Policy and Your Practice
| Keeping a Close Eye on the Medicare Budget |
| In
early February, President Bush submitted his final federal budget for
fiscal year 2009, which includes a proposed $12 billion in cuts, in the
form of payment reductions and freezes, to the Medicare program. The president is required by the Medicare Modernization Act to make a proposal to Congress on how to cut costs in the Medicare budget, once Medicare expenditures reach a certain percentage of the federal budget. It’s relatively unlikely that this proposed budget item will have an adverse short-term impact on Medicare payments for O&P providers, hospitals, nursing homes, physicians and others. Congress will consider a Medicare bill later in 2008 (see “Policy and Your Practice”, February O&P Almanac), but circumstances would have to be extraordinarily dire for legislators to saddle Medicare providers with major new cuts just before they go home to seek re-election. The Democratic chairs of the House and Senate Budget Committees disapprove of the president’s budget, and key Congressional health leaders have shown little interest in new Medicare cuts this year. The Medicare bill in 2008 will most likely result in a patch-up of Medicare physician payments and therapy caps with another short-term fix until after the elections. But in January 2009, we will have a new president and a new Congress. If the new president is a Republican, the final Bush budget may be the starting point for the new president’s game plan. If the new president is a Democrat, the political agenda is likely to include major health care reform to extend coverage to the uninsured, and costs would be high enough that the cuts proposed by President Bush could even be deepened. In either scenario, these proposed cuts could become a threat. “There is no doubt that all of us would prefer that this proposal had not been brought forward in the president’s budget…it makes us nervous, as it should,” says Tom Fise, AOPA’s executive director. “But we are more concerned about the implications of the proposed Medicare cuts 12-18 months down the road, and it will behoove us to prepare now for that.” As always, AOPA will be prepared to move aggressively in the unlikely event that actions unfold in congress to try to enact these new proposed extensive Medicare cuts in 2008. Concurrently, we will keep a close eye on the legislative landscape and will take action on behalf of AOPA members when the Medicare cuts come up for serious discussion in 2009. |
Legislative and Medicare Changes for 2008
By Thomas F. Fise, Esq., AOPA Executive Director
As I write this article, Congress is just about to adjourn the first
session (2007) of the 110th Congress for the holiday break. For the
first time, it is clear what will happen in the remaining hours, as
well as that a great deal of legislative work will need to be picked up
in 2008.
Changes delayed
When the White House and the Congress are controlled by different
political parties, it creates an environment where it is pretty hard to
get major changes accomplished. But sometimes that means benefits for
O&P.
Democrats came into the Congressional majority in January 2007. They
came into the majority with a vision to make changes to Iraq policy,
immigration, energy, taxes, environment, labor, and, yes, Medicare. But
a presidential election year always ends up being a time of bickering
and posturing when not much can be accomplished. While there have been
some changes on environmental and labor issues, not much of anything
noteworthy has been accomplished on the other fronts.
Wait six months
The bottom line for Medicare is that the only changes made were the
ones that would avoid perceived imminent political disaster. The final
2007 Medicare legislation being enacted will avert the 10.1 percent cut
in Medicare payments to physicians that would have taken effect on
January 1, 2008––but only until July 1, 2008. The costs for
this “deferral” will come from modest reductions in the
payment for the Medicare Advantage managed care programs.
The bill also included an extension of the so-called SCHIP (State
Children’s Health Insurance Program) program through March 31,
2009 (i.e., after next year’s elections.) There also were short
extensions on rural health supports and therapy caps, but nothing else
noteworthy. The House had enacted broader Medicare legislation, but the
Senate could never bring it to a vote because of disputes about
“pay-fors,” that is, which programs would be cut to cover
the costs of the changes.
For O&P, the good news is that there will not be any short-term fee
cuts that would impact O&P provider fees under Medicare. So, the
projected 2.7 percent increase in the Medicare fee schedule has taken
effect January 1, 2008 as planned.
But really, Congress has just kicked the can six months down the road.
