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NAAOP July Government Relations Update

National Legislation/Regulation

Recent weeks have witnessed significant legislative and regulatory activity at the federal level that impacts orthotics and prosthetics. First and foremost, NAAOP, along with our O&P Alliance partners, AAOP, AOPA and ABC, submitted extensive comments to CMS on the proposed competitive bidding regulations for DMEPOS. Although the competitive bidding program only applies to “off-the-shelf” orthotics (not to custom orthoses or prostheses), CMS has not yet defined this term.

The regulations have serious implications for the entire O&P field. The main reason for this is the interplay between competitive bidding and a separate requirement that all DMEPOS suppliers must meet quality standards in the future in order to bill Medicare Part B for O&P services. CMS has stated that it intends to require accreditation of all DMEPOS suppliers as a quality indicator. But the details of those requirements have not yet been released. NAAOP is working in concert with the O&P Alliance to ensure that CMS preserves access to quality orthotic and prosthetic care as it regulates this important area.

On legislative developments, the House Appropriations Committee passed its Labor-Health and Human Services (HHS)-Education spending bill in early June, but a controversial amendment on raising the federal minimum wage has prevented the leadership from bringing the bill to the House floor. The Senate Appropriation Labor-HHS-Education Subcommittee is expected to mark-up its spending bill July 19th, and the entire Appropriations Committee is expected to take up the bill on July 20th. Because of the pressure on the budget this year, it is unclear at this time whether funding for orthotic and prosthetic awareness, education and research will be negatively impacted.

Both the House and Senate are working under an overall $873 billion discretionary spending cap. After shifting funding from other programs, the House’s Labor-HHS-Education spending bill would allocate slightly less than $142 billion to discretionary programs under these departments. This represents only a 0.6% increase over FY 2006 and $4.1 billion more than President Bush requested. Last month, the Senate Appropriations Committee announced its FY 2007 outline and determined that they would shift approximately $11.4 billion in defense and foreign aid spending to other programs, including an additional $5 billion more than President Bush’s request to Labor, HHS, and Education programs. (Labor-HHS-Education would receive approximately $142.8 billion in FY 2007.) While this is an important increase over the Administration recommendations, the funding level would still only represent a 1.1 percent increase from FY 2006 and $2 billion less than FY 2005 levels after adjusting for inflation.

In Medicare developments, there has been speculation that a major Medicare and Medicaid bill will likely move forward next year. Congress feels it must address several issues including physician payments, pay-for-performance, Medicare Part D drug coverage, outpatient rehabilitation therapy caps, and technical corrections to the Medicare/Medicaid bill that was signed into law this past February.

But there is also significant pressure on Congress to fix the scheduled cut to the Medicare physician fee schedule by the first of the new year. Unless Congress acts this year, physicians’ fees will be cut by approximately 4.5 percent on January 1, 2007. This means that if Congress is going to accommodate the physicians, they will need to find “offsets” to pay for this legislative fix. The O&P fee schedule, which has been frozen for three years and is expected to receive a CPI increase at the beginning of next year, may be at risk under this scenario, as would the Medicare fees that all providers are paid under both Medicare Part A and B, including hospital fees, skilled nursing facility fees, home health, DME and others.

The November elections could have an important impact on Medicare and Medicaid legislation, both in December of this year and next year as well. However, either way, such legislation could be viewed as both a threat and an opportunity to accomplish goals related to quality standards, competitive bidding, and other O&P priorities.

Quality and Qualifications/Partnerships and Coalitions

The American Board for Certification in Orthotics and Prosthetics, Inc., (ABC) recently announced the proposed integration of the Board for Certification in Pedorthics, Inc., (BCP) into ABC. Accredited pedorthic facilities will join ABC’s comprehensive O&P and mastectomy accredited facilities.

NAAOP and ABC have a strong history of partnering to ensure high quality patient standards. This proposed integration of BCP into ABC furthers this common goal. From a government relations advocacy perspective, it broadens the professional O&P patient care community to include pedorthic professionals in one unified credentialing body further ensuring that pedorthic patients are protected by the highest quality standards and qualifications as are currently being defined by federal regulators. CMS is in the process of implementing §302(a)(1) of the Medicare Modernization Act of 2003, which requires the Secretary to establish “quality standards” for orthotic providers, prosthetic providers, and pedorthic footwear providers. CMS is currently inclined to rely on independent accreditation of providers to satisfy this legislative mandate.

NAAOP’s advocacy efforts are dedicated to all those in our profession who provide complex O&P care with sufficient education and experience as well as appropriate care facilities to ensure that patients’ needs are met. NAAOP membership has always been open to all ABC credentialed individuals, and if the proposed integration goes through, NAAOP would welcome and invite all ABC certified pedorthists to consider joining NAAOP.

Coverage and Reimbursement/Quality and Qualifications

The Centers for Medicare & Medicaid Services, (CMS) is in the process of converting from Legacy Identifiers to National Provider Identifiers, (NPI) for use in standard health care transactions. This change specified by the Health Insurance Portablity and Accountability Act of 1996 (HIPAA) should improve accuracy and processing time of medical claims. Additionally, the NPI requirement is consistent with efforts to ensure that payments only be made to those providers and suppliers who meet quality standards. Health care providers have until May 2007 to obtain their NPI, however, Medicare fee-for-service has been accepting the NPI since January 2006. For more information visit National Provider Identifier Standard at the CMS website.

Thank you for your support.Mark DeHarde PresidentGeorge W. Breece Executive DirectorPeter W. Thomas General Counsel

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