NAAOP Capitol Hill Health Care Update

NAAOP Capitol Hill Health Care Update

NAAOP

9/19/2009

Chairman Baucus Steps into the Health Care Reform Fray

Senator Baucus unveiled his long-awaited national healthcare reform plan on
Wednesday, September 16, 2009, joining the fray of contentious healthcare
reform discussions. The Baucus bill ultimately was unable to attract the
support of three key Republicans that Chairman Baucus has been negotiating
with for the past several months, making his bill a partisan product, much
to his chagrin. However, Chairman Baucus kept open the possibility of
compromise with Republican members as the bill is marked up in committee and
brought to the Senate floor in the coming weeks.

O&P Fee Schedule

The Baucus legislation, as it stands, is a mixed bag for the field of
orthotics and prosthetics but ultimately omits several major provisions that
could have negatively impacted O&P reimbursement. Most healthcare providers
are included in the Baucus legislation as receiving cuts in Medicare
reimbursement over the coming decade to help offset the cost of expansions
in coverage for uninsured Americans. The O&P fee schedule, however,
according to the 200-page summary document, is spared any cuts in annual
updates.

Competitive Bidding

The Baucus bill also expands competitive bidding and accelerates
implementation of competitive bidding to 100 of the largest Metropolitan
Statistical Areas (MSAs) over the next several years but does not signal any
expansion in the scope of DMEPOS items and services to be competitively bid.
The bill also extends to non-competitive bidding areas average prices
achieved in competitively bid MSAs. Again, this proposal would largely, if
not completely, spare O&P of any major exposure to competitive bidding and
reimbursement cuts that flow from it.

Medical Device Manufacturer Annual Fee

The Baucus proposal also imposes annual sector fees on companies that
manufacture or import medical devices for sale in the U.S. beginning in
2010. This totals approximately $4 billion per year in savings to the
federal government. Class I medical devices, which account for a large
percentage of orthotic and prosthetic components and products, are exempted
from this annual fee. Those O&P products and devices that are impacted by
this proposal, on balance, represent an extremely small portion of the
medical devices impacted by this provision. The annual fee would be applied
according to the market share of a given company and includes an exemption
for small manufacturers (i.e., sales up to $5 million).

Health Insurance Reforms that Benefit O&P Patients

Aside from the offsets necessary to pay for an expansion in coverage for
uninsured Americans, all the national healthcare reform bills moving through
Congress contain a series of health insurance market reforms that will
significantly assist persons in need of orthotic and prosthetic care.
Assuming that orthotics and prosthetics is included in the benefit package
in the final healthcare reform legislation that is signed by the President,
these market reforms will assist individuals with disabilities and those
requiring O&P services by:

- Prohibiting pre-existing condition exclusions;
- Guaranteeing issue and renewability of health insurance;
- Moderating premiums by prohibiting discrimination based on health and
disability status;
- Eliminating lifetime and annual caps in benefits;
- Limiting out-of-pocket costs spent on healthcare on a sliding scale
dependent upon income;
- Dramatically expanding Medicaid eligibility to ensure that those with low
incomes are able to access healthcare;
- Providing federal subsidies to individuals who require them in order to
afford health insurance; and
- Exempting small businesses from an employer mandate to provide insurance
to their employees while providing tax credits to small business to
encourage them to do so.

Coverage of Orthotics and Prosthetics in the Essential Benefits Package

A major problem with the Baucus approach (as of the day of this writing) is
that the essential benefits package, which must be provided by private
health plans that function under a new Health Insurance Exchange, is not
specifically required to provide coverage for orthotics and prosthetics.
Similarly problematic for people with physical disabilities is the fact that
the Baucus proposal also does not specifically provide coverage for durable
medical equipment or rehabilitation or habilitation services.

NAAOP, the O&P Alliance and a large number of disability organizations are
working hard to ensure that the final healthcare reform legislation includes
coverage of these services and devices. In fact, four of the five committees
that have marked up healthcare reform legislation in the House and Senate
have recognized coverage of these services in the basic package of benefits
that must be provided to individuals in private plans covered under the
Exchange.

NAAOP will continue to actively engage Congress and the administration to
ensure that national healthcare reform efforts benefit orthotic and
prosthetic patients and the providers who serve them with the least possible
negative impact on orthotic and prosthetic coverage and reimbursement. For
more information, contact 1-800-622-6740 or go to www.naaop.org.

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