By Walter Gorski

On Dec. 22, Congress adjourned without completing work on a contentious deficit reduction package, which would have trimmed federal spending by about $40 billion over five years—including about $11 billion in Medicare and Medicaid cuts.

The good news

The good news is that this package did not include provisions targeting O&P. The immediate threat that a search for revenue would lead lawmakers to freeze Medicare O&P payments in 2007 and 2008 was averted.

This near miss was achieved by the work of attendees at the O&P Policy Forum in June 2005, by the efforts of O&P professionals who educated their lawmakers by inviting them to tour an O&P facility, and by lobbying efforts in Washington, D.C.

The bad news

The bad news is that when Congress comes back to work in 2006, it's likely another Medicare bill will exist by year's end.

And policy experts believe no provider payments will be safe—meaning O&P could face another lengthy payment freeze.

Looking back to 2005

While Congress failed to finalize the spending cut package by year's end, it is still likely the legislation will be approved in early 2006. Until then, there will be hardships for some providers. Here are two examples.

First, the bill would have prevented physician payment cuts in 2006 by providing a one-year freeze in payment rates. Until the legislation is enacted, physician payments under Medicare will be 4.4 percent less in 2006 than in 2005.

Second, the legislation would have provided physical therapists with some relief from congressionally mandated caps in therapy services. Without legislative intervention, Medicare patients can receive no more than $1,740 in services for physical therapy, speech language pathology and occupational therapy.

What's ahead

Before outlining what is in store for O&P in 2006, it is important to put the upcoming year in context.

Policy experts are surprisingly united on the fact that Congress and the president must get a handle on federal spending. With waves of baby boomers set to begin retiring this year, federal entitlement programs such as Medicare and social security are simply unsustainable in their current form.

According to the nation's top auditor at the Government Accountability Office (GAO), the government's long-term liabilities and commitments have risen from over $20 trillion in fiscal year 2000 to more than $43 trillion in fiscal 2004. This increase is in large part due to the passage of the Medicare prescription drug benefit.

These numbers are staggering and virtually impossible to comprehend. But looking at it from an individual perspective, it translates into a burden of about $150,000 for every American and $350,000 for every full-time worker—up from $72,000 and $165,000 in 2000, respectively.

The GAO indicates that these amounts are growing so quickly because of continued federal budget deficits, an aging society, slower work-force growth and compounding interest costs.

Without a long-term strategy that focuses on spending, entitlement and tax programs, the GAO believes that policymakers will be forced into across-the-board spending cuts or other sweeping measures. These sentiments are beginning to gain a foothold in Congress. All of these factors could lead to additional payment freezes and reimbursement cuts for Medicare.

Impact on O&P

Someone once explained to me that an airplane was off course more than it was on target and that getting from point A to point B was a matter of minor course corrections in flight. This is a good analogy for how Congress is likely to operate over the next decade.

For the foreseeable future, AOPA expects lawmakers will attempt to "reform" Medicare—to keep the airplane flying. From the O&P standpoint, "course corrections" could come in the form of pay-for-performance initiatives linking payments to outcomes, payment freezes and other efforts that would restrain O&P Medicare spending. It is possible lawmakers could even cap O&P benefits at a certain amount or implement coverage restrictions.

The problem arising from this analogy as it relates to O&P is that once a "course correction" is made, and it is based on faulty or incomplete data, it will be virtually impossible to fix.

Here's why.

Congress calculates savings and spending estimates from each provision included in legislation. When Congress enacted the three-year O&P payment freeze, it assumed Medicare O&P spending would be reduced by about $1 billion over 10 years.

If lawmakers wanted to eliminate the freeze and provide O&P with a full CPI payment update in 2005 or 2006, it would be forced to find additional money to "pay for" this change. This is a very difficult proposition in a deficit-cutting environment.

Making preparations

Is the sky falling? Unfortunately, no one can answer this question until it is too late. Yet, the storm clouds on the horizon are beginning to look ominous. AOPA is not taking any chances and is developing more material to defend the field and the patients who require O&P services.

But, we need the help of O&P professionals to get this message out.

Lawmakers are less likely to make decisions adversely affecting O&P if they know you, your business and how you improve the lives of patients. This is particularly important for a small group without an enormous political constituency, such as O&P.

O&P professionals should take two steps in 2006 to protect O&P and not leave the future to chance.

The first is to get to know your lawmakers by inviting them to tour your facility.

The second is to become authorized to receive O&P Political Action Committee (PAC) information. The PAC plays a critical role in "educating" lawmakers about O&P and the way you restore health and well being to patients.

Through these two small efforts, we can better compete with other providers who will be fighting for scarce Medicare resources this year.

To join your peers in protecting the field, call me at (571) 431-0809.

Walter Gorski is the director of legislative and regulatory affairs for the American Orthotic & Prosthetic Association (AOPA).
Through government relations efforts, AOPA works to influence policies affecting the future of the O&P profession.
Questions? Call (571) 431-0876 or visit www.AOPAnet.org.