appropriations up to the new Democratic Majority. Democratic leaders enacted a long-term CR shortly after returning in January, funding most programs at the FY 2006 levels through September 30, 2007.
Labor- Health and Human Services – Education:
In November, Congress sent a relatively generous L-HHS appropriations bill to the President, but, because the bill exceeded the Bush Administration's discretionary budget request by $10 billion, the President vetoed the measure.
While the omnibus spending bill represents a major departure from the Democrats' desired focus on domestic priorities, Democratic leaders did manage to shift funds between the 11 spending bills in order to provide about $600 million more in discretionary spending than the Departments of Labor, Health and Human Services, and Education received in FY 2007. However, the discretionary total of the L-HHS section of the omnibus bill is about $5.6 billion less than the spending bill vetoed in November, and this was accomplished primarily through an across-the-board spending cut of 1.747% to many programs funded under this bill.
The L-HHS section of the omnibus bill totals $145.1 billion in discretionary spending, including $307 million that Democrats designated ''emergency'' spending which is not subject to budget caps. Under the Department of HHS, the National Institutes of Health (NIH) would receive approximately $29.2 billion, about $329 million over FY 2007 levels. Democrats were originally interested in increasing the NIH budget by nearly $1 billion, and many consider the revised increase to be entirely insufficient to fund the research and development activities of the NIH. The O&P research program at the NCMRR will presumably feel the pinch of this limited funding increase.
Within the Department of Education, the National Institute for Disability and Rehabilitation Research (NIDRR) was scheduled to receive an increase of $900,000 in FY 2008 – the first increase for NIDRR in several years – to specifically fund two Traumatic Brain Injury centers that were de-funded earlier this year. The omnibus spending bill specifically provides $1 million through the Rehabilitative Services Administration under the Department of Education to continue funding ''Project Quantum Leap,'' a grant program administered by the American Academy of Orthotists and Prosthetists (AAOP). This grant is designed to improve the quality of applied orthotic and prosthetic research and to help meet the demand for provider services. Funding of this grant in this budget environment represents a huge victory for the O&P field and, of course, for the AAOP.
Veterans Affairs:
The Veterans Health Administration will receive $37.2 billion in FY 2008 under the omnibus bill. This is an increase of $4.5 billion from FY 2007 and $2.6 billion more than President Bush requested. These are unprecedented increases and largely result from the fallout earlier this year from the Walter Reed scandal. Under this total, Medical and Prosthetic Research at the VA would receive $480 million, $69 million above the President's request and $66 million more than FY 2007. Although the VA tends to be very insular in terms of spending its federal research dollars, these dramatic funding increases can only benefit the O&P field.
Medicare Package
After months of debate and several veto threats, House and Senate leaders finally agreed to a so-called Medicare ''extenders'' package driven by a pending 10% cut to physician payments under the Medicare fee schedule.
The legislation temporarily averts the physician pay cut for six-months, providing doctors with a 0.5% reimbursement increase through June 2008. Democratic leaders had originally intended to pass a one- or two-year physician payment fix paid-for with cuts to Medicare managed care plans (Medicare Advantage) and other Medicare providers. However, after the President issued a veto threat on legislation that would broadly cut Medicare Advantage, Congressional leaders chose to pass a short-term fix and will have to address the issue again in the New Year. Of importance to NAAOP, no cuts to the O&P fee schedule were included in the Medicare bill and therefore, it is expected that the O&P field will receive a full CPI update on January 1, 2008, worth approximately 2.7% over current fees.
The Medicare package also includes an extension of the current State Children's Health Insurance Program (SCHIP) through March, 2009. Many consider this extension of the current funding to be a huge loss for Democrats who promoted reauthorization and expansion of SCHIP as one of their major priorities this year. However, the Administration stood firm on its opposition to additional funding being invested in the program as the President vetoed two SCHIP reauthorization/expansion bills this year. Democratic leaders did not have the necessary Republican support in Congress to override the vetoes.
Other provisions in the Medicare bill positively impacting people with disabilities include a permanent freeze of Medicare's 75% Rule on inpatient rehabilitation facilities at the 60% level and a six-month extension of the current exceptions process for the Medicare outpatient therapy caps. The legislation also contains a six-month moratorium on issuance of a final regulation to restrict allowable community rehabilitation services under the Medicaid Rehabilitative Services Option
Conclusion
Overall, NAAOP priorities fared very well in the last weeks of the Congressional year. Although, many of the programs of importance to NAAOP members did not see the spending increases that stakeholders had hoped for under a Democratic majority, Congress did manage to shift funding from other programs to several O&P-related programs while working under the President's austere budget restrictions. Additionally, the lack of O&P provider cuts in the final Medicare package should be considered a victory. However, as a result of the short physician payment patch, Congress is likely to begin work on a Medicare bill early next year to extend the physician fee payment fix and NAAOP will continue to work with Congress to ensure that the Medicare O&P fee schedule is protected in this process.
Prepared by: Peter W. Thomas, Esq., General Counsel, National Association for the Advancement of Orthotics and Prosthetics (NAAOP) and Emily Niederman, Legislative Director, Powers Pyles Sutter & Verville, P.C.