That means in June 2008 they will find themselves again facing the
prospect of a large-scale reduction in Medicare physician fees. This
time, it will be in the middle of a presidential and Congressional
election year, when the prospect for reaching a consensus will be even
slimmer than it is today. So the battle over making substantive changes
to Medicare and the Medicare physician fee schedule will simply
continue through the first six months of the new year.
I spoke with one senator in late December who agreed with that
analysis, saying “I don’t see anything that is going to
improve over the next six months that would make an agreement in June
2008 any easier than today. In fact, it will probably be even harder to
get consensus then. The only positive thing is that SCHIP will not come
up again in 2008, so that will make the battle over the
‘pay-fors’ more limited.”
Working to benefit O&P
The bad news for O&P about these minimal changes is that AOPA and
the O&P Alliance had some important proposals on the table that
would have mandated stronger enforcement against fraud and abuse, and
strengthened the O&P quality requirements. That’s a battle we
will continue to fight in 2008.
So, we can expect these same battles about Medicare funding, and
potential cuts and new taxes as “pay-fors,” to occupy the
first six months of 2008. The issues of Medicare changes and potential
provider cuts (to O&P as well), together with the election year,
mean that we can expect an unprecedented number of legislative
fundraisers and opportunities to pledge fealty to key Congressional
leaders. This is an unavoidable fact of political life. It makes your
support and the financial strengthening of the O&P PAC an even
higher priority in 2008.
| Start the New Year Right: Attend the 2008 O&P Policy Forum |
|
If you have never been to an O&P Policy Forum, this would be a great year to start! The 2008 O&P Policy Forum, which will be held in Washington, D.C. from March 9–11, is a three-day gathering of O&P professionals who wish to speak directly with the Congressional delegations whose decisions impact our profession. While AOPA has a staff of experts dedicated to lobbying members of Congress, you are the Congressional members’ voting constituents, and it is you whose support they need. AOPA staff and invited speakers will arm you with all the information and materials necessary to be a strong advocate, allowing you to present the O&P story in the best way to your legislators. You will educate lawmakers on the key issues facing O&P, so that we can continue to serve our patients and maintain viable businesses. See how simple it is to make contact with the decision-makers on Capitol Hill—one person really does make a difference! To kick off this important event, AOPA has invited former Sen. Bob Dole to speak to the attendees about his role as co-chairman of the President’s Commission on Care for America’s Returning Wounded Warriors. The cost of attending the O&P Policy Forum is $150 per registrant, which includes most meals during the event. AOPA has selected the renowned Hyatt Regency Bethesda for the event. If you need to reserve a hotel room for the duration of the Forum, you may contact the hotel directly at (301) 657-1234 or (800) 233-1234 to make your reservation. To sign up for the meeting itself, please register at www.AOPAnet.org under “Attend O&P Events,” or call Erin Kennedy at (571) 431-0876, ext. 234. |
Other issues
Beyond the Medicare logjam, there are likely to be some other
interesting issues that arise for O&P in 2008. Most notably, a
federal prosthetic parity bill may be introduced. AOPA and the O&P
Alliance both support, in principle, the objective of O&P parity
bills at both state and federal levels. While the anticipated
prosthetic parity bill has advanced to the point of being close to
introduction through the efforts, most notably, of patients under the
auspices of the Amputee Coalition of America (ACA), AOPA can expect to
be engaged in evaluating the legislation and potentially considering a
position and actions with respect to its prospects for enactment.
How AOPA will help you
And, of course, Medicare goes well beyond legislation. Medicare rules,
coding changes and directives, and policies enacted by CMS, the VA and
private insurers all have potentially dramatic effects on the bottom
line for most of our AOPA members.
As we move forward into 2008, you can count on AOPA’s Coding and
Reimbursement Committee, our AOPA staff, and our new tool, LCodeSearch.com, to be working for you each day to assure that you have the
up-to-date insights on health policies in the way that can most
favorably impact your patients and your company’s bottom line.
Tom Fise is the executive director of AOPA.
