Debt Ceiling Deal, Custom Prosthetics Claim Update, Veterans Amendment

Custom Prosthetic Device Claim Denials to be Reprocessed: CMS has ruled that custom prosthetic devices that were inadvertently denied dating back to April of this year will be reprocessed by Durable Medical Equipment Medicare Administrative Contractors (DMEMAC), but the underlying problem with the “L” code series will not officially be rectified until January 1st, 2012.  MORE

Senate Amendment Would Speed Prostheses to Veterans: Last week Senator Kelly Ayotte (R-NH) sponsored an amendment that would allow veterans to receive prostheses more quickly.  The amendment was included in the 2012 Military Construction and Veterans Affairs Appropriations bill, and passed 97-2.  MORE

Debt Ceiling Deal Reached: After a weeks of political posturing by House Republicans and Senate Democrats, a deal has finally been reached to raise the nations’ debt limit and avert the first ever default of the United States government.  Early Sunday evening word began to leak out that a deal had been reached between Senate Majority Leader Harry Reid, Minority Leader Mitch McConnell and House Speaker John Boehner to cut $2.4 trillion from the federal deficit over 10 years and raise the federal debt limit in two installments over the next 18 months to $14.29 trillion.  The plan is known as the “Budget Control Act of 2011”.

The final deal, scheduled to be voted on by the House and Senate Monday, would cut over $900 billion from the deficit immediately through budget caps on discretionary and non-discretionary spending and utilizes an oft used Washington scheme of creating a “super committee” to convene and map out a plan to reduce the deficit by at least an additional $1.2 trillion. This “super committee” would include twelve members of congress, six Democrats and six Republicans, pulled from both the House and Senate. The committee’s eventual plan would be granted a guaranteed up-or-down vote in both houses by December 23rd and would also include several automatic spending reduction mechanisms (known as “sequester”) designed to keep both Republicans and Democrats at the table negotiating the additional cuts.  If no deal is reached by the end of the year, automatic spending cuts will kick in for education programs and Medicare, key Democratic priorities and an additional $500 billion in defense spending, a key Republican spending priority.  Programs exempt from the sequester trigger include Medicaid, unemployment insurance and civilian and military retirement; any cuts to Medicare would be capped and limited to the provider side. As previously mentioned, this “super committee” is where cuts to priorities for the orthotics and prosthetics profession could be felt, IE reimbursement changes, etc.  But inaction by congress on the super committee recommendations would also likely bring negative consequences for O&P priorities.

Upon passage of the Budget Control Act of 2011, the President will have the authority to raise the debt limit by $1 trillion, which should last until the end of the year, when he will also be allowed to raise the debt limit again unilaterally by up to $1.1 trillion. If the “super committee” has not passed their additional deficit reductions by this time the automatic spending reduction mechanisms activate starting in 2013.  Congress can also override the President’s debt limit raising authority by voting by a 2/3’s majority to “disapprove” of the President’s plan.

This compromise plan will allow the United States economy to put the issue of raising the debt ceiling behind it until 2013 and hopefully chart a more positive course for economic growth than we have seen recently.  The cuts included in this deal, combined with the “super committee” recommendations and the expiration of the Bush tax cuts for upper income wage earners all create an environment ripe for political compromise on deficit reduction and tax reform that will put our country back on sound financial footing.

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