President Obama signed a two week budget extension last week, averting a government shutdown, as current funding was set to expire on March 4th. The extension cuts $4B from current spending levels over the two-week period and creates a new deadline of March 18th. Senate leaders have introduced their own funding document scheduled to begin debate this week. Any final agreement will need to be reconciled with the previously passed House version before a bill funding the government through September 30th can be reached. The House and Senate appear to be approximately $50B apart at the beginning of negotiations. In addition to the $50B, Senate Democrats and the White House are likely to fight for removal of the health care defunding amendments passed by the House. Removal of defunding amendments will ensure O&P friendly insurance reforms come to fruition, but also mean the anticipated negative Medicare productivity adjustment and medical device excise tax will also be allowed to move forward.
AOPA made headlines last week by lobbying the Treasury Department and the IRS for an exemption for O&P related products from the medical device excise tax. The Affordable Care Act allows for products that are retail in nature to be excluded from the tax. AOPA made a very convincing case for an exemption of all O&P products. AOPA also commissioned a study that concludes nearly 75% of private insurance packages include O&P coverage. This should help O&P’s efforts to be included in the “essential benefits package” being debated at HHS. The EBP is a minimum set of benefits that must be included in any insurance plan sold on the “health exchanges”, which will ramp up in 2014. It is very important that O&P be included in the essential benefits package. Check out the OPGA Connection for more information on the essential benefits package.
Last week brought more health care hearings to Capitol Hill. Several Governors testified on the stresses of Medicaid on state budgets this year and the need for waivers to be granted by CMS on eligibility and mandatory benefits. Governor Haley Barbour (R-MS) raised the possibility of turning Medicaid into a “block grant” program, meaning the Federal government would give each state a lump sum annually for Medicaid expenditures and leave implementation of the program completely up to individual states. Obviously, this depends heavily on individual state policies, but this proposal would likely to have a negative impact on the coverage of O&P under Medicaid, as well as the number of patients eligible for Medicaid nationwide. On a related note, the President did endorse a bill that would allow states to “opt out” of Affordable Care Act requirements, but only if they presented a plan to meet benchmarks outlined in the bill for coverage, benefits and cost containment.
OPGA Government Relations will continue to monitor these issues; you can follow these updates daily on our Government Effects blog, http://www.opga.com. Please contact us if you have any questions, comments or ideas.
NEWS YOU CAN USE…
State Watch: Iowa O&P State Licensure Bill Advances
A bill to create a state licensure board in Iowa cleared a major legislative hurdle last week. SF364 (formerly SF226), passed the Senate State Government committee 14-0, and now moves forward for a vote by the full Senate in the coming weeks. Passage was seen as less certain several weeks ago, but legislative leaders agreed to several changes that created the overwhelmingly bipartisan bill, including: adding language detailing who is eligible to sell over-the-counter orthosis and shoes, O&P education programs, residency requirements and a grandfather exemption allowing practice for up to one year before gaining a license. Text of the legislation can be viewed here http://coolice.legis.state.ia.us/linc/84/external/sf364_Introduced.pdf
Convicted Medicare fraudster, “defrauding Medicare incredibly easy”
Fraud in Medicare and Medicaid was also a hot topic in committee hearings on Capitol Hill last week. Officials from CMS pointed to their efforts to create new supplier standards and predictive modeling as ways they are working to eliminate fraud and abuse from the programs. The House Energy and Commerce Health Subcommittee received testimony from Aghaegbune “Ike” Odelugo, a convicted “fraudster”, who claimed defrauding the system is “incredibly easy” and detailed how he bilked more than $10M worth of fraudulent medical equipment (including O&P) from Medicare. It is stories like this that threaten the future of O&P being included in programs such as competitive bidding. http://www.pbs.org/newshour/rundown/2011/03/medicare-fraud-is-incredibly-easy-congressional-panel-hears.html
