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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SADMERC Add-On Coding Clarification Rescinded: NAAOP actively participated in an effort in December 2003 to convince the SADMERC to rescind a “coding clarification” relating to “add-on” orthotic codes.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.

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