NAAOP Update - The Sequester's Ax Falls: Impact on O&P Reimbursement
NAAOP
Description
Collection
Title:
NAAOP Update - The Sequester's Ax Falls: Impact on O&P Reimbursement
Creator:
NAAOP
Date:
3/7/2013
Text:
Last Friday, the President signed the sequestration order cutting $86
billion out of the federal budget over the next 7 months. This was
necessitated by the failure of Congress and the President to agree to an
alternative legislative package that achieved $1.2 trillion in deficit
reduction over ten years. The non-partisan Congressional Budget Office has
projected that sequestration will result in 750,000 fewer jobs and a .6%
reduction in GDP growth to about 1.4% in fiscal 2013. The Office of
Management and Budget (OMB) also issued a letter and a report to
Congressional leaders detailing the cuts across federal agencies by specific
accounts.
With respect to O&P reimbursement, Medicare payments to O&P providers and
suppliers will be cut by 2%, along with all other Medicare providers in all
settings. This cut totals $11.3 billion in fiscal year 2013 alone, according
to the OMB. The payment reductions will begin on April 1st due to the amount
of lead time needed by Medicare contractors to make these changes in their
claims payment procedures. It is unclear whether the amount of the cut will
be slightly higher than 2% given the fact that CMS will have to achieve
$11.3 billion in payment reductions over six months rather than seven. There
is no basis to suggest that these cuts will be restored, even if Congress is
able to agree on an alternative to sequestration in the future.
VA health care programs are exempt from sequestration and, therefore, we do
not expect similar cuts in payments for veterans' O&P care, but this is
unconfirmed. The magnitude of the spending cuts is much greater for other
federal programs of interest to the O&P profession:
National Institutes of Health (NIH) -$1.6 billion
Centers for Disease Control and Prevention (CDC) -$289 million
Health Care Fraud and Abuse Control -$57 million
Office of the Inspector General (OIG) -$3 million
Ironically, cuts to the fraud and OIG accounts will slow the pace of health
care fraud and abuse investigations, as well as Medicare contractors'
efforts to recover overpayments of Medicare claims. Sequestration will also
create furloughs for 4.4 million federal workers, including Congressional
staff, totaling 22 unpaid work days between now and September 30th for each
employee. This includes Medicare Administrative Law Judges (ALJs) and their
staff, meaning that waiting times for ALJ hearings for O&P claims denials
will only get worse.
On March 6th, the House of Representatives passed legislation to extend the
current continuing resolution or CR from March 26th through the
remainder of the fiscal year, September 30th. In so doing, the House shifted
additional dollars to the Pentagon's operating budget to help relieve the
sequesters impact on the Department of Defense. A bipartisan group of
Senators intend to do the same thing with other federal agencies when the
bill comes to the Senate. Assuming the President goes along with this
approach, this suggests two things: The federal government will not shut
down at the end of March due to the annual appropriations stalemate, and the
sequester may last much longer than most have predicted to date. Next week,
of course, separate budgets from the House and Senate will begin to emerge
for the next round of fiscal negotiations confronting our nation.
Please see the link below for our March government relations video webcast,
The Effects of the Sequester on Medicare O&P.
< <URL Redacted>>
<URL Redacted>
NAAOP will continue to keep you updated as events occur.
Please visit our website at: www.naaop.org
NAAOP
1501 M Street, NW
7th Floor
Washington, DC 20005-1700
e-mail: <Email Address Redacted>
(800) 622-6740
(202) 624-0064 Phone
(202) 785-1756 Fax
www.naaop.org
billion out of the federal budget over the next 7 months. This was
necessitated by the failure of Congress and the President to agree to an
alternative legislative package that achieved $1.2 trillion in deficit
reduction over ten years. The non-partisan Congressional Budget Office has
projected that sequestration will result in 750,000 fewer jobs and a .6%
reduction in GDP growth to about 1.4% in fiscal 2013. The Office of
Management and Budget (OMB) also issued a letter and a report to
Congressional leaders detailing the cuts across federal agencies by specific
accounts.
With respect to O&P reimbursement, Medicare payments to O&P providers and
suppliers will be cut by 2%, along with all other Medicare providers in all
settings. This cut totals $11.3 billion in fiscal year 2013 alone, according
to the OMB. The payment reductions will begin on April 1st due to the amount
of lead time needed by Medicare contractors to make these changes in their
claims payment procedures. It is unclear whether the amount of the cut will
be slightly higher than 2% given the fact that CMS will have to achieve
$11.3 billion in payment reductions over six months rather than seven. There
is no basis to suggest that these cuts will be restored, even if Congress is
able to agree on an alternative to sequestration in the future.
VA health care programs are exempt from sequestration and, therefore, we do
not expect similar cuts in payments for veterans' O&P care, but this is
unconfirmed. The magnitude of the spending cuts is much greater for other
federal programs of interest to the O&P profession:
National Institutes of Health (NIH) -$1.6 billion
Centers for Disease Control and Prevention (CDC) -$289 million
Health Care Fraud and Abuse Control -$57 million
Office of the Inspector General (OIG) -$3 million
Ironically, cuts to the fraud and OIG accounts will slow the pace of health
care fraud and abuse investigations, as well as Medicare contractors'
efforts to recover overpayments of Medicare claims. Sequestration will also
create furloughs for 4.4 million federal workers, including Congressional
staff, totaling 22 unpaid work days between now and September 30th for each
employee. This includes Medicare Administrative Law Judges (ALJs) and their
staff, meaning that waiting times for ALJ hearings for O&P claims denials
will only get worse.
On March 6th, the House of Representatives passed legislation to extend the
current continuing resolution or CR from March 26th through the
remainder of the fiscal year, September 30th. In so doing, the House shifted
additional dollars to the Pentagon's operating budget to help relieve the
sequesters impact on the Department of Defense. A bipartisan group of
Senators intend to do the same thing with other federal agencies when the
bill comes to the Senate. Assuming the President goes along with this
approach, this suggests two things: The federal government will not shut
down at the end of March due to the annual appropriations stalemate, and the
sequester may last much longer than most have predicted to date. Next week,
of course, separate budgets from the House and Senate will begin to emerge
for the next round of fiscal negotiations confronting our nation.
Please see the link below for our March government relations video webcast,
The Effects of the Sequester on Medicare O&P.
< <URL Redacted>>
<URL Redacted>
NAAOP will continue to keep you updated as events occur.
Please visit our website at: www.naaop.org
NAAOP
1501 M Street, NW
7th Floor
Washington, DC 20005-1700
e-mail: <Email Address Redacted>
(800) 622-6740
(202) 624-0064 Phone
(202) 785-1756 Fax
www.naaop.org
Citation
NAAOP, “NAAOP Update - The Sequester's Ax Falls: Impact on O&P Reimbursement,” Digital Resource Foundation for Orthotics and Prosthetics, accessed November 2, 2024, https://library.drfop.org/items/show/234858.