CMS Delays Medicaid RAC Implementation
The Center for Medicare and Medicaid Services has delayed the April 1st deadline for states to implement their Medicaid Recovery Audit Contractor (RAC) programs. CMS anticipates a new deadline will be included in the final rule to be issued later this year. The Medicaid RAC program (like Medicare RAC’s) will allow third-party auditors contracted by the state to keep a contingency fee based on the amount of provider payments identified as improper. http://www.cms.gov/MedicaidIntegrityProgram/Downloads/6411racdelay.pdf
House Repeals 1099 Tax Provision
The White House, Senate and House are in fierce agreement over an issue: health reform’s 1099 tax-reporting requirements ought to be repealed. The House voted Thursday to do away with the reporting requirements, following on the heels of the Senate’s February vote to do the same. Both efforts moved forward with strong bipartisan support — over three-quarters of both chambers showed support for the bills. Yet despite all the agreement, the issue is unlikely to move forward as the parties and chambers continue to squabble over an acceptable way to offset the $19 billion in lost revenues that would result from repeal. http://www.politico.com/news/stories/0311/50609.html#ixzz1FwBnuPfL
GAO: Medicare Losing $48B to Fraud, Improper Payments
A new report from the Government Accounting Office released Wednesday estimates that Medicare is losing $48B annually to fraud, or otherwise improper provider payments. CMS officials testifying before the House Energy and Commerce Health Subcommittee pointed to new provider screening rules issued earlier this year to clamp down on fraudulent providers entering the system by using background checks, fingerprint analysis and by better sharing information on fraudulent providers across federal agencies. http://www.politico.com/news/stories/0311/50543.html
Bipartisan Duo Wants Medicare to Make Payments to Doctors Public
Senators Grassley (R-IA) and Wyden (D-OR) are working to overturn a 1979 court injunction barring Medicare from releasing data on payments made to doctors and other providers. They believe that bringing transparency to the provider reimbursement process will cut into the estimated $70-$120B annual fraud problem currently facing the longtime program. http://online.wsj.com/article/SB10001424052748704728004576176760451957274.html?KEYWORDS=medicare
Judges’ Agreement on Healthcare Penalties Not Being a Tax is Key
The recent ruling in favor of the constitutionality of the Affordable Care Act brings the tally to 3-2 in favor of the controversial legislation. All five rulings have had one important thing in common; all have ruled the ACA’s fine for not obtaining health coverage is a penalty, not a tax. This is important because the constitution allows for the government to impose taxes, not penalties, to provide for the common welfare of citizens. http://thehill.com/blogs/healthwatch/health-reform-implementation/146331-judges-agreement-on-healthcare-penalties-not-being-a-tax-is-crucial-point
Defining “Essential” Care
The Institute of Medicine will meet again this week to discuss recommendations for the “Essential Benefits Package” that will form the minimum benefits allowed for plans included in State Health Exchanges as part of the PPACA. Orthotics and Prosthetics are believed to be included in broad category of “rehabilitative and habilitative services and devices”, but final recommendations have yet to be released. http://online.wsj.com/article/SB10001424052748703905404576164904171231570.html?KEYWORDS=health+law
Obama Offers Skeptical Governors Bigger Role Under the Health Law
At the National Governors Association winter meeting this past week, President Obama declared his support for a bill sponsored by Sen. Brown (R-MA) and Sen. Wyden (D-OR) that would allow individual states to opt out of the PPACA, while maintaining funding, if they are able to create their own plan that covers at least as many people, does not add to the deficit and meets other benchmarks identified in the bill. The opt out provision was written into the original bill to allow state opt outs in 2017, this new proposal would allow opt outs in 2014, the same year many of the main provisions in the bill would go into effect. http://online.wsj.com/article/SB10001424052748704615504576172410639315994.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsForth
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. http://hosted.ap.org/dynamic/stories/U/US_MEDICARE_FRAUD_BUST?SITE=WCNC&SECTION=HOME&TEMPLATE=DEFAULT
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. http://homecaremag.com/news/obama-budget-dme-20110215/