Funding the Government – Apocalypse Maybe!

Ryan Ball, OPGA Government Relations

Both the House and Senate are on President’s Day recess this week after all-night sessions in the House last week debating HR 1, the continuing resolution (CR) funding the government through August.  Debate culminated with 235 Republicans voting to pass the bill, 235-189, at 4:40 a.m. on Saturday.


The grueling, and often contentious, debate lasted nearly five days and would cut $60 billion from current requested levels.  Programs ranging from the Department of Defense’s sponsorship of NASCAR to funding of NASA were debated as part of the cuts, but many of the most explosive debates were saved for de-funding the Affordable Care Act. House leadership opted not to include Obamacare de-funding initiatives in the initial CR, but offered several amendments to cut funding for the law during the floor debate.

Successful amendments include cutting off funding for salaries of any employee of HHS, IRS, or other federal workers that seek to comply with, or enforce provisions of, the Affordable Care Act.  Attempts to de-fund Planned Parenthood and to eliminate the “medical loss ratio,” which requires insurance companies to spend a guaranteed percentage of their revenues on patient care, were also successful.  If implemented, these funding cuts will essentially kill the Affordable Care Act before it starts by preventing many of the O&P friendly insurance-related provisions of the ACA from being enforced.   Losing lifetime and annual coverage cap exclusions, barring preexisting condition exclusions and the loss of an estimated 30 million new patients nationwide, would be very detrimental to the future of the O&P industry.

Obviously, Senate leaders have serious reservations with the House version of this bill; they have outlined large cuts in their own continuing resolution and are scheduled to begin debate on Feb. 28.  The current spending agreement, passed during the lame-duck session in December, is scheduled to expire on March 4, leaving just a few weeks to reach a bi-partisan deal funding the government through August. If the Senate is able to pass its version of the continuing resolution next week, it will go to a conference committee to reconcile the differences between the House and Senate versions. The bill will then need to be voted on again by both houses before President Obama can sign the funding extension.

As you can see, Congress is running out of time. On Friday, Minority Leader Pelosi introduced another temporary continuing resolution, funding government through March 31, to allow additional time for an agreement, but Speaker Boehner has said any short-term funding would also have to cut spending from current levels.  Many in Washington are preparing for a government shutdown if the House, Senate and White House cannot come to an agreement before the March 4 deadline.



111 Charged in Medicare Scams Worth $225M****

Federal authorities charged more than 100 doctors, nurses and physical therapists in nine cities with Medicare fraud Thursday, part of a massive nationwide bust that snared more suspects than any other in history. More than 700 law enforcement agents fanned out to arrest dozens of people accused of illegally billing Medicare more than $225 million. The arrests are the latest in a string of major busts in the past two years as authorities have struggled to pare the fraud that’s believed to cost the government between $60 billion and $90 billion each year.  (Read more)

$5.5 Million O&P Fraud Found in Oklahoma

An orthotic and prosthetic practitioner from Oklahoma was indicted by a federal grand jury for health care fraud in connection with sales of prosthetic limbs and components, announced Sanford C. Coats, U.S. Attorney for the Western District of Oklahoma. It is also alleged that Faulkner submitted claims to Medicare and Medicaid for expensive, computerized prosthetic limbs, when the beneficiaries actually received less sophisticated prosthetics or none at all.  (Read more)

New FDA Approval Path for “Breakthrough” Devices

The FDA has announced a new initiative to speed “pioneering” medical devices to the market, and its first test will be a novel upper-extremity prosthetic that is controlled by the brain. The initiative, dubbed the Innovation Pathway, is designed to encourage cutting-edge technologies among medical device manufacturers, according to a press release sent Tuesday morning from the FDA’s Center for Devices and Radiological Health (CDRH).  (Read more)

Obama Budget Lands DME Sucker Punch

President Obama’s budget seeks to further implement a program known as “competitive bidding” for Durable Medical Equipment, Orthotics and Prosthetics Services (DMEPOS). Competitive bids are currently being taken in nine large metropolitan areas for Medicare patients and will be implemented in 91 cities by the end of the year.  The President’s budget would allow Medicaid to reimburse DMEPOS providers at competitive bid rates in those areas, further complicating small DME providers’ attempts to remain in business without billing certain Medicare items.  (Read more)

Veterans Affairs Budget Increase

The President’s budget proposes to increase The Department of Veterans Affairs funding by 4 percent for FY2012.  While the increase is primarily due to ongoing operations in Iraq and Afghanistan, prosthetics coverage for those who have lost limbs would also see an increase of $380 million, increasing the programs total to $2.5 billion.  (Read more)

Medical Device Excise Tax Repeal?

Medical device makers descended on Capitol Hill last week in support of repealing the medical device excise tax included in the Affordable Care Act.  Backers cited the number of jobs and economic impact of the device industry in the United States, and also called on the President to live up to his pledge not to stifle innovation with undue regulation.  Companion bills have been introduced in both the House and Senate repealing the tax; however, no proposals have identified the needed cost offsets to satisfy the “pay as you go” rules that will be crucial to getting the tax repealed.  With repeal uncertain, the focus will move to gaining an exemption from the tax, which is allowed for products sold primarily for retail purposes.  (Read more)

1099 Tax Requirement Repeal

Earlier this month, the Democratically-controlled Senate voted to repeal the onerous 1099 provision, which would force small businesses to report any purchase to a single vendor over $600 to the IRS, by a margin of 81-17.  House Republicans voted a 1099 repeal bill out of the Ways and Means Committee this week. The devil is always in the details, in this case, how to pay for the estimated $20B in revenue offsets the 1099 provision provides.  The Senate bill instructs the OMB to find “unobligated funds,” funds already appropriated but not currently being used, to offset the costs of repeal.  The proposed House bill would change the way tax credits for health insurance premiums would be recaptured if consumers are overpaid.  (Read more)

Arizona Gains Waiver to cut 280,000 Medicaid Beneficiaries

Last month, the State of Arizona applied for a waiver from a CMS requirement that states must maintain current eligibility levels for Medicaid from now until 2014, when further expansion of the program will begin. Most observers assumed this would be rejected by CMS, so Arizona officials were pleasantly surprised when Secretary Sebelius granted the waiver, which will allow Arizona to drop nearly 280,000 childless adults from their Medicaid rolls this year.  Arizona was one of a few states that had voluntarily expanded their Medicaid rolls and was under no federal obligation to keep the additional enrollees once the mandate expires in August of this year.  Thirty-three governors have requested some type of waiver from CMS to help improve their state budget situation by tweaking Medicaid eligibility, benefits, or both.  (Read more)

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